Earnings Call: H2 2020

Feb 25, 2021

Welcome, people joining our webcast. The agenda for today is that we will go through the full year numbers of 2020 and of course, also go through the operational developments and also the financial developments and the outlook for the year. And of course, we hope that we have a lot of questions and that we can give the answers. Alberts. I think this is a very important phrase that you will find Alberts where technology matters and real progress can be made, humanly, environmentally and financially. More and more you see that we are there where we have a uniqueness and where We have a niche technology to drive. When you look to the essence of Alberts, you see mission critical technologies for groundbreaking industries and everyday life, where good is never good enough, greatness is made of shared knowledge. Our way of value creation, you can see here. We have mission critical technologies. Good is never good enough. Greatness is made of shared knowledge. I cannot stress how important that is. Technology exchange, innovation speed, fast learning and adaption, Very important. Improve our EBITA margin continuously. High entry barriers, pricing power, high added value margins, Sustainable, profitable growth. This is the combination how we create shareholder value. Our playbook, the Albert's playbook, relentless pursuit of excellence. Also in 2020, this was a very important point because continuously improving your position, Going for competitive advantage, driving operational leverage and excellence, increasing your margin and Your margin expansion is a thing we are continuously doing. This drives our cash flow, which we also saw in 2020, And we keep on improving our portfolio all the time. This leads, when you continue that, to compounding returns. We call it the relentless pursuit of excellence. It creates continuously long term shareholder value. By doing this, already for many years, we have created a track record, now almost 45 years of sustainable profitable growth. So you can see that this is even when you look back from 2020, which was a very special year, that over this time frame, it's a proven sustainable business model, where we create continuously for all our stakeholders, but also the shareholder value. When we look to the last 10 years in our value creation, you can see that earnings per share went up from €1.10 to 1.81. So even when you look back 10 years and you take in mind this special year that we created a lot of value also in these past 10 years. The dividend, We will come back to that. But also there, we see compared, of course, to 'nineteen where we paid out the complete dividend as we promised, We see there a decrease of 25% in 2020, but also when you look back over the last 10 years, We see an increase. Our long term shareholders base has even grown in this last period from more than 50% to more than 55%, for holdings more than 3%. That gives us also a trust that we are on the right track and that people have trust in us, a proven sustainable business model. Most important, and I can't stress enough, is that our key strength is our mission critical people. The Albert's Way, how we call it, winning with people. So being an entrepreneur, taking ownership, go for excellence, Share and learn, act with integrity. I cannot tell you how important it is that also in the year we have now and behind us the last 12 months that especially also we keep the entrepreneurial spirit in our group. The local decisions which were made, going for the last ultimate goal, Go for excellence and sharing and learning a lot of things also when you are confronted with a pandemic. You try to learn from each other how people treat their processes and how we also keep our people safe. It was very important also the last 12 months. So greatness is made of shared knowledge, a unique advantage. The Alberts Way, winning with people, is more important than ever. Our strategy and objectives are not changed. We got also questions during the last 12 months about, yes, do we still reach our strategic objectives, What we presented in 2019, yes, we are we always said that we will not let go of these objectives because we will have still the aim to realize them. So still, we are aiming for an EBIT margin of more than 14%, a return on capital of more than 18%, A cash flow conversion of more than 70% and a leverage ratio which is below 2.5% and of course, a solvability higher than 40%, driven again by our entrepreneurship and a relentless pursuit of excellence. Also this year and also the last 12 months And also in 2020 and before, but also in the future, we will see how important innovation is for our company. It drives our organic revenue growth. Our pragmatic culture and actually the decisiveness to change all the time to improve The lean structure, how we call it, keeps us ahead of the game also in when you have new challenges to face. You see our innovation rate climbing. We see our come rate climbing. That means we're doing more business with bigger companies all over the world. It's part of our strategy. Our innovation rate made really a big jump the last 14 months. Important is also that we have integrated our sustainability inside our strategy. We explained that In 2019, during our Capital Markets Day, how we want to do that, and we get more and more traction with that. So what you see here in this slide is that we have a megatrends, which are shaping our future, like rapid urbanization, like climate change, resource scarcity, Internet of Things that drives also certain trends rapidly like globalization and co development, like connectivity and integration of systems in a solution. We said that already 2, 3, 4 years ago, We see more and more coming. What we have done, we aligned the niche technologies to the end markets in such a way that we also have create a big sustainable impact. And now we are so far that 65% of our revenue is already linked to the sustainable development goals, which we embrace and which have been agreed in Paris. So we achieve unique market positions With sustainable impact, for us very important that we take our responsibility, but also that we make impact and we are committed to do that. But it's part of our business model that is pretty unique. Operational in 2020, Albus highlights. Of course, we also faced the pandemic. We are very fortunate that we only faced a limited number of COVID-nineteen infections and that we could continue the operations in a safe way, which was not easy in the beginning. It was very special, especially when you look to March, April last year when we really saw, yes, a big threat coming. We didn't know what was coming. But I think our people did an excellent job to protect our factories and our people, but also to keep on servicing our customers. Our revenue declined organically with 7.0 percent, And we ended up with a revenue of €2,610,000,000 Very positive is that our order book was growing, especially also in the second half. And at the year end, we ended with 9.3% higher than last year. We will come back to that in our the explanation of the operational developments for the niche technologies. Our EBIT amounted to €283,000,000 Of course, that's before our strategic restructuring cost, which we did to accelerate our strategy. And as a percentage, this was 10.8. Our net profit amounted to €200,000,000 per share, €1,81,000,000 and we had a very strong free cash flow. It was €339,000,000 A record. Our net debt before IFRS 16 reduced with 24% to €444,000,000 We guided the whole year that we were on track to do a reduction of 15% to percent because it was a focus of ours because we had to protect our company, especially in quarter 2. And Yes. I think ending up with 24% reduction says something about the improvement we made during the year. Very important also, and that is thanks to the strength of the financial strength of the company, we continued our investments and innovations. Our capital expenditure was still almost €100,000,000 So we postponed some things, some buildings, some capacity expenses where we thought it doesn't make sense to do it now, but almost everything kept on going. We didn't stop things. And actually, when September came, we saw Again, a better situation. We increased our capital expenditure again going in towards 2021. We also decided in April And very quickly already that we should accelerate our strategy because we presented the strategy in December, and We were aiming to do that over a period of 3 years, but we said we're going to accelerate that action plan, which we made and presented in December. So we took a 1 off full year strategic restructuring cost of €51,000,000 where we aim for an annual benefit of approximately €50,000,000 And we designed a lot of projects in all segments and all our business teams. I must say this was a great job of all the teams, how they did that. But also, I think the strength and or the speed how we did this, when we can now look back almost 10 months, That was done very well, and it will bring us much quicker in a better, even stronger position. So Alberts accelerates strategy and continuous investments and innovations even after the during this year. Operational developments are again, as we said, organic revenue decline amounted to 7.0%. The Q2, we were impacted by COVID-nineteen. We took immediately actions to protect our people, to also protect our processes, But we were also faced with temporary customer shutdowns in different countries. So that was Yes, a situation we never experienced like that. We also immediately reacted. And fortunately, we could see that end of May and certain customers already beginning of May opened again their facilities, and we could ship again. So we saw gradually a recovery from end of May step by step. And the second half, the business overall recovered in a different speed, but it all recovered. Year ended with a strong order book 9.3% higher than last year. Focus was on cash management, cost optimizations and innovations, as already said. And also important to mention this, that we kept on Investing in R and D, in future technologies, growing product lines and we didn't stop that. And some building and capacity expansions we postponed. When we look to the end markets in the regions, we have 4 end markets where we focus on. Eco friendly buildings, they recovered well from a level lower level in the second quarter. The reason that's for this actually quick recovery was that we saw continuous traction of our innovations, especially certain connection technology products, which kept on growing. We reopened the distribution channels were reopened of our customers, so we could ship again. And we saw, especially in quarter 3 and also quarter 4, an increase in customer demand. There was more spending. And of course, the inventory level, which was reduced during quarter 2, was again increased in quarter 3. But we saw also that we got more order intake due to more customer demand because in our opinion, there's more money spent in this end market. And at the end of the year, our order book was increased to a record level in this end market. Semicon Efficiency performed very well, strong growth, A lot of new co developments and projects also initiated, and we ended the year with a record order book also. Sustainable transportation. That means that's also aerospace. It is also automotive. It is marine, all these kind of transportation and markets. We face difficult circumstances, especially in quarter 2 When customer shutdowns in combination with heavy, heavily inventory reduction of our customers, Yes, created a difficult situation. After reopening of the customer locations, We saw a gradual recovery, especially in beginning of our fluid control products, which we have to manufacture And also in service technology, our precision manufacturing, our precision technology activity saw recovery and which was followed by our service technologies because you first produce a part before you can treat it. And that kept on going. So in the second half, it further recovered due to increased demand, but also because the supply chain was again filled and the inventory level of our customers was further built up. Also there, we ended in a pretty good situation. Industrial niches, activities increased gradually For the quarter 4, also there, of course, a difficult situation in quarter 2, but there you saw that the recovery was a little bit later in quarter 4, except for our beverage dispense activities where we really the moment there were lockdowns announced, It resulted in a very low revenue, but fortunately, it's a small part of our business, but it had an effect and a difficult market situation. So in summary, Eco Friendly Buildings and Semi Con Efficiency, Record order book at year end, sustainable transportation and industrial niches gradually recovered in the second half of twenty twenty. How is our overview of end markets and regions? We presented this Also earlier, what we see here, semicon efficiency end markets had a strong growth, and we see also an increased revenue percentage of this end market. Operational excellence and portfolio optimization. As we announced, we, of course, had an action plan in our Capital Markets Day. We decided, as already said in April, to accelerate that action plan. So what did we do? We further focused, clustered and simplified the organization. We reduced overhead in all segments. We went through all the overhead and all the structure through the segments. We reduced the net working capital structurally, And we had many projects implemented to optimize our operations, many projects in all segments. So we did a lot of things. Combined with managing this pandemic, we initiated all these projects and that resulted and led to 1 off full year strategic restructuring cost of €51,000,000 where we see a benefit of approximately €50,000,000 partly 2020, fully 2021. We went ongoing with our divestment program, which we also presented during our Capital Markets Day. We did some divestments, small divestments, but I think very It was very difficult things to do, which were very important to do, and we still stick to the divestment program, which we have also announced. So acceleration of the action plans, let's say, not in 3 years, we hope to do it now in 1 1.5 years to evolve in a better and stronger Alberts. Organic growth, innovation and capital allocation. We didn't stop. We continued. We overcame the situation very quickly, and we went on what we are where we are good at, innovating organic growth, conquering markets. So in Piping Systems, We continue with sales and capacity expansion of connection technology. We even introduced additional innovations. Valve Technology, we introduced some very nice new valve, patented valve lines, A full flow line and a balancing valve line, which we introduced in the month of April, even in Q2. And we started more and more we see success with the digital piping design services with a dedicated team, where we engineer an optimized integrated piping system, because we have all the portfolio, But we are also now more and more able to show that to the customer, even design it for the customer. And the number of product projects, combined with our Harberts name, is strongly increasing. We aligned the organization further, utilizing our combined strength. That means we look to the branding, we look to a unified supply chain, which we also consolidate and optimize in North America, which is, yes, I think in very good shape now. In Europe, we are busy to optimize further the new assembly and distribution centers because we are building in Netherlands and in Belgium. In the Netherlands, we are now integrating the warehouses from Europe. And in Belgium, we do the same, and probably that will be finished in the coming 12 months because we do it step by step. You can also see that on the reduction of working capital that showed good results. Hydronic Flow Control, something mentioned to here. Yes, we kept on Pushing the newly launched product lines, increased innovation rate, we could see also see here, Not only in Hydronic, but also especially here because we launched a lot of new products. And what is very nice to see is that we combine it more and more with digital services. So that means that you offer data to the customer where the customer can show the data and can read the data, where we can improve his own heating and cooling system. And we combine that with our products, which we already delivered. It gives us also the opportunity, and that's maybe most important for us, to gain more and more projects from the building owner, but also from the project developer because we combine actually the digital service with the products and the systems we already delivered. That gives us a unique position. It's really going very fast Because we also have delivered and sold these long term contracts, which sometimes go over 10 years and which give a continuous stream of revenue, but we also score the projects where we deliver, of course, our products. Digital marketing and R and D capacity is strengthened. We have now a very nice group of software engineers. We strengthened that with also digital marketing know how from outside to bring ourselves further in this also for us very nice new world. Our strategy is aligned with the competence centers to a unified focused organization with less overhead, so we also look here to the overhead. We look to the different locations we had, and it was a complex process, but I think we are pretty well going forward here. Our new manufacturing distribution facility is in progress. That means we are building here in the Netherlands, where we combine the different warehouses in a new distribution facility and where we also expand our manufacturing facility of certain product lines, and we can also have an expansion of these lines because we have no capacity left in that area. Our water supply and District Energy activities performed well. Also here, we launched 2 new lines and one line is successful. We had to increase our capacity for this full throttle product. Service Technologies, a big part of the strategic Restructuring took place in Service Technologies. The last many years, we did a lot of acquisitions in this area. And we already had the plan to review the locations and to also look to the market trends, which we are facing. So we reviewed all the locations. We created actually the right technologies for the future. So we also stepped away from certain older technologies where we thought that doesn't have the future, looking to the market trends of electrification of vehicles, but also other areas where we think there are certain trends in the market. And we optimized our geographical footprint based on this analyze. And that meant that we have closed, consolidate and also reduced a lot of locations. So that means that our aim is to come much better out of this, but that we are also strategically aligned to the future like electrification of vehicles, like transfer of manufacturing locations of our customers where you see a trend that, for example, combustion engine manufacturing plants move more to Eastern Europe, so we follow them partly, but also that new technologies for electrification or other technologies come in the same area like in Germany or France. So we have to adapt your portfolio to that. So I think we make we made there a very good and big step, Very well managed the last months to also see the cost reductions and portfolio improvements. Again, electrification of vehicles gives us a lot of opportunities for development of processes for new parts, where you see all kind of new specifications. They are looking for light weighting, lesser weight in vehicles, Particle free, because otherwise you get electricity in your car. We see more heating coming in a car, so that has to be cooled. Certain coatings can help with that. We see noise reduction as a very important point, Because when you have no noise of a combustion engine, you hear the wheels. So you have to reduce the noise of your chassis. Therefore, they use coatings. Strengthening of new materials, strengthening of lighter materials, fantastic business with a great future. Our worldwide footprint, and I think we have there a great position worldwide because we are here Really a market leader in this field, in these technologies which we serve. That's really an advantage towards the future because The developments which are taking place in all kind of machine builds or electrification or commercial vehicles, they standardize more and more the parts. That means they want to produce or code the parts on the same way on different regions in the world, and we are perfectly positioned for that. Fruitt Control, difficult year, but we continued our innovation roadmap. We took advantage of new systems which we launched, New innovations for industrial niches and also upgrades for sustainable transportation, one of the examples you see here on the picture. It was a new upgrade for a CNG regulator, which we brought in the market. Our innovation roadmaps within Fluid Control are mostly focused on regulators, valves, measuring systems to reduce the use of fuel In vehicles, in means of transport, but also to drive the conversion to hydrogen, to LNG, to CNG, that all has to be regulated. You need valves for that, but you also need measuring systems to reduce the amount of fuel you use. We are starting also to develop hydrogen fuel cell applications where We see a big market in the future. You see more and more OEMs looking for applications here where they need partners. Now we have that knowledge, So we want to be in these kind of development projects. So we have there some nice starting points. And even when beverage dispense had a difficult year due to the worldwide lockdowns, we were able to launch 2 new systems. One, where we launched a dispensing system for disinfection, it was based on our beer dispensing, a very nice innovation, which we launched and we launched a new design and complete new system for our bargain Soft drinks, which we will take a nice share in the future is our opinion. Advanced Mechatronics, excellent year, realized strong growth. In the beginning, We had difficulties to deliver our systems and our goods because we had to take here also preventive measures Regarding the pandemic, but when we overcame that, I think we could deliver very well to our customers. And So that deserves a complement for that whole organization. Many new co development programs were started, especially in our high purity fluid systems, where we even strongly expanded our engineering capacity Due to a lot of co development projects, which were initiated during the year for the coming years, our vibration isolation activity, there we will expand our facility further to facilitate the strong growth. So we will expand our building there and our equipment which we need. And within our ultra precision frames, where we are real specialists, Which you will not find almost all over the world, our specialism there, we have already a big order book and we are optimizing our operations to deliver that order book and also implementing further all the capacity expansions, Yes, which we did the last years. Also here, we create a unique position Our specialized technologies combined with co development projects with our key accounts in combination with our investment power, That is really unique and we become more and more unique in this world and this semicon efficiency end market where we are active here is booming, so we will also take advantage of that. And now I would like to give the word to my colleague about the financial development. Thank you, Bryn. And also from my side, welcome to the webcast. Special year. We made revenue last year of €2,841,000,000 And due to the full year effect of acquisitions that we made in 2019, we have a positive effect in this year of €80,500,000 negative effect of divestments that we also made in 2019 was a negative impact of €26,100,000 The currency impact, which was mainly dollars, rubles, Polish zlotys and Great British pound had a negative effect of €31,900,000 And that ends up then to the total organic revenue decline of €191,400,000 to come to the €2,610,000,000 for 2020. The decline of 7% is to be split up in the first half year for 11.1%, as you may know. In the second half year, the decline was 2.5%. Then for the EBITA bridge, Coming from the €362,600,000 last year, we had the same positive effect of the acquisition that we made, the full year positive effect of acquisition that we made in 2019 of €2,900,000 We had a negative effect of our divestments that we made in 2019. In 2020, €1,400,000 And then we had a negative currency EBITA effect of €3,200,000 the same currencies as I mentioned earlier, And that then totals up to the organic decline of EBITA of €58,400,000 which is equal to 10.8 percent at €282,500,000 is equal to 10.8% full year versus the 12.8% last year. And again, also there, we saw an improvement in the second half with 12.2 percent of EBITA, And this is EBITA before our strategic restructuring cost. Then the consolidated income statement, Where you also see some stars for the SRC, for the EBITDA impact, it was €43,300,000 Because, of course, there was an €8,000,000 depreciation effect in our strategic restructuring costs, so that is also calculated there. Then the depreciation's €140,100,000 leaves that comes to the EBITA of €282,500,000 The net finance expenses costs and then the income tax expenses where we also calculated a 25% tax effect of the total strategic restructuring cost of €51,300,000 and that comes then to the total net profit before amortization of €199,600,000 versus the €267,000,000 last year. And that gives an EPS of €1.81 versus €2.42 last year. The balance sheet. As said, we had a lot of focus on our cash management and also the improvement, the structural improvement of working capital, and that came out, let's say, all these actions came also to a lower working capital this year. And that also, at the end, improves our cash and therefore reduced our net debt. So the net debt reduction, €444,000,000 versus €588,000,000 last year, 24% decline, which was even more than we have guided throughout the year. The leverage ratio at the end improved to 1.1 from 1,300,000 last year. And the net working capital asset also decreased with 90%, finishing at €399,000,000 end of 2020. And that's improved the days net working capital with 6 days. Despite the lower revenue, we could improve the days working capital with 6 days to 55 days. And that totals then the solvability at the end to more than 55% and a return on capital employed before IFRS 16 of 12.5% versus 50.1% last year. And I think especially the leverage ratio improvement showing the strong balance sheet that AbbVieux has at this moment. The condensed cash flow statement Where you see, of course, the lower EBITDA compensated By the improvement of working capital, that's where we make the biggest compensation of our lower profits in the cash. That leads to a cash flow from operations of €11,400,000 lower than last year. Then we also delayed postponed some investments, and this is the cash out effect of that. So the cash out effect of our CapEx was €35,000,000 lower than last year. And that helps, of course, also to come up to a better free cash flow full year of almost €27,000,000 better than last year. And then you see also the other costs around. And we also see the higher dividend payment In 2020, where we paid out, of course, the dividend of 2019 of €88,500,000 and that also Yes, shows our consistency what we promise we make despite difficult market circumstances. The segment reporting, it's we made an Adjustment for the 2019 figures because of some businesses that changed. There was one business going from the Industrial Technology to the Climate Technology segment. And there's one business that went from the installation technology to the climate technology business. So therefore, we have restated 2019 numbers to make it fully comparable with each other. And there you see that the revenue impact in Installation Technology was 5% with a good recovery in the second half. Material Technology was impacted 40%, Climate Technology with 8% and Industrial Technology with 5%. In The capital expenditure, you also see that we reduced, but we finished at the end with €95,000,000 of CapEx capital expenditure versus €248,000,000 last year. The EBITA and EBITA margin, There you see, of course, that the businesses with high added values are impacted also more heavily like material technology and also industrial technology. And in installation technology, It is and Climate Technology, it's they kept the level better. But at the end, Installation Technology reduced the EBIT percentage with 1.3%. Material Technology still made 8.5 percent EBITA, which leads to a reduction of 4.1%. Climate Technology performed also strong. They kept the level of EBITA percentage on the same level. And then the Industrial Technology business, as already said by my colleague, also impacted by this expense. It's also in the other market segments, yes, that was reduced at 4.3%. It was a short and resilient performance. Then a slide about the dividend, showing you the dividend since 2012 until 2020, where you see that, yes, the sustainable profitable growth also resulted at the end in a sustainable profitable growth development of dividend payouts. And also, as I said earlier, the €0.80 of 2019 was an high dividend that we to win our general meeting. And at the end, we paid it out in July 2020 After a very difficult quarter, but we also knew that with the good measures that we took, that the cash at Albers was safe and a good development and that we could do that. So we kept our promise. And it's the same for our 2020 proposal. Of course, we proposed less dividends, but there's also less profit that we made last year. So the proposal is €0.60 consistent with our, Let's say policy. Yes. The outlook. The outlook for, yes, let's say, the coming period, yes, I think, Yes. As already said, we are active, very busy with execution and further implementation of our strategic plans which we presented in December 2019. And of course, We still have to look how the effects and also how it continues with the pandemic, which is still at the moment still there. I must say, in our facilities, we have very good preventive measures, and people know how to react on it. So We keep on going there, but we still have to see how that works out. But we will drive forward our organic revenue growth plans. Innovations will be further pushed forward. And as I already said, we further ramped up our investments again in September, October last year because we have many, many good growth plans. And so you will also see an increase of our capital expenditure to facilitate these initiatives. The second thing is the strategic restructuring projects are not done yet. We launched them in April last year and even, I think in Surface Technology already a little bit earlier. So we will further pursue them to get the results out of it. I think that's very important for 2021 because we stick to the phrase that we have a benefit approximately of €50,000,000 Based on the restructuring cost of the €51,000,000 it was partly in 2020 and fully in 2021. And so we have to pursue that. It's a lot of work. And we will further improve our portfolio. That means our divestment program, optimization of our products and technologies, yes, to realize our strategic objectives, which we presented in our strategic plan. Besides that, and that's, I think, important, we see also opportunities for Further strengthening our market positions, not only organically where we have a lot of focus, but also inorganically. And Yes. So also strengthening niche technology position with bolt on acquisitions will say we will absolutely continue and also have our attention. Also, especially when, yes, we have overcome for a big part, let's say, this pandemic and We see now the vaccine programs coming in. So we will also look much more to this point. So yes, starting the year with a record order book in 2 of our niche technologies does not Yes, give us a bad feeling, I must say, but we have to be careful and that we have to pursue our strategy as we did with a fantastic group of people we have within Alberts. Questions and answers. Thank you very much. Our question and answer session will begin now. Our first question this morning comes from the line of Luc Van Bijck from Degroof Petercam. Please go ahead. Yes, good morning. Thank you for taking my questions. First, a couple of questions about the organic growth. If I calculated correctly, In Q4, revenues were flat roughly organically. Can you confirm this and talk a bit about how the early months of this year are shaping up? And also you indicate a backlog increase of 9%. Should we take that as a rough indicator of the kind of recovery you could see this year? Or is it Also partly, say, lengthening of the backlog. Now let's say 1st of all, the organic growth. Yes. The organic growth in the Q4, as I understand, your question was I can confirm that it was a small positive. Okay. Looking to the backlog, I didn't understand your question mainly in our eco friendly buildings activities and semi com, yes, where we really see higher demand. So I must say, We have even difficulties to service everything. So it's not only a recovery out of the quarter 2 situation. It's also an increase of demand, plus in combination with our innovations, which we of course launched last year. My question there was if we can see that as a rough indicator for the revenue increase in 2021. Yes. It is, of course, difficult to say because we are still living in a pandemic. I don't know how that works out also for the other segments, But for the other end markets, but when I look to the building market, it looks pretty good. And also the semiconductor energy market, we have a lot of yes, a big order book and a lot of projects in the pipeline. And we see the other end markets like transportation and also the industrial niches we see recovering, where we think that industrial niches is recovering a little bit more in the second half of the year. It's more project driven, so we'll take a little bit longer. But also in our sustainable transportation, we see good developments. And that means also for Service Technology. Okay. That's clear. And you reiterated The strategic targets, but didn't I didn't hear the organic growth target. Is 3% organic growth At least is that still a target for the full period on average or how should we read that target because obviously 2020 was an unexpected deviation from the original plans? Yes, of course, we have faced this pandemic. We didn't know that, of course, in 2019. So but as we said, we have no reason at the moment to yes, that we do not realize our strategic objectives. So let's see how that works out. Also for the average organic revenue growth, which is where we said the average over that period is higher than 3%. So the answer is yes. Okay. And then my final question for now is on the drop through, which was 40% in 2020, obviously, that's higher when you have a certain change in revenues. This year, we see a recovery. Should we also expect a similar high, so above the 25% drop through With the revenue recovery this year, maybe next year? Yes. It's, of course, different Per technology, yes, but you should also take in account that we also reduced 71,000,000 inventory. And when you reduce inventory in that amount, yes, and that's, of course, especially In our Piping Systems activity, yes, there you also lose absorption in your factory, which also affects your EBIT. So the moment you're going to produce again, which we have to do, yes, you also increase your absorption, your factory. So that will help. And in our activities, Service Technologies, yes, I think there we have a much higher drop through than also in the other segments because, yes, we have a relative you have a relative high breakeven point. So the moment you go down, Yes. You have a higher drop through going down, but a higher drop through going up. But how that works out in the total, that's difficult to say. It depends, of course, also how the pandemic is evolving. Okay. Thank you for answering my questions. Thank you very much. Our next question this morning comes from the line of Henk Wijermann from Kempen and Co. Please go ahead. Hi, good morning, everyone. Congratulations with the solid results in a very volatile environment last year. My first question is on the gross margin, which is 61% in the second half of the year. Is that related to pricing because it's a bit lower than the usual, let's say, run rate? Or is it also related to the copper prices, which have significantly in the second half of last year? And then my follow-up on that would be also on the copper prices. So what do you see In the market since the start of this year? And have you implemented any sort of measures to counter this Sort of very high inflation in copper prices? And will this impact profitability this year? Let's say your first question, We can split in, I think, in a few parts. First, the first reason of the lower added value in the second half It's, of course, the different mix that we have than last year where we still have the high added value business impacted more heavily on the top line than the, let's say, the Installation and Climate Technology businesses. The second one is what Wim already said, The inventory reduction, yes? So also there, we continued to structurally improve our inventories. And it also means that you produce relatively less than what you did last year. So these are the main reasons for the lower added value in the second half. Regarding the copper prices, of course, they are going up Quite heavily, and we take also our pricing actions for that. But as you also know, we are also covered for a couple of months ahead. So we always Yes, try to anticipate in the right way with our pricing instruments to keep the margins. But there is, of course, and challenge there to keep it in the right pace. But again, yes, our portfolio enables us also to do that, We did many times in the past also. But maybe to make it clear, Henk, it didn't affect the second half because we were already covered for the raw materials. What we faced a little bit in end of the year and beginning this year is also the yes, we had to do Yes. Also the shortages, so we had to do a lot of effort to get our raw materials, but that it's under control. But as you know, we are very on top of pricing excellence. So our my and our aim is to take advantage of it. So we immediately increased our pricing, and we can do that because we have very strong positions, and we will push it through as we always do and try to take advantage of even the situation. So it will not affect our margin. Of course, it's very important that you're on time. So we initiated these actions already last year, of course. But I think we're on top of that. Okay. Interesting. The second question is on the cash flow statement. Think in the first half of the year, the impact from, let's say, any COVID relief measures or governmental plans was very limited. Was this also the case in the second half? Or do you have any, let's say, did you book any tax deferrals in the second half of the year? No. Let's say cash flow generation. Let's say we did book about half of the support in the second half as in the first half. So we only took, let's say, Some short time reduction programs in some countries, not in the Netherlands, not in the U. S, but in some other countries, we did because These programs are also running. We're already running also in previous years. That is a normal procedure, so we continue doing that. And that is we booked less, about half of the support in the second half as in the first half. Okay. So that's relatively small then. First question is on the agenda for divestments. I mean Linda, I have here you indicated that the market for divestments is not that interesting for you also because you were busy restructuring as a couple of these businesses to get a higher price eventually. Now that the market, I guess, is improving quite rapidly and you've sort of done the major part of the restructuring, Is it do you expect divestments to be a strong focus point in 2021, so this year? And can you give maybe some color on what your plans are? Because I think so far the color on, let's say, the activities and Which segment the color like the divestments take place has been quite limited? Let me answer the question. It's 2 questions. Question 1 is, yes, it still has a lot of focus. So You're right. We were able to improve these, let's say, companies or clusters where we which we want to divest in the last months. I think we also said in December 'nineteen that we had a we have really indicated where we want to divest. Of course, we also still had some here and there some question marks, which I think the question marks are now all solved. So we know exactly what to do. We also improved the companies which we aim for. So I think the roughly number which we gave that time, it was 100,000,000 or even maybe going up to 350,000,000, but that's a 300,000,000. We still aim for that. I think we did A small amount of small locations in 2020, but and you're also right that it's now very good timing to now do The bigger divestment, so we are yes, we are very busy with a few projects to now execute that. The reason that we are a little bit vague also about the where we divest is also has to do with some confidentiality. We don't want to yes, let's say, we also are have competitors in the market, but we also have our own people. So let's say, the people Who should be aware of it, are aware of it inside our words, but I don't want to say more about that. But it is what we said Also in our Capital Markets Day, we look for when we cannot create a position in the future Where we can achieve growth or increase our profitability, then it could be one of the criteria. Another criteria is It has a low financial performance, and we are not able in a certain time frame to increase it. And the third is it has no link with the group. And we have a few still a few things where there's not a lot of link with the group. So but let's say We still have that program, and we will also execute it in the 3 years, as we said. It could be, and that has also to do with the strategic restructuring, that we may, in the end, close or consolidate a little bit more locations instead of selling them. But let's say that we will still be yes, let's say, somewhere between the €250,000,000 €300,000,000 we see it's still on our radar. And to be executed, the coming, what is it, coming 22 months. I mean, is that okay? Okay. Interesting. Last question is on CapEx, I mean, this year last year has been quite low, obviously, because you postponed most of the capacity expansions. So do we can we expect a, let's say, a ramp up maybe to above the EUR 140,000,000 to EUR 160,000,000 run rate this year? Or will it still be within, let's say, the €140,000,000 to €160,000,000 for 2021? I think maybe to come to the €95,000,000 CapEx and €105,000,000 cash out. Yes, I still think it's a big amount of money, which we pursued. So what we postponed was mainly some buildings, which we yes, where we delayed a little bit the building, we could do that in good cooperation with our suppliers and which we will continue This year, so that means you get a delay effect of the cash out. So probably some cash out will increase through that. It could be, I'm looking to my colleague, to €30,000,000 which we shift from 'twenty to 'twenty one from that effect. And yes, we have the same plans as we had before the pandemic. Means a lot of growth plans, which we will pursue. So you will see during the year, again, a further ramp up of the CapEx and cash out. And I think it will be still in that ballpark number of between 140,000,000, 160,000,000. That is what I think because operationally, you also have it yes, you have to manage it all, which is already a big job with these kind of amounts. But it is shifting a little bit more in the time. So we maybe, first of all, said, yes, You invest maybe in the years 2020 2021 mainly and then 2022 could be a little bit lower. So now it could be that 2021, 2022 is still high and it is in 2023 a little bit lower. That's more how you should see it. Okay. That's very clear. Thanks a lot. Thank you. We now have a question from the line of Aurelio Calderon from Morgan Stanley. Please go ahead. Hi, good morning. Thanks very much for taking my questions. I have 3. I'll take them one at a time, if I may, please. So first question is around your savings. If you could help us maybe understand the phasing of those EUR 50,000,000, I. E. How much was already in 2020 and how much we should expect for 2021? Let's say that's about 20%. The savings. The savings, yes. So the annual benefit €50,000,000 approximately is about 20% is in the book year of 2020. Okay. That's perfect. Thanks very much. And the second question is a little bit more in kind of your Different trends that you saw in the different verticals within eco friendly buildings, because we've obviously seen Very strong residential data coming out of the U. S. And Europe as well, but let's say more nuanced non resi data. So I would be curious to know whether you I know that you're more skewed towards residential construction. And so I would be curious to know How the different verticals have found out through the year? That means within Eco Friendly Buildings, The residential commercial? Yes, that's correct. Yes, first of all, maybe good to mention that 70% of our business roughly is renovation. So also the what happens now and that is really a driver of the business for the coming years is the whole building efficiency That you have to go to energy efficiency in buildings. It can be bigger residential apartment blocks or commercial houses is also driving the business, so because it's also renovation. So that's a 70% is renovation, 30% is new build. Of course, in Eastern Europe, for example, it can be a little bit different. And then when you come to residential, we are strong in residential in pretty strong in Europe. We are not less strong in the U. S, where we have more commercial and a little bit industrial focus there. And we are both strong in commercial in Europe. Now what we see is And you're right, in a residential arena, but it's also in the apartment blocks, let's say, the more combined units of residents, you could say. Yes, there is a big demand. You see that people are more spending on their homes. So that means they change their bathroom, change their kitchen or whatever, and They changed their heating or cooling system or whatever, and that helps. That really stimulates our growth and it will also go forward during this year. The second thing is the whole trend of building efficiency is really taking shape. And besides that, we have a few new innovations, which we launched the last years, especially in the connection range, like our press connections where we have now all the different materials, which we launched in more and more countries. And we have our Groove connections. Yes, that will also drive the business in residential, but commercial. So it's a combination of market effect, but also our own efforts where we that's also by our order book is at a record level in that area. Yes, that's helpful. Thanks very much. And maybe one last question from A little bit more kind of bigger picture. I think you mentioned that you are starting to kind of carve your own niche within hydrogen fuel cells. Obviously, there's a big growth end market and would be curious to know what your exposure Eitan, where do you think it could get in, let's say, 5, 10 years' time? I'll add that We are a big player and actually market leader in Europe, regulators for gas. So the shift from oil to gas, we are already a big player. And we get now more and more questions from big OEMs, and that's already the last 12 months, yes, to also look to solutions for regulation of hydrogen in their new, let's say, they are the new engines, the new fuel cells. So yes, that we are in discussion with them. We are making prototypes, but we know that business very well. We also have now very good contacts through additional strengthening of our management in our commercial vehicle area. So that means in the trucks and where you also see a trend to gas and but also to hydrogen. And of course, so yes, that can be very interesting. Of course, these kind of projects, they run sometimes 2, 3, 4 years. So but we have found our nice niche besides that we are very good at the gas side. LNG, CNG, But for regulation valves, we're also now aiming for hydrogen. Yes, how big that can be in the future, I don't know. But It's really we got a lot of questions in that field. And also from German OEMs, French OEMs, And we want to expand that also to the commercial vehicle market, yes, to also their OEMs to and that drives our innovation roadmap. So It should be one of our pillars for the future, but it takes time to come there of course. Okay. That's great. Thank you very much. Thank you. Our next question comes from the line of Peter Olofsen from Kepler Cheuvreux. Please go ahead. Yes, good morning, gentlemen. I have a question on the network optimization. I recall from the Capital Markets in 2019 that you were looking to reduce the number of sites by more than 30. So could you give an indication where you stand today and to what extent may you have to take additional cost for reducing that network or have you taken all necessary cost in 2020 already? Yes. I think it's a good question. It's we went from my head, we went from 156,000,000,000 our aim was to go to 122,000,000. When you look to our website, and we have updated that also end of the year, we are now at 133, So we did a big part. We are not there yet where we want to be. What we also, Of course, see is that sometimes you can maybe better consolidate and not close. So we are still in that process. But Yes. And we are not complete ready yet with the strategic restructuring. So we still aim for an amount of closures. And that at this case, it should be all in the €51,000,000 Of course, it can be that when you do additional acquisitions You come to some little different insight that we still, yes, maybe in the future take some additional measures. But Let's say, for the strategic restructuring program, which we aim for from €156,000,000 to the 122,000,000 There are, let's say, yes, almost all the costs are in this €51,000,000 But Don't correct me when I'm wrong. When we find new improvements in the coming years, we will not we will also do it. And but that's, I think, the most concrete answer. And hopefully, we can update you, let's say, the coming 2 years Because we still have the aim to go there in 3 years, but we only have 1 year passed now. Don't forget that We have now more than 1 year we are busy with this, but we accelerated it. But this 122 is still our aim to go for. Okay. That's clear. Then maybe on the change to the segment reporting. Can you explain what kind of business did you move to the Climate Technologies segment? We moved business that from the nature of it, we thought fits much better in the Climate Technologies segment, also with the projects that they are running at this moment for the future with product development. So that's the reason that we did it, to bring it more in line. That is also, yes, let's say, learning, of course, through the years, which made us that conclusion. So it's one business from Insulation Technology, and it's one business. Actually, what we also did, Peter, we had We merged 2 businesses. We combined 2 businesses, and one part was in Climate Technology and the other part was in Installation Technology. We found out that these locations, yes, were actually in the same market. In this case, it was water and supply activities for underground applications. So we brought these 2 companies together, And we decided to bring them all together within Climate Technology. So that I think is the main reason. So it's market driven. And also, yes, we see more and more future there also for in this case for hydrogen in buildings, but also district energy, So which is a focus point of ours, so that's why we brought it over. So the district energy activities and the underground activities, underground application for water and gas, we brought inside climate technology where we think it also belongs. So that really the piping systems are fully in installation technology, which we also explained in our strategy presentation. Okay. And then my final question is on innovation. Wim, in your introduction, you mentioned that the innovation rate Has clearly increased last year. Could you quantify that? We follow that very clearly, very closely actually. So we as you can maybe can remember, we were close to 10, a little bit below 10 When we announced our Capital Markets Day and our aim is to grow, our innovation rate bring from a small 10 to 20. Now we measured already during the year that we are already halfway almost. So we were at 14.5 something like that. So that's not only for Climate Technology, but Climate Technology was a big driver in that, but it's also for the others. And as you know, our innovation rate Yes, is defined as yes, the revenue which we introduced, let's say, launched 4 years ago, which is then 4 years later as a percentage of the year, the running year, let's say, of the last 12 months of the last yes, the last 12 months And then the percentage of that. So it's launched 4 years ago, how much revenue we have gained in these 4 years and that you divide by the last 12 months of the year where you are in and the percentage. So it's going really in the right direction. And innovation takes a lot of time. I've always said that. And it's a struggle because you always think that next month, you're going to launch, and then it takes another 3 months because it's technology. It's not actually, I'm also happy that, that happens sometimes otherwise, it would be very simple for competitors to copy us. But you see the rate climbing up. And it's not only in Climate Technology, It's also in our activities for Piping Systems, activities for Fluid Control, But also in Service Technologies, we launched some very nice new technologies in the U. S. A. Even during last year. But it's Yes, it's a locomotive which is rolling. So let's hope we aim for the 20% still. I think we can reach that. Okay. Sounds good. Thank you. Thank you. We now have a question from the line of Martin Dandriva from ABN AMRO. Please go ahead. Yes. Good morning. Well, most questions have been answered. But To start off, Wim, when we talk about capital allocation and the deleverage in the balance sheet is low, You've explained that the clustering and improvements of the to be divested units is progressing. How should we think about capital And balance sheet, should we almost pencil in share buybacks or especially given that you mentioned only small bolt on acquisitions? Or should we look at those possible acquisitions at somewhat of a larger size? That would be question 1. Yes. The answer is, as we always answered it, is that the disciplined capital allocation, and we even had a Slide 4 yet in the past has not changed. So that means that the first thing is our dividend, About 30% dividend which we want to pay out as we also did in 2020 of this figures of 2019, but we we'll do now again. The second thing is our organic growth plans for CapEx. We aim for the 140,000,000 million due to the lot of organic growth plans, which we'll pursue. And the third thing is that we want Yes, to increase our market positions through bolt ons and we also said it could be that you have a bigger opportunity. When the price is right and the synergies are there, that you also do a bigger opportunity in the case of higher revenue or higher or a bigger company. So I think all is still the same. I agree with you, the leverage ratio is even in this year 2020, we were even able to reduce it. It says something about the strength and the cash flow we have in this company. And but I would like to address that, yes, for us, we are entrepreneurs and that's still the case. So When we have when we can allocate our money to improve our business and also to improve our market positions, that's by far preferable for us. And I also always said at the moment we have too much cash or which is not the case because we still have €400,000,000 euros 44,000,000 net debt before IFRS. Then, of course, we will also think of other ways to give the cash back. I must say the environment for M and A is good for divestments, But we also have a nice pipeline at the moment. And I think we feel ourselves pretty safe to do these steps. Of course, last year, we were cautious. We did it on purpose because you have to protect your company, but we have a nice pipeline. So yes, I would say, let's see. We are open for bolt ons. And in the press release, you could see that the word small is not mentioned. So it can be a small one. It can maybe also be a bigger one in the future. You never know. But it is an aim for us because also You see now step by step that our migration of Alberts and also the strategic restructuring is getting more and more pace. And we're aiming for our objectives, but there comes also another phase of ours. And in my opinion, should that be a growth phase, Absolutely organic, but also inorganic because we are also good at it, inorganic, and we have the balance sheet to do it. Because we still think we can utilize the money and the cash to strengthen our company. But When there comes a moment, when we have too much cash in our opinion, we will give it back to the shareholder. But it's not our 1st objective. Okay. Pretty clear. Then on just on the 22 targets, you say you maintain them. It's the situation with regards to possible divestments is clear. But Are you able, where you stand today, to achieve those targets without major acquisitions? Would that be a proper conclusion? Also, we stick to the objectives, but maybe also going back to this a long time ago, to 2017, And you talked about bigger acquisitions. So we also said in 'seventeen, when we launched the strategy and in 'nineteen, we updated the strategy. We said when we do, of course, bigger acquisitions, which, of course, in beginning, dilute a little bit your return on capital, Yes. Then, of course, you should take that in mind because that in our opinion, it would not be completely fair. That's what we said in 'seventeen is still the case. But I think, yes, the line we have now taken, which is still the same line as we explained in 'nineteen That we will do our divestments, maybe a little bit less because we closed a little bit more locations, could be, but let's see. And we still strengthen our positions in that field. Yes, we still we can achieve our objectives. When we do a bigger acquisition, yes, which of course means also higher capital employed, where the return on the capital employed will take longer, Yes. It could be that you maybe not completely hit your return on capital of 18%, but I think that's also part of The balance you have because you have done a better position, which we also said in 'seventeen. So but there are coming opportunities. There are coming opportunities. So hopefully also this national gives you a little bit guidance. And then moving on to working capital. You mentioned The European Distribution Optimization Program, when should we, in terms of phasing, expect that program to be completed and thus the positive effects on inventory and working capital to come through? Is that an H1 'twenty one The fact is that a 2H 'twenty one effect. And a kind of similar question for the remainder of the savings in 2021, so this is from the restructuring. How should we view those relative to the first half of the twenty twenty one and the second half of twenty twenty one? Regarding the working capital, what we have explained in 2019 is that we have a 3 year program between €100,000,000 €150,000,000 of inventory reduction calculated on days, yes, that is still the program that we work on, and that is also what we have that is I think we started off this year in a difficult market environment, but we managed to bring it down and even to improve a little bit the days Despite the strong decrease of revenues, I believe the trend is ongoing. So that will continue also in 2021, The improvement, but of course, also our business will grow again. That's also why we always have said, yes, we improve calculate in days €100,000,000 to €150,000,000 But again, we are in line with that goal. What specifically are known? When is that process of Closing European smaller distribution centers and grouping them in the European New Year European centers, When is that finished? Is that going to be finished in the first half or is that going to be finished in second half? So we have a bit of a picture when those benefits come through. I should take that. I think in America, the USA, we have optimized the situation. We have brought it together. We have It was a difficult project, but I think it's pretty optimized. And also you see already the effect in the inventory reduction, but that will continue. In Europe, we as you know, we have built our distribution and assembly center in Zivol, which was finished last year And actually operational a little bit beginning last year, maybe the end of 'nineteen. So what we did then, because we have to integrate 8 warehouses, yes, 8. So first, you have to get the warehouses, which we had in Holland. We integrated it, and then the software has to be running. Now that is done in 'twenty, even despite the pandemic where we also had our issues there to do that. And now we are step by step integrating the other warehouses. So I think personally, it will take us the whole year 2021 and maybe even partly sum of 22 to get that all done because, yes, it are 8 warehouses. So let's say we did 2 bigger ones, And we still have to do, let's say, 2 bigger ones and then 4 small ones. And every time you have to adapt Your IT infrastructure. So America is done and Europe, let's say, will be done in, let's say, the first half of 'twenty two. That is and then step by step, we are, of course, in parallel, we are reducing already the inventory because the moment you move the inventory, you clean it up. So that's a parallel process. But I think the cash flow, which you saw in 2020 of free cash flow of €339,000,000 was also for a big part inventory reduction. So And I think we have now very good momentum, which is driven by Arnaud and the team, yes, to gain really traction further. It is already visible, but it will become more visible. Okay. Clear. And then on the final was On the remaining savings, if you could perhaps divide that EUR 40,000,000 that's still to come between the first half, the second half or perhaps even 2022? Yes. I think it's difficult to say first half or second half, but let's say we stick to the €50,000,000 20%, roughly €10,000,000 we took advantage in 2020,000,000 and €40,000,000 we took take advantage in 2021. It depends a little bit how quick these projects go, because we also close locations, yes. That mean you have to make agreement with people. You have to talk to, yes, lot of institutes to get that done. It's a lot of work, so sometimes that delays a little bit. So it's very difficult to put a figure on. But I originally thought it we could have done it all in summer 2021, but you see already now it's a little bit delaying to quarter 3, some projects due to these effects. But yes, I think 2021, we will really end up all these projects And which we defined April from April onwards last year. How it's Exactly divided is difficult to say. We will give you a wrong number in my opinion. No, I agree. And we always said when we get the revenue back on the 2019 level, yes, because that's also important for your absorption and your Yes. Let's say, the coverage of your costs, of course, yes, then you can count in the €50,000,000 So when The revenue will still be behind due to pandemic reasons. Now let's say we get a new variant besides the British The Brazilian or the South African variant, we get another one. Yes. That could delay, of course, these things. I don't hope so. But that has also an effect, of course. But I think what you should take in account, when the revenue comes back on 'nineteen level, yes, we count in the €50,000,000 Okay, that's clear. Thank you very much. Thank you. Our next question comes from the line of Tige Polish Stella from ING Bank. Please go ahead. Thanks, operator. Good morning, gentlemen. Yes, the first question, I noticed a new item on the balance sheet, what they said, current portion of other provisions of about EUR 22,000,000. This is, I guess, the near term expected cash outflow relating to the restructuring charge you took in 2020. And is this the total amount? Or do you expect, let's say, also cash outflows beyond 2021? That's the first question. Right, Thijs. We took a total strategic restructuring cost of €51,300,000 Out of these costs, €8,000,000 stands for depreciation, which, of course, was also booked in 2020. We paid out in 2020, €21,200,000 which leaves the €22,100,000 on the balance sheet for cash out in 2021. Okay. Got it. That's clear. Yes. Then also back to the inventory levels. If I remind well, You were guiding for an improvement structural improvement between NOK 100,000,000 150,000,000. We do see indeed, as Wim mentioned, a EUR 71,000,000 year over year reduction on the balance sheet, But we do see a EUR 42,000,000 impact in the cash flow. So was that target based on the absolute balance sheet number or the Expected cash flow gains of the target? The difference between the SEVTY 1 and the SEV42 is for a big part is Foreign exchange currency rate differences. So that is about €27,000,000 the exchange rate differences. And what I said earlier also in this call is that our aim is to save €100,000,000 to €150,000,000 calculated in days. So that means if you would record Alberts in 2022, yes, and we have at that time a revenue of X, You could also see how much we really improved our days inventory outstanding at that moment, and that should calculate back Yes, the improvement in euros. And again, we are yes, we are in line with that goal. So it for sure gives also positive cash flow effects. Yes. Okay. And also normally in the annual reports, Albers provides closure on the line items within the other operating costs. And there is one line item called operating income. Last year or in 2019, the comparable number was €43,500,000 Could you give us the number for 2020? That's a lot lower because last year, we had, of course, the still the effect of the fires in this other operating income line. And for this year, it's about it's €40,500,000, the other operating income. The effect of the fires is actually out. Okay. Yes. And then last one, and that is also a difficult one for me. I listened carefully to your comments on the restatements per division. Before the pandemic hit, there was already, let's say, discussion, I think between you and analysts, but also between investors about the disclosure on the reporting line, organic growth, the contribution from M and A per division. So yes, I do understand that you now have reallocated the businesses. But more than ever, It is quite important if I'm looking at my first half, let's say, revenue growth forecast per division, right, given what happened in the Q2 last year If I have some comparison base, which is now again completely gone, because you explained yourself there are quite some within these business clusters and also countries, so that makes analyzing it already pretty difficult. So one thing we at least have is the historic performance over a longer period of time of these entities, which is now completely reset. So If you could provide us at least with, let's say, the comparable first half twenty twenty revenue and EBITDA numbers of now the new divisions Because the COVID-nineteen impact was quite different. Some businesses dropped by 15%, others by only 5%. So That would be quite helpful. And yes, I would really appreciate it if these restatements would, yes, eventually stop. Yes, I understand. But as you when you are doing strategic restructuring, sometimes that happens. But I can imagine from your side. But we can give that insight, Thijs. So we will give you more insight in the comparable numbers also. Yes. I mean, I understand that you guys look headline numbers have it in light of reaching the targets, we're trying to calculate how to get there. So for us, it's quite important. And I don't think only for analysts. Think also a lot of investors are doing the same calculation. So it's for us, it's really important. Well noted. We do now have a question from the line of Martin Verdique From the idea, please go ahead. Good morning. It's Martin of the idea. Firstly, you state that you reiterate your Strategic long term targets, which is obviously pleasing to hear. But again, coming back to the average growth You project that was more than 3%. And if we have seen over the past 3 years, then more or less you're suggesting by reiterating the statement that you predict organic growth of about 8% for the next 2 years per annum. Is that a realistic number to assume? Yes. First of all, you know the year 'twenty, we went down a lot. So I think we will also get a recovery in 'twenty one for a big part. So that's how that completely works out again. The pandemic is still going on. Yes, so when of course, When the pandemic will stay on this whole year and next year also due to additional variance, Then, of course, it could be that you don't hit it. Yes, that could be. But that's not the situation as we judge it now. So 'twenty, of course, is we've had minus 7.0. So but in 'twenty one, you will see a recovery, Yes. We will see how much that is. And so that's why we still think and also 2021, we will see a recovery. You look to our business in fluid control, for example, in yes, we will see a tremendous recovery, which is still has to come in the second half Because it's industrial orientated. So at the moment, the world, let's say, is not locked down anymore. You will see tremendous in many areas also for us, yes, besides what we do already now with innovations. So that gives us The reason that at the moment, we still think we achieve it, yes? And yes, a big part of that recovery will also be done in 2021, but also still apart in 2022. But yes, you know yourself. In the Netherlands, we can't even go outside after 9 So when that situation stays For whatever reason, yes, that, of course, it makes more difficult, but not at the moment. We judge it with everything what is going on Also, let's say, regarding vaccines and everything, yes, you will see in the industrial markets a hiccup in the second half and the other markets are already recovering where yes, and we trust also that our innovations really ramp up. Okay. And then secondly, you ended the year well with an order book, which was close to 10% higher Then at year end 'nineteen, are you able to provide us with a qualitative number? Quantitative number? No, no. We are not able to do that. Okay. You mentioned that you already made a number of divestments in 2020. What you have done Today, could you provide us how much sales will be gone for 2021? 21? You mean the divestments that we did in 2020? Yes, exactly. Yes. It's a very small number, Martin? Because these were 2 very small sites. So maybe only a few million. Okay. And then Next to that, you when I look at your EBITDA contribution and also the EBITDA charge For holding and eliminations, that was virtually non existing in the second half of the year. Could you provide some more insight in that? Yes. That is good, good. You have seen that correct. Let's say, In the total full year number, we went from 11.7 in 2,009 to 7.2 in 2020. That means that the holding costs have been reduced and the extraordinary costs have also been reduced because the extraordinary costs, The normal extraordinary cost that we always have every year, they went down from about 3.3 in 20.90 to 1.3 in 2020, which means that the holding costs at the end also were brought down from €8,400,000 to €6,000,000 What happened in the second half, of course, is that the strategic restructuring costs that we also guided that have been taken in the first half year numbers, We took out because that is something we put separately. And why did we take it out? Because these were the this part of the strategic Restructuring benefit plan, the total of €51,300,000 of cost with an annual benefit of approximately €50,000,000 and because of the character of recurring. And that's a big difference with normal extraordinary costs, which are normally a one off. Okay. That's right. Thank you very much. Thank you very much. Thank you very much everybody. We do have a follow-up Question from the line of Tige Holsteller from ING Bank. Please go ahead. Yes. Thanks, operator. Yes, and the question about The jump in the minority line item in 2020 versus 2019, what is behind that? Let's say good performance of the minority business. Let's say that is one of the businesses Where we have not a full 100%, but there's always also a third party having the minority stake. And they are Yes, making a good growth development. So also that part is then increasing. And what type of business is this? It's a company in Eastern Europe, in Poland and where we have a very good partnership with, where we And it's part of Piping Systems. They're making plastic Piping Systems combined with our metal Piping Systems of Alberts. So we have there a very good cooperation already for more than 10 years, almost 15 years. And that's a minority stake for them and for us a majority. And they did very well. So we It's one of the examples of innovations and also market approach, which we did very well combined with our press fitting range. So you made good progress and made a nice profit. Yes. And also one basically on the question From Henk van Kempe, on the gross margin pressure in the second half, if I understand correctly, that is because the top line decrease in the higher value businesses was bigger compared to, let's say, Building Installations and Climate Control. But wasn't that more the case in the first half Or is there kind of a lagging effect on the gross margin from that? 2 effects we explained. One effect is what Arnaud said Is that you have the especially Surface Technologies recovered more gradually than the rest. So there we have a high added value margin, so the mix is different. And the second thing is the effect of inventory reduction. So the moment You start reducing your factories in April. March, we did that. Yes, it takes time Yes, to slow down your factories because, yes, these are big factories. So you cannot immediately see the effect. So the most of the effect you saw In end of quarter 2, quarter 3, quarter 4, and when you produce less, yes, you have also lesser added value in these factories. So that combined effect, yes, that's it. Actually, we were very happy with the added value, Looking to the more than €40,000,000 reduction of inventories, which was mainly made in the second half. So you also lose there your added value partly, which will ramp up again the moment you are producing, which is now the case. So that is the explanation. On pricing, we didn't lose. And it also has nothing to do with the raw material increase because we are always covered with our raw materials. Our goal is for a certain amount of months and so that we have the time to increase our pricing, which we also pursued already last year, this year again and probably again in April, May. So that to be very clear there that there's not a wrong Yes, it's very clear. There's a timing effect. Thank you. Thank you very much. Thank you very much everybody. We have now come to the end of our Q and A session. All questions via the phone lines have been answered. And we have no questions via the webcast. So I'd now like to hand back to our speakers for any concluding remarks. Thank you. Yes. I would say thank you for listening to our webcast. And yes, It's always a pleasure to explain it to you all. And also thank you for all the questions and interest, and We will push you further. Thank you very much. Thank you. Thank you very much, everybody.