Earnings Call: Q1 2018

May 18, 2018

Ladies and gentlemen, welcome to the Rockwall Q1 Report 2018. For the 1st part of this call, all participants will be in a listen only mode. And afterwards, there will be a question and answer session. I will now hand you over to Jensika Kalkscott, to begin the call. Thirgian Scorskow, and I'm here to gather the CEO, CEO, Jurgersen, and CFO, Kim Jong, Anderssson. First, Jens Birgerson will as always go through our presentation today also talk about our new sustained military report and give you a quick update. And then afterwards, we will be ready to answer all your good questions. But before I hand over the word to Jens Birgesen, I must ask Let's ask you to note the Slide 2. Our forward looking statements are please, as always, be aware, that this presentation contains uncertainties. And then we can go to the next slide, that is Slide number 3. And I will hand over the words to Mr. Jens, Pierre Vanacker. Good morning, everyone. Since we did a preannouncement already on 30th April, and we did a call in conjunction with that. I'm starting with the news, which is the sustainability report. That's that I make sure that you stay on that for a little bit. And I think for us, this is quite an important work we are doing. There is some increasing interest in sustainability. And we have this feeling that with our positioning on sustainability, what's good for the business is good for the world now. And you have a couple of drivers in here. One is this whole of sustainable cities. Non combustibility, we have seen the Grenfell development and a voluntary preference for that. And the other is the whole climate change. And at the end of that, reaching the energy efficiency goals. And if you look at that slide number 4, Not all of this is governmental initiatives, subnational players and in particular, the C40, the 100 top cities of the world. That's where we are driving and trying to go with the move that we see there. And if you take 1 of the C40 Cities, in the city, more than 50% of the greenhouse gas, derives from the buildings. So we fit in there together with the non combustibility for high rises and other sensible buildings like cost. So therefore, we put a little bit of extra work in this. If you go over to Slide 5, you see a little bit what we have done is on the one hand, the message on the outside, the other is internal work. We have managed thanks to improve productivity to get CO2 emissions to grade CO2 subs aside from our production. Down by 4%. During 2017, they also reduced the landfill. Didn't have any fatalities. So that's on the keep ourselves healthy. Ladies and gentlemen, welcome to the Rockwall Q1 Report 2018. For the 1st part of this call, all participants will be in a listen only mode. And afterwards, there will be a question and answer session. I will now hand you over to Jan Takier Korkesgaard, to begin the call. Urgence Korsgaard, and I'm here to get the CEO, CEO, Jens Birgerson and CFO, Kim Young Aniston. First, Yes, Birgarsan will as always go through our presentation today also talk about our new sustained military report. And give you a quick before I hand over the word 3 and speakers, I must ask you to note the slide number 2, our forward looking statements. So please, as always, be aware that this presentation contains uncertainties. And then we can go to the next slide, that is slide number 3. And I will hand over to Mr. Jens, Pierre Vazante. Good morning, everyone. Since we did a preannouncement already on 30th. So very prelim, we did a call in conjunction with that. I'm starting with the news, which is the sustainability report. So that I make sure that you stay on that for a little bit. And I think for us, this is quite an important work we are doing. There is an increasing interest in sustainability and we have this feeling that with our positioning on sustainability, what's good for the business is good for the world now. And you have a couple of drivers in here. 1 is this whole aspect of, sustainable cities. Non combustibility. We have seen the Grenfell Development and a voluntary preference for that. And the other is the whole climate change and at the end of that reaching the energy efficiency goals. And if you look at that slide number 4, Not all of this is governmental initiatives, subnational players and in particular, the C40, the 100 top cities of the world. That's where we are driving and trying to go with the move that we see there. And if you take 1 of the C4 to cities, in the city, more than 50% of the greenhouse gas, derives from the buildings. So we fit in there together with the non combustibility for high rises and other sensitive buildings like cost. So therefore, we put a little bit of extra work in this. If you go over to Slide 5, you see a little bit what we have done is on the one hand, the message on the outside, the other is internal work. We have managed thanks to improve productivity to get CO2 emissions to grade CO2 to say from power production down by 4%. During 2017, they also reduced the landfill. Didn't have any fatalities. So that's on the keep ourselves healthy and work towards our own goals to stay fit. To the right, you see some of the payback, the payback of the gray CO2 and the gray energy, so to say, during the start line. Finally, I'm evidence that you are more interested in, for the share. We have received quite a bit of recognition externally for the work we are doing on the sustainability side. And I would say, so on Slide 6, you see some of the ratings we have. And I think this one to the right SGG invest where they were the screened 65,000 companies in PIKTA 100 and we are in there. It's quite pleasing to see that with this communication on the work we do, we get picked up sometimes without having actively done anything other than doing a sustainability report and setting some goals. With that, I'll move on to the financials. The top line on the EBIT EBIT margin we have already, announced, and we had really a really good quarter, but we also compared, in some respect, we had a low low comparable because Q1 in 2017 was tough towards the end of Q1. We saw this inflationary pressures. But nevertheless, good quarter, very good growth in the insulation business. Installation business. So I moved to Slide 9, and the installation business grew 20% Systems only lowered 4.1% or 4%. And if we take the growth on business out, you have much better growth in there. So the other businesses had a pretty good Q1, but growth on Hess is one segment in the U. S. Where where the market has slowed down considerably. And compared to what I said, say, last year did plan this time. We didn't see that. We had some challenges on Rockphone and but not this drawdown, which is quite a healthy business will slow down and you can see that in the numbers. The regional developments, move on to Slide 10. Western Europe, Central Eastern Europe, North America. I would say it's all all quite strong. Western Europe, very pleasing with the growth in the UK. That is really high now. France, Germany and also some of the incentive initiatives to government have issued for energy efficiency, France, have announced, sometimes they call it $12,000,000,000 and sometimes $20,000,000,000, but we use the number 12. We haven't started to see that, but there is a true focus on energy efficiency. Germany has also pledged money and Poland has come out with money for energy efficiency. And this awareness we feed stock to come that you need to do energy efficiency to meet climate goals. Again, I'm not sure we see much in the numbers yet. The general market perception is good. And I think that some of the growth we see now is on the one hand work towards our own goals to stay fit. To the right, you see some of the payback, the payback of the gray CO2 and the gray energy, so to say, during the start line. Finally, I'm able to piece that you are more interested in for the share. We have received quite a bit of recognition externally for the work we are doing on the sustainability side. And I would say on Slide 6, you see some of the ratings we have And I think this one to the right SGG invest where they were the screened 65,000 companies and picked 100,000 and we are in there. It's quite pleasing to see that with this communication on the work we do with get picked up sometimes without having actively done anything other than doing a sustainability report and setting some goals. With that, I'll move on to the financials. The top line on the EBIT EBIT margin, we had already announced. And we had a really, really good quarter, but you also compared in some respect We had a low comparable because Q1 in 2017 was tough, towards the end of Q1. We saw this in flat inflationary pressures. But nevertheless, good quarter, very good growth in the insulation business. Insulation business. So I move to Slide 9, and the insulation business grew 20%. Systems only logged 4.1% or 4%. If we take the growth on business out, you have much better growth in there. So the other businesses had a pretty good Q1 but growth and has this one segment in the U. S. Where the market has slowed down considerably. And compared to what I said, say last year did time this time. We didn't see that. We had some challenges on Rockphone. And but now that it's grown down, which is quite a healthy business for slowdown and you can see that in the numbers. Regional Developments, move on to Slide 10, Western Europe, Central Eastern Europe, North America, I would say it's all quite strong. Western Europe, very pleasing with the growth in the UK that is really high now. France, Germany and also some of the incentive initiatives the government have issued for energy efficiency, France, have announced, sometimes they call $12,000,000,000, sometimes $20,000,000,000, but we use the number 12. We haven't started to see that, but there is a true focus on energy efficiency. Germany has also pledged money and Poland has come out with money energy efficiency. And this awareness we feed start to come that you need to do energy efficiency to meet climate goals, Again, I'm not sure we see much in the numbers yet. The general market perception is good. And I think that Some of the growth we see now is on the one hand sound building market, but some of it is actually some of the other insulation materials shifting into Stonewall, just a fraction on the plastic form side coming over to Stonewall will give good growth to us. In the Eastern European countries, everything growing, but Russia, not growing much, I don't think that is an economic effect. We grew a bit, but it was a bit lower than the previous quarter. So I think there are a few factors that was screen render conditions in Q3. And there could potentially also be a bit of a World Cup effect coming into this. A lot of building work has been done and now World Cup is coming up. But the rest on the Eastern side, really good growth. In North America, U. S. The normal double digit growth, China doing good. And Canada also did really good now. But again, the number we normally look at U. S. Insulation strong quarter. Profit then, good improvement both in EBITA and EBIT, 53 percent up in EBIT, that's good 3 percentage points up. So what caused that basically cost reductions over and above inflationary increase. So I want to emphasize that that the cost increase we saw last year hit us in Q1. We have a higher cost this year in Q1, but we have adopted the business, we have adapted pricing, and we are raising productivity. So that kind of cancels out. And then we have price and volume on top of that. And so hence the development, you can't expect a 3% EBIT improvement in every quarter because Q1 had a little bit lower profitability. And the insulation hasn't maybe really been a goal, but double digit margin in installation and a doubling on the EBIT, nice. So it's an innovation of them down due to a little bit of a mix issue that rockfall and growth on are not delivering the normal level here, especially growth on local slowdown. Yes. We move on to Slide 13, cash flow. We always start with the negative cash flow as you see from that. Diagram, networking capital percentage at the end of the quarter is the same as every year. So that means we have built more finished goods stock in relation to the growth, but net working capital percentage roughly unchanged. And that to get a bit of earnest, I'll give you a bit more cash, still negative, though, and that's normal. Investment activities the West Virginia drives a little bit of CapEx now and then we completed the project in Poland. We have started that up, and it went extremely well to start up. It was a renovation of a line very happy with that we delivered that one on time and could enter into full full drop of mold from Taiwan. After 2019, sales two reasons there. We see very good growth now. I don't see that the market will worsen during the year. But the comparables are different and we don't have a backdrop. So we see continued healthy business into 2018. So we have left that for non change on the margin. So not guide up and down every quarter. Around the 13%. So we're shooting for about a 2% improvement for profitability and price and productivity. Most upgrade we did. And then on the CapEx, we added 30,000,000 primarily that's been for the debottlenecking and upgrade and increased logistics. Around the our factory in Wales because we are growing in the UK. This is a very good project because we have 3 lines installed are not fully installed because we are not we didn't need to use all of that. And now we are doing investment to debottleneck it and get everything up to speed so that we can early next year run at full capacity. We do this while we're adding ships already, but this is very, very good investments doing that. With that, I hand over you. And our first question comes from the line of Yves Bormed from Exane BNP Paribas. Please go ahead. Your line is open. Good morning, everyone. Thanks for taking my questions. I actually have 3, if that's okay. And then I'll probably jump back in the queue because I probably have for fluon. But on the first question is on the segment division, system division, sorry, where margins be under pressure. And I think this time, you caught the Gordon product segment, which, has started to slow Could you maybe help us to understand how much does the gold represent in the total system division and whether the Solange is purely based on volumes or if you're seeing any type pricing pressure with new entrants? And also trying to understand what caused this slowdown and what your expectations are for margins in the system division for this year. My second question is on the insulation division, where you mentioned that you are seeing increasing demand for non install insulation products and that you're gaining market share. I just really wanted to understand whether or not you think that maybe the growth that is driven by mid to high rise dwellings where foam insulation tend not to be used is actually one of the driver of the higher growth or if you're actually seeing substitution across your markets. And lastly, on the tax rate, which was at 21% in Q1, should we take that as a good proxy for the rest of the year? And should we or is it going to be a bit higher? Could you give us a bit of color on the tax for this year. Thank you very much. Yes. Good. So let's start with the Systems segment. At the end of last year, we talked about the Rockform business. We did a restructuring in Asia. We laid off more than 100 people there. That means at this time, and that means a drop from in terms of growth. Has that business missing, but we didn't make money on it. So that's there. Proportion of the businesses I don't provide. But what I can say is that both growth and then rock from our substantial businesses And the segment we are talking about is the retail segment in the in the U. S. Have gone into negative territory. The price level is still very much. It's not new entrants. It's just a regulatory change where our customer base has kind of account plans at the moment because they're obviously with other things. We think it could take very hard to say 2, 3, 4, 5 quarters to reset and come back up again. This will come back. We are convinced of that, but it's hard to predict how long that is. On the storable, where the volume comes from, I would say, we We see a voluntary shift towards non combustible and this architect's contract course, other people and it's independent regulation. Sometimes we see a regulatory change, but we see it across. And it's just A few more proteomics hospitals, schools, high rises, but also flat roof in some markets where you have 4 used on flat roofs, logistics centers. You see a shift. You see it, for example, in the Amazon centers, increasingly in the data centers, in the sandwich panels, people want stonewall into an application instead of, foam. So it's coming a little bit here and there. And it's not super dramatic, but remember, Stonewall is just, you know, 14%, 15% maybe in most markets of the whole market. So suggested a little bit of creep, we'll give a bit of a volume increase for us. So that's on the installation demands. So I think it's primarily a voluntary trend that is happening. What else did we have? I can take the question. But wasn't it one of substitution across Yes, I think you responded to my question on the on the tax rate, there's primarily 2 things that are influencing this year. One thing is, it's sort of the overall decrease in corporate tax rates that also, going forward, will lower our sort of expected average effective tax rate. And then this year, we have a few countries where we have unrecognized tax assets due to a, you can say, a a significantly improved profitability in those countries. We are recognizing these tax assets this year. And I think we can expect the tax rate for the full year to be to be around the same level as Q1. Thank you. Our next question comes from the line of Christian Johansen from Danica Bank. Please go ahead. Your line is open. Christian Johansen from Danske Bank. Please go ahead. Your line is open. Sorry, I think my headset went off. My first question is around the guidance and the link between growth guidance and margin guidance Obviously, you have a spread of 3 percentage point on growth guidance and see around 13% on margin. And I would assume that there is a notable margin difference whether you make 7% or 10% growth? Yes. So should we read this that if you make 7% growth, you're at 12.5% margin and 10% will take you to 13.5 it depends a little bit how it plays out. But the as you know, you know, there's really well, Christian, that average shipping distance is about 300 kilometers, 350 kilometers. And If we grow more, we get to bigger, we have bigger volumes. So I can deliver more volumes if the market takes off in more volumes, but as the volume increase, we will pay with higher logistics costs. So the leverage, the factory leverage is it an upper end of that. So It's right that if we grow more, the more we grow, the more negative effect I have on the incremental volumes of the logistics. So for example, today what we do is we have a big flat roof project in car factory, Southern Germany or Southern Poland, and we can't supply it from there, we take it from Denmark because the prior is the customer. And remember, that will always give more money for online, the EBIT, but the margin on that those tons will be worse. So you're right. Higher the growth, the lower, the implicit EBIT margin, because we are not fully pricing in the longer shipment. We want the customers to have We are doing good on the gradual price increases with our customers, but we don't want to sit and recalculate with our partners and customers if we suddenly take it from an under place and then we want to increase the price of 40%. That's not how we want to work with them. We want to be a good partner with a decent price on the product and then we try to sort them out. So you're the numbers, I don't comment on versus the guidance, but the mechanics to logistics is working as you have suspected. Okay, that's very clear. Thank you very much. And then, my second question, on the UK, so the haggard review came out yesterday. I just wanted to get your thought on that and then how it potentially impacts your Yeah. So I mean, our view is that in high rise, it's in sensitive buildings, hospitals, schools should be banned. Should be banned. And everything that is not combustible. However, having read, well, I didn't have time to read it, but some of my very good people read it and summed it up for me I think there is a glimmer open that report because there are a couple of important elements in it. One is that it make it clear that the safe and easiest route to a safe building of those buildings I mentioned is to use non combustible materials. You don't need approvals, you don't need anything, you just need it, right? So that came out clear. The other one thing that the report hints towards is that if you go another roof in those buildings, the accountable should be pinned to Sunva. And what how I interpret the report is still only 24 hours is the report hinges towards that the contractor, the builder is accountable for the test results and the application of those other materials. And that's a fundamental difference. That's only recommendation. But if that comes into play, it means that someone takes accountability for the building. And that puts risk on a tangible thing. And we have already seen insurance premiums change for buildings of those types with combustible material. So I think they are carefully optimistic about it. But again, Storm today is just 2%, 3%, 4% of the UK. So just a voluntary change. It's enough for us to have a healthy business in the UK. So that's a little bit the picture. And then we will see how it plays out. I've also heard that there are some voices in governance that want to have a discussion into the issue of banning a non combustible. We have seen it. We don't know what the outcome is, but you can read on the web that voices are heard in that direction. So generally, I think, some very important items in that report Can you just remind us when is it expected to become actual law these recommendations? That's impossible to say. We just know that, that the report came out yesterday and then how how the consultation and the recommendations then turn into something or doesn't turn into something. That we don't know. But we know that the consultation goes into towards the end of July. That's what we know. But I had after that, I cannot predict the UK political system. And then after that, you know, that they have a recess in the UK. I don't know if they disappear for 1 month or 2 or 3, but they disappear. So I don't think we should expect anything before for sure not before end of August. Thank you. Our next question comes from the line of Klas Almer from Nordea. Please go ahead. Your line is open. Thank you. Also a few questions from my side. It should be banned. And everything that is not possible. However, having read, well, I didn't have time to read it, but some of my very good people read it and summed it up for me. I think there is a glimmer hope in that report because there are a couple of important elements in it. One is that it make it clear that the safe and easiest route to a safe building of those buildings I mentioned is to use non combustible materials. You don't need approvals. You don't need anything. You just built it. So that came out clear. The other one thing that the report hints towards is If you go another roof in those buildings, the accountable should be pinned to someone. And what how I interpret the report is still only 24 hours. It's the report hinges towards the contractor, the builder, is accountable for the test results and the application of those other materials. And that's a fundamental difference. That's only recommendation. But if that comes into play, It means that someone takes accountability for the building, and that puts risk on a tangible thing. And we have already insurance premiums change for buildings of those types with combustible material. So I think they are carefully optimistic about it. But again, storm today is just 2%, 3%, 4% or the UK. So just a voluntary change, it's enough for us to have a healthy business in the UK. So that's a little bit the picture. And then we will see how it plays out. I've also heard but there are some voices in government that want to have a discussion into the issue banning and non combustible. We have seen it. We don't know what the outcome is, but you can read on the web that voices are heard in that direction. So generally, I think some very important items in that report. Oh, okay, very quick. Can you just remind us when is it expected to to become actual law this recommendation That's impossible to say. We just know that the report came out yesterday. And then how how the consultation and the recommendations then turn into something or doesn't turn into something. That we don't know, but we know that the consultation goes into towards the end of July. That's what we know, but I after that, I cannot predict the UK political system. Fair enough. That was all for me. Thank you. And then after that, you know, that they have a recess in the UK. I don't know if they disappear for 1 month or 2 or 3, but they disappear So I don't think we should expect anything before for sure not before end of August. All right. Thank you. Our next question comes from the line of Klas Almer from Nordea. Please go ahead. Your line is open. Thank you. Also a few questions from my side. This impressive performance in Q1, James, could you pivot between pricing and volumes? That will be the first question. I can say like this, As I said, cost reduction compensated inflation tier cost reductions and then volume some price, together, roughly fifty-fifty gave the improvement. Okay. And then coming to your new guidance, you're sticking to this 7% to 10% revenue growth. Should we expect that to be performance already from Q2 or a softer second half of the year? How should we try to Exactly, as I say, H1, we, I'd say, higher growth rates in the first half of the year. And now we've delivered Q1 with a higher growth rate and we still insert that statement. So I have to say Q2 by deduction of what we said, higher growth rate. But higher growth like in so higher growth than the top the 10% high end of the guidance range. Is that what you're saying? It's higher growth than the 7% to 10% of house. Okay. Just want to be sure. Yes, good. I mean, just the final question, going to this incremental margin. So if you end up in the higher end of the range, then it sounds like the incremental margin will be eaten by higher transportation costs. Does that mean that you will only have incremental margin around the 13%. That's pretty low, I would say. Yes. It's hard to say because some orders, some orders, if you ship every far, the logistically is really, really high, but then you have incremental margins in the base, but as I answered, Christian, the mechanics you have is right. But you must remember that the price and all the rest in the base of the business there you have the incremental margins. So it's the volumes on top that makes life more complicated. And terms of debottlenecking, we are working across the plants, but unfortunate that there are some plants where we don't find so much and then there are other plants where we find more. So we do ship further and so we don't have the full leverage, but we have a leverage on the growth and then it kind of tapers off a bit when you get higher up there. Okay. It sounds as your normal guide philosophy, James, I have to say, but that's also okay. No, I'll stay the beginner, Claus. I'm still the dinner in this game. We learn we deliver many things to say throughout right, but we don't have a backlog. We need to see it in real life, along the way and about the trends, so pointing in the right direction. Our next question comes from the line of Michael Peterson from Handelsbank And Capital Markets. Please go ahead. Your line is open. Hi, thanks. Thank you for taking my question. I have a question regarding your CapEx. You recently increased your investments from 20 or 2030 to 260. Going forward in 2018, can we see like additional increases due to like a higher demand? Or how should we see this? I think in the base we did now, we covered some assumption on the bottlenecking and all the rest. The UK case is a specific one where we had prepared So we have 3 lines installed in the UK and 2 of them are kind of interconnected and there were some deficiencies on logistics It was never completed 20 years back because it was not needed. So we had an investment case ready And then we had defined so we have mapped out all the equipment, all the rest. We knew what to do, It also involves some expansion of the area we are on. So we have that ready and then we have set the trigger point for if we get to this growth and this loading, we trigger it and we trigger that now And then we know that in these many months, we start to see the capacity. So it's a very favorable investment in relation to the expand and the tons we get because a lot of the equipment and the things are there. We just need to debottleneck and put some things. And so 90% of what you see with the upgrade is just pure to that decision and the rest of the normal investments are covered. Then on the other hand, you could have in today's supply situation inflationary pressures that comes on products we have, you know, steel prices, other things can have. And there we will adjust as we go if something hits this year, but fundamental, we try to time this right for the plants we have announced this year and normal the normal bottleneck we may have this year. That's in the No, of course, no acquisitions. I mean, I think we have already guided slightly on CapEx. Also for the coming year because the investments that we have announced will already mean that the development will be slightly higher than this year. Yes, I understood. I just wanted to see like if you would experience like high demand then you rely on then could force some extra investments. And then if I can just quickly follow-up on that. Since you're on a debt free level now on net cash, what is your plan going forward in terms of M and A and so on? Are you you're looking for something or is it the floor market? Yes, definitely actively looking. So if you look at the floor market acquisition, it has been great. I mean, fantastic acquisition. And integration, great performance, great that fit into the culture grade and we are increasing capacity. Prices are often Switzerland, many, many good things. Those type of acquisitions we look at all the time. And if I find one and it makes sense, we'll do it. But we don't find many, but we keep looking and we can act very quickly when we find one. Thank We have another question coming from the line of Yves Bromed from Exane BNP Paribas. Please go ahead. Your line is open. Thank you for taking a follow-up question from my side. I just want to know, we've been talking quite a lot during this call on the shift with non combustible, especially in residential. And you've mentioned that you're seeing it also in flat roof in Leerty Centers. Do you believe that there is also a potential for regulations to change in the non residential segment? As of now, we're only talking about resi, but Is there, another opportunity there in the non res if the regulation does change? And are you seeing that happening? Or do you expect that? I think you have in many places through the fire code in all residential, actually. So you have it in many countries. And then In some cases, it's a creeping, creeping increase. And you see some of the insurance companies driving it indirectly. But I must admit when I think of any major regulatory changes, nothing that I count on. And I can't remember a case where there is a significant change now. It's more that this voluntary direction that such we see it in sandwich panels where we are a sub supplier, we see it in the facades in all segments in Germany, where the penetration of non combustible happens month by month by month. And it's not regulatory. Did you have any idea of how much you increased your penetration rate in stone ore for ethylene in the last 24 months? Given that it's since that it's been quite recently moved towards some loan? I don't know, but I see that if you compare, I guess you probably can do a better deduction than me that looking at the growth rates. The different materials. But I think there is a slight penetration and we hear it from customers. We have contractors saying, look, I did this and this and I only want to do that. So I did mix facade with foam and then stormwater fire barriers complicated. I want to do on the stone wall. So we see a few of those, but then we have many customers that just do it in the old way. So I don't dare to say what percentage, but there is a creep and we benefit from that. So sorry about not being able to give any more accurate numbers. That's fine. Very helpful. Thank you very much. Thank you. Our next question comes from the line of Klas Almer from Nordea. Please go ahead. Your line is open. Yes. Just a follow-up on the tax rate question. You said 21 for this year, which is including some tax assets So what should we expect beyond 2018? What is the more normalized tax rate? Mean, I think the more normalized tax rates going forward would be around 23%, 24%. Okay. And then a question regarding working capital, you're keeping your percentages of revenue despite building through inventory. How should we think about working capital going forward? No, we are building for us, it is a battle in Q1 to build inventory for the high season. So If we get to the same percentage of revenue, if the year is not traced in terms of growth between quarters, so it's very uneven. That means we were successful because it's not sitting in on the trade receivables. Meant we were successful in building the seasonal stock, but it's a bit higher than the previous year, which it should be because we have guided growth. So I think, due to that, the product is very bulky, there are 2 aspects of it. When we raise prices, it's difficult to pre buy a lot. You can buy a bit, but you don't have space. And then that networking capital And we don't see fundamental shifts in the percentage of revenue. But of course, if we have 5 new plants, where you do inventory on those plants. So you're just selling at 40% of turnover, then you have a negative net working capital. But since high up in the loading now, the percentages should be pretty unchanged. And we have no intention, you know, to give longer credits to or anything like that. So we shouldn't get higher net working capital because we don't get paid or we have longer trade receivables. We don't want to do Thank you very much. As there are no further questions, I'll hand back the conference to our speakers. Okay. Thanks a lot for participating in this conference call. And for many of you, you can all so wish you a good long weekend. Thank you.