Earnings Call: Q3 2020

Nov 12, 2020

Ladies and gentlemen, and welcome to Bill Finger's Third Quarter 2020 Conference Call. With us today are Tom Plates, our CEO and Kristina Johan Sohn, our CFO. Before we go to Q and A, Tom and Kristina take you through some of the key highlights of this morning's release and provide some background to the financial performance in the Q3. With this, I hand over to Tom Blake. Thank you, Bettina. So I think you read in our press release today, we are seeing a sequential top line recovery. That's much in line with what we went out with our, let's say, guidance in late April, early May. So it's good to see that the markets are slowly recovering, but more of that a little bit later. I think also when you look at our numbers, you see that we've taken out the excess capacity. So we've adjusted our business to the levels that we expect currently and going forward. And I think that's well reflected in the gross margins, which are much in line with Q3 gross margins 2019. Also, I think you would have noted that we've taken down SG and A to a time low. And of course, those two things combined We've had very tenacious teamwork on working capital management, and I think our team has done a great job there to drive cash flow to shore up the balance sheet. So I think we're positioned for what's ahead. And again, I think the money we've invested in restructuring and not only adjusting our size, but I think we're making Boafinger more robust and stronger for the future. To the slides and our view on the markets, again, we see continued recovering of those markets. It's going to be a while yet. We are working our numbers, our midterm planning, but we don't see a recovery to 2019 levels until early as 'twenty two. So we will so join in that fashion. Our own numbers, you see the 26% reduction, organic reduction in order intake. That's partially due to projects, especially large projects being delayed in this period of uncertainty. Also, to some extent, our own mark to market of our backlog. We've taken a closer look at the long term contracts. You recall that we put 12 months of our backlog into the current numbers. We've looked at that and we've taken that down a tad. So that's also contributed to the drop versus order intake 2019. On the revenue side, 18% drop and I think again in line with our full year guidance. There we've seen a mixed picture I would say. We see it as being a little bit less pessimistic in areas especially the North Sea. If you wind back to our Q2 presentations, we were actually looking at a 50% drop in the North Sea. That's our business out of Aberdeen and Savanga. Now we're looking more like 30%. So it's not quite as pessimistic as it once was at the beginning of the year. In terms of our EBITDA, as I mentioned, we're positive again. And I think we're on track to deliver what we said we would do by the end of the year. What is really encouraging is that now Technologies are also contributing to that positive EBITDA. On the flip side, we see some weakening on E&M International, but again, more of that later. On the cash flow, as I mentioned, the solid performance in working capital management is helping us tremendously. Also, of course, the fact that we're able to defer some of the tax and Social Security payments that's given us a very strong position on the cash side and on the balance sheet side. And I think, again, looking forward, we're fairly robust. We don't expect any additional financing requirements. As I said again at the outset, we confirmed our guidance for the year, which is the 20% drop in revenue year on year drop. We will make adjusted EBITDA positive and reported cash flow positive. Turning the page and giving a quick overview of the markets. I think no surprises here. In terms of our chemicals and petrochemicals market, despite COVID, we see relatively good performance in Europe. As I mentioned earlier on in the year, we've had delays in turnarounds. Those we are planning for 2021 2022. So I think there's despite COVID, there's an underlying confidence in being able to manage the business going forward. We also see some large projects being announced in Germany, in our sweet spot in Leuna, but also in Bene, Belgium, Netherlands. So I think that kind of under scores the fact that the chemical and petrochemical business in Europe, at least what we see, is relatively robust. Energy and Utilities, driven by various, let's say, megatrends. High on that list, of course, is ESG and CO2. We see a number of customers looking at their own CO2 emission balance. You're aware that the cost of CO2 is rising in the EU and will be trading higher next year. So people are looking at their plants, looking to see what they can do in terms of limiting or cleaning up some of their emissions. That in turn leads to modifications, which is good for our business. We also see more and more inquiries around hydrogen. These are small decentralized projects as well as some larger projects. In particular, now oil and gas companies are looking at this. So I think that's a theme going forward, among which we're very interested in because, again, it's close to our core businesses. Finally, there's nuclear. I think Hinkley Point, you're well aware what's happening there. We have the commitments. The order is a little bit slow coming in, also driven by COVID. But work continues there and we are confident in being able to report additional order intake against the commitments that we announced earlier on in the year. Finally, Oil and Gas in Europe. So E and M Europe, I think I mentioned the business around the North Sea. The midstream business continues. And also downstream certain refinery expansions also continue. So again here a sideways movement in terms of what we see on the markets. A and M International is where we again have a mixed picture, not as strong as in Europe. Middle East continues. They have a longer perspective on the market. You see projects continuing in Baruj also in Saudi projects being announced. Where we do see a slowdown of course driven by COVID is in the U. S. And the double whammy there of COVID and oil prices giving rise to a lot of uncertainty which does continue. We do think that a lot of these projects will materialize out, but only after the pandemic is behind us, which still can take a while. In our planning, we aren't planning any rapid recovery. So anything on the upside will, of course, help us, but we're not relying on that. We're still very much focused on self help. Energy and utilities is a theme in North America. It's a very small part of our portfolio. But also there, we think that CO2 reduction, maybe a rethink around alternate energies is going to be good for the market. And then finally, oil and gas, as I mentioned, the lockdowns, the COVID, the restrictions in travel have really dropped the demand for fuel, especially jet fuel for gasoline. And therefore, a lot of the refineries, a lot of the downstream work has slowed down for a while. We think that is temporary. We think it will climb again later. And therefore also there we think that mid- to long term the markets will recover also in the U. S. Finally, with regards to technologies, we have 2 focuses. 1 is around energy and utilities, driven of course by nuclear, which does continue as I mentioned. We also see that in other places outside of Europe, again clean energy is a theme. So we think that's good for us. And then finally, pharma and biopharma, although we're not directly involved in manufacturing COVID vaccine, The themes around what the messenger RNA and similar approaches to medicine bring is good for our business. As you know, we have modular production of fermentation units, distillation units, and we think that business will continue positive going forward. I need to round up. And again, I said this is the beginning. When we look at our business and look at what we're doing throughout COVID, I mean it hurts. Letting go of 4,000 colleagues is not easy. But I think our managers performed exceptionally well, moving very quickly, doing the right thing and doing it with a sense of urgency so that we've lost or dropped our headcount from a little over 33,000 employees down to around 29,000 employees. And a large part of that happened of course in North America and in the North Sea where we expect that these effects will be with us for a while yet. And therefore rightsizing has been part of the mantra here. Currently, we have 6 50 employees or there about in furlough. That's down from almost 3,000 at the peak. And again, that shows you that we're not relying on furlough to carry us through in the long term. We have adjusted and we will continue to do so going forward. As an aside note, today we have about 550 employees who are at home, not through furlough but through COVID. Of those about half of them actually have COVID. The other half are at home on precautionary quarantine measures. So again, we are managing and balancing our workforce and yet still delivering results. We've invested roughly CHF 70,000,000 in restructuring over the last few months. We think it's been the right thing to do as I think the numbers are test and we do see a payback for that inside of 2 years. So we see that as being an investment as the slide suggests. In terms of managing our costs and going down the P and L line, SG and A has been a focus, remains a focus and will continue to be in focus. We began the SG and A reduction program already last year. Because of that momentum, we were able to pull that through this year also. You see the target here roughly $310,000,000 for this year and we'll drop it further to under $300,000,000 in the coming year. So what does that mean for our business? That's the next slide. And this will just give you a feeling of what Agility means to us and how we've used, I guess, the pressure to make sure that we right size but also correct size the business going forward. On the top, on the right hand side of the slide is being able to differentiate between what is a short term effect and what is a mid term effect, taking those decisions on the blue collar workforce, but also on the SG and A side. The second bullet point there, the consequential wind down of unprofitable businesses, we've shared with you our intents on strategic alternatives on some of the loss making units. We've made a couple of divestitures in the quarter, which Cristina will touch on. And some of the problem childs or problem children that we had, we're getting very close to solving for those 2. So we think as we exit 2020, we're going to be in a leaner shape and able to look forward to a cleaner 2021. On the top left of the slide, it's let's see, to try to explain in an illustrative way, that's the graphic there on how we're looking at our headcount. Our business is very cyclical, as you're aware. Our low point is in Q1 driven by the weather, but also by the customers' budgets. So if we are right sized then in Q1 ideally we're able to meet our customers' demands entirely with our own permanent workforce. That's the gray bar that's showing in this illustration. As the end business develops throughout the year, we ramp up. And we ramp up not by hiring additional people, but by taking temporary workers, that's the dark blue you see there. And of course, that allows us to flex our business and to avoid underutilization or overcapacity during the low periods. We've had that in mind. We've budgeted and planned going forward in order to do that. Is where our investment in the HR systems or Hercules as we call it is also helping and allows us to give our internal manpower services company, our company in Poland, better visibility on what's required not only in terms of quantity but also in terms of type of labor whether we're looking for scaffolding people, turners, fitters or welders for example. So I think that's focused and honed our approach to managing our workforce in a much tighter regime. And as I said at the beginning, I think that will help us compare some goods to it going forward. So with that, I would pass over to Kristina. Thank you, Cam, and also welcome from my side. Let's take a closer look on the financials for quarter 3 2020 starting on Page 9. Orders received decreased organically by 26% to €710,000,000 Prior year's number in quarter 3 was €997,000,000 €1,000,000 The low number is mainly because of limited number of projects available in here, especially in North America, but also due to lower expectations in the oil and gas market resulted in a lower order intake. We also have to say that Hinkley Point that is one of the most important large orders that we have acknowledged this year. We are calling off the order intake as the call offs are signed off. And there is a certain delay here, no concern, the orders will come. And we are expecting here in quarter 4 to see a significant number going into the order books. Looking at the order backlog, we are however at a very solid nearly €2,500,000 that is to compare with €2,600,000,000 last year, which means a slight organic €1,000,000,000 last year, which means a slight organic decrease just below 3%. So no concern but also due to a number of midsized other projects. But also due to a number of midsized other projects. Book to bill ratio is 0.8 in quarter 3 2020. That, of course, reflects the low order intake from quarter 3. However, book to bill ratio stands at 105 year to date, so still a very solid order backlog. If we then turn to Page 10 and look at the revenues and the profitability, revenues decreased organically by 8% to €870,000,000 Prior year's number was €1,100,000,000 and this is minus 18%. Just to remind you, we had an organic decrease in quarter 2 that we regard to be the deepest point in the this year. The organic decrease in quarter 2 was 29%. So still a strong ramp up here, especially when we talk about the European business. The revenue was based on recovery actually from July onwards. Given the holiday in Europe in July August, especially then a very strong September, and I can confirm that we don't feel I wouldn't call it the 2nd lockdown, but we don't have any negative impact coming from the recent developments in regard of COVID. So also October is in line with our expectations and a strong month. A very solid adjusted EBITDA in quarter 3, clearly positive with CHF 23,000,000 to be compared with CHF 34,000,000 last year in quarter 3. A significant rebound versus quarter 2 where we had a loss of CHF 35,000,000. This is a very strong ramp up and rebound in regard of E and M Europe and also Technologies that we will take a closer look at later on in the presentation. The adjusted EBITA margin is moving up to 2.7% in quarter 3 2020, which is just slightly below what we generated last year. We had 3.1 percent EBITA margin in quarter 3 last year and well to recognize what also Tom mentioned, we are more agile because we still have a difference a significant difference in the top line, but we are able to generate more profit out of a lower sales. Special items increased to CHF 24,000,000. Last year, we had CHF 9,000,000 in quarter 3. This is in line with our expectation and especially due to further restructuring measures that were put in place in quarter 3. So out of the €24,000,000, euros 18,000,000 relates to restructuring cost, €3,000,000 relates to our ERP implementation that is slowly coming to an end. So we have one legal entity left for next year. But also here, we are proceeding in line with the plans for this year. We also then last but not least have a capital loss of SEK 3,000,000 in this part from disposals within the segment other operations. We announced in September that we have sold 2 entities in the Czech Republic, all in accordance with what we said at the beginning of the year. And the strategic background is focusing of certain activities in Eastern Europe on selected markets, and these two entities do not fit into our strategy. This was actually already announced in 2019 and executed in September 2020. The sales that these two entities generated in the 1st 9 months of this year would be €80,000,000 and we had a cash flow inflow of €13,000,000 at closing. We also have a potential earn out of €2,500,000 dollars for next year. We also plan for disposal of 1 or 2 additional legal entities in quarter 4. As always, it could be quarter 4. That would be our plan. But as you never know with the closing, it could also take until quarter 1 next year. So we are continuing to drive these entities that don't fit into our strategy as fast as possible to divest them from our portfolio. Special items for the full year. We are confirming what we said after quarter 2. We expect around about €70,000,000 in total for this year. And of course, the biggest part of this related to restructuring. Now to Page 11, and starting off with the developments on gross margin. In quarter 3, we had a strong improvement here. Gross margin was achieved at 10.2%. That is a considerable improvement against where we were in quarter 2. And as you can see on that page, it is in line with what we had in quarter 3 last year. The gross profit was €89,000,000 versus €112,000,000 last year, of course, with the lower sales. But as already said, with a similar gross margin ratio 10.2%, a strong ramp up and rebound. Looking at SG and A, as Tom mentioned, the lowest number we have seen, CHF 69,000,000 or 7.9% in quarter 3. Due to lower revenue, obviously, 7.9%. Last year, we were at 7.6 percent, but the absolute number was €84,000,000 This reflects the sustainable positive effects from the project that we planned and have implemented in the first half of this year, but also additional actions that we have taken as we have gone through COVID-nineteen. Some of these savings are sustainable and some are cost savings for this year. So we are targeting here to get to a number of roundabout €310,000,000 for the year, which is substantially lower than what we had planned and also substantially lower than what we had last year. For 2021, our planning is showing that we will even drive the SG and A down to a number below €300,000,000 Turning then to Page 12, looking into our 3 segments, starting off with the largest one, E and M Europe, Engineering and Maintenance Europe. And this segment has shown the highest agility in this very difficult year. And orders received in the quarter 3 decreased organically by 13% to $501,000,000 prior year same quarter $580,000,000 And of course, the backlog numbers here for oil and gas have been suffering this year. But nonetheless, I remind you that the organically organic decrease in quarter 2 was as high as 24% in this segment and now, as I said, 13%, so coming back very strongly here. Compared with quarter 2 2020, we have a very strong recovery when it comes to revenue and adjusted EBITDA. The revenue decreased to $571,000,000 which organically is a decrease of 11%. Last year, we had an absolute number of $647,000,000 It shows that our European maintenance business is very, very strong and very agile. And I think this is showing that we also, in regard of the restructuring this year are starting in quarter 3 to see the benefits. However, the revenue in the North Sea oil and gas Stream for us means U. K. And Norway and that business is still down by approximately 30%. Book to bill in quarter 3 0.9 percent year to date as high as 1.07 percent. Looking at the earnings. EBITDA adjusted €27,000,000 profit, last year €31,000,000 Earnings benefited from agile cost management, which led to a very strong margin improvement and to an EBITDA adjusted margin as high as 4.7% that is compared with last year 4.8%. So still having a significantly lower SAIF, but being able with the mitigations to get more out of it. And we have a similar margin as last year, very, very strong performance. And it's not coming from 1 or 2 countries. It is coming from the whole region. The forecast 2020 for the full year for E and M Europe continues to be still a significant decrease in revenues, but positive EBITDA adjusted. Looking at E and M International, the segment on Page 13, and this is representing roundabout 15% of our revenue. Revenues and earnings, as Tom already mentioned, are still under pressure. In quarter 3 2020, orders received were 57% organically below the same quarter last year, and we achieved an order intake of $82,000,000 This reflects the lack of project awards, especially in North America, partly caused by the situation in North America for COVID-nineteen, but also uncertainties regarding energy policy against the background of the U. S. Election. So the visibility in North America for us is much lower than in Europe, and we have a certain delay in being able to rebound in North America. Revenue more than halved to $108,000,000 compared to $238,000,000 last year in the same quarter. This is an organic decrease of 52%, a similar decrease as we saw in quarter 2. It is and it remains for the time being a very challenging environment. Book to bill with $800,000 which means then below 1. Earnings with an EBITDA adjusted, a loss of 9,000,000 impacted especially by underutilization of our capacities in North America. But also here we are working hard in quarter 3, quarter 4 to adjust our capacity. So it's a lot about cutting back cost. And that will enable us to be more profitable again in the next year, even if we are not expecting a big increase in the revenue line next year. The outlook for the full year 2020 continued to be a significant decrease in revenue, But the situation in E and M International, as we have seen it here coming through in quarter 3 especially, we have to change the guidance and we are expecting to see a negative adjusted EBITDA for the full year. So this is a small change in guidance for this segment that represents 15% of the sales in Bifinger. Last but not least, turning to Page 14, Technologies, very, very good quarter 3, very sound quarter. I don't dare to say more than that. We have stabilized this segment with a positive earnings contribution. And we have been able really to work on the weaknesses of this segment. And I think we haven't seen a positive quarter in Technology for a very long time. Orders received slightly increased to €90,000,000 Last year, we had €88,000,000 in quarter 3. A part of Hinkley Point is going into this segment, the other part into E and M Europe. And we are expecting here, as I said before, to see order intake from Hinkley Point going into quarter 4 2020, but also significant numbers in 2020 The revenue was $138,000,000 only 5% organically below the number we had last year. And this despite that we are winding down, for example, our capacities in areas like scrubbers. So strong performance also in the top line. Book to bill was 0.7% in quarter 3, but year to date, the same number is very solid with 1.4 percent. And then passing on coming to earnings. EBITA adjusted returned to a positive number, as I said, for the first time for a very long time, dollars 6,000,000 or 4.2 percent margin, a strong improvement here. And I can also confirm that it continues to look very stable and very good going forward. This is a result of strategic measures that we have put in place this year for the underperforming entities here. You remember last year, we had 2 legal entities that caused quite a lot of pain and also partly left the traces on the first half year. We feel much comfortable now that we have stabilized this situation. Good earnings also reflect a major project in Bilfinger that passed the 20% of completion. And when we passed the 20% of completion, we recognized the profit. That happened in September. So it gave a good upside here to both Technology, but also to E and M Europe. So a strong 4.2 percent EBITA margin in quarter 3. The outlook for the full year 2020, a slight decrease in revenue, as we have previously said, and the EBITDA adjusted a significant improvement versus last year, but still negative. So no change in regard of this. But I think internally a big success that we are able to stabilize technology. Turning to Page 15 and looking at net profit and cash. Reported net profit decreased to minus $19,000,000 prior year $6,000,000 obviously burdened by substantial restructuring cost in this quarter. However, adjusted net profit was positive at €11,000,000 last year's number was €17,000,000 considerable improvement in free cash flow, both reported and adjusted. Reported free cash flow is €43,000,000 in quarter 3. Last year's number was €5,000,000 Adjusted is €44,000,000 prior year's number €20,000,000 The restructuring cash out in this quarter was almost offset by the cash in of the settlement with the former Executive Board members. The P and L effect of that settlement was already included in quarter 2's reporting. Free cash flow improved also due to active working capital management despite first repayments of deferred taxes and Social Security contributions. Looking at the liquidity development on Page 16. Net liquidity, including IFRS 16 leases, is minus CHF62 1,000,000 dollars improved significantly in quarter 3 2020. Just as a reminder, we had 108,000,000 dollars when we closed quarter 2 2020. So from minus 108,000,000 to minus 62,000,000 dollars mainly due to a positive adjusted operating cash flow of plus €50,000,000 dollars Net trade assets decreased in absolute terms to $461,000,000 Prior year's number was 658,000,000 dollars DSO improved by 10 days against quarter 2 to 78 days last year at the same time we had 84 days, very, very strong improvement in a difficult environment. DPOs were stable with 66 days. Prior year was also 66 days and prior quarter 67 days. So far, the comments on the financials for quarter 3 2020 from my side. And now back to Tom again with the outlook. Thank you, Christina. So I think no surprise in the outlook. We stick to our guns. So our guidance is unchanged for the year. Revenues down by 20% compared to 2019. EBITDA adjusted will be positive and reported free cash flow will also be positive. The caveat at the bottom of the page is that current lockdown will not have any additional adverse effects on our business. And with that, I would hand back to Bettina. Yes. Thank you. And with that, we're ready to take your questions. We would now be happy to take any questions you may have. The first question comes from Gregor Kuglitsch, UBS. Hi, good afternoon. Thank you for the slides. So a couple of questions on E and M and Tenagun. Can you just repeat, you said you don't expect a recovery next year in top line. And what do you do you think you can be at least breakeven with the cost cutting? Or do you think it will with that kind of top line, which I think annualizes out as like €400,000,000 or €500,000,000 it's just not possible to make money or even be breakeven? Because obviously, it's going to be loss making this year. So if you could just help us on that one, that would be helpful. Similarly on Technologies, you flagged the margin in the quarter, which is around 4%. Do you think that's now the run rate? Or is it seasonal? Is it kind of misrepresented if we take Q3 as a sort of starting point for margins of that segment now that you kind of through cycled through some of the problematic areas? The third question on cash flow. So your net trade assets have dropped, I believe, on a year over year basis by, I don't know, dollars 175,000,000, right? So quite significantly. The question is, will that just bounce back as revenues recover, if they recover, of course? Or do you think you've made a structural improvement in the ratio of working capital to sales? And then finally, on the financials, you guided before that you thought you can recover to, I think, correct me if I'm wrong, dollars 4,000,000,000 of revenues next year. Do you think that's still doable if E&M International doesn't recover? And then finally, I think you did make a comment on the kind of takeover speculations today in the press call, I believe. But if you could just give us your thoughts, if you have anything to add on that. Good. I can start off and then pass on to Tom. So if we start off with E and M International. Yes, we are obviously with the top line that we will achieve this year, we are making a loss. The budget process is still ongoing for next year, but we are not expecting that we will have a lot of more sales next year than what we would see this year in North America and in the Middle East, maybe slightly better. But we are definitely with the mitigation actions we are taking on the cost structure, we are expecting to be also positive in North America, but no sensational number. But we should be on the positive side next year. Looking at Technologies and the margin in quarter 3, which is around 4%, if we look into next year, I would not expect for the full year that we will get it up to 4%, but not too far away from that. Looking at our development then on the net trade assets and the working capital, Yes, obviously, we are expecting to see some of some growth next year coming back again or rebound coming back again in certain areas as especially quarter 2 was very low this year. And it will require some working capital. But I'm not expecting I also see opportunities actually especially on the BIP balances to further improve here. And of course depending on the kind of business that comes out of growth, if it is more the frame agreement, it's not eating so much working capital. If we're talking about projects, you have a potential upside sometimes on prepayments, but it's getting tougher. And then you more have the risk of being forced to generate work in progress. So I think it's a trade off. I think the underlying working capital we can still do better than what we have achieved even if it was a great improvement in quarter 3. But then on the other side, as the revenue is increasing again, we also need some working capital to support that growth. So a little bit of a trade off. If I look more at the DSO days and if we now are achieving 78 days by the end of September, I think we have potential here for further improvements in total. Looking at the guided €4,000,000,000 I mean, I think we need to split here what is the organic number here. As I said, we now in September sold off the Czech businesses, which generated SEK 80,000,000 sales in 9 months this year. And we also have a couple of other businesses that we would like to close out until the end of the year. This will, of course, then lower the top line. So then it will not be possible to get to an absolute number of SEK4 1,000,000,000. But if we take out that part, the target would still be to get to a number close to the SEK4 1,000,000,000 But of course, if I look at what we have in the books and we would like to exit until the end of the year, besides the €80,000,000 from the Czech Republic, there could be another roundabout €100,000,000 of sales that would leave us that would have a positive impact on the bottom line. But of course, it will then put pressure on the top line. So then I would leave to Tom to talk about speculation. Okay. Thank you for that. Sorry. I guess the usual thing is to say no comment, but that would be maybe a little bit flippant. You guys are analysts. You do the math. You know the numbers. We're doing pretty good after the Capital Market Day in terms of share price development in late February, early March. Then along came COVID and our share price dropped to plusminus 15%. At the same time, we were still saying and we still do today that by 2024, we'll get to the €5,000,000,000 and we'll get to the 5% sustainable EBITDA. So that's obviously quite a value gap or value opportunity if you like. And some of the private equity companies, certainly the ones that follow the space, they reached out and said, can we have a conversation, which isn't here's an offer to buy the company, it's a conversation. And in those conversations, we share public domain information with them. We share our perspectives on the market and on the industry. And we do that in order to get perspectives on strategic development or value creation opportunities for our shareholders. We do not have a mandate from the shareholders that says sell the company And therefore, these are just part of the normal conversations that I think many companies are having out there. And today, there is no contract to sell the company on the table. And that's probably as much as I can say. I'm not hiding anything, but I think people read a lot into the numbers and into the situation and only time will tell. There are no further questions at the moment. Next question comes from Timo Bolles, Bank of China. Hi. So thanks first for the presentation. I have one question. Whenever I talk to my risk guys about Bivinger, I have to explain a lot because you always have a lot of adjustments in your reports. Because you're restructuring the whole company or at least parts of it, when is the sort of the road map when will you be finished? Is this still on time? And when exactly could we expect to be the process to be finished? Okay. Yes, I mean this year obviously turned out to be different than what we had planned. So we already this year had made a commitment that we should lower the amount of adjustments, which is related to restructuring. So we started off SEK 13,000,000 for this year. Obviously, with COVID-nineteen and the impact on the top line here, some of it being for a period of time and some of it maybe even staying for a longer period, we needed to react fast, and we needed to adjust our cost structure and improve our agility. So we have, of course, then during this year, we have taken actions, and we are now planning that $70,000,000 roundabout will be the adjustment. I think going into next year, it is our clear intention as we are starting more and more to recover that the only kind of adjustments we will have next year will be related to the last rollouts of the ERP system and some minor amounts. So looking at next year, we are maybe talking about something $15,000,000 to $20,000,000 of adjustments and 2021 would then be the last year, where we will talk about adjusted EBITDA and reported EBITDA. So it has become more this year than we planned, but that's because we lost on top line. And we tried to do the right things this year to be ready for next year and then to avoid having any impact in regard of adjustments beyond the ERP rollout next year. Okay. Thanks. The next question comes from Craig Abbott, Kepler Cheuvreux. Yes. Hi. Good afternoon. Yes, I guess there's also been some press reports recently obviously on EQT exploring potential exit options for Apteona. And there have been various assumptions put out there. But I believe also today in the Reuters news there was also mentioned, I think, by you that you're fairly optimistic that they were to successfully sell Optiona that you could realize a capital gain above that $240,000,000 book value that you have currently. And I just wondered if you can add any color into this and what kind of range or dimensions you might be seeing? Obviously, the historical reports about the owner available in the Bundensantiga, but there may have been some restructuring efforts going in the last couple years. If you can obviously see the current performance of the business, if you could shed some light on that and how that might feed into then the valuation? Thank you. Well, I of course, there are also a lot of rumors here and a lot of speculations. I wouldn't dare to say anything about what is a realistic expectation here. As you know, we are having a 49% part of Aplionna, but we are not involved in the exit or potential exit and we are not involved in managing Aplionna. So of course, we keep track of how they performing and we get numbers. And also the midterm plan is provided to us. I can only say what we have said for quite some time that the $240,000,000 that we have in the balance sheet is probably quite conservative. But is it going to be $300,000,000 Is it going to be $400,000,000 or even that? I don't know. It would be speculations. And there is an upside to come definitely, but how much it will be, I can't have a judgment on that. It is we are too far away from that exit. We haven't seen anything. Yes. No, I wasn't expecting obviously any kind of precision there. I just wondered if there were any kind of ballpark range, but that's very helpful. Thank you. The only thing I can say is that the business is well on track and they have been hit have not been hit by corona. That's the only thing I can say. So they are in a good shape. And that's, of course, also a positive news for us. Sure. Sure. Okay. Thank you. There are no further questions at the moment. The next question comes from Christian Kord, HSBC. Thank you very much and good afternoon. I have two questions, please. The first one is on free cash flow and the cash flow in general in the Q4. I just wanted to ask if there's anything left from the deferred payments you reported earlier in the year where you shifted some payments from the first half of the year into the second half, if there is something coming in the Q4? And then the second question is a little bit more strategic. A lot of companies say that the current crisis has accelerated digitalization at their clients and their customers. I just wanted to ask if you see something similar. I mean, we talked a lot about B CAP roughly 2 years ago and the digitalization offering that you were building up. We also heard that Heidelberg Cement talked a lot about digitalization, predictive maintenance and so on at their Capital Markets Day a couple of weeks ago. So I just wanted to ask where you are in your plans with this business currently and if you see any acceleration in the growth of this business? Thank you very much. Thank you. If I take the first question in regard of the deferred payments for tax and social insurance here, yes, we had the highest amount outstanding by the end of June. We have paid a part of it that became due during quarter 3, but we still have an amount in the balance sheet as per the end of September. There is a second part that we have to pay in quarter 4, but we also expect that we will have some of these still in the balance sheet left because some of the countries in Europe and also North America will partly allow us to take it into next year. So quite generous terms here. So it will quarter by quarter be reduced, but not all of it will be paid in quarter 4. Would you mind telling us how much will be left by the end of the year? By end of this year, most probably, we will still have a mid double digit €1,000,000 figure in the books. But we as Cristina said, there will be a certain payment in Q4 leading to a negative free cash flow in the Q4. Okay. Then to the question regarding digitalization and potential acceleration on the market, we haven't seen that. Our digitalization is less to replace people and more to drive overall equipment efficiency. In terms of the market itself, we do see continued opportunity. What we recognize actually is a marketing differentiation. So although our digitalization business is proceeding, I would say slower than initially expected, It is driving a lot of discussions and we have won a number of contracts where the customer says okay, I realize it may not be time for digitalization yet, but I like the fact that it's on your horizon. So we do see benefits even if it's not coming directly to the building and digital next P and L bottom line. All right. Thank you very much. Okay. So there are no further questions at the moment. So we conclude today's call. Thanks to all of you for participating. We wish you all the best for the coming months. Stay healthy, and we'll speak to you again later in February. Goodbye.