Investor Update

Aug 30, 2021

Slides

Good afternoon, everyone, and welcome to our Konecranes Service Investor Update. My name is Kira Freiberi, and I'm the Head of Investor Relations at Konecranes. Before we start, I would kindly remind you that this event is to discuss KONE Cranes business area service. Due to the securities laws in some jurisdictions, especially in The United States, we won't be discussing any merger related topics. For merger related information, please visit www.sustainablematerialflow.com. Our main star for today is Fabio Fiorino, our Head of Business Area Service. Fabio's presentation will be followed by Q and A. In case you would like to ask questions, please submit your questions by using the chat function. The questions can be sent already during Fabio's presentation, and we'll be moderating the chat. I have also our CFO, Teo Ottola, here with me in case we have any financial related questions. The content has been designed specifically to analysts and investors, and we have a lot of participants online today. Without any further speech, I will hand over to Fabio. Please go ahead. The line is yours. Well, thank you, Kira, and welcome, everyone. I'm really excited to provide you this update on our service business. Quite frankly, it's been too long since our last session. So without further ado, let's let's get on with it. Let's start with the agenda. We'll try to walk you through our service strategy and look at some of our business fundamentals. Then the popular topic of our agreement base, we'll try to unpack that a little bit for you, move on to the financial performance and provide some further insights on that. And then a very exciting topic, digitalization and how it's enabling growth and profitability. Then we'll summarize the presentation, give you some takeaways and talk about a bit of our ambition level. And we'll certainly leave quite ample time for Q and A. So let's start with the service strategy and fundamentals. What is a service strategy? It is to provide industry leading maintenance services for all types and makes of industrial cranes and hoists with the objective to improve the safety, productivity and sustainability of our customers' operations. And this strategy really rests on two pillars, one of customer focus and one of delivering on these promises. And let's talk a little bit on customer focus. Our aim is to build long term relationships. As you probably well know, the service agreement is the foundation of our business. We engage our customers through a consultative and open and transparent approach, deliver measurable improvements and of course, strive for commercial excellence, continuous improvement culture driven by KPIs. So now how do we deliver on these promises? How do we execute? First and foremost, Lifecycle Care, which is our comprehensive systematic approach to managing customer assets. We have created a digitally enabled customer experience, connecting data, machines and people in real time, applying smart technology to transform our customer assets to optimize maintenance and operations. And last but not least, operational excellence. Once again, continuous improvement culture, very much driven by KPIs. Let's talk a little bit about the service business model, which is really all about managing assets throughout the life cycle. Let's start with the agreement base. What is the agreement base? The agreement base is primarily made up of inspections, preventive maintenance, predictive maintenance, remote monitorings. The digital services are largely within our agreement base. The agreement base represents about 20% of sales, total sales. It is primarily sold through an outside sales force or agreement sales folks, and we are supported by an inside sales force that in the large part does a lot of the renewals. The base is actually executed, of course, by our inspectors and technicians in the field. From this agreement base, of course, ensues the corrective maintenance. Corrective maintenance largely repairs is another way to put it. And, of course, it's inspectors, technicians that execute that. Most of the some of the corrected maintenance is already kind of presold or as preauthorized as part of an agreement base. Otherwise, it is sold by the inspector technicians by inside sales, very much either on-site followed up by inside sales. It is all based on advice based on the findings and the condition monitoring. It's all about speed, getting the customer issues corrected as soon as possible. So about 50% of the business, 20% from this agreement base and 30% from corrected maintenance, 50% of the business is pretty much fundamental maintenance services, if you would. Another 25% of sales is represented by a little more of added value type services, retrofits, which is like replacing components, adding components, adding features, adding functionality to the equipment, consultation services, modernizations, which are, let's say, large scale retrofits where you're you're taking on a much larger project to extend the life or or bring on the the performance of the equipment. And we also do sell a lot of lifting equipments, primarily a lot of light lifting equipment is sold through service. Again, we have an outside sales force, we call them service sales, supported by inside sales. This is a little bit more of a consultative type selling approach. A lot of this is also analytics driven. We can see what's the age of the equipment, what condition of the equipment, we can look at the maintenance history, and we can create recommendations or suggestions for the retrofits and modernizations, etcetera. And and the last part of the business, the last 25%, a little bit more transactional. It's spare parts and accessories, primarily again sold by inside sales or e commerce, and the e commerce portion continues to grow. It is all about convenience. Now this 25% is not only the direct channel, not only sold directly to end users, but it also includes the indirect channel. It could be resellers. It also includes the component distributors. We would also call the Alpha brands. That spare part business is included there. You also may have spare part packages that are sold as part of an equipment delivery. Again, very important to note, agreement base is the foundation, and then the service orders flow from the agreement base. Look at the our global footprint. We're operating in approximately 50 countries. 40% of sales are coming from The Americas, about 45% coming from EMEA, and about 15% are coming from Asia Pacific. As you may well recall, we have had the MHED Mag acquisition at the beginning of twenty twenty in order to strengthen our position in Asia Pacific, in particular, within Southeast Asia Pacific. And the integration of that business is is going along quite well. The other countries where you would see in in in gray, those are either addressed by distributors in direct channel or in in some cases, if we have some large, deliveries, we may service those from neighboring countries, as well. We look at the available industrial crane service market. There's still plenty of market out there. We estimate the market to be north of €10,000,000,000, and you know that our sales are closer to 1.2, so that we got a lot more opportunity out there. The the trends are are certainly favorable. They're very much aligned with our strategy and with our actions, whether it's safety, productivity, sustainability, digitalize regulations and compliance continue to grow. There's aging industrial workforce in many countries. And, of course, nothing new with rise of Asia as well. That's, again, part of our focus. So we're very much aligned with what's going on out there and very much focused in in addressing these these trends. What are the revenue growth drivers? As again, as as we've been talking about the agreement base very much underpins the business and is very much agreement base expansion is certainly a revenue growth driver. We have we are uniquely positioned to tailor to the larger customers, the global companies, the large regional players. But at the same time, we have been tailoring our service programs to address other segments and other customer types. So I think there is still a lot of opportunity when you look at the breadth of industry and the sizes and types of customers that are out there. There's of course, we can continue to build on our base coverage, and we will talk about that in when we look at the agreement base. Still opportunity to increase retention, to increase penetration as well as building much more comprehensive agreements. So there's still a lot of opportunity in the agreement base expansion, which again drives then the orders. Digital services, very exciting area, and I'll be talking about this in quite in-depth later on in the presentation, so I won't spend a lot of time here. But this definitely is a growth driver, and we're gaining quite a bit of momentum here. Another exciting area is equivalent spare parts. These are equivalent replacement parts and components for third party equipment in view of OEM parts. We talked a little bit about the Asian footprint expansion. There's definitely a lot of opportunity there. As you've seen, only 15% of our sales are coming from APAC. Smart technologies, another area for revenue growth, whether utilizing retrofits and modernizations or some of our consultation services. And then, of course, there's bolt on acquisitions. We're well into the MHE Demag integration. We're moving into a new phase in the world, and we have reactivated our acquisition engine. We are looking at opportunities, and hopefully, those will materialize in the future. What are our profitability drivers? First is organizational efficiency. We've a lot, again, underpinned by digitalization, field operative productivity driven by mobility and digitalization, centralization, being able to create virtual teams. Again, it it really worked well through this pandemic period. We were well ahead of the curve, and, we actually accelerated, our deployment and adoption, through through the pandemic period. Our robotic process automation, customer self-service, end to end process optimization, and and big piece is data quality and data enrichment. All these systems and all the end to end processes are really driven by the quality of the data from end to end. Still opportunities in branch and warehouse consolidations, Salesforce performance management. The other area, of course, is material efficiency, very much, centered on sourcing, distribution, and procurement. We do have, you know, cross company wide, cross business area, procurement excellence strategic initiative, which, of course, we're a part of opportunities also in end to end process optimization here. Data quality also drives a lot of the opportunities in material efficiency. And as mentioned before, there's equivalent parts for third party equipment to replace OEM parts. As well, worth mentioning the MHED MEG integration, we we promise to deliver synergies there. We are creating critical mass and leverage, optimize and combining the offering. And then as we bring on bolt on acquisitions at some point, we will we're able to also leverage the business model and infrastructure that helps us drive profitability as well. So now let's turn the page a little bit, focus on the agreement base. Always an exciting topic. Let's so here's a different way of looking at it, unpacking the agreement base by hoist brand. The hoist or the hoisting machinery is the part of the crane that, of course, does the lifting, does a lot of the heavy work and usually requires the most maintenance and takes the wear and tear. If we look at the agreement base, it's by what's the percentage of the hoists that have been manufactured by the Konarkranes Group, that would be 45%. So 45% of the agreement base has been manufactured by the Konarkranes Group, whether it be a Konarkranes brand, the Demag brand or it could be a component brand, again, as we also refer to these as the Alfa brands, or perhaps a legacy brand, one of the, you know, brands we've we've acquired in the past, which, of course, means that 55% of the hoists in the agreement base are manufactured by third parties. Right? Which, of course, becomes also an opportunity for replacement. You know, hoist can be replaced when they reach the end of their service life, of course, or before you could replace the hoist to improve safety, productivity, sustainability, reduce maintenance costs, etcetera. So there is a lot of opportunity here to to modernize, if you would, the the fleet of hoisting machinery that's out there. The other way to look at the agreement base or to unpack it is is by asset coverage by the by the Crane brand, if you would. If we go back, as as you may remember, and even our back to 2017, the last time we had this conversation, we have learned a lot. We have since then migrated, you know, most of the Demag agreement base onto our into the concurrent systems, applied similar definitions, we're able to compare apples to apples. And the way that we we have recast a little bit the way that we look at coverage, We are looking at coverage based on the estimated asset installed base in operation. So the estimated asset installed base in operation, that would be the denominator. And then, of course, the numerator is those assets which are under agreement. We are applying, you know, our a consistent one Kona cranes asset definition, and the asset generally refers to the crane. If you would be could be an industrial crane. It could be a light crane system. It could be a a jib crane, etcetera. And it's important to note that a single asset can have multiple hoist on it. You know, back to the previous slide about about the hoist and the hoisting machinery. You know, hoist have a much shorter life than the crane itself, and the hoist can be replaced several times over over the life of the crane. Other thing probably is going be important to point out that not all assets are created equal. An asset could be a few thousand euros, it could be tens of thousands of euros, it could be hundreds of thousands of euros, it could even be millions of euros. So there is a quite a difference and quite a wide range in what we would call an asset, you know, from a jib crane over to a, you know, nuclear crane or a waste of energy crane on the on the far end. So that is that is important to note. Then when we look at here how how we made some progress, and if we look at 2017, again, kind of recast into this new definition, we certainly made progress in the asset coverage of of the MAG, and we certainly believe that there is opportunity to continue that. We've also made progress into the coverage of of Kona cranes. And also worth noting that once the usually, the warranty period is over and the the the actual coverage starts to to move up. A lot of times, sometimes cranes are also sold to, EPCs or or general contractors, etcetera. So there's a period between when maintenance would would start from, and a period when a crane is actually delivered and and handed over then to it to that end user. Hopefully, that adds a little bit more color and a little bit more insights to to our agreement base, and, certainly, I'm sure there'll be some questions on the topic. Now let's shift gears to financial performance. We certainly believe we have a strong track record of performance and then demonstrated resilience through COVID. If we look at our agreement base, and we're kind of starting with 2017, that's kind of the year of the MHPS acquisition or Demag, if we which is Demag brand or the MHPS, which is quite more important to industrials to industrial service and the industrial business. We you know, so the green base has grown over the years. Has it has performed pretty well. Our focus areas in post post DMAG acquisition were, of course, integration, delivering on synergies, finalizing the deployments, digitalization, etcetera. And as we were talking, we're starting to turn from profitability to pivot to growth. And, of course, as all well laid plans are, we we had 2020, and, you know, we had to shift our focus like everyone else in the world. And primary focus, of course, was safety of our people and our customers, business continuity and really addressing essential industries. We serve a lot of essential industries. So certainly, our customers were counting on us, and the world was counting on us keeping those industries running. We've also had to do some very difficult decisions and and and focus as well on cost flexing. And at the same time, as mentioned before, we accelerate our adoption of digitalization. And some of the mobility and and and the virtual ways of working certainly helped us through the pandemic. And if that weren't enough, through that same time, we've even through our MHED MAG integration, which, of course, started in January of twenty twenty. With all that said, you know, our EBITDA and EBITDA margin has been able to grow through the the period. Now going forward, what are we looking at? Getting back definitely, our our main focus is to get back to revenue growth and leverage the cost structure that we now have, continue our continuous improvement journey, commercial excellence, operational excellence, and digital services and our digital ecosystem, big, big topics, which we'll, again, we'll unpack a little bit later. If we look at 2021 a little bit more in in detail and a little more focus, can start with order intake. We can certainly see that the orders are have been picking up, so we are returning back to to post levels. Orders are are up close to 12%, 11.7% on a comparable currency basis. So the the orders are are moving in the right direction. We we are pleased with that. The order book is at an all time high. So quite frankly, we do have good orders on hand and a good order trend. Let's remember, the agreement base is not part of this order. So if you're at a level of $2.50, two fifty five, two fifty seven in orders and our agreement base is $2.80 range. You need to kind of divide that by four and add that 70 on top of this in terms of what needs to be kind of delivered. Of course, there is some seasonality to the delivery of the agreement base. So now when you look at sales, the story is a little bit different. Sales are only up 3.1%. We are lagging behind in terms of of the order of the order growth. Base invoicing is up 6.4%, as, you know, as I as I mentioned before, and I think we mentioned this in in June when we closed the the quarter, that there's probably another 20,000,000 here that should have happened, again, because of this lag. And where is this lag coming from? There are supply chain challenges. We're we're not immune to that like everyone else. Not only is there our own supply chain, but also in service, as as you well know, we are servicing, as we've showed before, 55% are are is machinery that we did not manufacture. So there is a lot of commercial items or a lot of items coming from third parties, whether hoist or components, their spare parts. So that definitely is is creating some challenges for us. Customer postponements and scheduling challenges as well. You know, they're they have the same issues, we do. You could see many industries that, in some cases, are shut down. And in some cases, when they do have their components and parts, then they they go full out, and they they, they'd rather focus on their production and and it creates the scheduling challenges just for us. And, of course, COVID has not disappeared. Unfortunately, in many parts of the world, there continues to be COVID related shutdowns and restrictions, specifically in Southeast Asia, there are parts of Latin America, but it's popping up, again, unfortunately, many other parts of the world. Labor shortages is is another topic. Of course, The US is is probably gets the most press, but, you know, there are other markets that there is a challenge as well. There are markets, you know, they also because of the COVID related shutdowns or restrictions, you know, it's hampering labor mobility where we would be able to move people around and send them to different jobs. With all that said, the the adjusted EBITDA has increased 8% on a comparable currency basis, and our margin has expanded, again, 6.8 from 15.5. And quite frankly, again, a lot of it is about leverage. We have very good flow through margin in in service. So if if sales would have been where we would have hoped them to be or should be, really, that would have been positively impacted. We look a little bit deeper then into into what's driving some efficiencies. If we look at personnel, we've gone from 8,000 to about 7,200 over the beginning of from the January levels. You could see the decline started kind of when the pandemic started. But definitely, our business and digital transformation continues to drive organizational efficiency. We you know, the MHED Mag also integration is well underway, so part of this efficiency comes from that. Continue to apply lean thinking and continuous improvement and have a continuous culture and and process in place. And, really, the service delivery model has been transformed by this mobility and digitalization. Brick and mortar reductions opportunity still exist. You know, our goal is to continue to drive this ratio up where we have the the operatives to staff ratio continues to move up. We certainly are in the market to attract more operatives. We're certainly looking into the months ahead to continue to add operatives, but to do so again in while improving this ratio and driving efficiencies. We talked many times about remote monitoring, being able to provide real time insights of demand environment. We know that service orders are driven by capacity utilization more in the short term and, of course, industrial production as well in the long term. Really, we're talking about equipment usage, straightforward. With remote monitoring, it does provide real time insights to by customer, by industry and region, which allows for a more dynamic planning allocation of resources. And we have a little bit more foresight and more accurate forecasting than waiting for the data that's generally available. So that's been a good thing for us. Customer satisfaction, of course, first and foremost, is is the customer. We we do have a very systematic and comprehensive use of voice of customer and utilization of the Net Promoter Score. As as you can see, it has been improving. And, generally, 50% in in most cases kind of considered a world class level. Of course, you need to look at your own business and how those are trending and what are the specifics. And there's we still got a lot of work to do. There's still a lot of opportunity to improve the customer satisfaction. We we look at responses. We look at resolution metrics. We follow-up all customer feedback. You know, we have real time visibility supplemented also. We use natural language learning to identify trends, provide further insights. Customer satisfaction, of course, drives retention and supports premium positioning. So here's the exciting topic, digitalization, and how it can enable growth and profitability. Let's start with the big picture. We have created a digitally enabled customer experience or the digital ecosystem that we're very proud of. What's very exciting piece is that as of last year, we were able to bring the crane operator into the picture, into the ecosystem. What I mean by the crane operator, we're talking about the individual that's actually on the factory floor operating the crane. And we've done so with I'll I'll talk a little bit later on this checkout, which for pre shift inspections and other types of services. Of course, the crane owner had already been in the picture with, you know, access to your Kona cranes, our customer portal, ecommerce, being able to receive alerts and notifications from from the TrueConnect, able to provide feedback through voice of customer. And our own people, if you start to look in this direction, of course, our inspectors and technicians through their mobility apps and tools that they have are able to not only enter inspection maintenance and and asset data, they're able to to be dispatched, able to get troubleshooting support, scheduling, and and all sorts of things, pretty much, able to to be totally mobile and independent. TrueConnect remote monitoring, again, we are able to bring in condition usage and operating data. Our sales and operations, planning, technical support are all working off the same platform, very much analytics driven, automated reporting, etcetera. And with all this data, of course, creates a lot of opportunity to use artificial intelligence, machine learning, mentioned before robotic process automation, predictive engines to not only make our sales and operations much more efficient, but again, to deliver on our promise of improving the safety, productivity and sustainability of our customers' operations. So this is really exciting. I think we're at the tip of the iceberg. The infrastructure has been built. We continue to build on it. We continue to improve it, and we are at really exciting times. I think we're here at the at the tipping point of what is possible. We are seeing increased adoption of this digital ecosystem. You know, how many assets now are under the one KC system? You know, we were a little bit higher, and then now with the acquisition bringing in more assets, it it dropped, but now we're back. And, of course, we we went through the pandemic, which slowed us down a little bit on our deployments. Now we're back on on track to to get back towards close to 100% over the next couple of years. We got some of the MHEDNAG countries to do. We already started with with three of them. We have other remaining countries in other parts of the world that we still need to tackle, but, you know, we're we're pushing 88% right now and continue that will continue to grow over the next two years to approach a 100% as close as possible. The Yorcona cranes and and customer portal, the adoption continues to grow. When we look at adoption by the agreement based monetary value, it's also much higher. We're pushing 60 or more, and that's because, you know, there's higher adoption by larger customers. The larger customers, a lot more value add there and able to manage their fleet. E commerce also continues higher adoption. This is percentage of order lines going through e commerce, mostly spare parts and other components so forth. This is by all brands. So that continues to to to move ahead. So that's another exciting area. Now we we pause a little bit and look at, you know, what are the areas that we have focused in in the development of digitalization. And, of course, there's digital services, which I'll talk about, smart technologies, customer experience, sales efficiency, service delivery efficiency, and service quality. Let's start with the first two, kinda customer facing. Check out for daily inspections. Now this is a pretty exciting product, the digital service. The a preshift inspection or or a daily preshift inspection is required by most jurisdictions. This is done by a crane operator. This is not done by our personnel. This is done by our customers' personnel. It it could be it should be a crane operator. Production management may be involved or safety personnel. Again, required in most jurisdictions, a good practice nonetheless, regardless whether whether there's a regulation for that in a particular country. Very difficult to do, though. There's, you know, how do you how do you how do you document it? There's, know, a lot of times with paper, dirty paper in the in the shop, and sometimes it's not even done. So we've now there's an app for that, called a CheckApp. It's kinda clever, I think, which allows for a very simple and fast data entry. And, of course, all this data is now tied to that asset data. It's tied to all the maintenance data. It's tied to remote monitoring data, etcetera. So it's it's all come it's one more piece of the puzzle. Easily report defects. They could add photos. They could add text. Again, this is a big piece of compliance. There are mandatory checkpoints, and you could also add some local you could add local specific checkpoints. So very exciting product. It's starting to take off. We're the June, close to 14,000. We're we're q three, we continued that the the trend, so we're doing doing quite well there. It is a subscription service, call it roughly a €100 per asset per annum. But, again, it it brings the crane operator into the ecosystem. It brings additional data. It brings the full view to the customer, and also may may and it's a quicker way to also identify maybe what's a safety item and also for us to have greater insight into the customer. Here's another, we call it, digitized slings and accessories inspection. Now there's nothing really digital about a sling and an accessory, or at least there wasn't before. What is a sling and an accessory? It's kind of stuff you see here. It's it's what goes between the hook and the load. It's what's used to secure the load, you know, very much mechanical items, you know, chain slings. There are synthetics type slings as well and other other means to secure to secure loads. You know, in a large plant, there are literally thousands of these. Very hard to keep track of them. They do need to be inspected. And we, you know, we have created a very efficient way to do that. We by adding an RFID tag to these items, we're able to easily identify and reliably keep track of them, keep track of the inventory. We've also created a way for our this is done by our own inspectors for them to enter the inspection data. And then the operator can also use their mobile device to kind of scan the sling or accessory and see if it has been inspected, what's the status of it, etcetera. And again, we sell this as an inspection service per device, and it really varies. There's some are complex, some are less complex. Now these devices, they're defective. They're normally replaced here. They're not repaired. So there is additional revenue stream from doing that. And we're starting to we we launched this in a few pilot customers and is starting again to to really be adopted in by our frontline folks as well as customers. Again, this is this is just a handful of customers here as we're starting to launch this and and really get some traction. The other one, TrueConnect remote monitoring. I know we've talked a lot about this in the past. We we've focused on building retrofits available for multiple brands and and and harmonizing the platform for these. We've added brake monitoring in the past. We just launched a this is exciting product, TrueConnect wire rope monitoring. So what it does is is kind of magnetic rope rope monitoring. It it it allows us to look inside the rope to some extent. A lot of times when you have certain failures, they start to occur in especially in heavy applications, process type applications, failure can start occurring what you cannot see necessarily in a visual inspection. So this is a very exciting product, again, very much targeted to process industry, heavy industry, high heavy crane users where downtime is extremely important, and and they're they're having very high value payloads as well. So we continue to to add connections to our agreement base. So so right now, there's close to 6,000 at the June, let's say, 6,000 subscriptions that are tied to the agreement base. So that is part of the base. And those can run anywhere from, you know, a 100 to a thousand per asset per annum. Again, the complexity of the asset, the number of sensors, we could also add life support to that. And then the total number of of active connections exceeds 16,000. There's, of course as the connections go out there, some of them also, you know, stop transmitting or something happens, etcetera. Right now, this this is the number of active connections. So we again, another area of focus. And, of course, remote monitoring, condition monitoring drives predictive maintenance. With the the remote monitoring, could drive, you know, TrueConnect warnings, the hoist, the brake, the wire rope has reached economical end of life and, you know, do something about it. At the same time, on top of that, you could add prediction models and be able to create, you know, predictive maintenance based on other types of usage information. So you kinda have the direct measurement style here versus also adding prediction models and being able to automatically create a sales quote, for example, to say, hey. We need this looks like it may need repair, this item, based on the number of hours, based on the usage, based on different conditions, do the repair quotes. Also, we're looking into the future where we take full responsibility for the the maintenance of an asset that then it will just create us a repair order and just go out there and and and replace that item or or or repair that item at the most optimal time as well. So very exciting things as well, again, on the on the cusp of of of breaking through. Then smart technology. Smart technologies, again, retrofits, modernizations. You could apply some of this to consultation services, again, transforming the customer assets and really all about safety, productivity, sustainability. We could spend the whole morning talking about this topic as well. Some of the examples, you know, sway control is it's you know, limits the swing of the load, so it doesn't hit things beside it or or individuals. Protected areas, you're not, you know, not able to bring a load into an area that there there could be a a potential hazard, the snag prevention, collision avoidance where you have cranes on the same runway could create more automation, add remote monitoring, site pull prevention, so you make sure you're centered over the load. Again, this is a safety issue, etcetera. So there are a lot of opportunities with smart technologies to to improve safety, productivity, and sustainability. Equivalent parts, as we talked about this a little bit before, we're talking about extending our offering from genuine Kona cranes and other OEM parts to equivalent replacement parts for all makes and models. Talking about reverse engineered parts as well as cross referenced commercial parts. Now this may not sound very digital, but this asset and component data and the process systems have been really key enablers in doing this and in allowing us to build here. So we're this is a journey. We continue to add parts and models and and and so forth. You could see here a an example is an equivalent replacement for rope guide. Rope guide is is what goes around the drum. It can guide the rope on the drum as the as the name so implies. And if we look at, you know, what is the opportunity here? Sizing, seizing the opportunity, call it three hundred thousand third party voice in our agreement base, which we maintain and buy parts from. By having the equivalent parts, it gives us both our customers and ourselves another opportunity to perhaps be a little more cost effective for them, and it gives us a little more margin opportunity for us. And also availability, we can certainly have the the availability in our own hands, which, again, goes to the customer experience as well. Ecommerce as well, we can we can we can obviously offer these to not only end users, but also resellers and and and other folks that are that may be involved in maintenance. And, certainly, we are they are already, you know, on our ecommerce site, and we continue to add, you know, practically on a daily basis the parts. So let's talk about a couple of other areas now, the customer experience, sales efficiency, service delivery efficiency, service quality. Customer experience, what are we doing there with digitalization? Well, we're trying to empower our customers, our personnel with the right information at the right time. A lot of focus on the digital journey, harmonizing the digital experience across all the touch points, driving end to end integration. Again, all of it is driven by if you have the right data upfront, whether it's from from a sales case to to to a part number, to a serial number, etcetera, it it really drives that end to end process, and it really drives the customer experience and our own efficiency as well. Customer engagement, you know, being managed multichannel communications, having a customer three sixty view, what's, you know, what's going on with all aspects of that customer with with all with all of Kona Cranes and being able to to, you know, manage the support with ticketing and escalations. So this has been an area that we've been, deploying and implementing and continue to to grow and improve. That oops. I think I went too far. Here we go. Sales efficiency. You know, harmonizing the ways of working. Again, end to end process, ensuring sales and back office operation are aligned. We leverage the data we have, utilize automation. You know, a lot of folks who are revamping all our configurators, focus on quoting automation. So we're now able to to use, you know, analytics and systems to to suggest, let's say, a part. So, you you know, if somebody's trying to quote a repair, we're looking into into the database or and and the system is actually saying, here here is the part number that, you should be you should be able to use there, and then here are the recommended hours you should be able to use. Let's remember, we we you we're we're managing, you know, assets from the small to the huge, from the simple to the complex, multiple brands spanning decades. So, you know, a lot of the efficiency drives us to identifying that part, how long will it take to to to do the job, etcetera. So the more that we can automate these things, the easier, the better the customer experience, both the speed, and the better, the more efficient that we are. We're applying, you know, deploying mobile sales tools, both for our field operatives as well, of course, for our sales force, deploying sales enablement platforms across the company, content management, training, coaching, etcetera. The other area is planning optimization, to deliver our total service commitment while optimizing field operative time. And, again, also goes to sustainability. Right? Optimizing the route, going away centralizing planning, removing brick and mortar, etcetera. So it also makes, makes us also a more sustainable operation. A lot of cool things here. You know, you can match skills and job alignment, visualization, and maps. It's very much where, you know, the operations live. And, of course, this can also be it has been deployed to, on a mobile platform, so our folks in the field have full access, whether it's an individual, whether it's a branch or a larger entity. Another big piece is how do we make our field operatives more efficient, drive efficiency, data quality, again, can't overemphasize the importance of data quality. And of course, the employee experience. The employee experience also impacts the customer experience. We're in the process of of, doing our, two point o in our mobility platform, and, it's going to be deployed here shortly, try to deliver a more enhanced employee experience, provide more feedback, guide the behavior so it's it's, more intuitive and, easier to use. Focus on asset data enrichment. We have, launched an app that highlights missing asset data, makes the asset structure easier to navigate. Again, asset data quality drives end to end process efficiency, the service delivery quality, and, of course, leads to improved customer experience. So, again, focusing on can we make sure we have all the serial numbers, all the model numbers, all the relevant data that makes it easy not only to quote things, but also to to deliver and procure. Intelligent troubleshooting, we've launched a platform that helps the field operatives diagnose and correct issues in the field. It it, the platform learns and improves as it is used. But, of course, we also have humans if necessary. Then we do have live technical support available via via video. So, again, a lot of exciting stuff, a lot of things that are that are just in the cusp or have been launched and are being deployed or or haven't been deployed for that long. So there's still a lot of opportunity for us to learn and continue to build, on these tools. So, let's summarize. What's the takeaway from all this, and what's our what's our kind of our ambition level? We talked about takeaway. I think, hopefully, it's been it's been pretty obvious that digitalization has really transformed the business, and it continues to do so. We're not done. This is a it is a journey, and we continue to build on that. The digital customer experience and ecosystem, you know, will drive growth and retention. It has created sales and service delivery efficiencies that have been locked in. But again, this is a journey, and there's there's more to come. We we are always looking for continuous improvement, continue to build our systems, our processes, our ways of working. It's bringing new products and services. I gave you a good glimpse in some of those, some digital services, smart technologies, the equivalent parts. And it also allows us to be more flexible with our offering and more tailored to position and segment our offering to multiple customer segments from the value customer to the premium and being able to perhaps be more efficient in servicing the more value type customer. Also, this MHED Man acquisition has strengthened our foothold in Asia Pacific. We've got a lot of room to grow there, of course, and our goal is to increase share of revenue from Asia Pacific. There are some also expanded opportunities in servicing non crane assets. MHED, Medica had other industrial products. So we are servicing those as well. And of course, bolt on acquisitions reactivated. I think we can now move into a more active phase, and, that could, of course, bring additional potential source of revenue and profitability growth. And then last but not least, what is our ambition? Of course, our ambition is to grow, to grow revenue, grow the top line. We have mentioned in the past, high high single digit growth target over the cycle. At the same time, we we our our goal is to continue our profitability expansion that has has been going on for for years quite honestly. A lot of it is driven by leverage. Again, a lot of good flow through margin and efficiencies as you can see that we continue to to to move with those, and there's still plenty of runway in in both and higher margins for higher margin products and services. Some of the the products and services we have shown, have shown you today do deliver those. So that is my presentation. Thank you for listening. And now we can move to the Q and A part of the program. Thank you, Fabio. We have a lot of questions coming from the audience. So why don't we just kick off with the first You mentioned service addressable market is over €10,000,000,000 How keen are you to serve cranes by other OEMs? Is servicing your own cranes more profitable than servicing other OEM cranes? There was also a question on the penetration of our own installed base, but I think you covered that in your presentation. Sure. First, let's give the direct answer. Very keen to service cranes made by other OEMs, absolutely. First of all, we service customers before servicing their equipment. And customers have all types of and and makes and models of equipment. Right? And so to service a customer properly, we wanna service their entire fleet no matter what, you know, what make it is. So absolutely, we do want to service all makes and very much interested in third party. When you talk about profitability, of course, proprietary parts do if we're employing proprietary parts in doing a repair, those generally do carry a higher margin than if we are buying those parts from a third party at. However, as mentioned in here, we do have there are a lot of parts that are equivalent parts that we can either reverse engineer or acquire as a commercial part that may be a similar part that we are already preparing anyway. So there's a lot of common parts and a lot of commercial parts as well on equipment. The other piece that's that's very important, a lot of these digital services are really brand or agnostic. Check app, as I mentioned, that that should be done on any piece of equipment, and profitability is the same no matter what the piece of equipment is. And a lot of these other things. So, you know, this equivalent parts will help us with with the margin as well on other third party equipment. Yeah. The other piece is, as mentioned before, there is there is not just repairing equipment. There is replacing equipment or components. Right? I mean, there is a limited life to to to hoisting machinery, and and it really varies from from, you know, the larger equipment to the smaller equipment. But there is quite a replacement cycle. And if if Kona Cranes is doing the service and the maintenance and we're there, you know, we have the opportunity when the time when the right time comes to replace that equipment with our own and and kind of standardize as well to you know, for the customer to standardize their fleet. So that also makes it more efficient for them. It could also replace that equipment not at the end of the life as well, as I mentioned before. There are other reasons that you may want to improve ergonomics or or or safety or, you know, different types of controls, etcetera. There are a lot of reasons or or the the production has increased and the throughput has increased. Now you need something you need to improve the performance of the lifting equipment. So that's this is what we call retrofits or modernizations. As you saw, it's a significant part of our business. So absolutely, the servicing of other third party equipment is, quite frankly, key and core to our strategy. Thank you. Next question would be on the agreement growth agreement based growth. Has the growth rate in the agreement base slowed down recently? And how could the growth momentum be sustained in the early quarter of twenty twenty H1 during peak COVID? What would you expect the growth rate to be in 2021 and 2022? All right. A few questions in there. Well, first of all, I think the way to look at this, if you look at our agreement base right now, it is above well above 2019 levels. Right? And and if you look at the performance of orders and sales in our own for ourselves or other industries, there's been that volatility. And the agreement base has not seen that. So that that shows that we've gone through the entire, let's say, pandemic cycle. Well, it's not over yet, but most of the pandemic cycle, let's say, as as we know it. And and we've gone through what we would call a renewal period, and we've been able to come out of that with a very solid, agreement base, which, again, goes back to the resilience. So I I think the I will look at it more in a positive way than a negative way, where where it is at. The, and I think it was mentioned was their early growth. I mean, a lot of the growth you know, it's really it's all about timing sometimes. You bring on certain larger agreements at a certain time in a certain quarter. There's also a renewal cycle where we're able to offer at those times perhaps newer products and services, bringing new agreements and scopes. It's quite dynamic. I mean there's literally tens of thousands of customers that we have, and it's a very dynamic situation. So sometimes, think it's we shouldn't read too much into it in a specific quarter or short time period. I think we need to look at it as on a longer trend basis. As far as what to look in the future, again, our focus is to grow. I you know, I we certainly do not comment on a specific number on the agreement based growth into the future. But you know what our revenue growth target is. And in order to achieve that, our agreement base will have to grow it kind of in line with that. Thank you. Third question. Taking into account the differences between Konecranes and DMAC, Branded Equipment, is there a major difference in asset coverage potential? What are the targets for the two brands? Is the business potential per asset very different? There is a little bit of a difference in the sense that the Demag installed base perhaps is the word could be used a little lighter. They do have a lot more chain hoist light crane systems, etcetera, in their in their in their base than Kona cranes. So there is a little bit of that difference. There is a little bit of a difference that there are, you know, third distributors that have also traditionally sold DMAG over the years and continue to do so. So there are some differences from from that perspective. But in general, you know, the the target would be the same in terms of coverage. There really is no reason not to be. And, let's let's remember that, yes, there are some customers that has very loyal to one brand or another, and they have, you know, large parts of their plant, you know, a certain brand. But in general, most customers and if you go you look you step back and look at a customer across multiple plants, they have all types of equipment and all makes of equipment. So it's, in essence, we we look at some extent more by by the customer that we're trying to take care of rather than just narrowly by by the brand because, you know, customers, again, are buying multiple brands. But there is there is no limit to to to the DMAG coverage versus the Kona Cranes coverage per se from from that perspective. And now we we have not really set a target where where we should be. I think there's still you saw the numbers where we are in terms of coverage, at least estimated coverage. It's not a, you know, perfect science. There's still there's still room to to expand, and there's obviously a little more room to expand the Demag brand because you know, we're we're a little bit further behind. And and also with the the MHE Demag acquisition, that also helps us in that part of the world with the the Demag installed base. So there I think there's a lot of positive trends, a lot of things to be positive about, and we just continue the steady progress. Thank you. Let's continue with the Konecranes and Demag theme. How has the pricing developed over the past years, differences in pricing of legacy Kona Cranes services versus DMAC branded? Well, we have aligned the pricing. We have very quickly you know, integrated the service businesses. You know, we went obviously country by country, and the North America was was certainly the fastest out of the gate. And and we went around the world basically integrating the business the same way we are we are doing it with with MHE Demag now. In terms of pricing, then there is no in the end, there is no pricing difference because we are one service organization, you know, servicing both Kona Cranes and Demag and really all brands. We we, you know, we market ourselves as as as a service company for for all makes and and and and and types. So the the the pricing is aligned. We certainly looked at the opportunity to to look at, you know, best practices and pricing and in in doing that alignment and getting some insights on, you know, who which organization, legacy organization, was doing things better than the other perhaps or or different than the other and then try to apply the, you know, the best in class, and and that's what we did. Then let's continue with pricing. So business area industrial service growth has been relying quite a bit last years on increasing spare parts prices every year. How much spare parts prices can still increase as individual parts prices are getting already above a new equipment? Quite a lot of insight this questioner has. Yeah. Well, I mean, that's obviously a broad statement. And, in terms of of there are a lot there are clearly thousands upon thousands of spare parts, and and, you know, each each category, you know, has its own dynamic. The the the pricing that we've we've done certainly is to keep ahead of inflation. I mean, if you look at what's going on in the world, the inflationary pressures, certainly, their commodities have grown. Pricing of commodities and cost of commodities have grown incredibly. You also look at transportation costs, container costs, again, you know, global supply chains. You look at operating in the COVID environment that we had to in in terms of new protocols and other things. So a lot of it has has been to to make sure that, you know, we keep we keep pace with with inflation and what's going out there. We also when we look at our our pricing or spare parts, there are some that we don't increase. There are some we actually reduce. So we we try to be a very to be market oriented. Yes. We understand spare parts can be relatively expensive. That's in in in all industries, but we try to also be cognizant of of being competitive. We're not alone out there, and we want to make sure that our offering is competitive and also stays in line to make sure that our equipment is competitive and folks are looking at the total cost of ownership. And also, you can't just look at the part of the price of a single part. Got to look at, again, total cost of ownership. What is you know, how often does something fail? How reliable is the equipment? Do you have a full a full program in place to to make sure that you have the the the the productivity and the and the total costs to where they should be. So it's easy to point out one thing. I think you need to look at at the whole. Thank you, Fabio. Then could you talk a little about the demand fluctuations of your various service subsegments, for example, parts, modernizations, maintenance, etcetera, throughout the pandemic? And where are we now versus pre pandemic levels? What are your expect what are you expecting in terms of pent up postponed demand? Yes. Mean, it's so first of all, I mean, it really varies, right? I mean, the pandemic was had different impacts across the world and continues to have different impacts in different different geographies. But, of course, you know, right out of the gate, the the one thing that does that does get impacted, you know, when you have access issues, right, when you talk back to the pandemic, Those that that is executing on the agreement based, the inspections, preventive maintenance, predictive maintenance, being able to get on-site was obviously, you know, a a limiting issue. There are essential industries that was easier to do. There were others that were, you know, totally shut down and you couldn't get at them. And there were also different attitudes and certain different customers in what they wanted to do. So that and, of course, when you have the agreement base being being affected, it you know, you're also not doing those repairs and other things. Again, it it all goes back to to equipment utilization, capacity utilization, etcetera. So if if equipment's not being used, it's not it's not wearing, it's not etcetera. So so that that, let's say, basic maintenance or fundamental maintenance certainly fluctuates with much more with utilization and with access. Right? And that's come back largely, right? But again, we have parts of the world that are still in the different phase. Then there is the more of the CapEx picture where you have some larger modernizations, etcetera. And we are seeing some of that that demand come back, some of that pent up demand come come back, maybe not to but, you know, it's it's a really it's a mixed bag. It's a weird environment to be operating in. You got you got, you know, some some folks that are that are taking a little bit more time with with decisions. You got they also again, going back to this whole global supply chain issues, you got a lot of customers that are really focusing on, you know, their own operation and their own issues that that perhaps are taking a little bit more time to look at some of the the, you know, the larger CapEx stuff. But we've also seen in other areas some pretty good, you know, modernization orders being led at the same time. So I hate to use the old word, it really depends. It's quite a it's quite a mixed bag in this environment. Thank you, Fabio. Hey. We have now used almost one hour. Would you still have some more minutes time to take a couple of more questions? We have a lot of them waiting. I do if you do. I do. Good. Let's continue. Next question would be on the installed base. At the time of the MHPS transaction in twenty sixteen-twenty seventeen, investors were told that the D MAX installed base was 15%, 20% penetrated by their service business, whereas the comparable number for Konecranes was in the mid-30s. Whilst the trend you highlight on Slide 12 is clearly positive, I note that the penetration numbers themselves are non comparable. Can you explain the difference between these penetration numbers and those communicated to investors in 2016, 2017? Thanks. I certainly will try, and I tried to do it at the time I showed the slide, but obviously, it was not successful. So when we were looking at the installed base then, and I think that the what the the phrase we use is is delivered pieces of equipment. So a lot of equipment, you know, and and both brands in the in the Kona Crane side, if you include all the brands and if DMAG, if you include, you know, all their equipment they sent they they pushed out there, it was both have about roughly was, I think, a million pieces of equipment. Let's use that number roughly, right, that were pushed out into the world. So they were it's very similar, let's say, in in number of pieces that were thrown out there. Now when you look at that, as as I was trying to explain, there is a difference between what you would classify as an asset that's made up of maybe multiple pieces of equipment, the crane that has multiple hoist or a light crane system, quite frankly, which DMAG, again, has has been a market leader in, has met you know, a lot of light light crane systems in their installed base and in the agreement base, which have multiple hoist. They could have two, three, four, five, you know, etcetera, number of hoist, these these chain hoist. So when you start to look at that and redefine it more as what is the asset, what is the big piece of machinery that's made up by all those components, you get a different number in terms of that denominator. It doesn't it's not a million anymore. It is something much less because you're bringing together some of these hoists into one asset. In addition to that, a lot of these hoists, especially when you get into the lighter side of the hoist, they get replaced, right? So some of these were sent out as replacement hoists. And and, of course, they may have been, as I was trying to explain before, they may have been switched over on a on a single asset multiple times. So at the time, that was the data we had. That was the best data we had. We we knew that roughly this this million pieces of equipment were out there. And and then we kinda know what we are the the number that we're servicing, and we're and that's kind of our kind of our best way to show now that we're a lot smarter or we have more data, let's put it that way, and and we have been able to migrate a lot of the a lot of the that base. And, also, we are migrating a lot of the manufacturing information, etcetera, into our systems. We're able to be much more granular, much more precise. I look at this more at the asset, as I as I was mentioning before, the the active asset level. And that's what makes the difference. And I think, you know, how we're looking at now is the probably the better way to do it. It's just we did not have that information at the time. And going forward, this is kind of how we're going to continue to track it. And again, as we continue to migrate, we continue to migrate MHEDMAG stuff, our data gets better every day. Our granularity gets better every day. Our insights get better every day. Hopefully, that answers the question. Thank you, Fabio. Let's now move to inflation. What is the level of cost inflation, salaries, material used in parts, etcetera, you are seeing in Service Business Unit? And is pricing a challenge? Are the margin levels seen in past years sustainable when your business moves into growth phase, taking into account underlying inflation and potential labor shortages? Yes. So I mean, I won't comment to specific percentages, and it varies, of course, across the board, right, from labor to materials. And in materials, you can unpack that, and there's also there is you know, depending if it's something that's got a lot of steel content or or copper content or or what have you, or there are other areas where, you know, the transportation is affecting it, etcetera, etcetera. We have been again, back to reiterating what I said before, we we've we've been very much trying to maintain ourselves to to cover those those costs and and be very dynamic about it. On the on the other side, we're also, again, this procurement excellence and focus on on sourcing and and other things that we can do ourselves to to dampen the effect of inflation. We have been doing so as well. The other piece, as we talked about, is is we continue to drive efficiencies, you know, whether it's how we can we can this organizational efficiency driven by digitalization, there is the reduction of brick and mortar, how we can operate in a more efficient fashion. Of course, we've also learned that you don't need to travel as much as you did in the past. Of course, there will be some return to that. So there's a lot of dynamics in the end, and and there's a lot of other products we're bringing in that are perhaps sort of, these digital products also are of of good margin products. These equivalent parts also allow us to to to expand margins when it comes to third party equipment. So it it's there's a lot of pluses and minuses. There's a lot of moving pieces. Our goal, as as was stated, is to continue that profitability expansion, and it's and it comes down to a mix of all these things that were mentioned. But we do believe that we can keep ahead or keep track of inflation. Thank you. Let's now move on to Asia. How would you compare Asian competitors' technical performance and capability against KONEcranes? Seems that KONEcranes business area service just keeps struggling every year, especially in China and India, due to too high premium pricing position by Konecranes, resulting to that market is seeking and having preference on local service providers instead of Konecranes. So your comments here, Fabio. Yeah. Well, first, of course, Asia is is quite diverse and and and vast and broad, so there isn't there isn't a single answer to to to the Asia question. But as as was mentioned in the question, you can look at it, with specific countries. And, yes, we we have taken a premium approach. That has been our decision not to chase, you know, the low low cost competitors. You know, our again, our goal is just to work with customers that are really interested in safety productivity, see the value of what we can bring. And and, of course, those markets will continue to develop. And, you know, I believe that over time, those markets will mature in their approach to maintenance service and their approach to what is required. And and you're seeing that in some in some cases. It is very difficult to to go chase the the race to the bottom of, you know, the local supplier. So we'd rather work with the customers that that appreciate the value. We are certainly looking on how to how to, as as mentioned as well, segment our offering as much as possible, and then we are looking at those those things as well. How do we deliver services that that that are more, tailored to a certain customer group? But I don't I don't think we'll we'll we'll ever chase the bottom. That's not who we are. That's not where we believe the value is. And quite frankly, we don't believe that that's how the customer in the long run, will will will profit or or is what is required for them in terms of safety, productivity, and and so on. So hopefully, that answers the question. Thank you, Fabio. Let's now move on top line. In the past, total services revenues were 5x to even 6x agreement base value. In H1 'twenty one, annualized services revenues were 4x. Is the ratio structurally falling? Or would you expect return to previous five to six times? Well, the there is the question of what's in the agreement base sometimes too. And as you try to bring in more services and things locked into the to the base, there is a little bit of that dynamic that could play into into the ratio. The so not not sure there's anything structurally perhaps different. There are a lot of things that happened over the years, and a lot there's been a lot of movements of things as well. We also, you know, past also had port services as part of the of of the BA, if you remember before the MHPS acquisition. So I I wouldn't read too much into it. I think we we structurally, where we are, I think we're we're in a good place in terms of how the the business dynamic, and it'll, of course, will change with the cycle. This whole this whole pandemic certainly did throw the the ratios into a bit of upside down. So, I mean, if you were to look certainly through the pandemic period, our ratios did get a little bit messed up because for simple reasons, you know, you may be doing some of the maintenance or the inspections, but then if you're not using as much equipment, you're not doing the repairs, you may you're you're holding off in CapEx and doing other things. So the priorities and the whole dynamic, I mean, the whole world is pretty much upside down. So I wouldn't certainly take a look at 2020 as a and read too much into that. So if the question is, you know, would the ratios go back back more to a a more normal beyond 2020 and so forth? Yes, I would expect that. Thank you. We still have some more questions, let's keep going for some minutes, if that's okay to you, Fabian. Sure. Sure. So is it so easy for you to service other OEMs' equipment? Are there any barriers to entry for other OEMs to do the same with your own equipment? Can this turn to be very deflationary price competitive for everyone? Yes. So first of all, can we you know, the the technology in in in in lifting equipment is is not too different. Right? I mean, we're, you know, we're talking controls, motors, drum, rope, hook. The so definitely, could we could service other other types quite easily. The, you know, the the the key then is is obtaining proprietary componentry and where do you source that to the extent that that piece of equipment has proprietary componentry. That's really the the only difference. Everything else in terms of the knowledge to inspect, the knowledge to to replace, etcetera, is very much out there. And, you know, and most local competitors, you know, service companies do do service, you know, other other piece of equipment. What I think makes us uniquely positioned is, of course, our network, our size, our leverage, our systematic approach, our ability to source, our ability to provide equivalent parts, our ability to provide retrofits, replacement technology, replacement equipment, the full range, etcetera. So I think it and it's not just about just servicing the equipment. It's providing the entire the entire package, the entire approach. So and and, of course, as I mentioned before, other services, you know, are kind of brand agnostic, some of these digital services and other things and consultation type services and all and so forth. So there is no barrier. No. Absolutely not. But at the same time, I believe that we are uniquely positioned in in in order to to service those. Most of our, what you would call competitors, global competitors of that, they're they're mostly selling through distribution. So most of our competitors at the end user level are local or or maybe regional companies in the in the country. So it's it's it's a little bit different. There's a lot of them. They certainly do service equipment. They service they service ours too. I mean, that's that's no no secret. But but, again, when we're talking on the on the bigger picture, we certainly have the offering, the capability and the reach that makes our offering quite attractive. Thank you. What are KPIs incentives for service sales employees? Would you say that you have emphasized margin improvement or growth post the Demag acquisition? Any change coming in priorities and incentives? Can the margin go above 20%? Or will you go purely for growth if you reach 20% margin? Good questions. I mean, certainly, we have emphasized profitability over growth in the incentives, and I won't give away that what that weighting is, but but there is a certain certainly a a weight to profitability over over revenue growth. And we will have to take a look at whether that weight changes as we go into next year or not. And some of this stuff we try to align across BAs and different things. So I'd rather not comment on that, but you certainly wanna align your incentives with your your direction and so forth. In terms of the 20% and beyond, and we have not set a a that target specifically. Our our target is to continue the the profitability expansion and see where it takes us. And, again, I think it'd be, it's it's good to point out that the revenue growth does drive profitability expansion. There is the, we shouldn't underestimate the leverage and the flow through margin that the service business can produce, especially as we have built the infrastructure and we continue to create this organizational efficiency. Our goal is to continue to build sales with less with and leverage that infrastructure, but definitely, you know, bringing in more and more operatives. But, the the infrastructure costs should should not grow at the speed of, the top line. And so revenue growth goes hand in hand with profitability expansion as well. Thank you, Fabio. We still have time for two more questions, let's continue for a couple of minutes. And let's continue with this target theme. Could you reiterate and specify what you mean with high single digit growth. In 02/2019, services sales compound average growth rate was 4.8%, including acquisitions such as MHBS. High single digit sounds unrealistic. How could you reach the targeted growth? Well, the so high single digit, what does it mean? I think it's pretty self evident. And then, of course, it is a range. And, of course, they're they're you know, depending on the year, there may be different circumstances and and and opportunities. That that revenue growth, of course, does include any other, you know, bolt on acquisition that we would do in the future as well. The again, how how can we achieve that? Well, our focus has been really on on this profitability expansion and really building the ecosystem that I've shown, building the products, getting the the integrations done, and really building ourselves for the future. So we really built ourselves we really built the engine. At the same time, profitability has expanded, you know, EBITDA the monetary values has expanded significantly. And, you know, we're now positioning ourselves for the the next phase. There's plenty of opportunity. Hope you can see there's plenty of opportunity with new products. There's plenty of opportunity geographically. There is there's plenty of opportunity, you know, with larger accounts. And then we also believe there's plenty of opportunity as we tailor our offering also with the smaller accounts. So that's that's, you know, our goal and our focus going forward. And let's see who's right and who's wrong going forward. Thank you. Are you currently leveraging your Industrial Service best practice into your Port Solutions business? Have you started to transfer some of the competence you have into the Port business yet? If so, what impact has it yielded on profits or growth thus far? Yeah. And, you know, I won't specifically comment on the impact. I mean, we certainly talk to each other and share best practices and do so on a regular basis and so forth. The structure of the port service business is a little bit different right now in terms of how much is agreements agreement based on how much is spare parts and retrofits and other types of services. So if you were to look at that breakdown that I gave, it would look quite different from the ports business. And they also have different business as well. You got lift trucks, which a lot of it is distributor based and so forth. So it's quite a little bit of a different structure. Right? So to be fair, I think the the question needs to go to to my to my colleague, Mika. But we obviously try to learn from each other, try to leverage some of the systems, try to leverage the practices, leverage the infrastructure for spare parts delivery, supply chain, procurement actions. So there's a lot of things that we do leverage, a lot of things that we do share, but I'd rather not comment on the specifics and and what it has meant to that business' growth and profitability. I'm sure Micha will be happy to do. Thank you, Fabio. Unfortunately, we have now run out of time, so we need to conclude this event. Thank you so much, Fabio, for spending the early morning U. S. Time with our investors and analysts. And I think that based on the number of questions, we should arrange these kinds of events a bit more regularly. I also want to thank all the participants for the active participation. A recording of this event and the presentation in a PDF format will be available on our investor website later on. And if there were any critical unanswered questions, we will, of course, have a look at them, and then we will try to touch upon this event on our IR block also by latest by the end of this week. Thank you, everyone. Have a great week.