Scanfil Oyj (HEL:SCANFL)

CMD 2021

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Sep 14, 2021

Good morning. Welcome to Scanfel's Capital Markets Day. This is the first one in Scanfel's history. Skansfield was listed in 2,002, so it has been 19 years without the Capital Markets Day. And today, actually, this is historical moment as well because we have the 1st virtual factory tour in combined with our Capital Markets Day. Very shortly, our agenda for today. So opening words. Then we will go to our CEO, Peter Jokitala. He will introduce Skantel's strategy. Then Timo Sonnen goes through our sales, organization, our targets there and what we how we are operating there and what are our benefits compared to our peer groups. Then operations, that is very exciting. Actually, Rico will go through our operational system also actually including our purchasing stuff and so forth. Then we will have a short lunch break around 30 minutes. Then we will go to Skankferen Smart. Marco, our CTO, will go that through. What I've seen actually before, there has been already quite many questions regarding the Skansfield Smart. What is it about? What does it do and so forth and about the investments as well? Regarding the investments, then we will go to Kai, our CFO. He will go through the financials and our position there and what kind of benefits and what we actually produce to our investors. Then to the historical part, the virtual factory tour to Suzhou, China, it will be live casted from Suzhou. So it will take something like 20 minutes and then we will go to closing remarks. If you have any questions from the crowd, we have some 5 people around here. So just raise your hand and Mina will bring you the microphone. And also through the chat window, what you can see on the web, you can actually post questions there and I will read those out loud here. Now next, to Peter Jokitawa. Welcome. Thank you, Fazdi. Good morning, everyone. Welcome to Skanfil CMD in behalf of me also. My idea was to tell you briefly about Scanfel, walk through the strategy key points, growth, profit drivers, competitive advantage kind of topics, then discuss a bit about our outlook for the year and our long term targets, talk about very important topic of sustainability, including how we are measuring our customers and people's satisfaction. And finally, there are possibility to ask questions. Let's start as kind of fill in brief what we want to be and what we are. We are manufacturing partner for all the stakeholders we have, especially for our customers, of course. Our rolling 12 month sales until end of Q2 this year, EUR 632 1,000,000 Sales coming from 5 different customer segments. The biggest segment, advanced consumer application segment, about 28% share of our sales. Total amount of people, about 3,300. About twothree of our people are located in China, East Poland and Estonia. And then about 10% of our people are located each of the countries, Finland, Sweden and Germany. And finally, 4% of our people are United States, Atlanta factory. We are present in 7 countries. We have 10 factories, 9 continuing factories. We are going to ramp down and close our Hamburg factory in few weeks end of Q3. We have factory in China in Suzhou close to Shanghai. In Poland, we have 2 factories, 1 in Sierach, other in Mislovitz. Estonia, we have factory in Parnu. Finland in Sievi, the place and city where Skankiv was born, 1976. In Sweden, we have 2 factories, one close to Linkoping, Ottwiddaperry and another in Malomir. And in Germany, beside Hamburg, we have other factory in Wutze. And United States, we have factory in Atlanta. What we are doing as a trusted manufacturing partner, especially we are focusing on electronics products manufacturing. So electronics manufacturing processes, of course, are the core of what we are doing. And there we have a wide range of process, starting from PCB assembly and then moving to other type of assembly, assembly processes, going to final assembly, final testing phase. And beside our electronics manufacturing processes, we have quite versatile set of other process is we are able to vertically integrate to our offering to our customers. And those other processes are including process is like sheet metal manufacturing, cable harnesses, very large set of different surface treatment processes and so on. And so we think so that our customers are getting the highest value from Scanfel if they are really considering outsourcing the completed products to Scanfel. And so they can utilize the whole vertically integrated manufacturing platform what we have. We have also services, which are like needed before the manufacturing itself, then we are talking about product design or kind of DFX kind of services. Then we are talking about services which are actually making product design really optimal for manufacturing. And that kind of services are really offered our factories, as we are calling these, close to customer R and D kind of factories. That kind of factories we have especially in Finland, Sweden and Germany. Then we have also called after sales services, including repair, spare parts, retrofitting kind of services and offered quite big amount of our customers. If then moving to strategy and business drivers, as said, our like most important element or choice what we have done is to focus on products with electronics. And there, especially we are focusing on products which are like manufactured in low volumes, then it's very many times means that also the mix is quite high. And that means that also those production series are rather short. And it's a rather important choice because then that means more or less automatically that our customers who has that kind of needs are pretty much industrial and met tech kind of customers. And also, it's really like a driver. We are going to hear more later today about how we are selecting our production lines and planning our production. But this is like a main driver, a guideline, how we are selecting our production lines, how we are planning our factories and so on, that these are optimal for kind of high mix, low volume production. What we mean about low volume production, then we are like typically talking about taking one single product. We are producing like 1,000 similar products or maybe tens of 1,000 similar products per year, not 1,000,000 or tens of 1,000,000 like consumer electronics typically do. As I already said, we have also a clear factory strategy. We have 2 kind of factories. We have factories we are calling close to customer R and D kind of factories and then factories we are calling close to customer markets. In factories, it's located close to customer markets, we are mainly serving our global customers, while large OEMs with global needs. And our close to customer market sites are located in China, East Europe and United States. There, of course, it's really core that we are efficient. We are able to improve productivity. Every year, we are really high performing there. Then we have factories, as I said, it's allocated close to customer R and D. There, we are focusing big different customers, maybe not so much global our global customers, but more local, quickly growing smaller companies, if not really companies who are at the start up phase, then rather quickly after that start up phase. And it's quite typical that, that kind of companies are really appreciating very wide wide support also starting from product design. And that's the reason that we have our own resources to make product design or that the effects kind of services or we have partners. We have 2 selected global design partners. We are offering together the services and like complete the design manufacturing services to our customers there. And then, of course, the aim is to help those smaller product companies to grow, scale up and be one day global and so we can offer our whole global factory network for the benefits. If you are looking at our financial year development top line as well as bottom line during the past 10 years, we can see that we have been able to continue to grow, grow the top line and then grow the bottom line. And then we could say that at least during the past 10 years, we have been quite predictable company from that point of view. And why is that? We believe that one key is our customer base. It's quite versatile. It's quite wide. We have 5 different customer segments. If you are taking our top 10 customers, they are not real competitors. They are coming from different businesses. And also, if you see we have seen the clear positive development what comes to our customer distribution during past 10 years. 10 years ago, our biggest customer was making more than 30% and nowadays, it's like a 15%. Also, this is same positive development when it comes to top 3 customers or top 10, whatever. And also we could say that having those industrial met tech customers, it's that point of view, I think that we are very good positioned because these customers, they tend to create very long term relationship with their manufacturing partners. We have customers who started cooperation early '80s and still continue. It's not so often, it's very basically unusual to lose a customer if the performance is okay, if performance is satisfactory. And of course, our intention is to continue the same trend that the business stays predictable. Our intention is to even further development customer distribution and make sure that the balance between different customer segments is there. About growth drivers, historically, we could say that EMS markets as a whole has been growing like 3% to 6% per annum. Now there are some survey houses proposing that at least the coming 2, 3 years, we will see higher growth, even talking about 6%, 7% kind of tailwind as expected. And of course, the main driver behind that positive everywhere. And there are we and everywhere. That there are we and basically, it's widely believed that the electronics need of electronics manufacturing is growing strongly. Also, what comes to global megatrends, we see that our customer base is, as you see some brand names there, they are very well positioned to get the tailwind from global megatrends. And so we see that most of our customers, they have a great opportunity to grow in coming years. And if we are serving them well, we are in excellent position to grow as well. M and A acquisitions been always in Scanfield Toolbox. During the past 8, 9 years, we have made 3 acquisitions. We have done always acquisitions even earlier. And we have said that repeatedly that we are certainly a market. We are our balance sheet is basically ready for that. Our organization is ready. We know what we want. And as soon as we identified a good company, strategically well fitting to Scanfel and the price tag is right, we are ready to move. When it comes to profit creation, the key is being successful manufacturing partners. The key is to keep the cost flexible and then fixed cost low. And we have been we have always understood that very well and still believe that this is really key also in the future. And we have been rather good for that and want to be so also in the Foods. Our clear factory strategy for SIR is one profit driver. We really understand the differences in factories. We understand them close to customer. Market factory, we need to pay really attention to our cost structure to be efficient, to improve productivity. And close to customer R and D market, our value add must be high enough that customers are willing to pay with higher price. If they are not willing to do that, then there's something wrong with our offering. Our business model to focus on high mix, low volume customers and also technology, which is so called generic, we can use it for wide range of customers, is somehow key to keep our investments needs somehow on reasonable level, our depreciations as well. We think that somewhere to our typical investment need per year, including replacement and somehow reasonable new investments as well will be somewhere between 2% 3% as well as our depreciation also in coming years. Business growth, last but not least, for sure, we are coming from CEV. We are basically being listed since 2002. Before that, we're a family owned company, successful entrepreneur. We are pretty much taking the best part of that culture still with us. And especially, I would like to highlight 2 things. We have quite effective decision making processes. We are rather fast decision makers, and we are rather good when executing the done decisions. And there, you can see some indicators that how successful we have been in order to use our asset that as well as return on equity as return on investment have been about 20% level or close to that during the past years. Then a few words about the first outlook for this year. In June, we revised our outlook. We were like moving at the sales turnover range to EUR 630,000,000 Originally, we stated EUR 600,000,000, EUR 640,000,000. Of course, the key driver behind that was very healthy customer demand, also some extent rising material and component prices. But main driver, very good customer demand. And we also improved our EBITDA range to €41,000,000 to €46,000,000, originally €40,000,000 44,000,000 There are 2 like main risks in the year. COVID-nineteen, of course, it's not over yet. Even we have learned a lot to live with that, and we don't see any immediate risks with that right now. Other is materials and components availability. This is a risk definitely not over. And we need to buy it every day in order to keep our factories and products like lines running. And it's very difficult to say when this is over. If talking with, for instance, semiconductor manufacturers, they are saying that it's at least next year, we can expect that situation to continue. Some of them are saying that maybe even 2023, we are not expecting any quick recovery there. Then long term targets, target we set 2 years ago. And in 2023, we are aiming SEK 700,000,000 sales with 7% operating profit. It's really like interesting to see how quickly market condition is changing. That's when I remember that in this year, February, when we published last year result, there were questions that is this sales target really realistic to get to 700 until or in 2023. And I say that, yes, it's realistic, but that means that we need to be able to grow faster, that instead of growing like 3% per year, we need to go up to 5% per year. And we have taken actions, we have recognized, we have prepared us, we are going to do that. Now there may be questions that, hey, is this really aggressive enough because we may be quite close to that already this year. And this is pretty much because of this quite strong market change what we have been testifying this year. And we have started strategy around just in Skanfiel. And for we will consider, reconsider and then come out when we have possible new targets. But this is still the valid target until we change it and tell it. What comes to 7% operating profit, even we are still a bit behind, I think that this 7% is really realistic target. That, of course, means that we have all factories are more or less in, let's say, decent shape, And we do not have any ramp downs or closings or something like that ongoing. But as said, now Hamburg will be closed by end of Q3 in coming 2, 3 weeks. And then at least next year, it could be excellent condition from that point of view to try to reach that target. Then very important topic of sustainability, what that means in at Skanofil, a few words about that. We like reaching that topic from using 4 different angles. 1 is, of course, environment. And in environment, of course, we are pretty much thinking and setting targets and spending efforts to make our energy raw material consumption as efficient as possible. We also continuously try to reduce different kind of waste and our carbon footprint. Responsible offering is pretty much and the efforts below are pretty much ensuring that our offering to our customers remains valid and is sustainable and responsible. Pretty much, we are listening our customers what they want from our side. We are committed to continuously improve our offering. And of course, everything whatever we are doing as well as our partners should be ethically high quality. Also can take people angle and taking the people angle and there again, this is really carefully listening what our people are feeling. Are we good workplace for them? Are we helping them to develop? Are we making sure that they have safe environment where they can work? And they've been continuously developed as well. Partners and community, we definitely want to be good corporate citizen, and we wanted our supplier and whole supply saying they want to be good corporate and they are good corporate citizens as well. And if going to more exact targets then, starting with responsible consumption. First of all, I need to say that you can see that we have like a clear annual targets how much we want to reduce for instance carbon footprint. It's like a 4.2% per annum. But this is based on the growth target that we have made like a baseline that we are going to grow like 5% per year. The sales is growing like 5% per year. It's not guidance. It's not really financial target, but this is how we have calculated those reduction targets. That carbon footprint, 4.2% per year. And that means if we are able to do it that, 2030, our fossil free energy consumption is higher than 50%. It's pretty much than heating and electricity. And if going that to responsible offering, we are continuously using KPI like customer I'm going to show you a bit later one example of the or a snapshot of the latest study we did in Zune, how our customers are feeling. There are also other KPIs how we are measuring that. And when it comes to people, we are regularly measuring our employee satisfaction by measuring we are calling like engagement survey and also showing you soon one snapshot about the development there. Partners and community, it's pretty much one tool there is code of conduct, where we are defining how we want our partners to behave and what we mean when we are saying that we are expecting ethically high quality behavior from our supply chain. Then going to customer satisfaction. As said, in June, we made Telatys. The customer satisfaction is measured like twice per year. And now in June, we have the latest result. And then just taking selecting 1 NPI, and it's like a net promoter score where we are. It's like a score how our what our customers are how they are rating us if asking that how likely you are recommend Skarnfill as supplier and scale is from 1 to 10. And basically, in that NPS score, we are reducing those promoters who are giving 9 or 10 is the score we are basically then reducing from that promoters to that threat trackers who are like giving score 0 to 6. And our NPS is at was in June 25. Using that scale there, it's still good. It used to be a bit better. We have seen growing trend here in the past years. And for instance, our December result was a bit better that most likely this material availability is a bit negatively impacting our customer satisfaction, but still good level and quite close to actually great. And then if solving our employee engagement survey, we have used a similar survey since 2016. It's done for the whole personnel, all factories using the same template. And here you see the group results, basically 2 key KPIs like satisfaction and motivation. We are level 68. We have been like growing quite nicely continuously from 61 to 68 during the 5 years. Loyalty is the other key KPI what we are measuring, and there you can see continuous improvement as well from 71 to 77. And our aim is to continuously improve both of these KPIs every year. That was pretty much my presentation. And now there could be time for questions. Do we have any questions from the floor? You can take the word first one. And we continue in English. Yes. So I think I have followed your company. I remember it was 90¢, So I think it must have been 8 years ago or so. And so now it's 10 times more valuable from the stock market point of view. So congratulations. I think you are a great Finnish company with great Finnish family owning it. And I think following those 8 years, your company, I think the great thing is that you are always under promising and over delivering. And I think as Petteri told, that's also the case in terms that 2 years ago, 2019, you told that in 4 years' time, you want to be €700,000,000 turnover company, €50,000,000 or €49,000,000 leekavoit operating profit. And now it's and it indeed, like Peter you said, it was somewhat ambitious call at that time, but now it seems that you are within almost within a kind of rounding error of already receiving it 2 years after instead of 4 years after. And so now, of course, as a shareholder, I'm already kind of dreaming that, that will when you are in the future, hopefully, before 2023, when you are giving your next goal, can I already dream of €1,000,000,000 company? Well, certainly €1,000,000,000 I hope, but maybe even €1,000,000,000 company. And interesting enough, the market value has gone up almost exactly the same line. So market value seem to be roughly your turnover. So obviously, this is about the future, so you cannot say too much. But what can you say about the future goals of the company? Yes. If starting that, assuming that our strategy also in future is pretty much electronics manufacturing, a high mix, low volume, I think that there are enough market to grow and be even multi €1,000,000,000 company when it comes to sales. I don't see that market to limit our growth. Then of course, this time, I think that growth itself without profit, it's not what we want, that it's important to somehow find profitable business model and profitable growth opportunities. But going to €1,000,000,000 level, it's realistic. Time line is not defined. Need to think about that. But why not scale also matters somehow in this business and see some benefits if being bigger, for instance, what comes to sourcing, sourcing volumes, grip of suppliers and that kind of topics. Right. Next, Parziv Aysane from Nordea has questions regarding our customer segments. What customer segments are the most affected by this global component shortage problem? I don't think so that it's pretty much related to customer segments. Basically, especially everybody who is using semiconductors or ships, they are negatively affected. And that kind of intelligent where semiconductors and even ships are used basically, It's everywhere. Then what comes to material availability is related to metals. Basically, we have been able to solve these issues a bit better using some extraordinary measures. Maybe could we Timo say that we have more customers where like sheet metal is used in, for instance, this energy and cleantech segment. Yes, and advanced consumer applications as well. Advanced consumer application as well. But as said, we have been able to find, let's say, easier solutions there. Yes. And Rick will actually continue regarding the subject as well. Another one from Pasi, which customer segments will offer the best growth in the future in the next 3 years period? Okay. And I think that if you are thinking about the potential, it's pretty much same customer, customer specific, that we could have great growth customers in each segment. Of course, someone could say that the connectivity customer segment connectivity is somehow maybe the center of very many megatrends. And percentage wise, that's possible that we are going to see there the growers the strongest growth, especially taking consideration that it's smallest segment now what we have. Yes, it is. As it continues regarding the risk in China maybe because of our investment plan. Would it be possible to that growth in China could calm down in the future from the levels what it used to be? For sure, I think that if thinking what it used to be, I think that are we then talking about that officially communicated 5% to 7% growth. I think this is quite expected, especially if time line is not defined. So, Twiteraid, has the issue with components availability worsened during the last 2 to 3 months? This could be also answered by Rico. How I see it, the situation has been very severe since Q2 this year and at least basically no improvement. Then a question regarding sustainability and customers. Are your customers more interested in sustainability? And are there any concerns raised? Yes. All customers are interested in sustainability, and companies are really taking that topic in the agenda very seriously. And they are expecting that their partners are also taking that seriously and beyond, so that the partners are taking care of their own supply chain. So Not I think there are no specific worries rised up, but for sure, everybody is taking it really seriously. The importance coming to grow. Okay. Is there any questions from the floor? I see no one more. Sorry. As an investor, advising couple of reasonably big clients who would like to I mean, they love your company, but the problem is for liquidity. They would love to take a €5,000,000 stake. But if I I can't remember exact number, but Bakkenen family and couple of big other owners, I think it's is it 80% of the shares? You probably know the number, but it's reasonably big. Maybe if taking like white Tagane family, it's less than 50%. Yes. But kind of if I look at the 10 biggest share orders, I believe that we are going. Yes, that level is. This is of course mainly about the company, not about the owners. Any idea about will this change when you become a €1,000,000,000 company that they will become more liquidity in the market and more reasonable price for the company, which seem to be undervalued at the moment. This liquidity is, of course, is recognized by the for instance, by the Board and discussed there. And of course, it's difficult to say what's going to happen, but I think that this is more likely that and less likely that after 5 or 10 years, there will be more liquidity, one way or other way. That's pretty much my personal opinion and feeling. But that's recognized, that liquidity thing. And there are, of course, different ways to increase the liquidity. And in some cases, there could be natural ways to do that. Maybe a couple of words about this liquidity issue. Last year, I think that approximately 8,000 shares were traded during the day. And this year, we are around 12,000 to 14,000. So significant increase already there, but not really deep pockets for 5,000,000. But anyways, better liquidity this year already. All right. Okay. Thank you, Petri. Thank you very much. Now next, Timo Sonnenen is in charge of our sales and also actually marketing and communications. Please go ahead. Good morning. My name is Timur Soninen, and I have worked for Electronics Industrial Business since 1988, over 30 years for a couple of companies. Now last 8 years for Scanfel and response for sales, as he mentioned. The content of my presentation, starting from some sales topics, going to why our customers are selecting Scanfel as a manufacturing partner. Sales activities, our elements how to boost organic growth. And starting from our sales organization, in global organization, we have roughly 30 people, 3 different function and areas are global account management people who are taking care of existing customers. Then we have a new sales function looking for potential good new customers as well a quotation team providing the cost calculations for the salespeople. And it's a global organization. We have people in China, in Europe, in North America as we had factories in Petri's presentations as well. Customer survey, as already mentioned, twice a year, but the survey itself, of course, is not the most important. More important is the feedback and how to utilize the feedback. So we have a process. We are getting the feedback related to capabilities, capacities, but also how do we cooperate, how do we communicate with the customers, etcetera, so different areas. And we are providing corrective action plans and presenting those to each customer that is this the direction you want Skanfir to go and taking strong actions within few months before, of course, the next survey, as mentioned twice a year. Our main process is where sales is running and owning our new customer acquisition process, RFQ, so mean quotation process and for our forecasting. We have a rolling forecast process by the customer and salespeople. They are responsible that customers, they are really forecasting. And nowadays, it's really, really important to get forecast process to be run because of this component availability challenges in the market. And at the same time, let's say, roughly a year ago, when we started this year, 2021, we reorganized a bit our sales organization as well the processes we streamlined. And for example, new sales, we have 5 different regional areas, responsibility areas in China, 3 areas in Europe and 1 in North America. And then this new customer acquisition process has been developed and focused. Basically, Central European area is one focus area where we are growing nicely. Skanfild as a company is very target oriented company, but also salespeople and sales organization. We have clear targets, incentives. When the people are doing good, they can get some bonuses, let's say, couple of few months per year as a salary level if everything is going as planned. For each key customers, we have so called customer plans, including needs and what kind of growth ideas, growth plan we are looking for. And this is also a plan that we are not hiding the customers. We go through with each customer that are we in the same page, how do you see scan fill potential and what kind of investments, what are the global factory footprint is needed, etcetera. Target is to grow. Of course, sales can't do that only with those 30 people. So our network, internal network, we have a cross functional teams coming from different functions from the plants, very close collaboration. For example, each plant have a customer service management organization. So those people, they are taking care of daily order to delivery process. Of course, account managers and sales guys, they are leading the team, and we have a couple of customers that quite many our plants are producing the products to that specific customer. So there is a leader coming from global sales, but then plants, of course, are producing the products and taking care of order to delivery pros. Marketing, communication activities, very close with sales and supporting to grow. Customer segments, once again, those 5 selected segments. And based on our market analysis, we really believe that we are in a growing businesses with our customers. So there is some megatrend and key drivers mentioned in the slide that believing. And it seems to be also that if you look our top 10 customers, which are roughly a bit more than 50% from total sales coming today. And also those have been split quite nicely with different segments. So that's also good. Related to those megatrends, for example, it is energy and cleantech segment. And as an example, with TOMRA, we have a huge growth potential. TOMRA is really driven by megatrend for global economy, and we are providing solution for them. And it's really partnership mode. The production and shipments from our plants, we are already shipping those to end user, can be Lidl in Hamburg or Prisma in Helsinki, and we are shipping direct the line to the end user. Connectivity segment, as Peter already mentioned, is 1 and including some traditional telecom companies, but as well, quite many new start up and small companies. And there is nice growing potential, of course, related to industrial Internet and connectivity solutions. Today, our offer is covering the whole product life cycle And our services, processes, functions has been have been built to serve high mix, low volume, medium volume needs. That's the key. And of course, core business is manufacturing services, producing the products. But more and more important also to be early involved in the phase when product design is ongoing, to giving strong support, even providing product design. And then when we go to the ramp up phase, supply chain setup, cost optimization and so on. Those are the phases our organization is really working very closely with customers. So this is the partnership mode today. And then after mass production phase, going to the end of the production cycle, we are also serving customers with some repairing services to keep product alive, spare parts, product maintenance, some even some distribution services to keep some products in the stock, etcetera. So this has changed now during the couple of if we go back 10, 20 years ago, the business was mainly to manufacture the products and this part. But today, it's really partnership mode. And in this industrial and medtech segment, those life cycles are typically quite long. We are talking easily 10 years and even more to produce is one product. In some consumer business, you know that the product life cycles are much, much shorter, but we are not working for those kind of customers. Of course, benefits to customer is that time to the market is shorter when we are working to get cost. I said that we are really focusing on what would be the cost in the mass production phase. And of course, for us, it's that stickiness is coming that customers, they are as Petter already mentioned that more or less we are not losing customers. So when they really select the manufacturing partner, we are working together to keep customers and time to market, time to profit even in the product level. Okay. Once again, those are our core services in manufacturing. Electronics, of course, is the key, producing PCBAs by our SMT lines and a lot of equipment. Mechanics today is more supporting our system integration products. So we are producing sheet metal parts, but mainly to build box, build units and complex system integrated products to our customers. Last one on the right side is production outsourcing. And this is the area we are developing. And like I mentioned, one reference, Ankers Room, a year ago, we they decided to outsource in Sweden their production to us. And now we are producing as a single source all ANKAS ROOM products, and it's already a quite good business. So this is the area we are also focusing on and looking for good growth potential. Time to life and to market those, as I mentioned, is Product Design. And those 2 mentioned partners are Sigma Connectivity, focusing on, of course, connectivity solution. And Eteplan is our partner also in this product design phase, as we have also our own resources, mainly in Sweden. But once again, depends on the case by case. Sometimes, we can take the responsibility to have a total package or part of the product design. And there is a very good references, for example, that from product idea, one quite big our customer, they came to us with the product idea, and we took the responsibility of the design with partners. And the time from the idea to and we were in a mass production was 9 months. And that was better what even this customer was expecting. Expectation was to have a longer that was really good project. Design for excellence, very key area. How to do the design, component selection, test strategies, etcetera, that the product is easy to produce and cost optimization is in place. Prototype manufacturing. We have separate processes by the plant to produce prototypes a bit because the lead time is crucial. So there's some shortcuts in the processes, those have been agreed with customer, for example, to use maybe some alternative components, what are available and so on. But lead time is the key. 1 case I can mention, Waisala. We have worked a lot with Waisala Technology Company to reduce our lead time in the prototype manufacturing and give it a good feedback to them that how to and so on. So this is really working nicely and good feedback from and so on. So this is really working nicely and good feedback from Wiesel. Test development is the area also that today more and more customers, they want to outsource test development. It's not their core. So we are taking responsibility. And not only anymore those production related ICT testers, but also functional testing solution, And we take whole package, whole test strategy of the product and using our own Scanfil ODIN test platform to produce and serve offer test solution. Somehow, the basis of the product and partnership is here and before we go to the mass products. Some product maintenance services. Distribution, of course, as I mentioned, optimized supply chain balancing and easier balance factory loading. There is some agreed buffer stocks to be able to fulfill, for example, nonforecasted demand. There is always coming some demand from the customers that they haven't forecasted, but we have been able to quite nicely to ship. Repairing services, as I mentioned, to keep product alive, do some revision changes, software changes, etcetera. Cost improvements, not only in the early phase, even in the mass production phase, we are running value add, value engineering project with the customers to keep costs and even in the same level, certain level or even going down. And there has been some customers that who has awarded us because of this function. For example, 2 years ago, it was Nokia who gave the supplier of the year award for us related to cost improvements. Supply chain, always, of course, important, but today even especially important how to set the supply chain, how to have reliable suppliers to get components. Okay. We can also split our customers with different ways. So mention those start ups. We are by quantity, we have even more than about 15% from our total customer portfolio. We have small companies, startup companies. And of course, with those ones, they are not investing at all for operations or for all production. So it's like fully packaged for us. So we are the manufacturing partner for them, and target is to, as better as I said, that scale up in the future when the business is really flying. Of course, there is some risks that some cases are never flying and that we try to be and we need to be very selective that who are the potential partners in those with those start ups. Then our legacy customers, of course, 85% from total customer portfolio by quantity, by turnover, of course, even more than 85% coming from established customers. The question, yes, why those very well known international companies who are market leaders in their own segments, why they are selecting Scanfiel as a manufacturing partner. Starting I think quality and trust is the key. And not only quality of the products we are producing, but quality is everywhere. When we are providing quotations and whatever we are doing, it must be no compromises with quality, our processes and so on. Of course, this we have a quite wide this manufacturing service. We are able to produce in house cables, PCBAs, sheet metal mechanics and finally, the system integrated products. That's a very good unique selling point as well in the market. We know, of course, market very well. Scanfel has been almost 50 years and focusing on industrial and medical businesses. So we know that. And reference customers, there has been cases that some new customers, when they know who are the partners today, it's also very good point and can be quite important also that they can trust that when we are working with those mentioned big boys, so many smaller companies, at least, they believe that processes and services are in a level as should. Global REITs, plans as well as sales organization, as I mentioned, and so on are global ones. So we are able to serve locally and globally. So that's the key. So many smaller customers, they are more locally and plants are taking care of the business and communication. But then when growing, we have a global organization and service footprint to give it to them. Okay. So let's say that once again, to be as a manufacturing partner, so today, the roles are very clear. Our customers, they focus on their own market, sales and marketing, maybe some research and those activities. But when going to product design, it's already started very, very good close cooperation during the product design. And then Skanfil is responsible for production operations and taking care that products are in live as long customer sees some needs from the market. Also, the sales, sometimes I have received the question to how many people are working for sales at Skarnfield. Of course, you saw that for global sales organization, 30 people, But I sometimes I'm saying that 3,300 people. So somehow, whatever we are doing, we are working for sales. Thank you, Timo. Are there any questions from the floor? Antti, just a sec. If you got, let's say, clearly more financial resources at your use, what would you do to improve group sales at first? So what was the background? If you got clearly more financial resources at your use, what would you do at first to improve group sales? Where would you invest? Difficult to hear. Where would you actually spend the money if you had all the resources to invest in sales? What would you do? 3 years. I still believe that we have had quite good resources to do what we want to do. So as I mentioned that we have reorganized. We have hired some new salespeople. We have refreshed our processes. So I don't see big needs, and I don't see that the money helps too much this moment. Of course, by the acquisition, it's easy to grow, as you know very well. So there we need money. But if you look over it grow, yes, as we have seen that how the grow has been in the past. So normally in this business, it's a one digit growth we have had and we are looking for. So more of course, yes, I don't see that money helps too much. I don't know, Patrick, do you have any other comments on that? For sure, we have been now like increased our sales activities in China and United States. And we are still somehow at the beginning. It's most likely we are going to increase our resources there. But as you said, we have financing in place that we are going to do that organized way when we are ready. Correct. Okay. And we hired last year and this year as well. For the sales. Yes. Pasi from Nordea. Your products and services cheaper or more expensive compared to industry average or compared to the main competitors? Is there a pricing issue? I think it's, of course, different customers and different business models agreed with in the agreements that what kind of business models, and that's variating, of course, the base on the customer. And of course, if you look our competition, we can see that company profit level point of view, we are in the page. And that's also our understanding that how our competitors, how they are yes, what kind of pricing models they have. So we are in the same page. Okay. Another one from Pasi. If all customers in the sector are sticky, would it also mean that it's hard to get a new big customer from a competitor? Of course, yes, that's true that if competitors has already selected some partner, of course, it's not easy. There must be some big issues if they really want to get rid of the current existing partner. There has some cases has happened. But of course, then many of those big customers, they have a sourcing of Etsy to have at least 2 partners, not only as a single source. So then it's a it's always competition of the market share. And previously, Petri has been mentioning that in Germany, some who has in sourced or in sourced manufacturing, they might be outsourcing it. So it might be a new chance as well. Especially this one focus area is Central Europe, where we can see big potential because many OEM companies, they are still producing electronics and system integration by themselves. So they haven't outsourced yet so much as here in Scandinavia. There's a question regarding the connectivity. I think that Peter already touched this subject upon. Connectivity segment is rather small, 5% of your revenue. Do you have any plans to grow it? Or how do you see the future of this segment? Yes. Definitely, the target is to grow. And yes, as mentioned, that segment is including some, let's say, traditional telecom players, big global ones, but also start up companies, and we can see potential to grow. Okay. Another one. How do your customers take a global shortage of components and materials? Can you get the price increases in customer prices? Yes. We have a regular process to update our prices with customers, not only in this situation but always that it's real. There is a component market prices are changing, but as well, currency exchange rates and so on. So there is a in the agreement with the customers, we have a process to update our prices even monthly, quarterly, annually, and that works. So of course, always question that is the timing exactly in the right place. But as a big picture, yes, definitely, we are doing that. Jyrki Hilli has a question. Maybe it's kind of a follow-up question on this question. How many new customers do you get in a typical year? How is your new customer acquisition pipeline now compared to the end of last year? Some kind of an indication. Yes, okay. Pipeline by quantities and by potential what we are measuring is higher. So those changes we did, that way you have those new for example, in North America and China, we started early this year new sales activities. It's we can see already some results coming as well. This year, it seems that we are able to fulfill our even our actual sales turnover by the new customers, what we planned when starting this year. Okay. Good to hear. All right. Next, we will actually thank you, Timo. Next, we will jump into the hot topic of materials and components. So operations, welcome, Rico Huneinera, Chief Operating Officer. Floor is yours. Thank you. Thanks. Hello, everybody. So another day in the office. So sales is making their pitch and then operations comes to the stage and tries to take care of the operations before the deadline, which is launched today. Happy to be here. My name is Rico Hunninen. I've been with Scanfel since 2018. My background is in Finnish Telecom Giant for a little bit more than 20 years, having worked in different operations, leadership positions there. I will go through some highlights around Skamfill operations, starting from the factory network, which we have been addressing already today and then going to the sourcing part and the materials market, which is having a challenging times. And then I will spend few minutes on the flexibility and how the flexibility is achieved in Scanfel Operations. And then finally, I will end up with the kind of a core of operations management, which is performance improvement and continuous performance improvement. Okay. So you have already seen the factory network. So I'm not going to repeat a world tour once again here. One thing that I would like to highlight related to the factory network is that all of the Skalfild factories are P and L responsible factories. So they are not like cost centers. They are responsible for delivering the profit. So they are the kind of profit realization engines of Scanfel. And also the management in each of the factory is incentivized to deliver not only operational performance, but also profitability. Then moving on to sourcing, which is today especially very, very important part of supply chain. In the past few years, it was mostly about how much we are able to negotiate the component prices down. And now on top of that, there is a huge effort getting the components in on time so that we can deliver the sales. How we are organized in sourcing? We have a global sourcing, which is the kind of looking after global categories that are commonly used across gun field factories. We have category management in place for those global categories And they are taking care of the global suppliers' relationships, handling the price negotiations with the global component suppliers and also taking care of supplier development and performance improvement. So global is about suppliers where scale matters that we can benefit from scale. And then when we move to the local sourcing, which is basically a team smaller sourcing teams in each of our factory, They are focusing on local suppliers that are typically used only by that very factory. So it's very local type of business. And they are doing the same in smaller scale. So looking at the relationship, supplier performance and trying to negotiate the best overall terms and conditions, including the prices. And these global and local teams, they are working in a community, sourcing community and also how it works that we are starting from the global category strategy and then we cascade the targets and objectives to the local teams in different factors. In total, it's about 50 persons taking care of all this in Skansfri. Then moving on to the market situation. So obviously, all of us who are following Scanfel and following the supply chain in this world are familiar with certain challenges that the supply chains of this world are having. So first of all, before the pandemic broke up, we started to have a trade war signals. Then came the pandemic, which turned into global supply shortages in especially in semiconductors and metals, led into a price inflation in selected categories. And also still today, we see disruptions in transportations, which are very unfortunate because they impact us with sudden surprises of not getting the materials on time because the transportation was delayed. So what we are doing? We are doing very hard putting a very high effort on mitigating the impacts to protect our customers from the supply chain disruptions. First of all, it's very important that those long term partnerships we have established with our preferred suppliers are nurtured because trust and relationship gives you a better position in the game. 2nd, we have made a lot of tactical moves like extending the forecasting periods that we are giving to our suppliers. We have increased the supply lead times in our ERP system so that we are shooting the orders earlier than we used to do before. And also in selected cases, we are placing fixed orders for certain time period for a supplier. All this is being coordinated in a company wide war room activities. And in very many cases, especially list of most difficult components that are really having biggest business impact, we are also working very closely with our customers. So it's like a 3 party, sometimes even 4 party escalations that we are having with our customers on our side, with our distributor and with our supplier and ourselves, trying to make the best out of the situation. So on top of that, there are, of course, other ways than just to escalate and try to order as timely as possible. It's also about our component engineers finding alternative sources that would fit as a replacement for a certain part. We are working with some redesigned cases to design out the worst components with shortages and things like that. So and there's maybe one reflection of the situation. This is like an open question to the industry that everybody is saying that the the those design laboratories, those companies who are designing the components with new selected components, which components they are choosing and how this will change the game over 2, 3 years of time. Okay. Then moving to flexibility in operations. So the 3 key building blocks of flexibility in any given factory is, 1st of all, built on flexible employee base. So in Scanfel, we have about 3,300 internal employees. And on top of that, we are using a more flexible workforce of about 1300 external and temporary employees. In all of our countries where we operate, we have established channels, hiring people. And naturally, as part of our sustainability agenda, we very much respect all the local rules and agreements and laws related to employment. 2nd, moving to technical capacity. So another source of flexibility is equipment. And equipment flexibility can be thought of in 2 ways. 1 is that you can always trigger investment purchase for new equipment and expanding your capacity to get more capacity, to get rid of a bottleneck. Or you can swap the machinery and equipment between the factories, which is based on the idea that in Stanfill, our different factories are sharing the same platform when it comes to production technology, for example, surface mount technology, intelligent vehicles, etcetera. Also, not only talking about kind of physical equipment, but also talking about the digital world and digital platforms. In Skansfield, all the 10 factories, they share a common ERP system, which makes it very transparent and very flexible, for example, if you need to have a team from another factory supporting another factory for a period of time if they are having a capacity shortage in that area. Also digital working instructions enable quick movements of products and production documents between the factors. Then come to 3rd lever for flexibility, the subcontractors. So in several factories, we have a kind of that can provide us quick capacity increase or they have a complementary technology that Scanfel does not have as its core technology and probably not a very attractive business case to invest in such a new process. But in those cases, we are benefiting from this partnership networks, call it subcontracting. So it's both about capacity and capability subcontracting. And next slide, I will further elaborate how the flexibility dynamics work. So starting from the employees, typically, when talking about external temporary employees, depending on the local laws and regulations, we can achieve quick improvements, quick flexibility impacts. Talking about days or weeks maximum that we can scale our capacity up and down. What comes to internal employees, it's, of course, not as flexible. However, we can do a lot with overtime arrangements and adding shifts, etcetera, always in compliance with the local rules. 2nd area, subcontractors. So if we are outsourcing capacity to a partner, which is established for that factory. It can be done in a matter of days. If we need to develop or we are talking about new parts for the subcontractor, we would be talking about few weeks. Then what comes to equipment and tools, I pretty much addressed that already that it gives us a possibility to optimize our global capacity across over the factories. And then naturally, when we see a need for additional capacity, we are making fast decisions, triggering investment requests and getting going forward with that. And depending on the lead time, we are talking about weeks, sometimes months that is needed to increase the capacity. And then 4th picture, which I added here, which is not like a single factory thing, but of course, we do have the factory network. And we can invest in the factory network, expanding our factories. We can do cross manufacturing, so not only using subcontractors to help with the capacity bottlenecks, but also move some part of the capacity for another factory, which has similar equipment, similar processes. So it's we are talking about weeks or months and that can be done. Okay. Then last part of my presentation is related to performance management. Let's talk about continuous performance improvement. And the key performance indicators that we are measuring is, if we are delivering on time, if our customer perceived quality is good or not, How is our inventory turns? So factories are also responsible for managing the net working capital on their part. And then 4th, the productivity, which we intend to improve every year. So how do we operate? So once in a year, as a part of our annual strategy review process, we are talking with its factory and setting long term targets for the factory. And it stems from a strategic analysis that we do in our factory network, looking at what is the strategic position of the factory and what is the performance of the factory. And that ends up in like a 4 field analysis of strategic performance and strategic position and performance. And then we can see there are some factories that are in urgent need improve the performance. And some factories might have excellent performance, but we see that the strategic position is a little bit short. So the performance might be short term unless we improve the strategic position. So that's the thinking process behind, and then we set the targets. That ends up in a consolidated plan that the operations organization is coordinating, and that is cascaded down to annual targets for the key performance indicators, improvement projects. They are strategic and proactive by nature. They are aiming at forward looking improvements in the performance. And naturally, as every company and every operations manager in this world has a lot of KPIs to deal with and following that in the dashboard to make sure that there's tight grip on performance. And then the annual targets and the OnePlan execution is followed up on monthly basis in the reviews. And the main emphasis is on these proactive matters, but also along the way, when surprises and different kinds of events happen, there are also some reactive things that we get on board once we see there is an issue somewhere and try to fix that by setting up new improvement actions. In addition to that, I would say that really the core and heart of performance improvement is happening every day in the factories. In front of the whiteboards with the key people gathering there every morning, looking at the performance, looking at the targets for the day and for the week, handling the issues that come up in order to have what should look like a seamless execution to our customers. Here's an example for those who love graphs. So just an example of this continuous improvement concept that we have been applying recently. So starting from the top right corner, you see there is like a 3 year strength of performance of on time delivery. And you see that the target has been improved or increased year by year because we have seen that what the heck, this factory is out achieving the targets every year. And what we are looking at those graphs is the trend. The trend needs to be improving. And also, it not only improving, but if we see a lot of variation in the month to month performance, that also raises question, what is the reason the performance is varying month to month? And to support our analysis, we are using our analytics platform to crunch the data and look at the Pareto's, okay, what are the which customers are the delivery issues related to and also what are the reasons in the processes, what which processes are causing the delayed shipments. As an example, we do that for the other KPIs as well. And based on that, we are not only having like a short term reactive view on Istus, but we are also able to follow longer term results where the problems really are in order to have the most effective measures to overcome those issues. And then on the left side, you see there is like a traditional action table to demonstrate the actions, responsible persons and deadlines. Okay. Thank you, bearing with me, operations part, and now see if there are any questions and answers. There are a lot of questions actually popping up. Maybe the first one will go actually to Kai instead of you because it's a P and L question. Any negative impact from the price increases in semis and metal regarding your own P and L? Or is it always passed on to the customer? Could it be you or Petter? Yes. We will come back to that in the last presentation when Kaj is on stage. Basi, Waisanen from Nordea again. Are you in a same some cases a subcontractor to another EMS company? Or are you only supplying products and services to your own end customers? Well, we have some very limited cases where Scanfel is a part supplier for another EMS company. But from what comes to business relevance, it's really minor. Question from Mika. This is actually regarding sales. Maybe put it in well, have you have the supply chain challenges during the pandemic caused changes in the behavior of your customers? Do you think that think your customers want to diversify their range of electronic suppliers to a higher extent as this could perhaps secure the supplier situation better than doing business exclusively with 1 supplier. So have we seen any cases that we have lost customers because of this? Maybe I can start and then Timo, if you would like to complement. What has materially changed is that instead of meeting the customers face to face, instead of having customers coming in person visiting our facilities, we are doing all that virtually. And that is the one of the biggest thing I have been amazed in COVID pandemic, how well these things work on virtual setting. Personally, I do not see a COVID pandemic driving big changes in customer sourcing strategies. There are maybe pros and cons. And one pro would be that if you have a reliable supplier who can demonstrate that they can deal with COVID issues, they can deal with supply chain issues, then I think it's further building the trust with the customer. You want to continue, Timo? So shortly, we have not lost any customers because of COVID and vice versa actually with those new technologies. As Riku mentioned that we have won some new ones even more or less without the meet new potential customers face to face. Good to hear. One further question regarding the biggest bottlenecks at the moment, what you see. Yes. Biggest bottlenecks, obviously. Obviously, certain parts, especially in the semiconductor side, certain suppliers there. So I don't want to go into names, but it actually comes down pretty narrow number of suppliers that are the biggest gatekeepers at the moment in the market. And then as I explained in the flexibility on the operations, we have seen a very healthy demand this year, and we have been working a lot with the factories to increase the bottlenecks. And this is basically what we are constantly doing. But all those internal bottlenecks can't be solved, and we can influence them. But what is difficult part is the semiconductors that nobody can really make a big change. Okay. Thank you, Reiko. Very interesting. Next, we will have a short break. It's around 25 minutes break and we'll be back at noon finish time and then we will continue with Markus' smart presentation. Thank you. Now for the Welcome back from the lunch break back to Skanfils Capital Markets Day. So next, we will have Marco Kosonen, our Chief Technology Officer, actually tell you about Skanfils Smart. Please, Markku. Thank you, Pasi. Hello, everyone. My name is Markku Kosonen, and I'm working as a Chief Technology Officer in Skanfil Group. I have been in EMS and contract manufacturing business since early 90s in several companies. I joined to Scanfila 11 years ago, 2020, and 1st, around 6 years, I was leading the global operations. 2019, I started in our current position and then led this Skansfiler Smart program, which I will tell you in next. So the content at first about smart vision and mission, then how the future scan factory would look like, what are the main initiatives projects in this year ongoing, Then what kind of benefits we are looking from smart program. And then we take a look at what kind of smart technology roadmap we have and in the end, how we are investing into the future. And then in the end, of course, place for questions. So Scanfel vision about the future factory. So our factories will be will have connected, transparent, proactive and optimized end to end supply chain and operations. Our smart mission is technology driven transformation in customer and employees experience as well as improving performance and our competitiveness. How to get there? So we established multiyear program, indeed 5 years program called SMART. And in early phase, we made a study and we decided to take technologies into the program like IoT solutions, mobility, overall connectivity of devices, even people into the program. Then manufacturing execution systems in next level, different kind of flexible automation, collaborative robotics, autonomous, intelligent vehicles, etcetera. But the automatization doesn't stop to the shop floor, but we decided also that we want to take this kind of robotic process automation. So indeed, software robotics in use in back offices as well. However, because of connectivity and such, we are able to get much more data for the future. So we included also the big data environment creation and cloud services into the program. And of course, to be able to utilize the data, then we decided that we need to select business intelligent analytics software and later on add also some artificial intelligence features. Let's take a look at how Scanfel future factory will look like. This is showing the ecosystem overall. And this combines and enables Canfield's competitive investment and technology leadership. We can see the factory from the left where materials are coming in. We have and we will have automation inspection, automated receiving, then smart warehousing and warehouse automation, then autonomous intelligent vehicles moving materials through the whole factory. Then in the middle, we can see that our production lines, modern lines are connected and then we are getting the real time data all the time from the processes as well in the future from materials as well. And then after the manufacturing of PCBs and mechanics, there are integration lines and their collaborative robotics are helping people to improve the efficiency and making the more most simple work in there. And whenever all these devices are connected via mesh system and manufacturing execution system and data is getting to the cloud in our big data environment, then we are able to utilize the data to improve the processes, develop our analytics, make it possible to give better views for decision making to the management and optimize our operations overall. And we can see that analytics will be and have been taken in use in basic level at first to get KPIs and reports. And now we are adding some intelligence in there and having pressed predictive analytics in the coming year and then adding AI and artificial intelligence on it. Whenever we have all this data available, it makes it possible for us to create a digital twin, virtual twin of the factory. And from that virtual digital twin, we are able to see what is happening all the time. And addition to that, if some changes will happen in customer demand or circumstances overall, we are able to simulate the new situation and optimize again. But in the end of day, people make this all happen, even automation is there and we will be able to attract best talents also by having this kind of technologies in use. This is showing a Scanfel way how we are introducing new technologies and then rolling them out to the other factories. So selected factories have been implemented, these technologies, mostly in 2019 2020, which are in the left side in here under rollouts. And after that, those factories have taken those technologies in use. Now we are rolling out them to the other factories to maximize the benefits. This is possible because we have around 10 people in our technology global organization who are owning these technologies and coordinating that best practices and an experience are transferred between the factories. However, a couple of new technologies taken into the program still in this year. Smart sensors, we found out that we have still some machines, some processes, which are not possible to connect with straight IoT systems to our manufacturing execution system, we decided to take this kind of study for smart sensors and then be able to get the data from all kind of processes and even older machines via this technology. And then digitalized services. Like mentioned in 2020, we created our big data environment selected tools in there. On that platform, we are now developing some applications like corporate KPI dashboard, Customer Portal, which gives our customers possibility to get instant information about their products and deliveries, for example, and quality. Then we are studying also operators' flow. This means that we are having the possibility to get the positions and tracking how people are moving in the factories anonymously, of course. And this gives us possibility to further develop our layouts and efficiency. HR mobile application mentioned as well as one application to improve the communication between factory management and all employees. But why we have this smart program? Of course, we are looking for the benefits. And we are defining so that benefits to the customers, to our people and of course, to improve our performance, customer people performance. So customer benefits from these initiatives, customer portal was mentioned. And then it was shown earlier that it's in our core to have the early involvement possibility in design phase with the customers. And we are now having the new tools to create this kind of design for excellence analysis and reports then to customers. And then a reason to that, we are manufacturing execution system. We have a comprehensive traceability available, not only in the components level, but also our process parameters and operators known who has produced all PCBs. People benefits, some to mention. We are studying and having the trials now to utilize this enhanced learning with extended reality classes in NPI, in remote advice together with customer, for example. Then like Rikku mentioned earlier that we have digitalized working instructions. It means that such tools in use that we are able to create very fast and high quality working instructions and share them in the shop floor. And then virtual visits for all factories, what we can see later today. And then what comes to the performance, of course, we are by automation improving our productivity. And by getting data, we are able to improve our overall equipment efficiency, find the reasons that if things are not in optimal. And then also improvements for quality like quality yields and strict process control to avoid mistakes, etcetera. So here is our technology road map, what we created for this multiyear program full of different kind of technologies, what many of them already mentioned in previously. But target is to show in here that when we recognized plenty of new technologies, we made a road map that what is the right order to implement and then roll out these to the other factories. And we are now in the middle of the program exactly indeed right now. Just what is ongoing right now this year and some studies, some examples that smart wearables is a very interesting area. We have 2 kind of studies ongoing. First one is that in warehousing, people can have integrated barcode or QR code scanner in close. This makes it possible to collect things by hand more efficiently. And that is, of course, connected to the manufacturing execution system. And second, wearables can be that what I already explained that we are able to track the positions of the people. It will happen so that we will have like a Bluetooth low energy tax, which can embed it to the collar or sleeve of the working code. And then we can understand how people are moving in the factory. And then investments. So Skalfield has a strong balance sheet and that enables us to make long term investment plans. And like Petri said earlier, so we are investing around 2% to 3% of turnover annually. All in all, what was mentioned also earlier that we are investing to generic machinery and equipment, which are optimal for high mix and low volume products. And what we want to take care is also that we have globally harmonized machines and processes in use to be able to support the factories if needed from other locations and also make technology transfers easier. And overall, smart, flexible manufacturing automation and digitalization and connected factories on focus right now. So to the end, summary of Smart Programme. Automation, digitalization, together with all factories, we are able to maximize benefits and getting the competitive edge. Thank you. Thank you, Marco. Are there any questions from the audience? That actually covered everything, so no questions. Thank you. There was actually a question coming from Twitter. What blockchain are we using? Very specific one. Yes, indeed. I will go back in here and explain what this means. So let's say more futuristic technologies, what we have not selected to our road map is shown in here. We can see that adding in the right top corner, adding public data like weather forecasts and such to our model, which indeed can affect, for example, to material availability if there would be tsunami or storm somewhere. And the second one is in the subfloor. What we can see that we want to improve the productivity by having this kind of gamification of the production. And the third one is the blockchain mentioned in the left side. So this is not in use, but this has been seen that in some time perspective, this may be used, for example, to secure the original source of the components and avoid fake components getting from the market. But this is not in use, but this has been seen that it may be one technology what we will take in use in the future. Okay. Thank you. A question regarding what are the first factors to add up new phases of smart and why did you choose those? Yes, indeed. Indeed, it's not so simple to answer, but I will give an example so that we selected 7, 8 main technologies, what we started to study 2019. So it was not so that one factory started the first technology and the others were waiting. But we for example, AIV technology has been studied and taken in use at first in Ottvidapar in Sweden. Manufacturing execution system and digitalization and IoT connectivity was taken first in Suzhou, China. Back office robotic software automation first time in Xie. So we were able to develop this in parallel and then now rolling out to relevant factories. But that's true that Suzhou and Alseras, they are 2 biggest electronics factories. So they have been able to adopt fast these new technologies. So they are in front line. Okay. Thank you. You said that the investments are 2% to 3% of turnover. Is this only smart or smart or all of investments? And how much do you see that is needed in the future to keep up the pace? Yes. This 2% to 3% is including all investments totally, including smart. And in it's a little bit difficult indeed to separate in these days what is smart and what is not non smart, because whenever we have the need to make a replacement, we are taking always the modern technology in use and you can call it smart. So they are together. So all the investments. All the investments, 2% to 3%. Yes. Thank you. Additional question actually from Pasi from Nordea. What is the profitability difference between the best and the weakest factory? Well, maybe Kai will have some kind of an indication regarding this, but we haven't been actually saying this out loud. But there is a slide regarding these kind of things. Jyrki Hilli, is there a risk that high volume companies using the same technologies may be able to move to low volume business efficiently? Yes, of course, there is a risk. But we believe that we can be very flexible and we are in the front line with these technologies. So we are in good position in developing business, especially looking for flexibility and generic processes and equipment. Okay. Johannes Reiss, as digitalization is moving, is it right to expect that the smart will have a follow on program after 2023? Yes, of course, this will be the our normal life. And we wanted to create this program to accelerate the development, especially in these years. Of course, we will continue after that. So the new program will be launched? Yes, our normal life, I don't know. Okay. Any questions from the floor? Okay. No further questions. So thank you, Marco. Now to our CFO, Clive Waller. Welcome on stage. And there were already some questions for you, but let's go first to the presentation, please. Okay. Good afternoon, everybody. My name is Kai Wallow, being in Skansfield now. Next month, 5 years, and let's say, I have been in this EMS or similar business about 20 over 20 years, out of which close to customer market in Taiwanese owned company in China, about 6 years, seeing from a little bit from the different perspective. And I would say that after that, nothing surprises me any longer. Okay. And then let's go to the presentation. This was my favorite topic, but okay. The content, we start from the long term turnover and the profitability. Then a few words, maybe answering the question also that how to get 7%. Then opening up a little bit more about this question regarding this cost structure and impact to the profitability, I hope. Balance sheet and the financial position, then go to the cash flow and then sharing the dividends over that time and then one slide about the total shareholder return. Let's go first to the big figures, in fact, quite small. But starting from the sales, we have been growing in average last 10 years in sales 16%. That, of course, is including also acquisitions, one major being here in 20 15 when the PartnerTech company was acquired and then more or less the revenue doubled on that time. There is other smaller acquisitions also over the time, but mainly organic growth besides that and pretty much following the like market overall development in revenue. What comes to the revenue of 2021 first half, you can see that there is a bit like a swing upwards, and the growth has been a bit more organic growth, 12.2% of revenue growth in first half in comparison to the previous year. That, however, is including like low margin sales, securing somehow the customer product availability and invoicing of the cost for that, that is €6,000,000 roughly out of the total. So the impact is like 2%. It's not much. So 10% growth even excluding that. So good figures. But of course, then overall, there is like this low margin business like nearly €17,000,000 included to the total. And that is good to keep in mind because that, of course, is not swallowing the profitability, but it's impacting to the operating margin, which then is lowering for that reason. Go to the profitability. The profitability growth over the time has been 20% was 24%, Of course, also supported by the acquisition, but also the good work. And I would say that it's somehow evidence of the like quality growth we have been able to do with and without the acquisitions. Also, we are reporting like you can see, we are reporting then like the official figures as well as then ATSAS did. We are trying to avoid report like pro form a figures. But then, of course, when you do some extraordinary moves like acquisition or divestments, then, of course, you need to somehow normalize the figures and present the normalized. And like last year, in fact, then the normalized figures were lower, NOK 5,000,000 than what we reported. So then it can be worked both ways, upwards and downwards, usually only upwards. But and last year, that was a combination of selling this Hangzhou factory and then also the decision what was made regarding Hamburg operation shutdown. And the combination of those EUR 5,000,000 like a positive and the normalized then was at SEK 39,000,000 roughly. What comes to the operating margin development, you can see that we have been very close to reach out this 7% 2020. And I would say that the result of that is very good, even operating margin slightly less than the year before. And then in this year, 6.1%, it's lower, but then I can maybe explain that in the upcoming page where I can show the cost structure and how that is impacting to the cost structure because otherwise, it's difficult to illustrate the impact. But the profitability year on year, first half, absolute terms, euro wise, we are growing €2,000,000 more profit than the year before. So that is not shrinking. Okay. Then go to this page. This is demonstrating how we like develop our business. And there was a question about these which companies are the most profitable, which least we are not publishing that information. But this is like showing that how we are managing the factories. On the horizontal line, you can see the like strategic position and then vertical line is the performance. And of course, we are trying to drive all the sides up to them like northeast corner somehow. But of course, that I believe that the corner is also moving more far when the more you drive. But anyway, it's like a continuous improvement. So that then in short term, those sites which are performing less than expected, then we are trying to drive them and driving the performance better. And then in longer term, then driving the strategic position in terms of our customer base and capabilities and so to be better in the longer term. So and then happens that like here is 2 red spots that illustrating what has happened in the past. Then with Hangzhou, we came up to the conclusion that it was performing quite well, but then we came to the conclusion that with other owners' hands that could better fit than being along with Strangfeld. And actually, that was good match. And then unfortunately, but this also happens, and we needed to we have to be capable to make decisions also. And we decided to shut down Hamburg operation as after long trial period, we just couldn't make it good enough and better, and then that is then how it is. But also, it's a question of decision making to make the quality growth and improvements in the operation. Okay. Then come back to the subject, which if the heart rate looks like this, then call ambulance. But here is like you can see the cost structure year by year, 10 years. And you can see that it's pretty much stable. The big bar is I guess the material cost, sorry. And then have the personnel cost is the next from the bottom. And then we have other operating expenses and depreciation. And there is no big swings over the time. So it's very stable year over year. But if looking closer, then of course, you can see here 2015, 'sixteen, you can see impact of the acquisition and the cost overall percentage, especially personnel and other operating expenses increased after the acquisition. And then we have done our homework and improved the business, and then the percentage have become lower and then the profitability improves. When we come to the near history, this year first half, I would point out here that if you look at the material cost, that has increased 0.6%. That's what I was trying to explain that we have the low margin sales, which is good. It's covering the cost, but it's we are not making much margin with that. And that is a bit confusing. So basically, to understand the figures excluding that, then you can come up with them. But we have not published what that kind of pro form a figure would be. But you can like looking this chart, you can see that there is 0.6% increase in the material cost and at the same time, almost the same impact in the operating profit. So some conclusion can be made based on that. Otherwise, the cost is more or less washed out. There is a bit less good development with the personnel cost, a little bit more other operating expenses and quite simple. Okay, go to the next balance sheet. Somehow being proud of the situation, proud of the balance sheet that, okay, 50% of equity ratio could ask that, is that too much? But of course, that change is usually then suddenly more if changed. So that if something will happen, then acquisition or such most likely would look different for a while and then need to climb back up. But it's in this situation, it's good to have a like a reserve. And then you can see that the debt accordingly is low, SEK 40,000,000 of debt, out of which 40% is leasing and 60% is loans. So it's pretty healthy. And we have also some cash, which could be used to cover most of the loans, SEK 17,000,000. But it's remarkable that if you look quite dominating. The inventories, accounts receivables and accounts payables are and all are growing, of course, along with the volumes, but inventory is also growing for the material situation ongoing, and we are investing a bit to inventories to be able to do our best to support the customers. So that's what we are aiming for. Fixed asset is about SEK 60,000,000. Go further, Few words about still repeating this strong financial position, but you can see that the net debt per EBITDA has dropped on the left side, has dropped from nearly 1 to now has been less than 0.5. It's very, very low. Other point here in this chart is there is a dotted line on the H1 net debt to EBITDA. And that is kind of illustrating that, okay, how much the debt per EBITDA could be. And then our policy is that our net debt shouldn't be more than half of the equity. So that is like a stated policy. So that is the low end of this dotted line. But then temporary based on the decisions accordingly, then I believe that we have a flexibility to have like from the financing point of view and from the companies offering the financing, I guess that we can go far beyond that. So I have ended the line 2.5, maybe the scale ends there. But anyway, we can say that stand alone, everybody can calculate the figures. It's about EUR 1,000,000 to EUR 150,000,000 stand alone, the possibility. Loans, leasing, and there is the breakdown of that. There may be no need to go too much through that, but you can see that there is still separation of how much is leasing and how much is loans and also the cash, very light line on the top. Next. Okay. And then this is about still describing a bit the cash flow situation. Again, I think the trend is somehow showing them the fact better than 1,000 words. If you look If you look at the cash flow from the operating activities, it's this blue or light blue bar. And then you see the cash flow from the operations, which is this gray color or light color. And the difference of those is the working capital or change in the working capital. And normally, in the past, it's quite stable. It's about less plusminus €10,000,000 along with the like revenue growth. So it's pretty stable. This year, it's a bit larger. And of course, the revenue growth has been more, but also then like I mentioned that we have been investing a bit, bad word, investing inventories, but anyway, buying more inventories to be able to make the supplies. That's a logic. And that's why then you can see and that's, of course, reflecting to the cash flow then at the end of the day. So if looking this year cash flow figure, 1st half, it's positive. But of course, it could have been better. But this is a decision that to make the future revenues possible, we need to invest a bit to the working capital. But on the other hand, our position is good to do so. We can do so, unlike maybe in some other situation cannot do, we can do. Okay. And I have a couple of minutes left still. Here is the dividends per share and every year growing from €0.04 to EUR0.17 the last year. I don't know what is the figure for the next year. So but and I will not answer that kind of question. But anyway, the trend is good. And yes, and the policy in principle is that around onethree of the earnings per share is paid as dividend. That is probably the last. So that I would say that to conclude how we are managing and how we have been doing in the past, this is somehow showing the result in how we are appreciated in the market. So but of course, it's always that as good as is the work, everyday work. So then I believe that in long run, this is the only way to create the shareholder value to do good job. And also don't know how the future looks, but we do our best. Okay. Any questions? Actually, we will have a short break for 1 to 2 minutes. We will test up the lines to Sochaux in the between and then we will actually continue with the Q and A. So please take some refreshments in the meanwhile. Welcome back from the technical break. We were testing some lines to Sutso, so bear us for that while. Now to the questions, we have one question from the floor already to Kai. Please go ahead. Jonas from Evli. It was said earlier today that start ups make 15% of your customers. And I think that and more established ones make 85%. And I think that was in terms of like customer account numbers. So could you maybe tell us how is the revenue mix is like there? Or if that's not possible, maybe give an indication of the potential like I think your largest customer at the moment is like around 10% of your revenue. So how large might the largest start up customer of yours be? Do you, Dimon, want to? Totally startup companies are less than 5% from our total sales today. And in Petter's presentation, he mentioned that the biggest customer today is roughly 15%. Okay. There's one additional question. It's important to indeed emphasize that operating profit is the important euro number and operating profit margin does not really mean anything when we talk about paying dividends or something like that one, which of course kind of then brings the question that when you have your new target for the next 4 years, when you will reveal it eventually, so far it was €700,000,000 turnover, 7 percent operating profit margin. Maybe the question would be that, is that margin the most important? Maybe even the target could be €1,000,000,000 sales and €17,000,000 Of course, it turns out to be 7%, but maybe the emphasis would be also there. It would be 1,000,000 of euros instead of margin figures instead of. Thank you. Okay. Is there any other questions? That was more or less, I would assume, a comment. Thanks about that. Antti, please. It seems that your factories have quite little deviation in terms of strategic position and performance. But on the other hand, top stars are lacking. What should you do to create 1 top star? And is it possible that one of your factories become really a top star leading the line in for whole group? Do you want to take the record? Actually, one point related to this metrics that Clive was demonstrating is that we are each year we are calibrating the absolute values that we are measuring in terms of strategic position and performance into a scale between 0 and 10. So we could do it easily by recalibrating the numbers. I think the key is really that not so much about if we are really in the top right corner, but that we can find really differences between the factories and we understand what is needed to improve the strategic position and performance. And yes, indeed, we are pushing forward with further improving the best ones. And I can tell you that they are making good progress at the moment. And maybe I can also say that perhaps we are a little bit humble also that I think there is stars. Could we go back to the slide regarding the cost structure and more explain about Johan Suresh's question or regarding the P and L and the semis and metal effect on there? Should we check it through again or You mean this cost structure? Yes. We explained it already quite much, but just to have a review there. So it was any negative impact from the price increases in semisandmetal regarding your P and L Or is it always passed on to the customer? So it can be Yes. I think that Timo partially replied to this question already that, yes, we have a process that with like a contractual defined frequency renegotiate renegotiate the prices either quarterly, monthly or yearly basis. And then on the top of that, there has been like invoicing like for kind of extraordinary expenses perhaps, which then is also like covering the cost for like certain materials and the deviations. But basically, yes, there is a mechanism and like well was from the audience that yes, it's really so that then need to keep in mind that the percentage is an indicator, but then the euro is what matters and we are making way more operating profit than we did a year ago. And even the percentage are looking a bit like tail is this at this point of time then. But when if let's say so that when the situation normalizes, this kind of tail of trading business, what we have in this year will we are not in this kind of trading business eventually. So then that will go away. And then when the material situation normalizes, I guess we will have we should see back to the normal also in terms of percentage. So then that will automatically correct itself. But now I think the good and important message is that like that we are able to cover the cost in difficult situation, but also more important is that we are able to do our best to keep and satisfy our customers. That is anyway the long term most important thing that our customers are satisfied and we are able to make the deliveries. Yes. These are ordinary invoicing in the H1 in the first half of the year was something like SEK 6,100,000, if I remember. Yes, SEK 6,100,000 and this trading then about SEK 10,000,000 more. Yes. So that is the effect there. Is there any further questions from the floor? Okay. Pasi from Norde. What is the amount of future order book or orders received per quarter? How long is the sales visibility at maximum? I think that it was maybe over to Timo. Just a second. As mentioned that we are receiving rolling forecast from our customers on a monthly basis. And it has been in the past 12 months nowadays, quite many of our key customers, they are even providing 18 months rolling forecast in this moment because of this component availability. Then of course, it's a question that what is the accuracy of this forecast always that the actual demand will change and is fluctuating. But we can see by the forecast 1 to 1.5 years from now. Book value. Order book value, then there is by the even in the product level that order the delivery time is starting from one day and can be 1 week, 2 weeks, 1 month, couple of months, depends on the business model by the product. Okay. Thank you. Any further questions from the floor? We still have some 8 minutes in between or are we should we continue directly to the Sutso or take a break? We are actually ready to go to Sutso. So let's start a virtual tour a bit earlier than originally agreed on. So okay, let's break a leg. Okay. Are we online? Looks like, yes. Okay, good. Then good afternoon, everyone. My name is Christian Kersten, and I'm leading this SUJU plant. And SUJU is located in Yangtze, 1.5 hours away from Shanghai, and we are operating in China, of course. I would like to take the opportunity today to briefly show an overview of our plant operation and also touch upon the planned expansion investment that we have released. But main focus will, of course, be our virtual factory tour. And we will go through we don't have time to cover the whole production, but we will select strategically pick up some key points that also address the smart operation program that Marco had told about earlier. And we will show you in detail about the automation activities as well as the digitalization activities and what that means to us. Focusing to my health, I have not only myself, but part of my management team and it will be Ivan Song, our Technical Manager. It will be Harry Lee, our Plant Director as well as our Production Manager, Brian Foo, that will guide us through the production. But let's start off with a short video giving a brief overview of Scamfield Suzhou was established in 1998 and is located close to beautiful Yangshong Lake. We have around 600 employees. We provide vertical integration from PCBA, FPC, cable harness, box building and integration service to our customers. Okay. That was a very short overview, but any can anyway can give you an idea on how it looks where we operate. We will then switch over to our virtual factory tour. And I hope that you can see our presentation where we show the floor plan. And we will start off following the logical flow of production from incoming to outgoing. And we will start with our automation warehouse activities led by presented by Harri. Then switch over to our SMT manufacturing line. Brian will show you how we have digitalized that process to have a strict control and that also enables traceability to our customers. After that, we will show you some examples of automation applications, both focused on mid- to high volume, but also what is key for us, high mix, lowtomidvolume manufacturing where change over time and generic processes and flexibility is of key importance. And finally, we will demonstrate our war room and where we have a cockpit overview of the whole factory and we will demonstrate how we are operating our daily life and to drive our continuous improvement activities. So without further ado, I would like to switch over to Harry that will start from our warehouse automation. Okay. Hello, everyone. My name is Harry Li, product director for our Suzu site. So welcome to our smart packaging. So in past years, so with our employees' efforts and great support from our headquarter, so both of our new technology and smart solution are developed very fast. So meanwhile, more value created for our customers, second horse and our employees. So during this year, our sales revenue, operating profit, our quarter and opportunity also had a remarkable improvement. So we passed it and are leader most smart projects in our group. In our site, the smart solution already cover our process. And our smart manufacturing will also be qualified by our Chinese government. So today, we will share some of our practice to you for our smart solution application in our site. So now, I mean, our warehouse, so behind me, you can see, we introduced the automation solution for our raw material management in our Suzhou site. So now we have around 28,000 SKUs in our warehouse within 3,600 screen width. So as I mentioned in past years, we introduced our machine solution and we designed a specific software for our room control management. So all of the key permits, so for example, the raw material cycle, first in, first out, material safe life and material safety will be controlled by our software. And we design this software by ourselves, both our ERP and MES platform. Because of these activities, in past years, our SMT raw material warehouse capacity increased around 10x compared with traditional material sales. At the same time, our employees' productivity also have more than 7% year by year. So as I highlight that, so all the process or all the key factors were controlled by our software. This means that we can avoid 100% manpower mistake. So of course, because our faster business grows, so now both of our warehouse and production space will be the content for us. In past months, we got the green light from our board to start our new purpose packaging project. So now we are preparing the project plan for that. Okay. Consider the limited time, I would like to hand over to my colleague, Brian. He will introduce our smart application info, our SMT area. Thanks. Okay. Good morning, everyone. This is Brian, Production Manager. Let me shortly introduce our smart manufacturing solution in short floor. Host, I will share my screen. Okay. Can you see my screen? Yes. Yes. Okay. So actually, here is our water factory, which is from our mats and provided by Siemens. Our engineering will build machine 3 d module in system, and it is linked to our IoT box. You could see detailed for SMB all the machine, all the station schedules from here. Core smart solution include NPI tour, planning tour, short floor control until our finishers ship out. Okay, let's move to the my big screen. So from our big screen, you could see all the SMT line status, our current efficiency, our line quality, also what is current order, what is the next one. In here, it will be for management team to see whole factory situation. Then in front of each line, you also could see details of our shop order planning. Our operator could see from mid level wind produced work and also when they have done this and the current product yield change over time. Also this TV has the online system. It will be call someone. When I need some problem, we have list out like material shortage, thermal resource shortage, machine problem. Then operator could be call someone from this TV. It will be sent by message like, say, like our Facebook. Then the support will come in and boarding here. Also, in third of the line, we have mass line computer. You could see in here, the green, it means machine working. Yellow, it means machine waiting. In here, we also will control all the tooling, like our sensor, usage, our solder paste, shelf life, all those will be controlled by mass. In here also, we could see details of machine like machine material be verified. Also, it will remind us this material could use in how many minutes. It will avoid our livestock. The operator could be, before livestock, connect a new material for us. When we have this math system, we improved our performance at least 10 percentage. Okay. Let's continue go to next process. Before the board come to our machine, we have the scanner which is to read all the barcode. With this barcode, we can further trace our process, our material used by which machine and by when, by which parameter of the machine. In here, we have all the line have online salt based quality system. So this machine will detect out our salt based quality and create out our online SPC to guarantee all the qualified board go to next process. Scanfels Suzhou have latest generation airtime machine, which is more faster and stable. In here, you see all the feeder with green light. It means those material be conformed and ripe. So we avoid any mistake in advance. Then continue, you see our operator, they have the smart solution to collect our material either and the devices. SMD is a more valuable process. They will add to the component to our PCB. Then when the board be on the PCB the material on the PCB, we will move the component to our reflow. In our reflow, next, we'll get all the temperature by oven. It will be controlled, and this data will link together to each serial number of the PCB. Okay. We continue when the board done the OS process, it will move to our online AOI. With online AOI, we have 3 d ones. It means they will from different angle take a picture compared with our target picture to identify the soldering quality and the position of the components, also the mark of the components. Here is all the process for SMB. When the process done, we will move the board to TXT process. Okay. I will hand over camera to Adam. He will continue to introduce our high volumes product solution. Good afternoon, everyone. My name is Ivan, Technical Manager here. I would like to introduce our high volume solution for in our automation lines. So the annual demand for the product, which produced in this line, it's more than 3,000,000 pieces a year. Now from the productivity point of view, way before the automation, we total need more than 20 operators. But now we only need 8 operators to meet our customer demand. And from the quality point of view, currently, the customer PPM is 8. So is that means here now, we already delivered more than 1 point 3,000,000 pieces to our customer, but only received 10 pieces of the fab. And for our automation solution, during develop, we always bring a lot of the smart solutions and always bring a lot of the mistake, proving ideas. So in this lens, for this product, we have a lot of critical dimensions and a lot of the CTQs we need to control. Now with all the data in the process is linked to the math. And the math, we are control who the process to make sure our quality. And now from here, you can see AI being coming. So in San Bei of Suzhou, 10 80 pass between each area and the total running around 14 kilometer. Thank you. Now I will hand over to our colleague Harry to continue for the presentation. Okay. Welcome back. Start. Okay. So welcome back. So here is our another smart solution application area for our low and mid volume products. So behind me, you can see this is our corporate UR, which is our Okay, welcome back. So here is our another smart solution application area for our low and mid volume products. So here, you can see this is our corporate UR. We designed automation solution for our growing process. In past years, because of this solution, our productivity improved much more. At least now, we can see, everyday, we can amount to 2 operators serving. And the key point is that our yield improved much more. Before this growth in introduction, our process yield reached around 95%, but now it's around always 1%. So it's really smart solution for us. And on my left hand, you can see our another smart solution application for our testing area. So here you can see, so here is another U. R. Or a Cobalt application for our testing area. So 1 cobalt will control 2 ICT machinery instead of our traditional main power loading and unloading. And as we highlighted, so all of our machinery were linked to our mess by the IoT solution. So all the database, for example, our test log file, our machinery utilization and our first priority and our testing times for every board. So all database will be upload and served in our platform, MS platform by IoT solution. So all this data will be read on data for our engineering study. So this means that so we no need to manually collect all the data what I mentioned. So our engineering team, our management team, we'll just check the data real time and take the fast action. So, it's really a benefit for our faster response. So, at the same time, we have more and more the same solution for other process, for example, for packing, subassembling and integration. But considering lean time, we were not introduced 1 by 1. So now I need to hand over to my colleague Brian. He will share our database in our mass platform and share how to use this data for our continued improvement. Okay. Thanks. Okay. As Harry said, we have so many smart solutions, and we collect so many data. In our joint war room, we'll show you how we utilize the data. So here is our drawing award room. In this room, we have show out the data what we have trickled out from production. You could see here is our daily pass year like FPUI year, DPU, those data. The second is our machine efficiency. It will see our OE data, quality data, our reliability data. In here in middle, you could see our quality in past days. Then you will see what is top one defect in our house. Then in the right, you could see the scrap cost in here. This is a 3 whole factory situation we drive in here. Then we also have details for the line. Like we could see the different line data in here, availability, performance, all the data here. We can touch and choose all the data if anyone is interested. Also in here, you can see with our small team, the ongoing discussion what happened. Right here, we have some line yield data like SMD data, TH data. What is top one happened for which customer, which station? They will take some actions when they see some data. Also in here, we have some scrap costs like we really care of the cost for company. So we will try to debug out where is our where we can improve from this net system. In here, we also have some small TV. In this TV, we will have some training. Then like what is ESD, what is safety knowledge, we are training our operator. Okay. I will hand over camera to Preston, continue introduce. Okay. Yes. That was actually a very short overview of our operations. And I hope that it has given you a flavor of what our digitalization and automation program and smart really means in reality and how that also can improve our operation. So now we open up for questions and we'll try to manage from there. Currently, we don't have any questions from the chat. Is there any questions here in the audience? No questions. I think that you stunned everyone. So no questions. Thank you for the tour. It was really interesting to see. And like I was actually expecting to have some minor issues with the connections and we saw that, but minor details. But everything worked okay really well. It was I hope that the audience enjoyed it as well. One note regarding the on demand version. So the factory tour will not be actually available on demand afterwards. So for the customer intimacy reasons, that is what we actually decided to do. So Petter, should we go to the closing remarks? You're actually a bit ahead of schedule now, but I don't think that nobody minds about that. But now over to Petri. Thank you, Parzvi. And yes, you had opportunity to see our factory in China and participate in virtual factory tour. And basically, that's the way we have been working with our customers now about 1.5 years. Since the COVID-nineteen started to spread, basically no one from Europe was not able to or United States able to travel to China. And meanwhile, we have won new customers to suit. So we have ramped up new products using such virtual factory audits. And I personally, I don't think so that we are returning back to old life that we are traveling so often to China or United States or somewhere else. It's easy to understand the benefits that if we can win 1 week trip by having 1 or couple of that kind of virtual meetings or audits and do the same job in practice. No need to return completed old life. Some summary about what we discussed. Scanfel, trusted manufacturing partner for products including electronics. We have global factory network means and that means that we are capable to operate globally. We are capable to serve our customers globally. We are very proud about our customer bases. It's very versatile. It's strong. They are global leaders in their customer segments. They want to be long term partners with Scanfel. Also beside those well established global customers, we have quickly growing nice portfolio of quickly growing smaller product companies. Market looks strong, especially this year, maybe next year. There are also good drivers to make us to believe that there will be good demand for electronics products for a longer time. Drivers like Intelligent and Electronics really will be embedded in all kind of products into foods. Our customers are also very well performed very well positioned what come to global megatrends and tailwind from this. Risks are mainly related to materials availability right now. And then I'm talking about the foreseen risks this year, maybe next year. Timo asked a good question in his presentation that why our customers are selecting Skansfield. I think that this is really a key core question. And as he said, of course, we need 2 things. We need to write set of services, write quality of services. And then on top of that, we need trust customer need to trust that we also have the right type of services, right quality of services after 5 years or 10 years. 2 things are needed. And how to make sure that our customers really believe that we are right partner not only now, but also after 5 years, there are a few things. First, we need to continuously improve our operations, as Rick well explained. We can never stop. We need to improve our productivity. We need to improve our quality, our OTD, everything. Every day, every month, every year, we need to aim higher targets. We need to continuously invest, as Marco explained well. We need to invest in latest technology. Technology is best serving our strategy to focus on high mix, low volume, state of the art technology. We need to continuously consider how good factory network we have, as Kai explained. We need to try and we need to develop our factories performance as well as strategic position every month, every year in order to be competitive not only right now but after 5 years. And last but not least, we need to show our customers that we are also right partners what comes to sustainability. We need to whatever we are doing, we need to do it in a sustainable way, The way that we are taking consideration environmental aspects, our people aspects, our partners thought that we are good corporate citizens today and after 5 years. A few words about operational model as Rick will open that. Centric points where our values created are factories. There are real customer values created factories. So we want that factories are quite independent. They are able to run the business in the local environment where they are. And that they are also profit loss responsible. So take like total responsibility. At top of our factories, we have a global organization and the key reason why we have global organization is, of course, is somehow to set kind of frame where we are operating, showing direction where we are going as a group, giving some guideline, some support when needed and especially to make sure that we are getting scale benefits. Scale benefits could be, for instance, related to global sourcing, easy to understand or taking care of our global customers and so on. How to make sure that our profitability remains and even improve? I think that that's key. I think that quite many of us, if not all, mentioned that the flexibility is the key. Keep our cost flexible. Flexibility is key in very many ways when we are serving our customers, but also in order to control our cost. Keep the fixed cost so low than possible. Continuous improvement, of course, there as well and evaluating our strategic position on factory level year after year. If thinking the Scanfel business case, one attractive thing is, as said earlier today, is that our investment needs are quite reasonable. By fulfilling our existing strategy and serving our customers by generic equipment, machines, factories. And so it's really like controlling the need of investments and making the business case stronger. Our balance sheet is strong. As explained by Kai, it's giving a good fundament to further invest and also consider some attractive acquisition opportunities. Our main aim is to grow organically so that always the profitability goes first, but grow organically, but also we are looking for acquisition opportunities. So thank you very much for participating in the first CMD of Scanfel. You had a great opportunity to somehow go a bit behind the numbers, understand a bit more about Sunnfield operations and processes and so. I hope that you found it interesting, informative and you enjoy it. Thank you very much. Have a good

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