Earnings Call: Q4 2020

Jan 28, 2021

Good morning. Welcome to Wartsila's 4th Quarter Earnings Call. My name is Natalia Waldasari. I'm Head of Investor Relations here at Wartsila, and I'm joined here today by Jaakko Escobar, our President and CEO. Before I let him take over and run through the results themselves, Just a few words on the Q and A session, which we will have later on in this presentation. In order for you to enter the questions queue, please use the raise your hand function. And when the moderator calls your name, please remember to Phones, and then lower your hand once your question has been asked. If you do experience any audio issues, there is a chat function, and I'll try to raise those questions during the session as well. And then finally, I'm sure that we'll have a lot of questions coming in, so please do limit yourselves to one question, one follow-up and then rejoin the queue if you have With that, I'll let Jakku take over. Thank you, Natalia, and good morning, everybody. Welcome to the Result Presentation 2020. I'll have with me here in Helsinki Campus Atte Palomaki and Natalia, as you saw. And then on the lines, the whole Board of Management. So we are ready then to answer all your questions and Dave will help me with detailed Analysis of the businesses. Let me Start with this slide and really the title a year by COVID-nineteen related uncertainty. 2020 was An unprecedented year with Wartsila's end markets heavily affected by The COVID-nineteen outbreak and the measures taking globally to contain the pandemic. Deteriorating economic macroeconomic conditions have caused our customers In both of our end markets to reevaluate their capital and operating expenditures expenditure plans. Vessel contracting, as you know, has decreased to record low levels. Investments in new power plant capacity were postponed and maintenance activities We're pushed out as the utilization of installations declined And Travel Restrictions Limited, the mobility of service engineers. If you look at this backdrop, I'm happy to see that we have had resilience Of the demand for storage solutions and the acceleration of the marine markets digital transformation was especially Encouraging. Some of the key figures and first of all, order intake. The decline in order intake reflect the uncertainty in our market environment and Demand decline in the cruise segment continued to represent the main challenge in Marine Power and Voyage, affecting both equipment and service orders. Marine Systems Order intake was heavily impacted by reduced fuel spreads, lowering demand for our scrubber Or our customers scrubber investments. While energy order intake was affected By the slowdown in economic activity, some signs, as I mentioned, of market stabilization we're seeing towards the end of the year And specifically in our storage solutions. If you look at net sales, 2020 decreased because of lower service volumes and the disruption of For disruption to equipment deliveries. Profitability for the full year came in well below that of 20 'nineteen, the main reasons being volume and less favorable sales mix, Under absorption of fixed cost and COVID-nineteen driven cost inflation. We have mitigated the financial effects of the COVID-nineteen by implementing actions In the form of reduced discretionary spending, work time reductions and Temporary layoffs. We during the year, we said that these resulted in temporary cost savings of around €100,000,000 which was being recognized during the year. And I mean, this all was like we Initially expected. If you look at this slide, one of the highlight of 2020 was definitely our cash flow. It's a record high number, Almost SEK 700,000,000. I haven't seen that high number during my years in Wartsila. And heavy focus has been on our working capital and of course looking at our Customer Relationships and Supplier Situation. And this will be And we'll continue during 2021 A detailed focus on cash flow from our operating activities. Dividend proposal Per share this year is 0.20. A couple of slides, More detailed slides about the markets. Here you can see the vessel contracting. December, we saw some increase on November, December in the vessel contracting, but we are still at very Low numbers. And specifically in December, we So merchant vessel contracting picking up a bit and also LNG carriers. And today you can see we announced Just one major transaction also what comes to the new LNG vessels. And with all these LNG vessels and special Tonnichi, as you see also here, there of course the future always Brings quite steady service income going forward. In EciMarkets, This is the slide we used to show about our market share. The situation has stabilized during 2020 and our market share development has been quite steady. Order intake as such in Wartsila Group, you can see from the right Side of the slide that Marine Power went down, energy went up. And then Services, which is a good sign, services order intake increased. So that's of course A good sign for future development. Order book as such has been coming down during these Difficult years. It's still a bit over SEK5 1,000,000,000. And then when you look at the delivery schedule, This year we are starting the year a bit behind compared to last year. And of course that has to be taken into account when you look at the possibilities to get new orders during the year. Net sales, again, services on the Q4 was developing a bit better. I mean all net sales on almost every business has been Increasing, but services itself on the Q4 picking up a bit better. But as we said during the year Several times that I mean the whole year has been extremely challenging and we expect that the 4th quarter He's picking up a bit, but we will not see and we didn't see anything like we used to have during earlier Yes. And as I said earlier, the comparable operating result was also affected Heavily by the COVID-nineteen and related issues. Cash flow very strong, as I said, record high. And here you can see also The earnings per share and now the dividend proposal by the Board of Directors for the AGM. A bit about the businesses. Marine Power, I mean, as I said, every business You see decreasing numbers and mainly affected by to start with by the COVID. Here in Marine Power, order intake decreased, sales decreased. I mean, we have a lot of fleet idling going on in the sector and customers are really Trusting their needs, when and where to invest. And then you see it also what comes The Marine Power Net Sales Development that if one of the segment Like cruise is not doing quite well, it will definitely affect Wartsila's numbers. Comparable operating result also decreased and there we had A less favorable sales mix and also the weak fixed cost absorption Affected our profitability. Net sales from installations under agreement, I have always said that this is quite Important slide to show. And here, of course, when COVID It's our customers and they are not sailing their ships that will also impact our service levels. Marine Systems as you know has 4 businesses scrubbers, electrical systems, Gas Solutions and Saftline Solutions. A lot of postponed customer decisions. We have seen some orders moving from 2020 to 2021. And of course, the reduced fuel spread It's hitting the Exalt Gas business orders heavily. At the same time, we have been delivering last year our products and solutions to customers. And that has definitely also helped our result in the Marine System Business. Overall, then if you start comparing, it's good to remember in 2019, The result was weakened by some of the Gas Solution projects. Voyage, the business where we see the future, where we still are investing Heavily, very much our voyage solution projects are going To ferry and cruise business. And if those businesses have been down, it has affected the order intake. And also sales was affected because of lower service business And transactional service and also project postponements. The profitability of voyage is still Negative and we are investing in our digital competencies. As we have said earlier that We need to look at the EBITDA level. And during the next couple of years, I hope Sooner than later, I mean, we need to turn this business positive. And there is a lot of actions Going on in that transition. Here you see Also one important slide when you look at our voyage business, which is the connected vessels And that has been doubling and increasing very much during the year with nice deals like this Ultra Ship Fleet Applications, I mean that will finally pay out. Energy as such, order intake increased but not so much as in the Marine Businesses. And here the slowdown in the economic activity has definitely hit us. Storage market, you have seen the resilience. I already mentioned that one. And now going forward, I think storage plays an important role, but also the renewable transition where Wartsila has Great solutions to our customers. Operating result Was also hit and here we see some delivery delays, Okay. Hitting the fixed costs on the factories as the same factories we are building our marine and Energy Engines. And then if you compare also 2019 2020, it's good to remember these cost overruns we had. And last year, when we have been delivering out Those projects with 0 margin. Service installed base State the same level, but you have been reading some of the news of quite nice Transactions with our customers, the example here is from Papua and Ukraine, where we service We get the service for the 10 year agreement with our customer. Final slide, Prospects for 2020. We expect that the near term now the Q1 demand environment to be Similar of that of the previous year, so last year. And At the same time, we have been hoping, of course, the vaccination coming in and helping some of our customer segments. But at the same time, I need to say that the conditions, the experience we hear every day That the prevailing market conditions make the outlook uncertain. And this is everything we can say at the moment. With this slide, I Let you all to start asking questions. And as Natalia said, 1 question or 2 questions and then if you can go back to the line. But please. Good morning. My name is Mikko Metin, and I'm your moderator this morning. Welcome. First question on the line, we have Andreas Willi, JB Morgan, please. Can you hear me? Yes. Now we can hear on. Yes. Sorry. Good morning, Jakob. Good morning, Natalia. Jakob, wish you all the best in your next chapter after retiring as CEO. Thank you. I only have one question, a bit more Longer maybe, but I would like to better understand the profit development in 2020 so we can also better understand the Potential recovery going forward. If you look at the 2019 base and reverse the charges out, Comparable operating profit was slightly above SEK 600,000,000 compared to the SEK 274,000,000 for 2020. You had SEK 100,000,000 temporary savings in 2020 as well. So if we leave them to a side, profits fell by more than €400,000,000 year on year. Obviously, there is a negative mix on Service and Marine, but Energy Service It's fairly resilient. Maybe you could give us some information on the level of COVID related extra costs you have, Maybe the impact on price pressure year on year and other factors that we would have to consider to better understand The decline in profit and maybe then also what share of the SEK 100,000,000 you think you can Keep in 2021 or turn into more permanent savings? Thank you very much. Thank you, Andreas. And yes, I mean, the profitability was heavily affected by certain elements as you mentioned. And if you look at 1st of all, if I start with pricing pressure and the pricing pressure, it is there. It's both in our markets, end markets, Marine and Energy. Marine, it's So of course, when you look at the vessel contracting that you don't get you don't see so many ships coming out. And there is a huge price pressure what comes to the ships and then of course it goes down to The suppliers and we have been talking about it for 4 years. And I don't know if it's getting even deeper. I mean, there are Certain same players in the market trying to get the same deals, but definitely there is a pressure on the pricing. And then when you look at certain segments and products, of course, One profitable part of our business has been our scrubbers. There is a price pressure on scrubbers. And of course, as you see, Voyage is still suffering with their profitability. Energy, of course, there is a little bit less, I would say, deals and the deals are getting Postponed or the decision making is not so fast. I don't know if that's Creating any price pressure, but of course, every transaction you have in the market, You have the engine players, you have the turbine players and so on. So you need to create something more and there of course Wartsila services might Bring something where the customer values our solutions. But price pressure definitely is there. Then you have the mix, as you mentioned, you have the service mix and the new equipment mix. And finally, I mean, if you look at the whole year, our if the volume stop, of course, that hits definitely To the profitability, if service volumes drop that hits to the profitability. I cannot give you a Exact number of COVID-nineteen related hits, but it's definitely At every business, at every sector. And it's hitting us Because it's difficult, I mean, you need to deal with suppliers, you need to deal with the deliveries, You need to deal with service people and having extra time when they are on quarantine and so And it really hits the I mean, the cost, of course, everywhere. Logistics is more expensive. And then finally, I mean, we and as I said, we have been delivering 100,000,000 Around €100,000,000 net sales out with 0 margin, which is hitting us heavily also Was hitting us last year. About the temporary savings, we are at the moment when As you saw, the outlook being the same. We are definitely looking at very carefully. What how to continue, We cannot start spending money and expanding the operations before we Start seeing that the markets are getting back. So very carefully now looking at continuing Some of the temporary cost savings, but at the same time looking at is there something Which we can actually restructure and continue with Better efficiency. And as I said, there is a big program going on already or has been in our voyage business, which Definitely, we'll turn the voyage business faster to profitability than probably expected. But a lot of these items put in together, It's a huge number when you compare to the SEK 600,000,000 what we did earlier. Thank you very much. Okay. Thank you. Next question on the line, we have Johan Eliason, Kepler Cheuvreux. Please, could you open your mic for Hello, Johan. Yes. You can hear me. Good. Yes. Excellent. So I was just wondering a little bit on Energy side, I mean, as you say, market share has been stable 2019, 2020, but there was obviously somewhat of a drop from previous. Is that related to engines losing out versus the turbines? Or is there an engine competitor that you see have taken market share? And then secondly, we are talking about some positives as well. This LNG order, It seems like it's the main engines. I thought you sort of were closing down your main engine business. Or is this Special niche where your 4 stroke engines are still applicable or what's the development there? Thank you. Thank you, Johan. And I can answer the marine Related, 1st, Roger could probably be better, but I take the answer from Roger. Roger can come back later. I mean But it's an Arctic LNG. And in Arctic waters, you still need 4 stroke Engine Technology, and it's a main engine. So 6 engines per vessel and 6 vessels first and was it 4 options. And so it's a huge deal and really these technologies still continues when you look at the Arctic waters, you can't SURVIVE with 2 stroke technology. So that's a major one. That's a positive one. But when it comes to the energy and the competition price pressure, Susil Purohit, the Head of our Energy, he's in Houston and it's early morning, but I hope Susil is around And he could really be open up where we are with price pressure and competition. Thanks a lot, Jaakko. Can you hear me? Yes. Good. Yes, thanks for the question. I think what we are seeing, of course, is we still continue to hold our market share on the wider Gas Market. And on the when it compares to the engineering players, we are the leader right now And we continue to be the leader. We, of course, the price pressure is there. It's a tough market. There are only a number of projects. Those happen in the bigger capacity. But At the same time, we do not really see a decline from the previous level. So the margin levels are stable right now. What we are seeing, of course, when you talk about the energy transition moving forward, what we are seeing is the customer, the dynamic features, Especially on the flexibility side more and more. And we start to gain a bit more interest from the market compared to our gas turbine friends. So all in all, I would say, yes, the competition is tough. We are gaining Some interest from the market for our products because of the dynamic features. And at the same time, The we on the engine side, we continue to hold the ground with our leadership. Okay. Thank you. Just to follow-up on the LNG side, are there more of these Arctic order potential in the near term future as Well, Good question. And Roger, now I let you To explain a little bit more about the LNG market, because it is one of the active segments and that's a good question, Johan. So Roger, why don't you Tell us more about LNG. Yes. Thank you and thank you, Johan, for the question. Good morning to everyone. Yes, there are some Still in the pipeline, of course, the majority are not. So the majority of the LNG carrier orders are related to normal operations, But there are still some in the pipeline as opportunities for Arctic operations as well. Probably the Arctic route will be more important going forward. Thank you. Okay. Next question on the line, we have Max Yates, please. Hi. Can you hear me? Yes. Good morning, Max. Excellent. Morning. So my first question was just around working capital. And obviously, that's where you've done a very good job this year. I just wondered what You think is a sustainable level of working capital to sales going forward and whether We should see a lot of this coming back into the business if we're in if sales are flat next year, do you think you can keep this level of working capital? Thank you. Magnus, that's a very good question. And Arjen normally wouldn't have a possibility to answer too many questions. So I would let Arjen Berens, our CFO, who is now even here in Finland. So Arjen, could you talk about working capital? Yes, he's in Finland, but in quarantine. Thanks, Max, for the question. Let's say the working capital, of course, depends on many factors. And let's say, I don't think it's easy to give, let's say, a ratio going forward. It depends, of course, very much on, let's say, which business is Majorly in development, as we have seen in the past going to 2019 'eighteen, when we Boosted significantly, let's say, the scrubber business, that's totally gone today. We are actually delivering the order book out. So I think To give one ratio for Wartsila is basically impossible. It depends very much on, let's say, which sector is moving and which sector is not moving. And that will drive the working capital, but we are really, let's say, focused on keeping it as low as possible and trying to get Also, let's say, finance by our customers and suppliers to a large extent and Hopefully, an increasing extent. Am I getting good advanced payments and also payment terms with our suppliers? Okay. And Jaakko, just a quick follow-up question. You talk about Scrubbers previously being a sort of profitable business for you. Obviously, orders have been weak there, but I assume You were still delivering sales this year. So I just wondered what was the level of scrubber sales this year? And It would also be helpful to note kind of the EBIT contribution to understand, obviously, one of the headwinds into next year or into this year as other parts The business obviously will do better, but that's clearly one that will have challenges. So that would be helpful. Scrubble sales Forecast this year is definitely going to I mean, at this moment, I have to say that it's going to be lower than last year. Last year, it was around 300, Hi, if I remember right. But it's going to be it's going to at this moment, I have to say that it looks like It will be less. On the other hand, if something happens to the spread, you would definitely If you order now, you could still deliver this year. So let's see how it develops. I cannot forecast the exact number, but it's going to be less And last year. Profitability, finally, of course, I mean, I hope we will stay at the same level. Let's see how that finally goes out. And let's hope there will not be any postponements. But so far, I think the business has been doing quite well. But ultimately, if you look at End numbers, we might be less profitability or the profits will be less than this year. Okay. And maybe just so with the orders kind of compared to that €300,000,000 Presumably, they were much lower. Could you give us a sense of the orders this year in what, in 2020 that you had relative So that NOK 300,000,000? No, no, I can't. Sorry. I was looking at Natalia, but no, sorry. And would it be above Marine divisional average in terms of profitability? Or should we view it as a sort of equipment business? Historically, I can say that the profitability of scrubber business Okay. Now be careful. If you look at Marine Power, which has Big service elements, the profitability consolidated profitability is nice, high. If you have pure equipment business Without any service, it's normally low. Scrubbers, we have had a better profitability level than In a normal equipment business. Okay. Thank you very much. Thank you, Max. Okay. Thank you. Next question on the line, we have Antti Kanzonen, SAB, please. Antti, we can Okay. Can you hear me now? Yes, Antti, please. Yeah. Good morning, Jakku and team. I have a bit of a broader question on capital allocation. You had a fairly Strong or really strong cash flow last year. However, there is a kind of substantial dividend cut to kind of protect the balance sheet. So If we think about capital allocation and MFA, for example, going forward, how do you see your technology portfolio, especially on the energy, The Power Plant division being a fit to the energy transformation that we are seeing right now. Is there something to add Technology wise, that would be complementary. How should we think about that? Thank you, Antti. And before I let Susil to Probably open it a bit more. I would say that today we first need to solve The future of engines, and then I talk about the new fuels. So we are testing, spending a lot of money Running the engines with ammonia, which will definitely be the next step and we are very close to that one. Of course, Together with that one, you need to be able to run the engines with synthetic fuels, so the power to ax products. And then finally, Hydrogen. I mean, the trend is good. We will ultimately be there. I'm not going to give you any number or the year exactly, but development is good. We are mixing quite a lot of hydrogen today Two different gases and run the engines. So there we definitely will be investing and that will help Our Marine Power business ultimately too. What comes to other possibilities and Is it then something with the storage and so on? But Susil, Could you give your opinion about this, Susyl Porahit? Thank you, Jaakko, and thanks, Ankit, for that question. I think Jaakko already touched upon the fuel future fuel, so that's that I'm not going to talk too much about. When you talk about energy transition, Currently, what is happening is, of course, there's a lot of investment on the renewables and renewables are intermittent. We have 2 Technology, one is engines with dynamic feature where we can start these engines and ramp up within a couple of minutes and then also ramp down. At the same time, these are really good for the flexibility, flexible generation. And at the same time, we have also Storage, which is an excellent one in our portfolio. So these 2 are really going to be playing a major role In the future when, of course, the energy transition progresses, right now, there's a lot of investment happening, of course, On the renewables, and we see now quite a bit of momentum on the energy storage. And hopefully, in a couple of years, We will see also quite strong And on the engines. If I just give you an example, on South Australia, I mean, which is in the forefront of energy transition, where you talk about 60%, 70% renewable energy right now in the power systems. There, we delivered last year a gas speaker, a large gas speaker, which actually Just then sort of helping the utility to integrate a lot of vendor booths. And the same utility now have we have sort of been now announced by them as one of the preferred vendor for their large energy storage program. So this is Australia, which is in the forefront of energy transition, which is an open market. And they are actually buying our technology, both Engines as well as storage. So we have 2 very, very good technology in our portfolio. And Of course, we will look out for other technology when we look out when we are Sort of progressing in this transition and see what fits into our strategy and what adds more value towards our customer. But I think we have We have a pretty good portfolio right now. And the future fuel will, of course, bridge the final push towards the 100 As we have been driving. Thank you. Thanks. Can I ask a follow-up for Sushil maybe regarding the U? S. Market? How do you see that evolving now given Especially the role of LNG, Blue Hydrogen, given the new administration, maybe U. S. Has a bit more positive stance towards Carbon capture than Europe, for example. So what does this impact your business and the engine technology, let's say, storage and backup market? Yeah. Thanks a lot, Antti, for that question. I think yesterday, the President here Has signed an executive order also. So we need to look at what it says. But clearly, I think that the new administration is We're going to do a lot of stuff on getting more and more renewables into the power system. And that will clearly sort of You know, also increase the demand for flexibility. And we already see that United States is moving pretty fast on the energy storage. We start to see that also in our own order books. And then we are now expecting the same thing will happen going forward on the engine side. Of course, Carbon capture is going to be a solution, future fuels. We are talking about all kinds of other type of fuel That will play a part in the mix as well. But we are in a transition. I think we must not forget. I mean, you cannot wake up to 100% renewable tomorrow. There is a path that we need to look at. And if you have seen, we have been working quite heavily In modeling different states and including California and the fastest path towards a Sort of forward neutral future will have to include, of course, tremendous amount of renewables, but flexible generation as well as Energy Storage. So we are looking at it with a lot of eagerness On how this will unfold now in terms of energy transition. All right. Thanks so much. Thank you, Antti. Okay. Thank you. Next Question on the line. We have Antti Suttelin from Danske Bank. Please. Hi, and thank you. Two questions. First, ship contracting. You said you observed some In November, December, the question I would have is, do you think this was one off only or do you think this potentially could continue, Meaning that the trough would have been passed by now in overall ship contracting. That's my first question, please. Thank you, Antti. And now Roger Holm, Head of our Marine Power would probably Be the right person to talk about the contracting and how does it look going forward? Thank you, Antti, for the question. And yes, it was slightly better in Q4 and especially towards the end of the year on vessel contracting. I think the estimate is some slight improvements in 2021 compared to 2020. And I think that should happen. It has been so low levels for quite some time and even lower now during 20 Svenja, I don't expect huge movements, but looking at it now, we would see some slight recoveries on the contracting volumes. Okay. Thank you. And then, I guess this is a Jakob question. You closed The year with a lower order book year over year, does this now mean that 2021 sales will inevitably fall? Is There any chance that new order intake could be so strong that sales wouldn't fall this year? Thank you, Antti, and that's a very good question. The starting point, as I said, It's lower than last year. But hearing and looking at our organization and our salespeople, I hope it will not be. But as you know, we don't guide sales numbers or profitability numbers. Visibility is really, really bad. The market conditions are really shaky. And I only wish and then let's see when we continue, I mean, how more would we know In April and so on. We are ready. We are spending a lot of R and D To new products, new ideas to help our customers. And then as you know very well That we need to get also service levels. I mean that's one element with our customers. The transactional business, which You go through the whole every year and certain segments. I mean, this is So easy to calculate that if ships are not sailing, you don't get too many transactional Service Business. But The moment they go out, the moment there is a ship which is even half empty goes out, Cruise ship or ferry or any kind of a ship, it the engines are running and that will mean More and more business. So let's see how months go on and hope the sailings will Continue to increase month by month. Okay. Thank you. Understood. And All the best, Jaakko. Thank you, Antti. I think the moderator is giving me an opportunity to ask a question here that's come in from the lines. So from the line of Daniela Costa, she has to Sorry, Natalia, this is echoing. I can't hear. Is it better now? Okay. Let's try. I'll try to be slow, so maybe the echo doesn't disturb. Daniela asks how much the cost overruns in Marine and Energy are affecting the EBIT this in 2020 And how much is still expected to impact in 2021? And now we are cost overruns. And now we are talking about our problem Projects. And okay, I don't have a number exactly how much it affected 2020. But going forward, we as we said earlier, most of I mean, we said That SEK 100,000,000 was going out in 2020 with 0 margin. So that's something which everybody should remember. And now almost everything is out there. There are a couple of projects which will be Finalized this year, but they will not or shouldn't, they will not Effect has a major impact on profitability this year anymore. But there are a couple of projects still Where the final handover is this year. Thank you, Jakob. And then one follow-up question from her on the portfolio business. She asks what the prospect for timing is to divest the remaining portion of the portfolio business. Yeah, that's a good question. And our portfolio business and as we announced, we sold our entertainment business, which has always been a little bit Strange business to be in, but Tamara de Krutter, Head of Marine Power Marine Systems And at the same time, looking after our portfolio business and the divestments. Tamara, You are in Holland, I hope not in quarantine, but probably not too much able to move anywhere. But Please, could you open up a bit the portfolio business and the future? Yes. Thank you, Jaakko, and good morning to everyone, and thank you for a good question, Daniel. I think with the portfolio business, we managed to divest 3 of our business units in last year, and as Jaco said, we last week signed the divestment of our entertainment. So we still have Four business units left in portfolio business. And it's always a bit difficult to estimate the exact timing of that. And it also depends a bit on the situation in the total market with the COVID and how many interested buyers we have. I would say that the forecast at this moment is that we would expect that the majority of the businesses we could sell in this year, maybe one slipping To 2021, but yes, it is a bit uncertain and we are preparing them for exit and working hard on that. But exact time lines is difficult to give, but majority should be in this year. And sleeping to 2022? Sorry, 2022. Yes. Yes, good. Thank you, Tamara. And then also from the line's, a question from Sebastian Puen From the line is a question from Sebastian Puen from RBC. On the voyage business, when do we expect Voyage business to breakeven. And how much sales volume do we need to see before it starts to turn profitable? Yes. The Voyage, as Already said, we need to look at the EBIT numbers. But Saan hasn't been able to answer any questions yet. Sean Firmback from Germany. I think are you in Berlin or Hamburg, please? I'm in Berlin. Good morning. Good morning. Yes. Well, so Voyage is, as you may know, is a collection of Very interesting companies that have been acquired since 2014. And the business took The decision to carve it out from the large marine business, which was effective July 1 this year just after I came in. And that's really allowed us to get a much better visibility around the cost structure of Voyage as it stands today. And As Jako alluded to earlier, there's a very, very significant program underway to address Some of that and look at some of the waste in the business. And a lot of that is a result of Really not doing the synergy exercises as you would do normally when you post acquisition. So there's like you say, there's a lot of work Moving on there. And I think the second thing I would say is that we have a very, very broad Portfolio of products and services and quite a mix in the sense that some very forward looking Innovations to address the market and the industry as it changes through this journey of digitalization, but also some That are some legacy products and services that we carry and Carry very low margin and high cost and therefore sort of destroy a bit of value in the business. So again, in this current Program of transformation, we are looking at reshaping that portfolio to very much address the needs of the business Of the market and the industry as we see it changing going forward, as we see decarbonization coming more and more Under pressure with owner operators as we see the need for more autonomous solutions being required by Certainly, innovative owner operators. And that's helping us take decisions around shaping And I believe in doing so, then the business will start to those numbers will start to improve significantly. So We are comfortably optimistic that we will end the year in a lot better shape than we did in 2020. So I think I would leave it at that Thank you, Soren. And then a second question still from Sebastian on the storage market. He is asking around the margins of the business, whether or not it's fair to assume that this is a pass through item And thus, how is the margin of the storage business? Margins in storage business. And Susie, would you be able of course, we don't guide margins or say exactly where our margins are. But Susie, could you elaborate a bit about storage and margins? Thank you. Thank you for the question. I think like Jaakko said, we can, of course, guide the margins. Of course, what we see is It's a growth market right now. We see strong growth in that market. Maybe the margins are slightly below Our normal engine projects, but what we are also seeing is there's a Tremendous amount of activity on the sourcing side when you talk about the storage prices are declining. So it's very difficult to really guide on margin as such. At the same time, I think we if you look at the volume Going into the market, it's not only us, but from the electric Trig vehicles or the grid scale energy storage and behind the meter energy storage, there's a lot of activities going on. And we are seeing strong growth. And even in our own order books, we are seeing, as Jaakol mentioned, it's the market has been resilient In spite of the headwind we faced from the COVID in other side. So We are it's we are hoping that when the volumes are going to be strong, we will also be able To get the margins to a pretty good level. Thank you, Sascha. And then one more question from Tomi Rijlo at DNB. He asked about the cruise market. Have you started to experience a pickup in cruise service? What do we hear from cruise operators? And what is the outlook for 2021? Yes. Cruise Business and Roker, I mean, it's a business which is important To us, and definitely we need to follow very, very carefully. But Roger Holm, Head of Marine Power, please. Thank you, Tommy, for the question. And I don't think we expect in Q1 big movements on cruise. We, in Q4, saw some small activities on the service side, but it's still on a very limited level. As we see it today, I would hope that we will see some start to see some more activities on that part in Q2. But of course, it's very much connected to how fast the vaccinations can be rolled out In the customer target segments, and that will determine a lot on how we will see a gradual ramp back of cruise activities during then the whole Remaining part of 2021. Thank you, Roger. Those were all the questions I had received. Moderator, are there any questions on the line still? Yes. Next one, we have Erki Vesola from Indoress, please. Hi, good morning. Can you hear me? Yes, Erkki, please. Good. About the storage or the storage only orders you are getting That's obviously an increasing part of your energy business. But how about the aftermarket side of this? Is there any maintenance business once the storage solutions have been delivered? Or are we just talking about, say, potential GEMS upgrades, etcetera? Yes. Thank you, Erki. And again, Susil, a lot of our questions to Energy. So You are busy now, Susil Purohit. Something about storage and services? Yes. Okay. I think on the services side, of course, we most of our energy storage projects that we are now taking into our order books are Always associated with the long term service agreement. So that is good. Of course, These type of products are not requiring a lot of service and a lot of parts As we do it in the engine side, but we are making the first steps in providing services. Going forward, we are, of course, working on various things to see what added value We can bring in terms of providing our customers more support on managing Not only the storage assets, but also sort of managing the portfolio. So again, It's very early stage in our thought process and then we'll see how we go forward on that. But just to Make it clear, we are getting long term service agreements with most of our projects. Okay. Thank you so much. And Jakob, all the best in the future on your say less hectic days. Thank you, Erki. And this was the last question. And so thank you all. As you know, this was my last quarterly result presentation. And I really want to thank you all for your support, your interest in Wartsila and sometimes helping us also to understand better where we are. So Good luck with all of you. And in April, you will see Hakan Agenewal as our new CEO running the show. Thank you and bye bye.