Earnings Call: Q3 2021

Oct 26, 2021

So dear all, a warm welcome to this presentation of the 3rd quarter for Eifry. My name is Jonas Gustafsson, CEO of Efrain, and I will do part of the presentation. As always, Josep Paimon, Our CFO will take care of the numbers related to that. And we will also have time for questions just after the presentation. So thanks again, and let's move into the numbers for the Q3. Starting with an overview, in the positive part was that we delivered a strong organic growth in the quarter, really driven from the Industrial segment, as you have seen. And the numbers is pretty clear for you. We ended up at SEK4.4 billion, EBITDA on SEK3.69 billion and margin 8 point III. And what we saw is that on the industrial side, really good demand. And I mean, if you look on our divisions, 4 division have delivered strong margin and if you look on 3 of them, really strong growth. So 10% is the total growth in the quarter because we have done some good acquisitions, but organic is 7.5%. And again then, 4 divisions have delivered really strong performance. I mean, we know Ennurgey still are focusing getting back to growth, but the margins are stable and high. It is absolutely clear that the challenge in the quarter was infrastructure and part of infrastructure where you could even narrow it down to the Swedish part of Transportation Road and Rail, where we had a slower start and lower utilization during the quarter even though the market is stable. We have also so far announced acquisitions this year equal to SEK1 1,000,000,000 in net sales, really good. And yesterday, we will get back to that. We announced a really good fitting acquisition in Finland, the Wahanen Group, that That's really a really good complement to our infrastructure business in Finland. So I will say most of the quarter is solid and good, and then we have a bit more challenging situation in part of the infrastructure. And obviously, we are not really happy with that result, and we are really working a lot to bring that back on track. Market, as we said, it's a general good demand, I would say, especially when you look on industrial segments. And I would say that we really see The effect from the transformation that is done in the industry, we see a big demand on software support, we see a lot of things going on And we also, of course, see a recovery from the pandemic. Infrastructure, I would say, overall stable. So if you look on the markets outside Sweden, it's been a stable quarter. And I would say even in Sweden, the market as such Industry and Data Solutions, strong demand across all segments. And for example, automotive, Really good pace, and I think here we see now the effect of the transformation is going on with more electrification and software, the manufacturing for the Life Science. So Industry and Digital had a really, really nice quarter with strong demand. A bit recovery from a week last year, but also solid good demand. Process industry, strong. The market remains very stable, especially in the OpEx service, but we So see that the CapEx is on a solid level. Energy, I would say we are really happy with the margin that Energy is delivering. Then of course, now the focus is to get back on growth. And we have a lot of good projects in the pipeline also. So I know there is a strong focus to drive growth. And Management consulting for sure really positive trends. So I would say on the overall picture, it's a favorable market. But of course, it's easy to zoom into that area where we have had a bit more of a challenge, and I could imagine there will be a few questions related to that. Then looking on the projects to highlight, I mean, we have done some really nice projects in the quarter and more and more of them have a digital part of And one that we are really proud of is with Hitachi ABB Power, where they, together with us, used the digital twin. So that's a really nice part. We have also a nice assignment to the Swedish Transport Administration for Eifry's Flowity. And this is an AI driven intelligence for measuring traffic flows. We had good engineering assignment from MetsoBoard. We have also a nice rail engineering assignment in Finland and also a nice big solar plant in Thailand. So I will say, and Jusser will confirm, that the overall order backlog remains stable and good. Now with acquisitions, we have added, as we said, SEK1 1,000,000,000 in acquisition so far this year, And it's totaled 16. So it's been an intense acquisition focus this year. We did some nice one in the Q3. 1, to highlight Cubic Analytics in Finland, it's an analytic company into the digital area. Sert, also a nice one and Inuzco in Denmark. And then yesterday, and Josef probably will comment a bit more On that, we did a really good announced a good one, Wahannen Group in Finland. And this is a Finnish consulting company in the real estate, really nice complement to us in Finland. And Wahan and Group together with our current infra business will really strengthen our operation and focus on infra in Finland. And of course, with the Pori in Finland and the history, this really adds to a good infra position in Finland. And that's roughly SEK 500,000,000, SEK 470,000,000. And I'm really happy that we could come to an agreement and of course, now the process starts then with Wuhanen Group. So on the acquisition part, we are happy and again the SEK 1,000,000,000 that we have added to the top line. Also one thing I want to highlight because a couple of years back we did the rebranding to Eifri and of course, now we're working in many ends, sustainability, but also to make sure that Aifri is seen as one of the most attractive employers in Sweden. And we are climbing the ranking and this is a recent ranking where we can see that we are again ranked as the one of Bachelor of Engineers and number 8 among Masters of Science Engineer. And again, it shows also that companies that have a clear Eifry, sustainability focus and interesting projects, of course, is able to attract the best competence. So this is key for us, and we are happy with that. Now I will leave it over to Jussung, our CFO, who will take you through the numbers. Thank you, Jonas. So let's talk about a bit on the numbers. So as usual, let's start from the net sales development. Before going that one, I still highlight that we have now 2.9% structural growth from M and A, but then when acquiring Wuhanen and complementing our Finnish platform, As it closes after competition or authority approvals, we will get a bit of boost on that one. So I'm really happy that we can improve our total offering in Finland with the real estate now. So if we go for the net sales development, we are just couple of 1,000,000 shy of double digit growth, 9.9 percent and ending up on SEK4.4 billion compared to SEK4 1,000,000,000 previous year. Out of that one, organic growth is 7.4% and adjusted organic growth 7.5%. So we are accelerating on the revenue part. I'm absolutely happy that we get there. And at the same time, it is highly supported by our industrial offering, whether it comes from Industry and Digital Solutions, Process Industries Then in the management contract, I think, who have quite impressive organic growth numbers, while then infrastructure in a modest growth track and Energy still in the negative ones on the growing part. But going back there with after the COVID pandemic as the major projects can start up. At the same time, order stock is continued at a stable level. We are continuously winning projects, like Jonas explained in the earlier slides, and having a solid strong backlog to be implemented in the future. Going from net sales to EBITDA development, we made SEK369 1,000,000 Of EBITDA, excluding items affecting comparability, previous year, we were at SEK 288,000,000. That SEK 288,000,000 of cost, so included SEK 62,000,000 of state subsidies within those numbers. We ended up into the EBITDA margins, which are solid, but at the same time, we need to recall the salary accounting method. So compared to previous year, we have gained On the salary periodization in the Q3, not to the amount we expected and guided, I will come back to that one. But with that adjustment, we end up into 7.1% EBITDA margin. We have especially strong development in the industrial segments, whether it is Industry and Digital Solutions, Process Industries, Energy or Management Consulting. But as Jonas highlighted, our issue is within the infrastructure. It is especially in transport infrastructure in Sweden, where we basically are facing a lower utilization. And at the same time, we can say that we had a slow start After the summer, we can basically split that slow start into 2 different impacts. And this is now happening across Nordic portfolio, not only Sweden and to certain degree, not only in infrastructure. We have seen that people have taken more vacation time, especially in than in the previous years, which has impacted which has been more probably coming from our client behavior. So clients also ramped up slower after the vacation. And this jointly then impact our EBITDA, especially in infra, but slightly in other parts of the portfolio also. Couple of words on the change salary accounting method. We have a SEK57 1,000,000 positive on Q3, while we earlier guided SEK91 1,000,000. And Basically, if we step back and first go to the methodology what we are talking about, we are periodicizing salaries throughout the year. And that periodization logic has gone from actual fixed salaries or from Daily salaries to actual fixed salaries. So for example, employee, most of our employees are having fixed monthly salary. So in February, you get, let's say, SEK 50000. And in March, you get SEK 50000 irrespective how many working days you work. And earlier, we accounted that salary based on those working days. And today, we account them based on the actual fixed salary. And the change in the holiday behavior impacted this calculation in a manner that we were not able to expect earlier. So all in all, the impact on full year basis is still 0. We are splitting salaries between 12 months, But the positive impact is now hitting more the heavy working months of October November compared to our earlier expectation. So with that one, let's talk about couple of words on the divisions. We have basically solid market conditions, Solid delivery in the Industrial segments, we have increased from the profitability 7.2% to 8 point The salary accounting method has been supporting infrastructure and Industry and Digital Solutions especially. And basically, the one more day Vacation spent and delays after summer is especially in the Nordic portfolio, so also having a minor impact in Process Industries and Energy. Calendar was more or less stable. It's a minor negative, not worth mentioning in the total. It is. Then we have the common cost that are SEK 37,000,000 below previous year. We have now gone live successfully in the ERP in the second quarter, And we start to pay a bill on depreciation and then rolling out in the new entities in the Q3, and that is impacting the AFRY. But then we are also building up our digital offering, and we have some investments there in AFRYX that We are making to make us better and better in the digital world and especially in the software offering. So all in all, 4 out of 5 shooting well and one where we have Clearly more work to be done. Going to growth and profitability, we have basically 3 divisions on double digits, management consulting even, Starting with the 3, those are very solid, supported by the market, and we are really happy to see this type of a growth. Then especially in the Q3 also solid profitability. We have 3 entities in double digit profits: Energy Process Industries and Management Consulting. Then while infra lagging behind previous year, despite being supported by the salary accounting changes and only modest 0.7% growth. So as said, we have more work to be done within the infra to push it back, but the market is there, and we are working on it. Then a couple of words still further in the profits. Energy was Continued strong results. It is supported by very solid execution of the larger projects. But at the same time, the negative growth is arising from projects that are continuously awarded. So they are in our order stock, but they are not progressing to the execution phase due to COVID and due to travel restrictions and due to still continued restrictions, especially in Southeastern Asia. So this is something that has impacted the growth, but at the same time, we see very solid project execution in the larger projects that supports the The management consulting has been benefiting both the favorable market environment, and they are supported by the high transaction volumes In the M and A market, we are doing a lot of services in there for due diligence, supporting the transactions on profit perspective. So really happy to see that high numbers also in there. But as you know, it is a volatile business that goes up and down, but in the end, deliver solid results. On the net debt development, basically, We are having a stable cash flow. There is basically net working capital impact a bit. We are at SEK4.2 billion €4,200,000,000 net debt and still at €2,300,000,000 And remembering our acquisitions, It is quite a solid one, and we are happy where we have and we still have available liquid assets well. We have during the quarter, we have bought Shares back, we have always mitigated the convertible program in the markets that we have had earlier, and We have bought those shares again back and then obviously the acquisitions. So the underlying operating cash flow is stable and ticking. And then we have been investing into our future with acquisitions. Maybe good to note from the group level at this page is that We are also seeing then EPS growing our earnings per share and the profit or the profits are dropping down to earnings per share. We have some 70% increase in the quarter 3 and some 30% increase year to date. So we are delivering both on the income statement and in the balance sheet to our With these words, handing back to Jonas. Thank you, Jusso. I will just then Summarize this thank you so much, Joosse. Of course, if you look on the overall now, we are focusing general on growth and profitability. And if you look on the industrial side, as you also highlighted, there is a lot of positive things ongoing. Demand is increasing, and we are well positioned. Just looking on Industry and Digital Solutions, where we have a strong position in Sweden, but also now expanding in the Nordics. Software demand, we talk about asset management. We have really interesting position in Food and Life Science. So for sure, we will continue to push. We see also a lot of projects evolving that goes across divisions with a big, big portion of industrial content. So we are happy with that. Then of course, infrastructure. We are not happy with the performance that we have had in some of the units or areas this quarter. That's clear. This effect of many things, as Jussus said, coming back from vacation late and on the client side. So You could just imagine that we have a strong, strong focus on operational improvements in those areas. And we have, of course, seen an improvement during the quarter, but there is a strong focus to get back to where we think it should be in those areas and, of course, the focus on growth and profitability. M and A, we will, of course, always continue and look for good acquisitions that complements or strengthen our portfolio. And of course, now to integrate those companies, we have done 16 so far this year, Quite a few small ones in the 1st part of the year that are already integrating, delivering. And then again, for example, the Wuhanen Group that we yesterday, which will be a super complement for us in Finland. We're really happy with that. And then 2 things then, digital and sustainability. We are scaling digital and of course, building the Aifry X, being more and more clear and precise what to offer. Strong focus on service, on IoT, AI and even looking on cybersecurity where we actually have at Aifry a strong competence level, and we are delivering as of today, too, and how can we further expand that position and also step by step climb up in the value chain on recurring revenue models, SaaS, service, etcetera. We highlighted 2 projects in the list earlier today here with Hitachi in the digital twin and the Flowity, which is also a very nice example of that. And then, of course, sustainability that goes across the whole company. So I think in total, we are well positioned and we know where we need to be working a bit more to bring back to bring the operation where we think it should be. So with that said, I will start and Open for any questions that you might have to me or Jossa. So I know, Catherine or Ebba, you are monitoring the questions. It's Eva here. So first to say that you need to use the function, raise your hand if you have a question, and then we'll take them in order. So we start with a question from Johan Sundin at Carnegie. So please unmute yourself and go ahead with your question. Yes. Thank you. Hope you can hear me. First, a few questions on the infrastructure business. When I listen to your presentation, I get a little bit different feeling for when I read the report this morning. When I read the report, my take was More that there was an issue in the market. Now when I listen to your presentation, I get the feeling that more kind of your own operation that has been the problem with the slower start, hard to how should we balance that message? Is it more a market problem or is it your own issues? I can understand that, Johan. And I think the truth is a bit on both sides. If you look on the market and then include the clients, we have seen that clients as well as Astrand after vacation started up slower. So And then we have also highlighted an increased competition and also even increased price pressure in segments like road and rail. But equally, Johan, we also know that we have we could have done better with the performance and how we drive the business in that area. So I think it's on both sides, I would say. I don't know if you want to complement that, Jussum. No, I think that is exactly the case. Like always, it is a bit on both sides. We have the market there, but the market has been behaving a bit differently. And then our reaction to that different behavior could have been swifter. So that's Yes. And I wouldn't say that it's a Swing in the quarter, I had that earlier today, if something dramatic ever changed, I said no. But we know that the Q3 with especially in Sweden and the Nordics, getting back from vacation, it's a weak quarter in general. And what we noted was that we And clients in those segments were later starting up the operation. And we it ended up with a lower utilization, especially in those 2 months. And if you look on the August, that's an in between month where we have part of the organization on vacation, part is ramping up, but we could see in the quarter that it improved. But then we know that we could do more. So for sure, right now, there's a tremendous focus on bringing our operational performance back on track where it should be. Thank you for that clarification. And also another follow-up on the infrastructure side. We have tried to call the bottom for this segment for maybe a year now. I think during Capital Market Day In November last year, you said that we are hitting the bottom and that should be improving from here. How should we see this Segment developing going forward in Q4 and next year. Because maybe if you just look at the trends, then the kind of The margin continues to slide and the progress maybe, what you say, is escalating. How are we In the process of turning this segment around. Yes. I would say the segment infrastructure, which is a wide segment for us then, we know that we have issues, as you have seen in this quarter, especially on the Swedish side, especially on the transportation side. At the same time, we have units that is well balanced and improving according to plan. So I will say, we don't we are not in any, how to say, Worried that the whole infra is not delivering and developing as we want, but we have had a hiccup in the quarter That was not in our plans either. So on the overall infra, I am not worried at all. But unfortunately, we had a hiccup in the quarter on some areas, and that had kind of impacted the overall result. But we are working a lot on addressing that. And then, of course, we also need to understand that infra market over the last year have been tremendously favorable, but we know that competition is increasing, price pressures there. So it's not a market that will be stable forever, but the overall demand is there because we know there is a need for additional public spending, there is a need for new solutions in transport, etcetera. But I'm not that worried on the overall, and I agree, we said it bottomed out, and That's what we see also on the total. But again then, now we had a part of the infra that did not deliver according to plan in the Q3. Perfect. One more question, if I may. And that's regarding vacation outtake. From Juste's presentation, I get the feeling that you had a little bit tougher development on the vacation outtake that's hampering your development. Is should you say that you're more on balance going into Q4? So worries for high education outtake is behind us? Or Is that something that we should be worried going into Q4 as well? No, I think you're right. And what happened is and you know that the part of our especially infrastructure in Sweden, it's a quite decentralized business model and that works very good. But I think when we had a quarter now where both on the client side and our side, there's been a slow ramp up with a few more days of vacation in August, especially then, and that affected us. But I would not say that we are fearing an increased vacation moving forward in the Q4, no. Perfect. Thank you. That was all for me. I got to get back to you. Okay. So we take the next question from Johan Dahl, Danske Bank. Please go ahead and unmute yourself. Yes. Hi there. I was just wondering on infra again. Can you talk a little bit about the specific you're taking in this area. Again, just to reiterate, a bit surprising to hear you talk about the quarterly problem when its margins have been sloping for 3 years. But what actions are you actually taking? And secondly, also, is this do you feel it's the right time to take on another 500 people in Finland in this business area right now given the operational challenges. Yes. Thank you for the questions. Well, if you look on the start with the Wahaan Group then, which is a really solid company in Finland on building that is a good complement. And you could just imagine that it does not have too much of causing problems on the Swedish transportation side. So we don't think that, that is not an issue at all. And If you look also outside Sweden and in different segments, we have really good development in infrastructure. So The fact that we have more challenge in part of that doesn't say that we should not continue to develop the overall business. And then what actions and I believe it's Juso. But right now, it's clear that we are monitoring and looking on that part on I have to say on that we have improved our performance management part on those part that were starting up slower. I don't know, Jose, if you want to complement. Yes, maybe just to complement on the acquiring 500 employees in Finland. We need to remember that we have a very strong double digit delivering platform in Finland, and we are bringing another solid mini platform with 500 employees into that community, complementing the services. So I think that our capability to integrate that one is especially strong in Finland. And also after the Peru merger, We have rehearsed quite many things quite well. So this is something that I would not feel uncomfortable. I feel actually really happy on that one. It both complements the Finnish offering, and it complements our position in Finland. But also then it makes infra stronger and less reliant after the competition authority approval. So this is something that I definitely don't have a stomach pain with. Okay. And just on cash flow, can you just possibly share with us how we should look at this For the full year, I mean, you reversed the gains that you had last year in the 9 month period. But Can you give us some sort of indications where you think this could end up for the full year? It doesn't look too good on the 9 month basis. Yeah. Basically, first of all, if we take 9 months, you're absolutely correct. We have had the net working capital tie up back if you look our organic growth and growth figures from that perspective. The net working capital that we released during the pandemic in the previous year has We're now being tied back to net working capital. We have a bit work to be done in there to improve it. But at the same time, like you see, our traditional cash curves, Q4 is the time when we actually make quite a big bulk of our money or cash flow, and I'm not worried That part then also in a way thinking about where the cash flows are working on, It's then important to know that 9 months is quite a short time on that one. So our cash delivery last year was very strong And part of that one has been now tied back. So then Q4 should be strong, but obviously not to expect similar type of cash conversion rates as a year ago, when it was, I said, supported by the pandemic and the net working capital release from that one. So strong Q4 ahead of us. And then there's Lots of questions like always in there, will the clients pay before Christmas or will they pay after New Year? That's always the big question, and Nobody ever knows in detail the answer on that one. It's highly depending on client behavior. Got you. And just finally on the sort of management agenda Into next year, there's a new Chairman of the Board, I guess. And how has that sort of Changed lately into next year. Any specific items you want to mention, Jonas, on that topic? No, I mean, there has been you said yes, but there has been a change. Tom Eriksson has stepped in. And I know Tom since a long time back, even a bit through the Sandvik days. And I think Tom shares a lot of the ideas and thoughts that Anders had, Nordwinger, who left. So I think from that perspective, it's not a big change. But we are, of course, now We have spent some time on looking on those areas where we really think and believe that Eifry can excel and where we should continue to build our strong. So for example, digital is one area that we strongly believe that Efrain have a good position. We also see that our industrial part will be and is so important moving forward because many of the projects that are evolving will have an interesting mixture of infra related part, but the equally industrial part and digital part. So I think there's not a new agenda, but for sure, So always with the new Chairman and a few new Board members, we are looking on the play field with open eyes and strengthening and focusing on those areas that we believe in. So I feel really it's really good and really supportive on the journey ahead. And So we will continue to push and develop Eifry. Okay. Thank you, Johan. Next question is from Don Johan Son at SEB. Please go ahead. Thank you so much. A couple of more questions from me. First, maybe a follow-up question on the acquisition in Finland. In terms of margin level, is it roughly in line with your current group margin? Or is it lower or higher? Basically, it is above group margin, but Okay. Thank you. And on demand, you mentioned in the report that pandemic continues to affect certain decision making processes for major projects. Has The situation improved now in the beginning of Q4, reducing our restrictions. And could we see a better situation now already in Q4? Or do you see it Take perhaps a while longer into next year. I mean, generally, as you are saying, Don, I mean, if you look on the Nordics restriction are released, But some of the products that we are referring to, especially on the anery side, they are really global. I mean, we have a lot of things in Southeast Asia even Africa. And of course, here the situation is slightly different. So I think on overall, you would say that the pandemic releases are supportive of us, but they are still on Our global business still effects on products that were awarded, but for different reasons, they are not able to start up. We believe it will step by step also on that side improve, but still we have some effects. And especially on the Energy side, they feel it the most on some of these CapEx projects that We have been sometimes even on and off to be started up because then suddenly there's a lock in of a country or part of or a site. I want to complement the acquisition. I mean, this is an acquisition that we really, really like. It's a sizable one, 500 employees. It's super fit in Finland because we have not had that strong offering on the buildings, real estate development in Finland. We have a strong already platform in Finland with, of course, the former Poyri part. We know the market. So in a way, it's a really, really good acquisitions that I'm super happy that we could bring in and it will strengthen our operation in Finland significantly on the infra part. And I think it's important that you are not getting Of course, we know that we have not delivered on expectations on part of Infra. No question about that, and we will not even try to hide from that. But we also know that there are part of infra that have delivered really good and where we are really stable and solid. And Of course, when these opportunities occurs like Wuhanen, we are going for them and we will continue to do that. But I will agree to you on part of the Swedish operation Right now, to add a lot of acquisition is probably not on our core agenda, but drive improvements operation performance. But since we are now having a footprint with Finland, Sweden, Norway, Denmark, even Switzerland, we have opportunities to strengthen part of the infra without interfering with those part where we have operational challenges. Thank you so much, Jonas. I think you answered my second question as well in terms of the focus now going forward That's an integration of operational improvements. Yes, you should not try. I mean, Of course, we know that we need to improve those areas where we have not delivered. There is no question about that. And there, we will not have any other focus than bringing the operation back. And of course, we are not happy that somebody said that you have promised, Antonia, and we know that our base plan, of course, is to bring infra to the level on where it should be. I want to highlight that part of the infra business is doing well. But in the Q3, it has been a bit more challenging for us and we see it in the numbers. So in those areas, there is no other focus than bringing the performance back. That's a strong promise from our side. Thank Thank you, Dan. Next question is from Erik Elander, Hello. I forgot I had to unmute, but now I'm here, back in business. So I was actually also wondering about the infrastructure part. So your growth the last 12 months has been minus 2%. And over that same period, the EBITDA margin has been 7.5%. I mean, you have a group Target of 5% organic growth and 10% margin. When do you expect to get back on that level? Well, I would say, Erik, on the growth level, I agree with you that if you look on the infra part after the pandemic, that was a bit more For us last year, we would have believed and hoped that we would be back on stronger growth number for Infra. When we will be back on that, I will We will not commit to, but we will for sure do our utmost to bring the growth in the total infra business back. And on the margin side, we have a plan. Last year, I remember we were challenged because we did focus too much on cost and margin and maybe not enough on growth and on the higher we are. But for sure, we are we have a plan to bring the whole group up on the 10% level for a full year. And when that will happen, I will also not commit to, but it should happen sooner than later. Now we had a hiccup in the Q3, and you're correct, and Erik, if you look on the infra over the longer period, it's not super fantastic, we know that. And Yes, we are working on bringing that on the levels that we expect. I don't know if you want to complement? No, I think that was exactly the same which was in my So I would love to say when, Erik, but we will not do that because it's but we know where we are not Happy with the performance and it's the good thing is, and referring to a few other answers, that it's not spread all over, which I think is good. It's really central to areas that we now can address. And I think it's part has been a 3rd quarter, I would say I think 3rd quarter challenge for us for different reasons. So for sure, we will do everything else we have said before to address them. All right. Because the thing here is that you have actually done a really Pretty much exactly 2 years to get from 7.2% up till 10% today. And this is basically Where infrastructure is. Infrastructure basically is energy 2 years ago, something like that in terms of margins at least. When you improve the margins of the energy business, you pretty much downsized the business. Is this kind of what you can Expect also for infrastructure, meaning that it will take around 2 years to get back to 10% margins in that area And you will do it through downsizing of the business or how will you actually achieve those 10% in infrastructure? It's a good question, Erik, and I understand it's tempting to do the comparison. I don't think really that it's the same medicine though. I fully agree with you. We are super happy with the development in energy, and I know that many also challenged Our belief is that we will bring the margin up and we had a good plan. It was also a combination when we integrated the former OS business, as you remember, with the Peury business, and we could get a good kind of leverage into that, and it's a very solid segment. On the Infra business, we fundamentally believe it's a growth segment. And the plan we have is to both Improved profitability because it is not on the level we expect, but at the same time driving growth. And coming back to because infra is roughly 40% of the portfolio and when you slice infra in Our division into we have a building, we have a road and we have rail and we have water and we have environment and architect. And we know today pretty well where we have the challenges on that. So I would say it is a combination of Performance improvement, but at the same time, leaning forward into growth. And I hear you and but so it's not a copy paste from Energiew to infra, but of course, things that we have done and Energiew in driving performance, project execution, etcetera, all the good thing we can copy and use, we are doing. But maybe it is good to complement on the comment that Energy and Infra business are different, both from the Geographical footprint and the volume base perspective. So infra is driving couple of big volume basis Sweden, Finland, Norway, Switzerland, while Energy is an international business with more scattered footprint. So Energy projects are bigger and lengthier than infra projects. In infra, we obviously have the transportation part where you have longer projects, but those are not as long as in Energy or the structure is different. And then at the same time, there's a big portion of the revenues, 40 plus percent is building projects that is normally a short order stock structure in the portfolio. So the turnaround times can't be compared between Energy and Infra from that perspective. Obviously, the methodology on how you drive performance in People Afrin. And finally to say, it will it should not take 2 years to bring it back. That's what I wanted to hear. And then I strongly believe that because when you zoom out, for sure, I believe that the market will not always be constant without increased competition price pressure. But what we believe is that the market is favorable. It's shifting, but I believe that we are well positioned. You could say, as Jussus that if you go back a few years, we had some big projects also in the transportation side. Bypass Stockholm was a big one. And now the project sizes for Efrain has gone down slightly. So it's a bit of a different landscape. And but we will be on it and we will do our utmost to bring it to the level that we expect it to be. Okay. So we have another question from Johan Sundien, Carnegie. You raised your hand, so I think you have an additional question. Go ahead. Yes. I have an additional follow-up question on the Energy segment, if I may. And that's regarding the margin profile there. I have asked you multiple times of how sustainable these levels are. You said that it's lumpy. It depends on where you are currently in specific projects and so on. And given your I think your comments on the outlook is a little bit more positive than you've had for the last 2 quarters or so. Can we expect can we be extrapolate this good margin level this time? Or is it the similar thinking that It's lumpy or where are we in the phasing there? I mean, Jussi, but I think as you said, It is a corridor that we because as you said, we have effect from big projects and also as we talked about the pandemic, Eifry. We have seen the Energ division have reached a robust level. But to really knock it down to say it will not go So this or we will go about this, I think it's a bit challenging in a product environment. We know That it's been proven now that we have reached a sustainable good level, but it will vary over time. And I believe now, in general, when you zoom out with the ongoing transformation in the Energy segment, I believe that when we are getting back because now we are delivering solid margins with negative growth. And of course, keeping the operational performance and getting Top line growth, I mean, who knows what we can deliver, but I will not commit to it because I think that we have done a good job reaching the level we are today. And then maybe to complement on that one, I've said it earlier in a way that the project curve in energy is like a S curve. So you start slowly, then you accelerate and then you end slowly. And in the margin management of those projects, obviously, when you are in the hectic phase or early phase, you evaluate your future Quite often lump sum projects, then when you reach the end part of the cycle, then you may have positive surprises in And that is typical in the project business. And now we are in a situation where we are expecting many of the newly awarded projects to enter those hectic phases. So during those times, they deliver solid normal profits. And then obviously, when we execute them Within the plan or even better than plan, it can come out with a kicker. Now this is normally fully smoothed over time. But now due to the COVID pandemic and delayed starts in the projects. We have maybe now a portfolio that is slightly at the margin levels. But in a smooth portfolio, of course, when we get to the growth and like Jonas says, we have quite a good potential also in there in the future. And just to follow-up on your explanation that you saw, the timing for this kind of Normalization, is it 1 quarter ahead or is it 6 months or 9 months or so? How should you think about? In a normal perspective, we are talking about 1 to 2 quarters normally. But this is, of course, highly driven how the volume Start ramping up and how the project start ramping up, especially in the Southeastern Asia part. But as in general, This is normal behavior in the project business. This is how it works. So it's nothing abnormal. You get a bit of volatility in there. And when you manage your projects well, obviously, then you are happy to see volatility more in the positive side than in the negative side. Perfect. Thanks so much. Thank you. Okay. So we have one more question from Erik Paulsson. Please go ahead And unmute yourself. Yes. Hi, there. It's Erik Possen at Entefonder. I was just thinking about the engineering Efrain. Hiring of new personnel there, if you see any tight supply, etcetera, and potential inflation coming up on that side, what do you see there? Yes, I can start and you also complement. I mean, right now, I think we are able with the Eifry brand and with our development to attract really good But we are also aware that the fight for talents will only increase, especially in those segments where Many industries clients are going like digitalization. So we will fight to offer really interesting company, good development, sustainability being the base, diverse company, international company. And right now, we have not seen inflation taking off dramatically in the overall business. It is stable. But from a stomach feeling, with all the transformations ongoing, It will be a fight for competence, and we are getting prepared for that and doing our utmost to stick out as a company that you would like to start with that offers a really interesting career and that you can actually make a meaningful thing because large our portfolio is gearing towards really sustainable products to our clients. So we are keeping a good eye on that, but right now from inflation point of view, no dramatic changes. All right. Thank you very much. Thank you. Okay. So we have one we can take one last question from Erik Elander. Please go ahead. Okay. No, there was not a question anymore. Johan Sundien, perhaps you have a question. One last question. No, I have no more questions. I think Johan Dahl has. Johan Dahl has raised his hand. One last question, Johan Dahl. Thank you so much. Excellent. I get the last question. I'll make it a long one. Just kidding. Can you just in your the acquisitions that have been made year It seems that the multiple have been roughly 10x if just doing the math. Is that Where you peg the market at right now? Or should we take into consideration what the last 12 months, the pandemic, etcetera? Or Have prices gone up in your view? Good question. Good last question. I think and I will ask Jose to support me. I think I would say that we are also looking on companies that are maybe not the same companies we looked at 3 years back. So that's one reason digital companies like we acquired a company in Finland, Cubic Analytics, which really is an analytic company that will complement our digital offering. We did the one in Wuhan and now in Finland. So I think on the overall, we are pushing our appetite to bring in companies with higher, I would say niche competence than before, and that pushes the multiple up slightly. But then on the total valuation, I don't know, Jussi, if you want to Yes. I think that we see on those multiples 2 different impacts. The other one is the portfolio impact, what we buy. And like Jonas explained, We have entered more and more the digital world where the valuations are different compared to traditional engineering world. So that impacts the numbers you refer to Johan a bit. But then the second part is that as you all probably have seen, equity markets have been Quite positive after the pandemic first outbreak and decline, and that is also to certain degree trickling down to also M and A market in the non listed companies. So we can see that the valuations compared to 2 years ago have been modestly going upwards. But that is highly, I would say, fragmented market. And as said, we are operating the engineering part, we are operating in the different parts of the consulting part, and we are operating in the digital And we're operating in the digital part. So all of those ones have different valuation multiples or principles on the acquisitions. But in general, it is fair to say that when equity values go up in the stock market at some kind of lag, it's also visible in the non listed market. Okay. Thanks. Okay. So we have no more questions. So please go ahead, Ignacio. Okay. So thank you again then. Good questions. And So thank you for that. And just again then summarizing the quarter, I think the Q3 with vacations is normally the most challenging quarter for us. So when you zoom out a bit, we are happy with the 10% close to 10% growth. We are not hiding away from the fact that we have issues and challenges to bring infra back on business on the level it should be. We believe that the market is stable solid, and we will focus on those areas that has not performed on the level we expect. No question about that. But then, zooming out a bit still then, We are really happy with industrial recovery and the impact it has on our divisions like IDS, Process Industries Stable Management Consulting and Energy Good Levels. And again, we have acquired a lot of companies like Vahannen, which is a really good complement in Finland that will have no real impact in the negative into the areas where we have our challenges. So there is a lot of positives, but we know where we need to work and bring the performance up on a better level. So with that said, thank you so much for listening and taking the time and looking forward to see you soon again. Thank you so much.