Earnings Call: Q2 2021

Aug 12, 2021

Okay. Thank you. Good morning, everybody. This is Lars Pernellis on here, and I'm happy to present our 2nd quarterly results for this year. If we move on to Slide 2, you can see that overall most record operating results for us with the Russian sales up 31% in revenue. Market is picking up speed. We saw strong performance in our aftermarket and contract services businesses. In Germany, we had truck sales in units, which were up 4% to 7% compared to Q2 last year and obviously we then gaining market shares. We continued our investments in service network and organization in Germany and fully grouped and record operating results despite negative currency effects both in Russia and in Germany. Strong operating cash flows as working capital remains low. So if we turn to Slide 3. Some more financial highlights. As I said, group revenue up 32% to close to SEK 1,600,000. Russia revenue up 31% insec and 54% in rubles. Equipment sales up 50% in rubles, 28% in sales aftermarket 34% in rubles and 14% in SEK. And Contracting Services actually more than doubled its revenue in rubles and then drop back 80 2 percent in Swedish kroner. German revenue up 37% to kroner 3.30 kroner 6,000,000 where we saw equipment sales up 49% actually 57% in euro aftermarket sales up 28%, whereas other sales declined. And group operating profit increased by 37% to, as I said before, a record SEK 144,000,000 Russia increased 31%, Germany increased profit to 14%, still at a loss of SEK 13,000,000. And we had the operating margin, which increase then from 8.7% to 9%. And strong cash flows as working capital declined to 2 center revenue and net debt at SEK 143,000,000. If we then turn to Slide 4, some operational highlights. The market for Construction Equipment, if we measure it in units, the total market, all product crudes included grew by as much as 74%. The increase in the market was support team by improving business outlook, pent up demand, strong commodity prices increased governance infrastructure spending. The so called national projects are now being implemented and we see strong demand from our customers for these projects. We there are still supply chain concerns and there are also potential changes in the utilization fee, at least rumors that may temporarily boost demand going forward or have throughout the quarter, of course, possibly a pre buy effect on expectation of an increased utilization fee. New construction equipment units grew 26% to 369 units. We grow most notably in sales of our bigger machine articulated haulers, forestry equipments and tailors. We have record sales of road construction equipments. And we have an average sales ticket, outlook was plus 25% in local currency and 5% in SEK. And obviously, that is mainly due to the product mix. One very positive thing is also that we again this quarter caught up with the ruble devaluation decision in the aftermarket sales. And then while we increased it 34% ruble, that resulted in 14% increase in Swedish kroner. Planning contracting services. We have reached the plans drastically now Sartorius operations in Norilsk. You might remember we have been mobilizing for 2 or 3 quarters. We are now at plant capacity, and we have also expanded our operations in oil and Irkutsk. As we then saw contracts and services increases as a percent of revenue, 5 percentage points to 2017, and we saw also good sales support equipment. Obviously, aftermarket share revenue declined by 3 percentage points to 20%. And if we look into Germany, Germany in Q2 2 registrations were up by 20% for heavy trucks. Also here pent up demand from last year and also the economic recovery obviously. It was mainly driven by the tractor segments. You can see tractor segments up 41%, whereas rigids are only up 3%. Our area represented about 19% of the general market, and our area grew faster at 22% year on year, although only 2% quarter on quarter. And our new truck sales in units increased by 47%. And obviously, we took market share in the quarter then. And partly this is because some customer key postponed purchases in Q1 this year and we're waiting for the new Volvo models to arrive to the markets in Europe, which happened in April. Aftermarket sales increased by 28% tech, 34% in euro, and this is partly due to the acquisitions of the workshops that we made, and these acquisitions contributed approximately 20 percent of the total aftermarket sales. And gross margin was at 9.6%, which is up from 6.7% from last year. Somewhat on business development on the next Slide 6. In Germany, we are expanding our network and we are improving delivery to customers, so to speak, and we have then completed the acquisitions of workshops in Fulda, Nordhausen at Limburg. We are continuing to expand the network. We're also continuing to change processes and organization as we speak on rolling and including incentive structures and a new way of looking at CRM work system itself. In Russia, as I said, Contracting Services, we reached plant stats in Rielk. Our long term customer Geely goal, we have further expanded our operations with the best company in Kultur. And also very positive news for us is that in our rebuild center Strenica Dreamberg. We produced our 100 maybe components was produced during the quarter. And the first rebuilt machines had the warranty expiring during the quarter without any issues whatsoever. We started our cooperation with Sandvik Mobile Crushers and Screens in all of Russia. We launched in April and we're very excited about this cooperation going forward. But as you can see, we have just launched it during the quarter. If we then turn to Slide 7, this is a picture of our network now in Germany where we closed transaction with Foulba in January, Lindbergh in April and Nordhaus in June. We have also we are planning for a service since sales have a new one in Alvaro, which will be greenfield investments. The land has been bought, and we are investing now in 2021, 2022, and we hopefully should be ready by Q3 of 2022. And by that, I hand over to you, Ulrik, for Economic Development. Yes. Thank you, Lars. If we can move to the next slide, please. And you should see there some of the macroeconomic highlights. Operator, are you moving one slide forward? There we go. Yes. So to give the macroeconomic context, Russia, very strong growth in the Q2, 10.1%. That is potentially versus the trough of last year. Q2 was when we had more or less of a full lockdown in Russia Due to the pandemic last year. So if we look quarter on quarter, it's also up, but less so. These are data from the Ministry of Economy. Expectation for the full year, not as big as again the rebound versus last year that we saw this quarter, but 4.4% is still strong growth and then an expectation of 3.1 in 2022. Inflation, transitory or not, is a big debate in global markets. But in Russia, it's also picked up as we emerge from the lockdown situation, the restrictions. So we saw 6.5% in June And that compares to 3.2% last year. As a response to that, the Central Bank has hiked rates, 50 basis points in June and then another 100 basis points after the reporting period in July, so now standing at 6.5%, same period last year was 4.5%. So that is a meaningful increase. Ruble depreciated 18% on average And 13% on end of period used to translate the balance sheet, the average is for the income statement. So impacting our The way our financials look in that way. If we look at Kazakhstan and take there the first half of the year, we also see a rebound over a longer period as we have there the 6 months, not as strong, But it was also strong in the Q2. 3.2% expected for the duration of this year and then next year 4%. And Germany, strong also, low base effect partly from last year, Of course, but picking up there 11% in the second quarter, specifically at 3.6% expected for the full year of 2021 and 4.1% next year. So all markets expected to continue to recover this year and also see strong growth next year. If we move one slide forward, you will see a slide that we come back And track for the market and it shows on the one hand the market for Construction Equipment For Russia CIS, since the founding of AirNordic, AirNordic was founded in 2010, Where the market was in 2011. And you can see that we're still only even after the healthy pickup that we saw in this quarter and have seen this year only 62% looking on a 12 month basis, so those 62% this last 12 months versus where we were in 2011. So we believe there is still quite some way to go for Russia to replenish its fleet and park of machines and Indeed to deliver on the infrastructure ambitions that the country has set itself. Our revenue It's up 70% despite that market being again significantly lower than it was in 2011. And our operating profit almost 4 times, 3 94% versus 2011 level. So quite a positive development in our financials there. If we move to the financial statements to give you an overview and a summary of what we've seen. We have then A total revenue of SEK 1,600,000,000, strong growth there year on year of 32%, as Lars mentioned. Split is more or less unchanged of what we saw, 79% Russia, 21% Germany. We have been around that, 4five of Russia and 1five being Germany. If we look at the revenue by activity also year on year. Equipment and truck sales as a share is unchanged year on year. Aftermarket stand at 21%, That was actually 24% last year. So that's a decrease. And that's due to the increase in contracting services. So that's now 13% of the revenue mix. It was 10% last year. And then we have a small part of other there, which mostly relates to rental and car business in Germany. Gross margin, positive development to 18% versus 17.2%. That's driven partly by a higher gross margin in Germany, also slightly higher gross margin in Russia, but a bigger pickup if we look year on year in Germany there. SG and A, so our cost overheads stood at 8.9% of revenue, down from 9.4%. So that's a positive development and that's much driven by a lower rate in Russia CIF 7.7%, that was 8.4% last year. If we look at the operating margin Achieve this strong results for the group there as a whole 9% and that's a result So the greater share of the operating profit coming from Russia CIS and the margin being higher 12.5%, same as it were as last year, but also a lower or less negative operating margin in Germany. We had some one off costs again in Germany. Those are related to the acquisitions, mainly that we have completed and engaged in during the quarter, SEK 3,200,000 there. And as a result of these effects, we saw an increase of the operating profit by 37% for the group as a whole SEK 144,000,000 and that is a record profit for a single quarter operating profit, which is encouraging. We had higher taxes in the quarter. That's partly due to higher operating profits and pretax profits rather, but also related to withholding taxes as we paid intercompany dividends from the Russian subsidiaries up to the parent company, partly to fund the dividend payment to shareholders in the quarter in May and that is subject to 5% withholding tax in Russia and that what's realized in the Q2. We had lower financial costs as we had lower Net debt. If you recall, last year during the pandemic, we did draw on working capital facilities in that environment to boost our liquidity situation. And that had some impact, of course, on the interest expense that we faced in that quarter. If we move to the next slide for a visualization of the movement in operating profit between the years, Q2 2020 and Q2 of this year, you will see that The gross profit in Russia CIS is the big mover. That is an effect of both then A higher revenue and a slightly higher gross margin. That growth doesn't come without costs. We have grown the organization partly in contracting services, partly to support those sales. And then there are some low base effects also, I would say. We had especially Q2 last year, almost a full stop on travel and marketing expenses and they should return and they are returning to the business. We have some extraordinary as we put it here in Q2 2020. Last year, we had a one off customs refund in that specific quarter, which also lifted the operating result that year. And then we have Germany, a stronger gross profit. There are also bigger revenue and higher margin there as well, but an increase in cost as well and those one off costs that I mentioned related mainly to our acquisition and M and A activity. If we look quickly at long term trends on the next Slide number 12, We can see that we continue to grow our top line, and that's both in both segments. So both segments contribute to the growth of the group. And this is showing the last 12 months trend. And again, you can see there the group results in red and Russia CIS in the black there, but again, both contributing to the growth. If we look at the lower margin trends, that is the graph that you see to your lower left, Then also good trends there, stronger gross profit, but also then higher operating margin, again driven by the bigger contribution from Russia CIS and the high margin there, but also a less negative margin from Germany. If we move to Slide 13, we can See the long term trends again last 12 months here. So rolling 4 quarters, you can say. There was also a decline in SG and A expenses to revenue. So for the group, We ended up below 10% at 9.9%, which is something that we're quite happy with and much driven by higher revenue achieved from our cost base in Russia and lower level there as a percent of revenue both year on year and quarter on quarter. To your right, you will see our return on capital employed, positive trend there also for the group and much driven by the higher operating income in Russia CIS. Also, we have a negative result from Germany, but that's lower than it was last year. So in that sense, also contributing to a better return for the group as a whole. If we move to briefly look at cash flows, we had again strong cash flows in the group as a whole, driven by the strong operating result, but also partly due to the low working capital we had in at the end of the quarter. Tax payments, I mentioned, were higher, higher tax profit before taxation and then to some extent the withholding taxes that I mentioned. Lower interest payments again from that lower debt stock outstanding And then cash flow from investing activities higher and that's partly due to the acquisitions That we completed in the quarter in Germany, 2 of them mentioned by Lars, but then also investments in the Russia CIS business. We make a point particularly that we had big additions of machines to contracting services. As you see here, SEK 96,000,000,000 rental machines also to our rental business of SEK 15,000,000. And those in the quarter are not in the cash flows. They are partly an increase in payables, but partly also reduction of inventory moved to PPE. So that cash flow will be seen in the cash flow statement when the payables come due. And cash flows from financing activities reflect mainly debt increase that we have taken in, in Russia's JF. There is a question of leases for mainly the contracting services business and then debt funding in Germany. And of course also the dividend payment that we made to investors in May of this year of SEK 109,000,000. If we move briefly to the balance sheet to summarize that, on the next slide, number 15, You will see an increase in PPE versus the last quarter. I mentioned the increase in machines in contracting services that's captured there. Also the acquisitions again in Germany increases the property, plant and equipment. Against those factors, you would have, of depreciation, but also some effect from the currency remind you there that it was a 13% depreciation of the ruble if we're looking at the end of the period rather than the average rate. Working capital in Russia decreased further. So we were at 0% over the last 12 months revenue, mainly an effect of higher payables. We continue to order in a strong market inventory come out very quickly in the demand that we face. We mentioned in the report that these are low levels of working capital. We have typically historically seen between 5% 15%. In Germany, a slight increase in working capital from 11% to 14%, mainly on higher inventories, but also less payables in Germany. For the group then we ended up at 3% of trailing 12 months revenue in terms of working capital Net debt increased, partly driven by the dividend payment that we had and partly by the investments and that we've taken on to fund that. And we then end up with a net debt to EBITDA of NOK 0.3 at this point. Mentioned last quarter, But closed in this quarter was the credit facility with Nordea that we agreed. If we move onwards to our financial objectives to update where we stand, starting From the top there with revenue objective to double revenue by 2025, just set in the beginning of this year and we are moving forward. And when it comes operating margin staying above 7%, well, again 9% in this quarter, but trailing 12 months at 7.7, so above that target and well below the 3 times net debt to EBITDA that we set over a business cycle. And with that, Lars, I hand back Thank you for a few words on the outlook. Yes. Thank you. And as you have understood from our presentation, obviously, customer activity in our markets has improved, and we expect our markets to continue to recover as the economies open up and of course, again, as a result September demand. As we talked about, Russia says higher commodity prices increased activity in the so called national projects, but again moderated by potential risk of increased utilization fee. In Germany, we expect the broader European Economic Recovery to boosting on. Clearly, uncertainty remains regarding supply chain constraints. But in the longer perspective and also in the longer perspective, we see strong underlying fundamentals and business opportunities in our markets. So to summarize again, on Slide 18. This was our best operating results ever and good performance in all business areas and truck sales in Germany up 47%, I suppose that summarizes a bit. And by that, I hand over for questions, please. Telephone keypad. It's 01. On your telephone keypad, we have a first question from Victor Van Aerten from Nordea. Please go ahead. Hello, Lars Erik. Thank you for taking my questions. So I'm wondering if you could provide any color on the national projects that you mentioned and what you are currently seeing in the market. Is activity continuing to ramp up? And if you, in any way, could quantify the market improvement here versus last year, please? Yes, we see a ramp up of the national projects and there are roads being built, not only in main highways, but also throughout the country in Khamsin and investments into railways and highways mainly. There is an attempt to accelerate those national projects to put up speed. But as we have mentioned Q4. There is not enough capacity in the machine fleet, in this machine park and in among the contract structurally ramp up much quicker unless we sell more machines to the markets and that is what we see happening right now. Obviously, as you all know, the supply chain is constrained and limits potentially short term at least to the implementation of these projects. And I will need to use older machines to do it and it will not be as efficient. But the money is coming out to this national project. Mean, we've been waiting for this for a long time, but now it's actually happening. So it's a good sign. I don't know what you mean final market editor, can you please? Yes. How much it has improved? How much more the project value versus last year Basically. I can't tell you that exactly, but it wasn't too much last year. And how much has been spent yet, I can't really tell you. We know that roughly how much has been devoted to be spent. But totally, I can't give you that number there are so many different projects in different not only from the federal government, but also in the regional governments that are supporting these national projects, so to speak. Okay. Wonderful, Lars. I appreciate the color on that. And a follow-up. To what extent do you believe this helped your sales in Q2 in Russia? Well, clearly, it has helped our sales. And as we said, we have record sales of road construction equipment. We have a very strong market share in road construction equipment sales. So it clearly has helped us. How much in, in fact, percentage is very difficult to sale because again, the pent up demand would have been there even without these projects because the machine fleet has been depleted since 2015 when we saw the side, which showed the market is not even today big enough to replenish itself. So what is what here I think the real question is when will the additional capacity being installed into the market to be able to finalize these projects really. Okay, great. And regarding working capital in Russia, it declined to 0% in Q2. And could this impact your ability to deliver machines or spare parts and possibly services in the near term? Maybe I'll start there. I mean, I think, Victor, this is a reflection of a tighter supply situation in a strong market. We order and usually there is a certain stock turnover time and that has been Has shrunk basically. So I think I mean to answer your question, it's reflecting of the fact that yes, there are supply constraints. But we do believe when especially when it comes to service and aftermarket that we can definitely continue to service our clients. Can we capture all equipment opportunities that we would like to, probably not, But that's a normal market situation as well. So yes, and I think also as we mentioned in report. And as I said in the presentation, historically, we've had a higher working capital. So these are low levels. If the current situation continues strong market and some constraints in supply, then one could expect the working capital to remain low for some time. But ultimately, I would expect a normalization to occur. Okay. And thank you, Erik. And regarding your sales price, it improved in Russia CIS. And I'm wondering If this is driven by price hikes possibly made possible from the strong demand or possibly to mitigate currency headwinds or perhaps Change sales mix or anything else? It's a combination of those three things. And obviously, when the ruble devaluates, there will be a price increase in the market eventually and it comes. We also, usually in a situation like this, we try to increase prices to the customers, obviously, in real currencies, to put it that way. And we're also trying to focus on selling machines, bigger machines where we have better profitability over time where the aftermarket requirements are very high and put like an investment into the installed base machines. So that is what we're trying to do in a situation like we are in now, yes. Okay. Great. And so regarding your financial targets, Your current EBIT margin, it's significantly above your group target already with Germany set to improve. And given that you continue to perform well in Russia, it appears to me that your target is rather prudent. Do you have any comments here? Maybe I'll start, Lars, you can add. I think short answer, no. We stick to the targets that we set. I mean, we set the target as above 7%. And The development out over the horizon that we set those targets for will hold some differences, I think, in how the segment develops. We expect Germany to grow as we roll out the network. And even if the margin comes up there, it will still have on the total effect of lowering. And then when it comes to Russia CIS, well, it is a lot depending on not only How quickly as we say, it is a stated business target to increase Contracting Services. We believe this segment or activity has a lot of potential for us. But it also depends on how we grow that business, how much we rely on subcontractors as we partly do in Norilsk. The more we rely on some contractors and manage such fleets, the lower the margin will be margin contribution, But on the other hand, the lower the capital commitment will be as well. So I think we stick to our targets where we are now. And again, it depends a bit on the growth opportunities that we find as we grow the revenue. Okay, great. And a final topic. For Germany, do you still target the breakeven results from the end of the year? And would it be possible for you to reach this with your current footprint? Or would you need to add more outlets as we are doing and guided for? We stick to our target to have a run rate of breakeven during the year. With RCC, we have gotten some additional sales from the new workshops that we have acquired in the aftermarket. And clearly, the key to reach breakeven is to continue to improve and increase our off to market sales and that we will continue to do. But yes, we stick to our target to have a breakeven level on EBIT this year. Thanks a lot. That's all for me. Thank you. Next question from Adrian Guilherme from ABG. Please go ahead. Yes. Hello, this is Adrian from ABG. I would like to start off by asking a bit about the aftermarket sales. And You mentioned that a strong driver for the aftermarket performance was that customers had increased utilization rates for this quarter. Do you see this increasing utilization rate as more of a show trend or was this a onetime boost for this particular quarter? Well, hi, Adam. I don't think we said that the customers have increased the utilization. We say that there is risk of increasing utilization fee. But you're right, the utilization of the machines is high and has increased. And as long as that demand and as long as the activities in the markets SAAR like they are and the commodity prices are like they are and the government is continuing to invest into national projects, we expect this utilization rates to be high. We need to understand that there is a limit to how high they can be because as the machine fleet is depleted, there is a problem keeping the machines up and running very old machines all the time to actually have a high utilization of machines. And that's why there is a limit to how high that can be as well as there is a limit to supply at the moment. So it's a those two things. But we expect it to be on a high level. And obviously, that is good for our off to market business because these machines should be operating more or less around the clock. Okay. That's a clear answer. Moving on to the Contracting Services segment. You mentioned here that you have reached the plant capacity in Norilsk. Does this also mean that all the costs associated with the ramp up here are also completely behind us? If I address that one, I would say with the proper accruals over time, They should accompany. So yes, but as I flagged on the cash flow statements, some of the CapEx Comes when with a lag, yes, because we have certain supplier terms. So you would see through the cash flow at least a bit later. But then also, I think over the life of the project, you will have some cost dynamics. And If I put it this way, Adrian, all things equal, they should be relatively stable. But there can be changes in again how we work with subcontractors. Do we use more? Do we use less? And that will in turn Determine part of how we maybe renew our own fleet. So you can have such effect that would make the cost picture a little bit less stable. And then when it comes to the margin of all this business per se. It's worth pointing out that I think we want sort of a bigger business. We want a bigger portfolio of projects. But project by project, you can have, especially if you look over a single quarter, variations profitability depending on what phase you're working on in the specific mine site etcetera. But then we're more speaking maybe of a revenue effect and a margin rather than the cost effect itself. But Adrian, if we're speaking about Norilsk again, I mean expectations for you as an analyst would be that, yes, the revenue and the cost Have now stabilized because we have reached that capacity. Okay. In that case, Moving on to equipment sales. You are looking at Russia CIS. Obviously, you've been a bit behind the market growth for this particular quarter. Would you or in the report, you state that the product groups where you have a lower market share grew more and this is part of what affected it. But would you say there are other factors at play here or is this the main reason? There is there are other factors, obviously. And one of the factors that is always happening in a growing market where the market grows very quickly is that the premium brands lose a bit of market share. The opposite happens when the markets slowdown than the premium brands and mobile, which is the most premium in particular. And that has to do with the customer mix that our customers are stronger then our nonpremium customers. And they remain in the market and they continue to use the machine also in a downward economy or when the economy is not so good. When things are moving very rapidly upwards, we tend to lose market share simply because there are new players coming into the markets, smaller customers work as subcontractors perhaps with very small feet and they tend to buy they tend to be more price sensitive in the initial investment. And this week, we have seen this all the time when the market is taking off. So that's one thing. And that is also happening. I mean, it is part of that product group thing because the product mix that are growing quickly or using smaller machines, less, I should call it, advanced machines and they grow quickly when the market 6th off. And obviously, clearly, supply as you can see from our working capital, we have a supply in constraints, which is clearly affecting a bit as well. But mainly, I would say, it's the customer behavior, customer mix that comes back customers are coming back into the market when there is work around to do for smaller customers. Okay. And just a final question from my side. You showed us the EBIT bridge, which was a good way to visualize things. And you showed us that the big driver was the gross profit in Russia CIS. Was it the revenue increase alone here that drove the higher gross profit in Russia CIS? Or are there other dynamics that you'd like to highlight? I think it's always Mathematically, it's revenue and then the margin that we get from that revenue to gross profit. And then onwards if you want to look at the G and A costs as we also sort of highlight in there. And we saw a slight improvement in gross profit versus last year in Russia's CIF. And that is, as always, I mean, it's a factor What margins do we get from the new equipment sales or equipment sales broader, we should include the used part there as well. And that in turn is depending on product mix. And we've said here that, I mean, it is hard to sort of predict trends there. It depends on 1 quarter. We may have bigger orders of big machines and big machines tend to come with bigger margins than smaller machines. So that may vary. And then you have the revenue mix. So which part is after that equipment sales, the aftermarket and the contracting services with both those having higher margins than the equipment sales. And then as we were on to before Adrian on the contracting services itself, You can have variations also and especially major over longer term, yes, when you change structure of how much you rely on subcontractors. And there again, it's that trade off between, I think, capital commitment on the one hand and margin on the other where our guiding light is getting attractive returns on capital for our shareholders and investors. So those are the factors. And yes, I think where will we go from here, it's no guidance I can provide you on either of those. What we say is that we do expect to grow significantly in Russia. We see great potential the equipment market per se that graph where we show where we are versus historical, but also what we think the Russian market needs To replenish and to meet its needs both private and public. And then when it comes to contracting services, our ambition is to grow that business. So I think that's what we can say there. Okay. Thank you. That was all for me. Thank you. We don't have any more questions for the moment. We have a new question from Thanet Hor from Kymriahidea. Please go ahead. Yes. Thank you. Yes. So I was wondering, the coronavirus is spreading quite a lot and the government is really fighting In Russia, I'm talking about that. And the government is fighting for people should get vaccinated and the citizens don't really trust them and so on. So are you fearing that there will be sort of more restrictions that being introduced that could make your work tougher again, I mean, traveling between different regions and so on? Well, I mean, the risk, of course, is always there or not always, but nowadays, it's there. The we have not really seen any intentions or any movement from the government to restrict traveling even though there's been a 3rd wave whatever we should call it. So at the moment, we don't see that happening. But to you, I mean, we always have to have that in consideration. Although, I mean, we were able to overcome that quite well in the Q2 last year, I suppose, even when there were very, very strict restrictions. And we were able allowed to continue to service vital transport and infrastructure in Russia. And in Q2 now, it was not many restrictions. Was it easy to change operators in contracting services and having people travel around and so on. Well, there are still restrictions in place and but they are not as harsh as they were. But there are certain restrictions in place still with when you change shifts, strength in contracting services. We need to under low quarantine, etcetera. So it there is still but it has eased up a little, I must say. And it's mainly when it comes to isolated sites where obviously they don't want to have the COVID into those sites. But traveling between regions, etcetera, development now. Okay. Great. And then on Germany, When you took over the German operations, you had a plan on where you wanted to be in a couple of years when you Should be profitable and what kind of structure you should have and so on. Would you say that, that plan has been executed to, I don't know, 30% or 50% or yes. I mean, obviously, the corona didn't help to put that plan into place. But I think we have so far more or less performed according to our plan. And we stick to the expansion plan we have. And we will continue to spending method to the network and improve it and increase the optimal disease. And obviously, we should increase our drug sales system because we need the drugs to service. So I mean, so far we are going to plan, but obviously the corona has hindered mainly traveling, mainly contacts between our in our organization and those Hindus still exist actually. So we need to but we haven't been trying to overcome it through digital meetings and so on and so forth, but very limited to what you can do. But percentage of where we how much we have accomplished as opposed to where we want to be. I cannot give you that, but we are not ready yet for sure, but I can say. Okay. Sounds good. Thank you. Thank you. Thank you. We don't have any more questions for the moment. Scope 1. We have a new question from Victor Hansen from Nordea. Please go ahead. Hi, again. A follow-up on Germany. So in the market, you're seeing a high utilization of the trucks. And last year, you alluded a bit to this just recently. I'm wondering if there could be any pent up demand in Germany in terms of the aftermarket, please. To a certain extent, not as much as for new trucks actually. And what happened was last year, obviously, there was a sharp decline in utilization, which bumped back quite quickly because trucks were used to transport food and there was an increase in logistics due to online purchases, etcetera, etcetera. But so and what happens usually when trucks are not replaced or machines are not replaced. You see aftermarket actually improving because the older trucks need service. So I can't say that there is a big pent up demand in the aftermarket. But clearly, there are more it's more activity in the business and then that creates more off the market as well. Thank you. We don't have any more questions for the moment. On the different value, 0 and 1. Sales side. We don't have any more questions. Back to you for the conclusion. Okay. So thank you very much for listening in and for your questions. And I wish you to have a good continued day. Thank you very much.