All right, hello and welcome everyone to this Q1 presentation by Inission. My name is Henrik Hintze, and I'm an Equity Analyst covering the company here to moderate the Q&A session after the presentation. To begin with, I'll hand over the word to Fredrik Berghel, CEO of the company, to deliver the presentation. If you think of any questions for Fredrik during the presentation, please go ahead and type them in the Q&A chat, and I'll read them out after the presentation. Please go ahead, Fredrik.
Thank you very much, Henrik, and welcome to Inission annual meeting and our Q1 presentation. My name is Fredrik Berghel. I started this company together with Olle, soon to be 18 years ago, and we are still both active. I am the CEO of the company, and O lle is the chairman. Today, we would like to present the highlights, financial, and also a presentation on what we have been up to during 2024. We will go through the same thing, really, for Q1 2025, the financials, and also a verbal description of what we have been up to. We will present what we are doing. I almost recognize all the faces here, so you have heard me saying most of these things before, but still. We will also talk about Enedo, our acquisition and growth strategy, and then finally our financial targets.
And then at the end, Henrik will assist us with the Q&A session. Both here in Karlstad and on the web, please think of questions during the presentations. Okay, looking at the result for 2024, we had a turnover of SEK 2.15 billion, and there was a drop in organic sales with SEK 191 million, which gave an organic gross profit drop of SEK 15 million. The comparatively small gross profit drop is due to significantly better material share compared to last year. We also had higher costs, remembering we added a factory into the Inission program end of January last year, which resulted in a higher cost level. Still, though, if we sum this up, the AXXE contribution and the AXXE EBITDA as a group, we came down SEK 37 million in EBITDA, which results in a margin, EBITDA margin of 5.8%.
Profit per share became SEK 3.3, which is SEK 1.2 lower than compared to last year. If we zoom out a little bit, a sales of SEK 2.15 billion, we are running slightly slower than 2023, and the EBITDA margin quite a bit less. Still, thinking of the whole year, this is the second best year in absolute money both for turnover and for profit in the Inission history. The result decline here, if you put it really simple, we had one factory extra in cost, but due to the slower market, we actually had a low line. That is really on the high level, the explanation. So much about the financials. What happened during last year? The main bullets. I just talked about AXXE, a Norwegian company situated in Halden that came into the group end of January last week.
We also, about a year ago, announced our ambition to move to the main market. I will revert to that. We also, about one year ago, hired Mathias Larsson as Business Area Manager for business area Inission EMS. Mathias had a previous history all the way back in Munkfors. Welcome. Long time ago. Then he had some other positions. Originally, Mathias came from the Saab organization. Also, between Inission Munkfors , he came back here. He was at a company called Rainpower, Kristinehamn, and also AnVa in Sunne. We are very happy to have Mathias back in the family. Inission South invested substantially in new SMT capacity, surface mounting machines. At the peak situation, we also launched new capacity for about EUR 2 million in our Estonian factory, sort of end last year, but really being into production early last year.
We also decided to move, I will revert to that also, but we also decided to move the Enedo Tunis factory to the Inission EMS organization. We hired Elisabeth Nilsson as our MD for Innovate. Elisabeth has a history as McKinsey consultant, and she has also worked for Volkswagen Central Organization in Germany. Inission Innovate is our engineering company that has their base in Västerås. We have also reinforced our organization with the Chief Digital Officer, Charlotte Johnson. She has a history working for Ericsson, H&M Group, and also Epidemic Sound. We also, for the business area Enedo, hired a new financial manager, Tommi Alakärppä , which has a history in Lu-Ve Nordics and Patria, as well as Nano Group. We also rebuilt, remade, enlarged the factory in Malmö with about 50%.
Towards the end of last year, we actually had a big celebration and a grand opening of the factory there. We invited our customers, our suppliers, and of course, coworkers from across the organization to celebrate this. It's not so often that we actually open a new factory, partly old, but still, we made a happening out of this, which we were very pleased of. Much about 2024. Now moving into Q1 2025, more recent history. Reported sales decreased with almost 17% to SEK 484 million. If we also consider the AXXE contribution in January, that is not included in the organic sales, the organic growth or organic decline was 19%. Quite a bit of headwind here in our sales situation. Looking at the result of SEK 20 million in EBITDA result, it is very much volume-driven, having 111 lower sales organically.
We also had a very much lower material share. What I refer to as the net added value was only SEK 25 million lower. Cost-wise, I have talked about the whole last year, and we keep on talking about cost reduction. We have to shrink in cost, and we have done that now. If we adjust back for the extra AXXE cost, January, SEK 5 million-ish, we are year over year, we are square in cost. If you also take or adjust for the extra cost that our lift chains have incurred, we are about annualized about SEK 10 million lower cost level year over year. If you also think about that, we have quite a bit of an inflation situation. We have definitely taken down the cost in the group, but not enough.
All in all then, this resulted in an EBITDA margin of 4.1%, which is very much lower than compared to last year. Still, Q1 2024 was peak level in Inission history for a quarter. When it comes to cash flow, we had a decent Q1 cash flow with SEK 34 million, driven by improved networking cash situation. Looking year on year, it looks dramatic. This picture shows the sequence. If you have a little bit of goodwill, you can see that the profit fall hopefully has sort of stabilized now, and hopefully we can turn it the other way around. This is a lot less than tragic, I would say. We will need further cost reduction. We have a program taking down cost in Enedo Italy and Enedo Tunis quite a bit. We also have a cost reduction program going on in South.
The result of those, we really want to see now in Q2, the effect of those. On top of that, we're also adding on other cost reduction programs that will start now, and they will be in full effect, yeah, Q3, Q4 at the latest. We have to realize if we run on this lower top line, lower net added value, then we simply have to adopt the cost to that level so that we reach our—we should be able to reach our profit margin target even on this low contribution level. If we see this LTM, last 12 numbered figures, we are running just about SEK 2 billion, and we have an EBITDA LTM of SEK 93 million, which then is 4.5% as a margin. What have we been doing Q1 2025?
First of all, we have hired a new plant manager or company manager in Inission Munkfors, Mathias Neumann. He has a background being having leading positions at Rolls-Royce, which is, by the way, one of our major customers. He also, since Rolls-Royce Kristinehamn became KONGSBERG. KONGSBERG, they acquired the whole of Rolls-Royce marine division. His most recent posting was working for KONGSBERG in Singapore. KONGSBERG now have actually taken over the position as our most important customer since we are selling to KONGSBERG both in Sweden and in Norway. That is one big project that we've been running. We also had worked the whole last year really and also very intensified this first quarter. We have been working with the NAFDAC leveling, going to NAFDAC main market. We had a big celebration there just a couple of weeks ago. Fantastic.
[audio distortion] and John ringing in the bell there. We had the board around and the group management. It was really a blast, really. The important thing is we are doing this to create a better, stable, and more secure company following the Nasdaq main market rules when it comes to regulations, financial handbook, IT security. There are a number of things that we have improved with the company being able to comply with these rules. Of course, this becomes a quality standard for Inission, meaning that we can attract also international investors better. Hopefully, we get better visibility so that we will have a better trade in our stock, in our share. Better trade, we get a smaller or narrower spread, less volatility, and improve the trade so that being public really gets—so we get the benefit that was originally meant.
One of those was to use our share as a currency when we do mergers and acquisitions. Yeah, so far it has started reasonably well. We have increased the number of shares traded per day from 10 + to about 30,000 per day. These first eight trading days have been not good, been quite good. Secondly, we have worked and finalized another big project that we also worked with almost during the full last year and intensifying now. That is actually moving our Enedo Tunis factory into the Inission EMS organization, making the Tunis factory EMS provided. That has two major things there really. One is Enedo will become a focused product company. I will revert and talk to Enedo later. They will be more focused, having only the products, the marketing, and the sales to look after.
For Inission EMS, this will widen the offering to the market, meaning that we can actually sell higher volumes for a little bit lower cost base in Tunis. We have already now made quite a few RFQs. We had a few customer visits, and we already actually have the first win there. Not much in money, but still we have a prototype win. We hopefully will already during this year ramp up some EMS production together, of course, with the Enedo production still being there. Enedo is now the only and the biggest customer there. Here on the picture, you will see our management team in Tunis and also a picture from outside. If we look into the financial performance of the business areas, it varies quite a bit. I would say that still Inission EMS, they are running slower.
We had quite a push out from two big accounts in Norway and also one big account in Sweden, meaning that we have pushed about SEK 50 million out of this quarter, which of course affected the top line quite a bit. We also have sales contraction due to the fact that we have receivables in U.S. dollar and in Swedish krona being a lot stronger. That has taken down the sales for currency purpose. In this situation, I think anyhow, having this EBITDA margin of 5.7%, it's not good, but it's decent, I would say. As I said earlier, now having a cost reduction program for the Enedo mostly, but we will also move now into the Inission EMS organization to reduce cost. Business area Enedo, they had an organic sales drop of 30%. That is really dramatic.
That is for the same reasons really that we have talked about last year. We have still de-stocking going on in major accounts. They still have too much on the shelves at the moment. We have cut down on cost, but as you can see from the numbers here, we are selling for SEK 83 million, and we are actually losing SEK 3 million. This is really bad. Our LTM number series is getting close to zero. We are now shrinking fast in Italy and in Tunis. Let's just generally talk about our operations. Our business area today is Inission EMS, contract manufacturing, industrial electronics. That is what we do. We have business area Enedo OEM. They are providing power supplies. Different to Inission EMS, they are a product company. They develop their own products, marketing, and selling their own products.
Centrally, we are working with our values. Long, long, long time ago when we started this company, and especially when we launched Inission as a brand, we had a wide discussion within the company. The company was a lot smaller at that time. How do we want to be perceived against our customer, supplier, internally? We talked to more or less all people employed at that time. These four value words derived from those discussions. We are keeping working with this all the way from our board of directors to all new employees. We are actually having education programs. We have propaganda.
We also, I think when it comes to the best, that is when we have a daily pulse meeting in the factory in Munkfors in the morning there, boys and girls saying to each other, "What did we do yesterday that was really in line with our values? Did we do anything that was against the values?" They have a small chit chat there. If we can get that through the organization, I think it is really driving a strong force. We keep on working with our sustainability. Here we have really clean production, and we are close to our 2025 target of having net zero, scope one, scope two when it comes to carbon dioxide. We will perhaps not get close, absolutely down to zero, but then we will compensate. When we sum up this year, we will get there.
The main thing that we work on now when it comes to sustainability is to comply with these EU CSRD directives. That is quite a lot of work there. It's quite a lot of bureaucracy, but still we will work to be able to comply to that during this year. That is our target. Over then to business area Inission EMS. We are a leading supplier of manufacturing services, mostly for electronics, but also for metal fabrication, sheet metal production. We also have our own design capabilities. We have a small engineering office in Västerås. We are very much a Scandinavian company. Here you see the sales split. Even though the sales here is mostly Sweden, Norway, Finland, the products that we produce, they will be spread out all over the world.
We also think box build is really important, meaning that we provide to our customer a ready-made product. We learned early in this soon-to-be 18-year Inission life that the more we do for our customer, the more pleased they are when we do the customer survey. Also, the more we do for our customer, the better chances that we have a good margin. The more value we provide, the more there is to share about. It's not more complicated than that. Inission is very much an acquisition story. We have, since we started in 2007, added to the group about a company per year, and we have kept on going like this. I will revert to acquisition strategy, but that is also our ambition for the future to keep on growing also with acquisitions.
We call ourselves a total supplier in that meaning that we provide all the services in the product's lifecycle. If you look up at the web pages, all our competitors claim that they do the same, but we actually have our own development engineers. We provide both new and old customers extensively with prototypes, helping them industrialize the products. Of course, manufacturing is a core of what we are doing. Maybe 90%-95% is manufacturing. We have a fantastic customer portfolio. Our industry is the widest segment here, but also the biggest. All in all, 37 key accounts build up about 60% of our revenue here. The largest key account, as I said, is KONGSBERG. There is about 10% of what we are doing for Inission EMS. There are some of these, especially defense, that is for sad reasons, have a strong growth.
We do not have these type of customer that says our sales manager says, "Let's say bang," yet. We have some starting points there. On the next level, on tier two suppliers, the suppliers that supply to those, there we have some business. This segment is really, really growing fast now. Also, the electrification and communication segment have strong growth. Over to Enedo in brief. As I said, Enedo is a product company in difference to Inission EMS. They own their own IPRs, big difference in business model in that sense. They also, like Inission, provide customized high-end products. A big share of the Enedo products is actually customized product that is tailor-made for that specific customer. Also, Enedo has a fantastic customer portfolio. Here you see also total difference compared to Inission EMS. That is that they are more of a global company.
They have the most customers in the EU and in the U.S. 30% of what we are doing in Enedo is going to U.S. customers, I would say, because some of the products are actually sent to their factories in Asia. A lot of this is power supply. We have the LED drivers and the smallest, and that is mainly the Finnish part of the company, is DC systems. Enedo has a background in telecom industry in Finland, Nokia related. They realized back in the history that it was not really possible to produce that type of sort of high-volume products in this part of the world. They divested the telecom business and they acquired an Italian company called ROAL. A few years later, a Finnish company called Powernet. That is really the base of Enedo today. Segment split.
You see the lighting, the display, industry, and optimization. Here the Enedo customer portfolio is somewhat more concentrated compared to Inission EMS. The list of their customers, again, it's a very interesting possibility there for also Inission EMS to do business with those customers. A lot of those are also using EMS services. The other way around, all Inission EMS customers, they use power supplies in their application. That's where the connection between Enedo and Inission comes close. A few words about our acquisition strategy. As I said, we have been acquiring a company per year. The most important thing we look for when we do these cases is the customer. Manufacturing capacity and these things can always be fixed. The key here is the customer, really. Then, of course, management culture, financial potential, and then geography-wise.
We think of proximity as an important thing within Inission, meaning that we want to build out our geography. We are more or less done in Sweden, Norway. We perhaps want to have something more in Finland. Denmark, and then we see Germany as the next possible place to be. We will also, in due course, start to do acquisitions within the Enedo business area. That will be when we have stabilized the financial, meaning decent profitability, decent cash flow. We will work on. Since we have been doing this for the last 17 years-18 years, we think we have become quite good at doing acquisitions. We have an electrification process, we call it. We actually lay the ground for the electrification process during the DV.
When we make the analysis of the company, we parallel write down the things that we want to improve, things as a target company, or things that we see that they do really good that we can use back ourselves. Normally, this is no easy win there. It is a tedious project that takes a few years actually to develop the profitability. As I said earlier, AXXE, a little bit more than one year ago, we acquired those, and they are an excellent example of companies that we look for. Einstein here on the picture, he is one of the founders, and he is also MD, and he is driving this company in really a really good entrepreneurship way. Yeah, normally there are quite a bit of synergies between when we take in a new EMS company to do, but we never use these synergies to justify the price.
Some of the items we implement quite fast. It could be financial reporting. It could be the sourcing that everyone in our business has the same component supplier, these worldwide component distributors. We use the same so that it would be easy to include them in our program. KPI, follow-up, and so forth. We are in a headwind situation now. We dropped organically sales last year, Inission EMS, 7% ish. We have a tough quarter now, but the underlying growth in this industry is really good. It is driven by a number of mega trends.
These mega trends, they have been there for quite a while, and they have been reinforced first by COVID, and then also by this tragic war in Ukraine, meaning that electrification, for example, when the Russian gas becomes too expensive or even banned, electricity also for heating down in Europe, which we already know here in Scandinavia, it's a good trick. Regionalization is another mega trend that has also been pushed forward by these really big happenings in the world. Of course, optimization, communication, and internet of things, machines talking to machines. There is a lot of things that is actually driving the need for and the use for industrial electronics, which is beneficial for, of course, both Enedo and for Inission EMS. Yes, before I jump into our financial targets, I want to show you the history here.
We became a public company 10th of June 2015, and since then, we have been growing in average cover 25%. So we have been growing reasonably fast. We have had an EBITDA during this time, five-ish, I normally say, but you can see it varies a little bit. The dip here 2021 is when we consolidated in the Enedo numbers. That was quite ugly. Coming from this history, we have put forward the financial targets for 2025. The board of directors have decided these targets to be SEK 2.2 billion. We target to reach an EBITDA level of 6%. We have a target of having our net debt over EBITDA to be 2.5 or less. Here, the covenant with our bank is a little bit higher. There is a hedge room between our target and the bank covenant. We also want to exceed 30% in equity ratio.
We like to pay dividends. There is a balance, of course, whether the money should stay in the company or go back to the shareholders. Our policy says up to 30% after tax. This year, we are glad to announce, of course, that we will reach about that. Every share will correspond to SEK 1 in dividend. Midterm, we have higher targets. We want to grow 15% annually. If you compare to that historical 25%, meaning we will slow down in growth speed. We want to also wait over from acquisition-driven growth to organic growth because organic growth is really the key to increase the profitability. To grow organically is extremely helpful when it comes to profitability. That is how we see it.
Then we have a set of other things that we also really want to, that we're working on long term, so that we should be able to reach 9% EBITDA. That should be looked at three, four, five years down the road. Regarding capital structure and equity ratio, they are the same short term and also midterm, as well as our dividend ambition. That was all from me. Henrik, do we have any questions?
All right. Very good, Fredrik. I think I'll start us off with some questions on my own and let everyone else gather their thoughts for a few minutes. First of all, you wrote in the report that deliveries of three high-volume products have been moved forward in time. Should we interpret this as a temporary headwind for sales in Q1, or will this keep affecting sales negatively in the coming quarters?
The good answer would be, of course, that these push-outs, they will end up in Q2. We think of those push-outs as not lost sales. We think of those as postponed sales. Of course, you always have orders coming in and going out. It is a mix there always. We do not see those as lost. We see them as should be delivered later. One of these three cases is extremely concrete because that was our PCB supplier supplying, and that was I talked about KONGSBERG earlier. That is orders going to KONGSBERG in Norway. They are working on those right now because we have already got the better quality PCBs, and they will be shipped now in Q2. They are not lost. They are postponed. That is the way to see it.
All right. Very good.
Secondly, there was some mixed messaging in the report, I would say. On the one hand, you maintain your guidance, keep your cautiously positive view on the market. On the other hand, you also say that the U.S. tariffs are bad for the global economy and that you are therefore not as optimistic on market growth in H2 as before. Also, orders have been very strong for the past two quarters, I would say, but you still choose to now implement additional cost savings programs. How should we sort of reconcile these positive and negative statements?
Yeah, it is a complicated world. I think with the macro things happening, especially what is happening in the U.S. now with this possible trade war coming up or already trade tariffs, which is significant. They will affect, for sure, they will affect the growth in the world.
How much and how this will impact, we do not know. Of course, everything becomes more unsecure. When we talk to our customer and try to understand where they are, how they will be affected by these U.S. tariffs, for example, we do not get any clear good answers. What to do? We stay with our best guess that we already had, but we try to signal in the report that the level of unsecurity has increased dramatically. We do not have any concrete examples of customer canceling orders or delaying orders or pushing out from the rest of the year. We understand that the unsecurity level is much higher, but we do not have any better guess than we have already presented. We maintain our SEK 2.2 billion as our sales target. Yes.
When it comes to the cost, when it comes to the cost cutting, we, of course, if half of that ish is already decided and earlier cost cutting programs that have not come through in the way we want to see them. The new cost cutting program, you can see it as precaution. Of course, if really the ship hits the fan and it becomes a disaster, those cost cutting programs that we have put into place now or are starting to work with, they will not be enough. We have to, yeah, it could be a totally different level. We are not there now. We are basically optimistic also in our company. Our customers are optimistic. We talked about Defence here earlier. When we talk to KONGSBERG, they are extremely optimistic. The amount of orders these people are getting is enormous. Yeah.
All right. Same base case, but more uncertainty.
It's a very mixed picture, if I put it like that. Extremely mixed picture.
All right. Very good. Now, the transfer of your Tunis factory from Enedo to Inission was completed on May 5th. You wrote and mentioned in the presentation now that you have signed your first external customer. What kind of demand have you seen from potential new external customers for production in Tunis?
We foresee with the cost level that we have in Tunis, blue collar operator, EUR 2 per hour. That is a cost level about China or even lower, perhaps Vietnamese cost level, that we can target, perhaps not new customer or different type of customer, but type of products that is running in higher volumes, that is more that has a higher cost pressure on them.
That normally would have been around East, South, East in Europe, or even in Asia. That type of production could be, we could do that type of products competitively out of Tunis. Not necessarily other customers, but type of products that is running in longer and higher series. That is what we are targeting. That is a type of production and a type of offering all our big competitors have, but we have not had that until now.
All right. Can you say anything about what kind of pipeline of potential customers you have for this factory?
We have not quantified it. Maybe it would be reckless of me to quantify it here. We have a decent pipeline of requests. We have a decent RFQ pipeline. Even a small order win, it is small in money, but normally we start with prototypes and small wins.
You get the first tryout series, and then you build from there. It would be substantial, I think, within a couple of years. A substantial portion of the initial EMS will come out of Tunis. What we really do not want to see either is that we move production, that we move already existing production. That would be a disaster. We will not really target for type of products where we are not competitive with the Scandinavian production or even the Estonia production.
All right. Going back to demand on the group level, your order book is now 23% higher than it was a year ago. Yet you seem a bit cautious on volume growth for the year. Why is this given the strong increase in the order book? How should we think about that?
Yeah, we have had good bookings.
We had really good bookings in Q4, and the good booking also continued now in Q1. A portion of this order book is, of course, later than 2025. It goes into 2026 also. History teaches us that when times are good, order books come closer to you. When times are more slow, speed in economy is lower, the existing order books tend to stretch in time. When we say order book, that is frame orders. They have, of course, a schedule, absolutely. That schedule will be sort of longer if the customer would not need those products. We do not have a history of just stuffing products into the throat of our customer because it says that. We could perhaps do it by contract, but it would not be wise to do that because first, they do not like it, and they become upset.
Secondly, if we do that, that sales will be missing just a bit later. It will be a little bit about this similarity of peeing in your pants. It will feel better now, but it will be cold later. We normally do not do that. That is where we are. That is where we have the situation.
All right. The 2025 profitability target for Enedo is 2%. In Q1, the EBITDA margin was only -2.75%. Given that you have previously stated that you have already cut costs very significantly in Enedo, how would you say is the 2% target for the full year still feasible following the Q1 results?
Yeah, it will be challenging, but we have come down, as I said, but they have intensified in a way now. We have split it there in our presentation.
Still, it should be seen as the total target is 6% EBITDA. And then we have sort of just split it up from historical background. So it's not hard targets externally in that sense. But it will be challenging, yes, but absolutely doable because cost will come down even further.
All right. Very good. Finally, from me, maybe you sounded quite positive on the potential for an acquisition this year. How do you view the ability of your current balance sheet to support a new acquisition given your current debt level and covenants?
Yeah, we have net debt over EBITDA at 2.6. So there are some room to make acquisitions. When we debate with some of our target companies, we also discuss with those whether they can take shares as part of the payment. So yeah, we absolutely think there should be room for at least one acquisition.
That would be our sweet spot is really SEK 100 million-SEK 300 million in turnover. That type of company, we should absolutely be able to acquire within our borrowing capacity.
All right. I think that's all the questions I had. I do not see any questions in the chat at the moment. Do you have any in the room, maybe? Anyone?
I noticed that the tie in our networking capital or working capital expired on our market cap. Adding inventory and receivables, sort of plan to reduce the first.
We, of course, measure this carefully, and we could be better. We split it in stock, receivables, and payables. When it comes to stock, we are on 25% stock level over turnover, annualized, and then I take the last quarter's invoice. We are on 25% now. We were on 24%. Chevron is on 24%.
I would say we are not good, but we are in par with the market. When it comes to the receivables, the only one there that is clearly better than the market, that is HANSA, because they are selling a lot of their receivables. I should have mentioned that earlier, but during this year, we made an RFQ, or we sourced banking services. We negotiated with a number of banks how to finance this company. We decided to get out of selling invoices, which have actually increased our receivables quite a bit. We get a lot less administration. It becomes more cost-efficient. That means that receivables are also about in par with the rest of our payables. Where it comes out clearly different, that is with payables. Some of those that do it really the best, they have extremely long payment terms.
When we are on like 12% payables over invoicing, they are at the double. That's where you have a big difference in peer group comparison between our networking capital level. Then we are very low in investment. We are very capital aligned when it comes to investment machines. We are not a paper mill or a steel mill. We finance our customers' inventory, meaning that we buy on their behalf, their components, put them on our balance sheet, keep them in our stock. We have back-to-back contract here. That stock is really the customer's stock. If they do not need it, we will sell it back to them. That normally works well, but there are also accidents, of course, yes. You also see a lot of inventory issues related to offset inventory. No, we call it obsolete and excess.
Since there is a well-established program for this, and this is part of our business, when we have obsolete or excess, we sell it back. We have a continuous ongoing process. We measure in every factory. We see what has not moved the last nine months. They become on the selling list. After 12 months, we take it out. We control this, even though for our size of the company, of course, we have a lot of inventory. We have a continuous process actually keeping it fresh, keeping it young.
This is a bit unfortunate, but I'm truly comfortable with the situation that there are some headwinds in the markets. What is your plan to blend into more growth areas, customer areas, for example, defense, or other areas where there is very big investment in the current society or global market?
Is it possible, or is this a very slow-moving industry that is technically very hard actually to address new markets and customers?
This is one of the things that we discuss the most on company level, business area level, and also group level with the board and also management. In the industry, there is quite a threshold to move existing production. You don't move that. If you have well-functioning, price-competitive production, you don't move it just because you get a little bit of price or just because you are a little bit angry. You have to be extremely angry if you move existing production. Your window opens when our customer or our not customers have a new project, when they have new products coming into the market. There is a window, and then we have to be there.
What we have done now differently the last two, three years compared to earlier, that is that we actually invest in dedicated people only doing this, calling these people, visiting these people, making sure that we are on their list as a potential supplier. We do that. We see the result of that. We see new RFQs coming in from that type of customer. When it comes to fast-moving defense, for example, we have been working on SAR the last 18 years. Now we have some SAR business. We have some SAR business in Stockholm. We have some SAR business in Munkfors. Of course, now it's about to increase it. When it comes to defense, we also have a few breakthrough orders with KONGSBERG Defense and Aerospace. We have a test order in AXXE.
We also have some small business, and we have interesting RFQs in Løkken. If we can break the ice really there, that would make a big difference, yes. It is not that we do not try. It is not that we do not work systematically, but the timeline between starting a cold call until you have substantial business is, unfortunately, years.
Any other questions? We end this. Thank you all that have participated here in Karlstad and also on the web. Thank you very much. Take care.