Earnings Call: Q4 2020

Feb 10, 2021

Thank you very much. Good morning, everybody, and welcome to this presentation of Envido's Q4 and full year 2020 results. My name is Henrik Jallmasohn. I am the President and CEO. And with me, I have Pietra Weline, CFO and Deputy CEO. Next page please, Page 2. We're going to spend the coming 25 minutes or so going through a brief overview of Envito for those of you who are new to us, looking into Q4 performance and some year end highlights, A Short Summary of the Market Outlook and Our Key Priorities Going Forward. Peter will then come in and go through the details of the financials, and I'll wrap up with a summary, after which there will be plenty of time for questions at the end. Next page, please, Page 3. So Envito is a leading window group in Europe, a clear market leader in the Nordic region with a strong presence in the UK and Ireland. 2020 net sales of SEK 6,700,000,000 with an operating EBITA margin of 10.9 percent and roughly 4,300 employees across 12 geographies in Northern Europe that you can see highlighted on the map on the right hand side. We have we market and sell all the fantastic brands that you can see on the bottom part of this slide. Next page, please, Page 4. Envido is built on 4 cornerstones for sustainable and profitable growth that we believe are the fundamentals of driving long term sustainable profit growth for the group. Firstly, we run a decentralized structure because we know that, that drives customer focus and customer value as well as focus and highlights on performance and results. Number 2, we focus on the consumer driven markets because we know over time those are more attractive and generate better returns number 3. We believe in sustainable growth driven not only through organic growth in our existing businesses, but also with acquisitions. And number 4, we drive synergies because we know in areas such as leadership, procurement and technology because we know that, that drives structural improvements and profit improvements over time. Next page, please. Page 5. Some highlights from Q4 then. We saw an all time high Q4 operating EBITA, the 7th consecutive quarter of strength in margins and the 3rd quarter in a row with organic growth. Continued good cash flows, good order intake and a very strong order backlog at the end of the quarter. I'll come back to that. E Commerce continued good growth, organically at 32%. Sales in the quarter, however, was held back due to COVID-nineteen, the pandemic, with one example being the shutdown in Western Denmark, resulting from a mutated virus spreading among the mink population. We had higher sick leave impacting efficiency and capacity, particularly in the Swedish geography. And we also had a successful and fortunately very uneventful go live of an ERP system in the Swedish businesses without any operational or reporting disturbances, but did force us to close down the operation for 2 days as we went live, which also then meant a slight impact on capacity and sales. Overall. We've seen positive consumer markets with some exceptions. I've talked before about the more hesitant direct sales market with installation in Finland and some early emerging signs of recovering industry markets, and I'll come back to that. Next page, please, Page 6. Sales. If we look at the numbers then, sales came in at SEK 1,798,000,000, slightly down versus last year, but organically up 1%. Operating EBITDA grew nicely to SEK 231,000,000 from 211,000,000 last year. That means that the operating We seem to have lost the line. So could I please have the presentation back to Page 6, please, Page 6. So in terms of the numbers for quarter 4, we saw sales come in at SEK 1,798,000,000 organically up 1%. Operating EBITDA strengthened nicely to SEK 231,000,000, up from SEK 211,000,000 last year. Operating EBITDA margin strengthened 1.3 percentage points to 12.9 percent. Order intake, robust, 11% up, taking a order backlog very strong plus 48% versus same time last year. Continued robust operating cash flow of SEK 337,000,000, taking then the net debt versus operating EBITDA to 0.9%, excluding IFRS 16 considerably down from last year. Next page please, Page 7. Looking then at Business Area South. As you can see in the ring chart on the right hand side, Business Area South has the considerable exposure to the consumer market. We saw continued strong results in the quarter. E commerce, as I mentioned before, grew nicely, up 32% organically with a strong order intake of +47 percent and a very strong order backlog at the end of the quarter, 55% up versus a year ago. We saw continued strong consumer sales in the larger Danish units. However, as I mentioned previously, COVID-nineteen did impact negatively with the shutdown is in Western Jutland, impacting both capacities and efficiencies. Sales reported sales up 3%, organically up 5 percent to SEK 768,000,000. The operating EBITA margin down slightly then due to the COVID-nineteen efficiency impact to 18.8 percent. And the order backlog strong at the end of the quarter, plus 82% versus last year. Next page, please, Page 8. Looking at business area north, which as you can see on the ring chart on the right hand side then has some considerably more industry exposure. We did see continued margin recovery very nicely in the quarter. We saw stable consumer markets overall, although, as I mentioned before, parts of the direct sales with installation in Finland is still challenging. We did see some early signs of stabilizing industry markets. I'll come back to that. We did have operational disturbances from high sick leave due to COVID-nineteen, particularly in Sweden, impacting capacity and efficiency. And on top of that, as I mentioned before, the ERP go live then also impacted capacities in the quarter as we had to shut down for 2 days during the go live. Reported sales down 3%, organically down 2% to SEK 994,000,000. Operating EBITA margin slightly up then by 0.1 percentage points to 7.4 percent and the order backlog at the end of the quarter, up 27% versus a year ago. Next page, please, Page 9. Trying then to summarize the market development in 2020. Overall, I think summaries that we saw relatively boring consumer markets, but overall more hesitant industrial demand. The Danish, German and Norwegian markets were supported by a relatively robust consumer demand, some of that likely driven by COVID-nineteen and the stay at home trend. Swedish market, stable in general, with some positive impact on the smaller consumer order side. However, the bigger consumer projects and the bigger consumer renovations, slightly more negative in the year. The Finnish market somewhat negative, held back by the hesitant industrial markets. And the UK and Ireland impacted considerably by more exhaustive shutdowns, particularly during Q2 and then now also at the back end of Q4 enhanced with a more negative overall market development in the year. Next page please, Page 10. Just a short update then in terms of COVID-nineteen. The second wave here during the latter part of Q4 did impact and challenge our efficiency in factories with, periodically, quite high sick leave, particularly, as I mentioned before, in Sweden. We've seen confirmed very positively though, confirmed infected employees levels are still at quite moderate levels or even low levels and amount of virus spread in the workplace very, very limited. The November lockdown in Western Denmark, I mentioned previously, SLE impacted in both the capacity and efficiency in the larger Danish BUs. We saw continued somewhat possible positive demand impact on primarily e commerce sales with the smaller consumer markets staying healthy, impacting mainly e commerce sales. However, as I mentioned previously, the long term effects of COVID-nineteen still remain hard to predict. We monitor situation very closely, and we stand ready to take both expansive as well as more restrictive actions if we need to. Next page please, Page 11. Summarizing then the full year 2020. We've seen overall good capitalization on robust consumer markets in most of our geographies, a very strong e commerce performance throughout the year, good cost management helping us to prop up margins, but also remain very active in terms of adjusting capacities to more hesitant as well as more buoyant market conditions. Sales has grown organically by 2% to SEK 6,681,000,000. Operating EBITDA margin growing nicely to sorry, operating EBITDA growing nicely to SEK 7 SEK 9,000,000, up from SEK 6.46 last year, increasing then the operating EBITDA margin by 1.2 percentage points to 10.9%. Strong continued operating cash flow throughout the year, ending up at SEK 1,209,000,000. And in summary, the Board proposes a dividend of SEK 4.50 per share for the year 2020. Next page, please, Page 12. Just a few words on sustainability as that has been a very active topic for us during the year. A short reminder on the Envito Sustainability Compass, which guides our strategic activities as well as the activities within the sustainability area. This is built on 3 pillars. The first being to be an environmental front because we need natural resources to do responsible business. The second being to be a good place to work because we know that empowered colleagues make a difference. And And the third one is to be a responsible business because we know that aligning with society creates more opportunities. Next page then, Page 13, please. If we summarize our sustainability work in 2020 then, it's really pleasing for me to note that we make good progress on principally all the reported sustainability KPIs, which we use to follow-up and track our progress. As an example, CO2 emissions per unit was down 7% versus 2019, which I think is a good testament to the very active position and programs that we have to tackle these challenges and continuously improve. The only exception is the sick leave KPI, which was impacted negatively, obviously, by the COVID-nineteen pandemic, as I mentioned before. I'm also happy that we launched a new ambition with regards to carbon footprint that we will reduce our carbon dioxide emission by 50% by 2,030 and be carbon neutral by 2,050. And I'm also personally very happy that several of our business units have made bolder commitments both to their customers as well markets and support them by elaborate plans to continue to actively work in improving sustainability, not only reducing our impact, but actively contributing to a more sustainable society. Next page, please, Page 14. Just very briefly then on M and A. As we've mentioned previously, we are continuously increasing our activity levels with regards to M and A, given the considerably stronger balance sheet we stand with today than a year ago. At the moment, obviously, activities are impacted by the ongoing pandemic. We see that it's relatively easier to make progress in smaller transactions and also in geographies where we have local management. However, to look at larger positions or entering new geographies is more challenging, particularly than given the travel and meeting restrictions in effect at the moment. But we will continue with an increased activity level in the area to make sure that when the timing as well as targets is right, we will add that into the group. Next page please, Page 15. In terms then of the market outlook, We are obviously in the winter season now and enter quarter 1 with a seasonally lower consumer activity, but with a very strong order backlog versus same time last year. The short term expectations is still on a fairly robust consumer demand, fueled them by continually rising house prices, changes in behavior, partly than due to the COVID pandemic and potential government stimuli in some geographies. As I mentioned previously, we see some early signs of potential recovery in the industry market in Sweden and Finland, but that still remains to be proven, I would say. Underlying demand in Ireland and UK is clearly there. And long term, we remain optimistic in relation to that. But short term, it's obviously impacted by the 2nd wave COVID-nineteen shutdowns that we've seen over the past weeks months. And worth to note, as we've seen in other industries, is the current recovery of the economy overall. It's now impacting raw material and component supply chains. So the overall situation is strange, which we see has some short term quite considerable inflationary pressures that we have to tackle. Next page, please, Page 16. Looking at the short term priorities, they remain largely the same, which is to manage our way through the rest of the pandemic while we build for future long term growth. We want to continue to strengthen our positions in our key geographies in this dynamic market, something I think we've shown so far in this period that we've done quite successfully. We will continue our ongoing screening of a dialogue with select acquisition targets. We will continue our investments in e commerce for continued profitable growth. We will also continue with proactive cost management in the face of changing demand and obviously continue actions to drive growth and capitalize on the market opportunities that we see out there in these fairly turbulent times. Next page, please, Page 17. Presentation. And with that, I'm going to hand over to Peter, who's going to take you through some of the details in the financials. Peter, please. Thank you so much, Henrik. We go to Page number 18, please, 18. On this page, we can see the income statement for Q4 and for the full year 2020 2019. To the left, you can see the Q4 to the right, you can see the full year. Sales in the quarter was minus 1%. If we then adjust the currency, the Swedish krona went stronger end of the quarter. So adjusted currency, the organic growth was plus 1% instead of minus 1% as reported. Gross margin was improved also in this quarter from 25.6 percent to 26.8 percent, thanks to higher consumer share and also due to mix. Envido has, in the quarter, received governmental subsidies related COVID-nineteen of SEK 7,000,000 and this SEK7 million has been booked as reduced costs in the quarter. Most of these subsidies were received by the Danish business unit as part of the Danish government's efforts to support and to secure the continuation of trainee positions during the COVID-nineteen pandemic. Operating data has been improved in the quarter from SEK 211,000,000 to SEK 231,000,000 higher sales, higher organic sales, better gross margins, plus lower overhead costs have improved results. And the margin was improved from 11.6 percent to 12.9%. Further down the income statement, we can see that profit after tax and annual per share has been improved by 32%. We also have a positive currency impact in the quarter due to stronger SAIC end of the quarter. The earnings per share was improved from 2.28 to 3.02. If we look at the full year impact, sales was amounted to SEK 6,681,000,000, an increase of 1%. Adjusted for the currency impact, sales was plus 2%. For the full year, the margin was improved by 0.5% units from 25.5% to 26%, thanks to improved margin in Q3 and in call. For the full year, Envido has received SEK 25,000,000 in government support due to the COVID-nineteen, which most of this support were related to the business units in UK and Ireland due to the shutdown in Q2. That's more than 50% of the support. The rest is related to sick leaves in Sweden, the support for Trainees in Denmark and then also Paul for temporary layoffs. Operating beta ended at SEK 729,000,000 for the full year. First time ever, Envito is above SEK 700,000,000 and the margin went up to 10.9% compared to 9.7% last year. Furthering in the income statement, we can see that earnings per share was improved by 15% from SEK 7.48 to SEK 8.64 We then turn page. We go to Page number 19. This page is showing reported sales for the Q4 as well as the order intake for the Q4 for 2018, 2019 and 2020. To the left, you can see the sales and to the right, you can see the order intake. Reported sales, minus 1%, organically, it's +1%. North had minus 2% organic sales and South was plus 5% in organic sales, where e commerce was plus 32%. COVID-nineteen had a negative impact of the capacity in the quarter and thereby lower sales. At Henrikstad. In South, we had in Denmark, we had issues with closed down regions due to the mix. And that made it not possible for all employees to go to the workplace, and thereby, we had reduced capacity for 1 week in the Danish business factories. And in North as well as in South, we have also higher sick leave and thereby reduced capacity in the quarter. It has impacted the capacity as well as efficiency in the quarter. However, if we look at the order intake, the order intake was increased in the quarter, +11 percent. North was plus 6% compared to last year and South was plus 18% compared to last year, and also above the level of 2018. If we then turn Page, we go to Page number 20. On this page, we can see the order backlog end of each quarter from Q4 2015 to Q4 2020. With high order intake, plus 11% in the quarter compared to last year and with a lower reported sales of 1% compared to last year, The backlog has been increased. It went from SEK 770,000,000 to SEK 1,142,000,000, an increase of SEK 372,000,000 compared to last year or 48% compared to last year. North is plus 27% end of December this year compared to end of December last year, and SAD is +82 percent compared to last year. The backlog end of December this year is the highest backlog for Q4 ever for Envido. And it's and as I said, plus 48% compared to last year. We go to next page, Page number 21, please. On this page, we can C operating EBITA and operating EBITA margin for Q4 to the left and for the full year to the right for 2018, 2019 and 2020. For 2020, we have higher organic sales, we have improved gross margins, We had low overhead costs and thereby the margin has been improved from 11.6% to 12.9%. And in 2018, we reached 11.5%. Operating EBITDA SEK 231,000,000 compared to SEK 211,000,000 last year. It is the highest operating EBITA in SEK for Envito in Q4. Not the highest EBITA margin, it was a bit higher in 2016, but higher in SEK, the highest level in SEK with the SEK 231. For the full year, we can see it was an improvement from 9.7% in operating EBITA margin to 10.9%. Envido has now 7 quarters in a row, improved our margin every quarter, and we just reached below 11%, 10.9%. The EBITDA, SEK 729,000,000 for the full year is the highest for Envito. And as I said before, it's the first time that we are above SEK 700,000,000 in a full year. In 2018, we reached 9.9% and SEK 657,000,000 operating EBITDA. If you then turn to Page 22, This page is showing the net debt end of each quarter and the net debt versus EBITDA, excluding IFRS 16. Answer right, we can see cash flows from operating activities. Net debt has been reduced in the quarter and was, end of December, SEK 740,000,000, a reduction of SEK 971,000,000 compared to last year. Net debt versus EBITDA, excluding IFRS 16, went from 2.2% December last year to 0.9% December this year. In June 2018, we were on 3.2. So in 10 quarters, Envido has succeeded to go from 3.2 NOK 0.9 when it comes to net debt versus EBITDA, excluding IFRS 16, an improvement of NOK 2.3. The net debt has been reduced by SEK 1,600,000,000 since June 2018. If we include IFRS 16, we should add on SEK 356,000,000 to the net debt. And the net debt plus EBITDA is EUR 1,100,000 including IFRS 16, except for EUR 0.9, excluding IFRS 16. And last year it was SEK 2,400,000,000 instead of SEK 2,200,000,000. The graph to the right illustrates the operating cash flows for 2017 to 2020, the full year. Please note that 2017, 2018 are excluding IFRS 16, whereas 2019 2020 are including IFRS 16. As we can be seen on this graph, operating cash flows has been improved during the last 2 years, thanks to improved resource, less tax payments and also improved working capital. Especially this year, we have a quite large improvement in working capital. Presentation. I now hand over back to Henrik to make a summary before we open up the questions. Next page, please, Page 23. So if we summarize quarter 4 and the full year 2020 then, we saw overall robust consumer activity and from our side a very strong e commerce performance in the year. Q4 was the 7th consecutive quarter of strength in margins in the Q3 in a row with organic growth. We've seen continued good cash flows, as Peter just talked about, improving our balance sheet considerably and then opening up for intensified M and A activities. COVID-nineteen has impacted sales efficiency and sick leave in Q4, sum potential possible positive impact on smaller consumer orders and overall marginal effect on the total year performance. We enter 2021 with a strong order backlog and then compared to last year and a stable consumer market outlook. But obviously, COVID-nineteen consequences and which impact it will have operationally and market wise is still hard to predict. Next page please, Page 24. So with that, we thank you very much for your attention and we open up for questions. Operator, please. We have a question from Victor Hansen from Nordea. Please go ahead. Hi, Victor from Nordea here. Thank you, Henrik and Peter, for taking my questions. First off, how much of your cost control seen in Q4 should we interpret as temporary compared to long term savings that will remain once society has reopened fully. Hi, Vito. It's a bit it's hard to give any definite answer to that question because obviously this is partially moving target. But I would say that the improved efficiencies that we've seen will come we'll try to hang on to. And we think Structurally, we made improvements that we will be able to hang on to. But obviously, as travel increases, meeting frequencies increase, Some of that will then dissipate over the coming years. So we will hang on to, I would say, some of the millions, but maybe not some of them. Think it's the best answer we can give at the moment. Okay. Fair enough. Could you please elaborate on your supply chain that you mentioned was stretched with regards to raw materials? Are you having some difficulties in getting the material you need in time? Yes. So overall, I mean, obviously, I'm very proud of how well our local strong leaders have managed our way through this pandemic and all the restraints, restrictions and changes we've had to behavior. We've had some operational impact, as I mentioned previously, with the shutdowns in Western Denmark and High Sik Leaves. And what we can see is obviously that other players in the supply chain further back have had similar challenges. And on top of that, I think the recovery in some segments of markets, not specifically just in the window market, but in the economy overall, it's a bit stronger than expected, which which combined with relatively low inventory levels after the summers, have strained the components in raw material situations. So we don't foresee any immediate operational challenges on our behalf. However, we do see an inflationary pressure the sequence of a slightly shorter overall raw material market. Okay. Thank you. And a follow-up on that. We've seen raw material prices such as wood and glass increasing price lately. I'm wondering if you have any hedges or have taken any other measures to mitigate some of this price increase. We do have varying contract lengths to lock prices based on our predictions in terms of market development and our outlook. So in terms of that, I guess you could call that partly hedge, and that varies depending on the different material categories. We are not fully hedged for material prices for the full year 2021, though. So we have we still have inflationary exposure in the year. Sorry, did you have a second part to that question? No, that was it. And then I have a final question related to something else. Do you believe we should expect a delayed return in consumer demand from the cold and snowy weather stretching far into February? I think it's a we're looking at the we entered the quarter, the Q1 with a very strong order look. Our experience is that once orders are, let's say, confirmed for delivery, in our experience, they tend to be delivered. However, It's hard for us at this point to exclude any weather impact in the group, but I guess particularly the farther north you get to the geographies. But In general, our experience is that confirmed orders remain confirmed for delivery unless there is a very, very sudden or unnatural shifting weather or something else. Thanks very much for the answers. That's all for me. We have a question from Adena Dhasin from Handelsbanken. Please go ahead. Yes, good morning. Thank you so much for taking my questions. So my first question relates to something that I think is top of mind for most people, given that you've been able to What are the main priorities or, let's say, characteristics That you're looking for in a potential target at the moment. And then also a follow-up on that. Is it safe to assume that the possibility of you Something larger near term given the pandemic is quite small. So thanks, Adela. Hi. I think it's if we look at the overall situation at the moment, the way we've prioritized the activities is actually more activities around the somewhat smaller targets in the geographies where we already are. And it's driven for practical reasons and the limitations in travel and meetings, etcetera. So that's where the bulk of the activity has been sort of in the short term. We should also remember that in our industry, and we've talked about this historically, transactions are the timing is a little bit unpredictable and transactions can take quite some time. So it's actually hard to say, what will push a transaction dialogue sort of over the edge and make it reality, given that in many cases, we buy from private owners and often family owners. But I think it's to expect anything material or anything larger until we see slight improvement in the restriction situation is unlikely, to be quite honest. However, we should absolutely be able to, given that we find the right target the right dialogue, close on smaller targets even with the current restrictive situation, obviously, assuming that the price and the conditions and the spirit in the discussion is right. All right. And then on the strong momentum that you experience in the e commerce segment and that continued also in this quarter. Have you set any expectations of where you expect things to go from here on, possibly a normalized growth level post COVID-nineteen. I mean, we have overall in e commerce, we have Express, and we continue to express an aggressive growth agenda. If you link back to our Capital Markets state presentation from 2019. We launched the ambition to double that business in a we didn't set an exact time line, but underlying in a few years' time. We've made to be quite honest, we've made a bit faster progress on that trajectory than we thought. But our ambition continues to be aggressive and optimistic, and we're continuing to make investments in that. So I would expect us to go back to a good growth level, but perhaps slightly lower than we've seen organically in 2020. Okay. And then on the pandemic impact on your production units, and now I'm talking specifically about Denmark and maybe also the UK. Are you still experiencing capacity issues here? Or are things fully back up and running currently? In Denmark, we're basically up to sort of normal more or less as normal as things can be, I guess, in a COVID situation, but normal operational levels. In the UK, we are being held back by the current situation. And most of you have noted that the U. K have gone back as of early January into basically a full lockdown, as has, by the way, than Ireland, where we also have a pretty good presence. So that is impacting the situation there. But Denmark and the other geographies are, as I said, as normal as they can be given the situation, sick leave levels given all the restrictions and tight guidelines is obviously quite high still. But other than that, operationally as normal as can be. All right. And then finally, do you expect to continue to receive government support in the coming quarters? It's there will be a mixed answer to that question. So we're not expecting any, let's say, any material or considerable and definitely not on top of what we've seen. But there might be still in some geographies specific targeted support. I mean, Peter mentioned before the targeted support that the Danish authorities have put in place versus against maintaining trainees. The exact stent and time of that. I'm not the right one to predict actually. So I would expect there to be some, but nothing critically material from a group perspective. All right. Thank you so much for taking my questions. Thank you. We have the question from Julius Raffelli from SEB. Please go ahead. Hi, good morning, guys, and thanks for taking my questions. First question relating to Division North. Could you just elaborate a bit on the means of increasing North margins closer to the historical levels of mainly 8% plusminus. Or do you actually need to see the industry market come up to speed before that is achievable. So the answer is yes and yes. But There are a number of, let's say, internal activities that we're taking to improve margins. There are The two main ones, I would say, is one is linked around efficiencies and improve continuing to invest to improve efficiencies in production and conversion. And the second one is actually very much mix related. So we talk a lot about consumer exposure and how we can improve our position in the consumer market to strength in our average margin. And that's something where there's a lot of activity ongoing, actually both in Finland and in Sweden, I would say. But to be quite honest, to get to sort of the margin levels where we would like to be longer term, we need a bit support also from a I mean, we have now an market. It's been a bit more gloomy for quite some time. So we need some support from a recovery in that to get the margins all the way to where we want them to be long term. All right, perfect. Thanks. Then just a short question. In Q4. You had the group wide eliminations were positive, SEK 10,000,000. Anything you can Tell us, yes, what is behind that? Peter here. There are a couple of things. One thing is, of course, that we have a lower central cost this year compared to last year. And then we had some business units which are not reported on the south or north, and they have improved in the quarter compared to last year. We also took some provisions, central provisions in Q3 related to bad debts. And then they have been moved out to the central units the local units in Q4. And then we also have some allocations of costs in Q4. Okay. Thanks, Anna. Should we expect that to move back to the normal level that was in previous quarters or is it basically Yes. Yes. Yes. That was one time hit now for Q4. So normal levels for the future. All right. Thanks. That's all from my side. Thank you. We have a question from Kenneth Tull from Carnegie. Please go ahead. Yes. Thank you. So I was wondering, you have quite a seasonal effect in the Q1 And if I refer you to the weather in the Nordics, if I remember correctly, you usually take down your labor, the amount of people working for you a bit in the Q1. And then you increase back up again towards the spring when demand usually comes back. But given now that you have such a strong order book when you enter Q1. Have you been able to sort of plan for a bit higher manning in your plants to cater for that higher order book as you enter Q1 or was it too late? Hi, Kenneth. Thanks. Good question, actually. And it's been something that's been occupying our minds, obviously, throughout the Q4 as we've been planning for January, February, particularly, which are normally, as you say, slower. And we have actually been able we are versus an average sort of Q3 number. We are down still in capacities, but less so than normally. So we have been able to adjust versus sort of a normal capacity in terms of labor availability, slightly up. Then obviously, the short term becomes a little bit complicated then because of the higher sick leave and COVID impact. But overall, the answer to your question is yes. We have been able to increase slightly versus will be sort of a normal winter level. Okay, great. Yes. That's all for me. Thank you. Thank you very much. There are no further questions at this time. Please go ahead, speakers. Presentation. Okay. Thank you very much for listening in. Apologies for the technical challenges with the lost line. Thanks for your patience, and see you next time. Bye bye.