Earnings Call: Q4 2021

May 11, 2021

Good morning, everyone. I think we have a lot of people joining here. So we will try and put you all this welcome to Lagerkran's year end report presentation that we will run here during 40 5 minutes to an hour, I think it will take or so. We as we normally do this, we try to let you all have the presentation available on our website, and it's currently available on www.loggerkranz.com. You can download the presentation, and we will run it through. And we have as normally, we will cover some pages in the beginning or a chapter in the beginning where we'll give you a background to all those of you that are new to the group. Then we will go over the year end report and the figures. And then we will to talk about what we see ahead of us and also connecting them to our new program, the lager kraas towards a billion, which is the program we won't share a month ago. And as said, we will put you all on mute, and I will try to do that first. Just sitting here and if you need to. Okay. So let's get started. I think we released the numbers here this morning. And as you're I'm sure you're all familiar with, we have a year that is ending the end of March. This is so this is our full fiscal year 2021 ending end of March, so 2021. And the numbers were released this morning. And together with me here today is our CFO as well, Kristina and Elszern Mackintosh, if you will also join us. Elszern is available here over the phone and ready to answer any questions you might have. We try to run it like we are giving the presentation, and we will open up the Q and A at the end. But if you feel an urgent need to sort of for the question in between. Please don't hesitate to do so, but we will open up quickly and A at the end. That, I think, is a better option. So let's start with Page number 12 here. To give you the first an overview, LagerCrowns currently and a tech group with and we are some 58 companies currently with all the latest acquisitions we made. We view companies as profit centers or businesses, and it might be more than one legal entity in each of them. But still, as we run them as profit centers, we divide them into and currently, it's 58 different businesses that we have within the group, all very niche oriented, addressing a specific market, which are niche very clear technologies and working in niches, building strong market positions in these different niches. All what the companies are very different, that they all have in common that they all work B2B with different types of technologies addressing a specific market. And we do quite a lot of value creating and value adding within the group. So we don't do sort of just pure distribution or pure box moving or anything like that. We order the products, add things to the products, and we also drive a lot around proprietary products currently, which I will describe a little bit later. The revenues in the group is currently exceeding the SEK 4,000,000,000, and we have been growing the group steadily for many years and have reached that number now, and we are around 1600 employees. You can see also the divisional structure up to the top of page number 2. That is the new structure. So for those of you familiar with this, know that we have, up until now, really been running 4 different divisions, but we are I've made now made a reorganization or a new structure where we are putting up the 5 divisions, and I will describe them a little bit later. You can see over to the right where we have our how we have our businesses geographically. And you can see that we are basically in the Nordics and Northern Europe. But also you can see all over the Europe to the ice, you can also there. We have some footholds and some sales companies in other parts of the world with both China and the U. S. And a couple of other places as well. We what is important to know about us is that we have acquisitions as the clear thing within our DNA, and I'm making some 5 to 8 acquisitions per year that is part of our business model. And we've been on the Stockholm Stock Exchange since 2,001 as a separate company. Before that, we were part of the Bergman and Bewing Group and have been, as such, part on the Stockholm Stock Exchange since 1976. So we've been around for many years. We move on to the next slide, which is the division on divisions on Page 5 sorry, on Page 3. There we have the divisions again. And it's again, according to the new structure. We have now split up the different businesses in the in these segments or divisions. The electrified is basically the old mechatronics, where we are have quite a number of companies that are addressing the trend in the side a little more electrification, have quite a number of different companies addressing and driving products and services around into that market. The second one is the control. That's basically half of the old division, communications, where while we have a number of companies in sort of the area measure and control with Petenitra, Radenova and a couple of others that are the main ones, but we also have a number of more niche oriented smaller companies as well. The 3rd sector we think is very interesting for the future is the tech sector, the technical security. We see a lot of things happening there, and we also see that we can address that with some of our companies already addressing that. With we started out with the AIC Nordic and a couple of other companies, more of traditional type of tech stack company. We have built the group broader than that with some Harkon with the sprinkler systems, but also now with the FrickTape coming into that division and also the CWL, which is the new company we acquired just announced ago. And the 4th division is then the niche products division, but that is basically unchanged compared to previously. But here, we managed to make quite a few acquisitions over the years, and it's willing to be one of the key parts of the group. It's currently a nice for the important part when it comes to profits and sort of yes, in and so on the same level as Electrify fire when it comes to business volumes. They have around 30% of each of the volumes and profit in the group. Last but not least, we're going to be the International division, which contains some of the companies that we have done in Central Europe. Here, we have the German companies, the UK companies and a lot of the Danish companies as well. And here, we plan to go more for exports or international related sites businesses and have some acquisitions being made in the UK hand also in Germany. Thank you. So that's sort of the decision structure. Then entering into the numbers then, let's look at Page number 4. You can see here our trend over a long period of time, all the way back in 2,005 'six, and you can see the upward trend in our profits. And you can also see that we the profit line is exceeding the bars behind, which is the net sales on and you can see then that the margins are improving along the way. And you can also look at and see that we have we've been affected by the COVID-nineteen pandemic here in the last year. But as we see that it's been picking up along the way, and we have now had a couple of better quarters. And especially the last one was we feel very strong with some really good numbers and good margins as that will come to. And for the year, we now climbed above the 500 limit in terms of focus out the financial license, which is something we've been working towards along the way. So it's and a very strong sort of uptick there in the last quarter, as you can see, all the way over to the right. So we're basically back on track and feel that we are confident about what we have ahead of us. Looking at and moving a little bit more into the numbers, we have also communicated in our report now around the business conditions that we saw a general improvement. I'm on Page 5 now then. We saw a general improvement in recovery during the quarter. And even though the pipeline wasn't growing. We saw some stronger order intake. It's been like that over the year that we have seen sort of an upwards trend in our numbers along the way, and the order intake was up in 5% compared to the Q4 last year for comparable units. But we also saw that a handful of our groups, some 55 or even 58 businesses that I talked about earlier still are affected by the pandemic. It's ASAP, it's the QuickTape, it's Zara Nova and a couple of others that we have mentioned. But otherwise, we feel that most of companies are doing very well and especially the bigger ones are doing very well. For instance, as to point out here that Toolmake has been doing it very well for us during last year and continue to do so. WAPO for another one. And EcoDawn and also then YieldPress, of course, within the Mekatonix division delivered another strong quarter. What we also saw in the quarter was that the restructuring measures, I've been talking quite a lot about them in the last year in the Electronics division. We have not been satisfied with the types of businesses and how they've delivered from the Electronics division for some time. And we decided a year ago to do some restructuring in Germany, in Poland and then a couple of companies in Norway as well. And we now saw some effects of that or have had 2 now quarters of effect from that, which means that the electronics have the division of electronics have delivered quite much better numbers now in the last couple of quarters. During the period, we also both 5 new acquisitions on board, meaning that we also added to the numbers. So 1st January, we have Witek Metals, from Hubicom, ESRU through AARGM a little bit later and then also VHAG also a little bit later. And they complement our existing operations to these companies. So they are very sort of there we also can see some synergies along the way. I think it's also very important to point out the Sigve Lundberg acquisition we made here in the last month that will add to the group here starting in 1st April. That is one of the bigger acquisitions we made over the years, and we see the net sales is close to EUR 200,000,000 there, and EBITDA is on EUR 33,000,000 last year, and it's been growing quite nicely in the few last few years. And we expect a lot over the city lumber going forward. Very nice acquisitions to be brought on board to the group and will be some of the I think it will be a cornerstone for us going forward with that acquisition as well. Looking a little bit more on the numbers on Page 6. You can see that the net revenues that amounted to SEK 1,000,000,000 SEK 118,000,000, which is slightly up from last year, but not very much, surely. We as again, we saw some of most of the businesses doing very well and also having some good growth in some companies. Back again, some 5 companies or so, a handful of companies were quite affected still by the COVID, and therefore, we didn't manage to grow the net revenues during the quarter. EBITDA, on the other hand, was very strong, increased by SEK 100,000,000 to SEK 292,000,000 as to $152,000,000 last year, and that meant that we had an all time high EBITA margin of 17.2%. As those of you who have followed us know that we have been in the 13%, 14%, 15% range earlier on, but now we reached the 17 on 2, which I think is great. We see that they have a stronger and stronger portfolio along the way. And it was great to see we also managed to deliver very strong EBITDA margin here during the quarter. And then profit at the financial items then was increased by 32%, as you can see there. And as also important to point out the cash flows and the acquisitions. I think I've covered the other ones on that slide. Looking at Page number 7. We then landed a good year, we feel, given the pandemic. I think it was a very strong year. Sales again. It picked up a little bit in the last part of the year, but earlier on, it was a bit soft, so and affected by the COVID again. But EBITA for the full year then increased by 9% and a strong EBITA margin of 15.1% as opposed to 13.5%. That is also and the strongest in the hands for the full year. And focusing on the financial items increased by 9%, and you can see that earnings per share reach the SEK 1.91 per share. And the return on equity will spend 22%, which I think is a good level even though we have the target of 25%. So slightly below that, but still on a very good level, our IPO. I think it's also important to point out the cash closer to a very, very strong, a bit strong last year with the 507 as well, but a bit even stronger this year with the SEK 782,000,000, which I think is a very strong number. During the year also, we or in the last part of the year, we also then launched a program for the future growth, which we call the target trends towards SEK 1,000,000,000. As you know, we are growing the 15% per year, and that means that we basically have the ambition to double the size of all the crowns within 5 years. And given now that we are at the SEK 500,000,000 for the year, we basically are aiming for the SEK 1,000,000,000 in the years to come. And with some good acquisitions along the way, we are along the way. We feel that we have a good opportunity to reach that within the 5 years. And the Board of Dylext has then finally propose a dividend raise, a good raise really from SEK 0.67 to SEK 1 per share, which will be handled on the Annual Shareholders Meeting in August. Looking at Page number 8, you can see the outcome by division, how that looks. This is the older divisional structure. I have another slide later on with the new divisional structure. But you can see it was a very strong quarter. You can see that we down below to the left. You can see the very strong EBITA margins in all divisions really. The electronics, you can see, had a few softer quarters looking efforts there in time series there. And but have been delivering now some nice numbers here for 2 quarters with a total 12.5% and 14.3%. And then the other ones have been doing very well and came in very strongly here. We also put out some comments by division here on Page 9. And you can see that the electronics division then increased yes, the increase in their EBITA with a strong 85%. But given that and that is heavily affected then by the restructuring they made in Germany, Poland and Norway, as I pointed out earlier. And we also saw some improvement in the market situation in Germany, which is also something we commented on earlier on, that has been turned for the better for the companies that we have down there. And that also contributed to the strong earnings here in the quarter within the Electronics division. Within the Mechatronics division, EBITDA increased by 9% and had a very strong EBITDA margin. We saw some positive developments, especially in the bigger companies with the yield press and a couple of others as well in Cape Verde and more West Coast also did it very well. But we also saw some negative impacts by the pandemic in some of the companies, the Frick space, which was part of the mechatronics up until now, 1st April, where it will be moved to another division. But they were I mean, they're addressing the Helidek out there offshore, and it's very hard for them to perform any installations given that they're not welcome out there for the sake of not spreading the virus. And therefore, they have been struggling a bit. We also had last year some international telecom projects that affected the numbers very nicely last year. That was not repeated this year, but they are moving to a later date, some of those also affected by the pandemic. But on the other hand, the acquisitions yesterday and the Intermittality are contributing very well to the improvement in earnings in Mechatronics. So I would say, Mechatronics perform a very nice quarter even though they didn't have all companies doing well and then affected also by these delays in the international in the international telecom projects. Communications also reach the SEK 39,000,000 and basically the same level as last year, but it's an improvement in margins. We saw some positive developments in a few of the companies, in Preci Mid area, I see Nordic and Leasing in Norway, and which performed by a while. On the other hand, Radanova, which is a strong profit contributor, especially in the wintertime when they're making measurements around Reagan, and they have their seats done. And that was negatively affected by the pandemic. Customers have a lower tendency to measure radon when everyone is occupied with sort of dealing with the pandemic rather than worrying about Veydon. And but we know that, that probably will come back here in a year or so not a huge effect, but still an effect that is affecting the total numbers. We also So I have the Archon, which is the one of the main contributors within communications. They had a good order intake was but the company was moved to new facilities, new premises, and that affected the invoicing and the production facility down in Norrkoping here during this quarter, which we feel is a temporary thing. And last but not least, we have the niche products division, which then was the really contributed very well with an increase in EBITA with 49% to SEK 61,000,000 in a very good margin. And niche products is becoming really one of the very key things with the loyalty grounds with becoming the biggest division, starting a little bit with electrified. So those 2 sort of divisions on the biggest ones within the group going forward. And we saw some strong volume growth in earnings improvement from several businesses and especially on Toolmec, Codan and Watburg, we highlighted here. They will report a good growth. But we also saw some continued challenges due to the pandemic for ASEP and SIB. There are rushes for airfields that it's also been negatively affected by the pandemic. So we still have a handful of companies that are affected, all in all, a very strong quarter, I would say. That was what I would comment on the year end report. Then I would like to move on to what we see ahead of us, and I would like to describe a little bit on who we see with the large accounts toward SEK 1,000,000,000. And as pointed out, we have made a strategy work here and during the year. And we feel that we have a very strong business concept within the group. And have put it together in a strategic program now that we will that really lines out and will continue the journey for the next for the future. And within 5 years, we have definitely the ambition to build and even strongly B2B Tech Group with and deliver 1,000,000,000 in profits. And that is the EBITD profit that we're talking about then. That is sort of the highlight of the whole thing. And what does this mean then? What will we do? Well, we will we have tried to, both internally and externally internally, and to everyone, clarify the strategies and the financial goals and make them even clearer and and sort of ambitions for the future. We have identified also to reorganize into 5 divisions with clear growth conditions for each division. We have decided to increase the capacity within M and A, try to speed that up even more and set some clear and more ambitious ambitions for M and A going forward. And we will also then focus on sustainability, which we feel is very important to all our companies, something we've been working with for many years, and we will continue to do that for the future as well. And to go into this a little bit, we will we have then clarified our vision and financial goals. We would like to be a sustainable supplier of value adding technologies with market leading positions in several expansions and issues is our vision statement going forward. And that means that we will continue to build the group, and the Kruger here over to the right is a very good picture of that. Wherever we'll have really niche oriented short companies within the group, and we can perceive ourselves as a good owner of these companies. And they will together bring a very sort of stable, good profit growth for the shareholders and for the group. And that means that we have our annual growth profit target of 18%, which is the earnings before tax. And we have also highlighted that we really are through for better organic growth going forward. We feel that we have good opportunity with more proprietary products. And as that share of sales increases. We feel that we can go more for exports and have a better organic growth going forward once we are through the pandemic and everyone is sort of back to normal. I think we believe that, that is a very justifiable goal for us. And we have then also decided to raise the bar a little bit when it comes to acquisitions, to the 5 to 8 acquisitions per year. And those 2 together, the organic growth and the acquisitions per year should clearly lean at the 50% per year. And we should also do this very profitably with having the return on equity in exceeding 25%. We have been in that neighborhood for quite some years now, and we plan to continue doing that and along the way also deliver fully on the 25%. I think the key thing in doing this, I'm on Page 12 now, is the aim for the 75% proprietor is in the last report here, we communicated at 65%, which is the level we are at the moment. And you can see how that gray field here has been in improving and increasing along the way over the years. All the way since we first acquired Yieldcrest in 'six, we can we basically see an upward trend in the share of proprietary products within the group. And we have the clear aim of 75 and given that we now have made more acquisitions of companies with proprietary products, obviously, here, a little bit of lift already there and here in the months in the quarters to come. So and that's very key to us. With the proprietary products. We feel we see that the margins are higher. We said that the gross margins was higher. We see that the EBIT margins are higher. We see better opportunities for growth when it comes to exports, when it comes to sort of, yes, developing more products and addressing new customer segments. And that means that opportunities for organic growth we feel are better when it comes to proprietary products and also with some higher margins and that so we feel confident that that's the right route for us to go. And we will also remain our focus on value add. On Page 13, you can see the development back in 'five, 'six. And this is, of course, something we're very proud of. This is a very good trend. And we reached a new all time high, as you can see here, in the last year. So let's say, at the 38.5 And of course, this is very important also to our bottom line to have some good gross margins. We will, in the target cost towards SEK 1,000,000,000 program, also then reorganize into 5 divisions. We have highlighted in our communication in our report some really clear and obvious reasons for doing this. We feel that the old divisional structure has been we've always been opportunistic, and that means that we have, to some extent, also a quiet space we believe in, even though the headline is not maybe the right thing. But along the way, we feel that these headlines is better for us because they're both so it clarifies what's in the different divisions, but it also clarifies where you would like to go. Here, we have identified a number of areas where we feel that there is underlying structural growth, and that is something that we're aiming for now. And especially within the electrified, that's very clear. Within control, we see a lot of measure and control technologies, including sensors and other type of things. That is also very sort of in an area of growth. We see the Tech Tech area where we feel that that is also a growing area where we would like to take better care of society and personnel and health and environment and when it comes and take that area is growing depending on those things. The niche progress is doing basically what they have been doing. And internationally then taking the companies that we have already within the International division, the ones that we have in Denmark, in Germany, in Poland, in the UK. And here, we basically would like to take niche products concepts really on export. So we basically should look for companies that have proprietary products that are working maybe in those areas, in those geographies rather than in the Nordic and sort of copy a little bit what we've been doing in each product and doing internationally within the new international division. So I think this is very exciting. This is very promising for the future. And you can see that the different divisions down there, you can see they have a little bit of difference in size. And but they all have good ambitions when it comes to EBITA margins down to the bottom there, and you can also see what companies that are in the different divisions. And we have communicated this. I think it's very promising and something very important for us internally. We have in our communication, as you can point we pointed out on Page 15. You can see how the pro form a in the new division structure will look like. We have done this 2 years back sort of so you can see the pro form a quarter by quarter. And this is how now we will follow-up the group and communicate to the market as well as our first Q1 report, and we will drop the old way of reporting, the old divisional structure moving into this one instead. Part of this program is also the increased focus on sustainability. Here, we have basically gone with what most are doing, working in the key dimension, environmental sustainability, the governance factor in the social society factor you can see there. We have basically put together some clear goals and some clear ambitions in those levels. While I also think it's very important to highlight the one we have on the left here where we have some 50 plus local initiatives in our different companies. I think we have a very strong portfolio when it comes to what is sustainable, what has growth, what would add to society going forward. But to highlight that even more and to make everyone involved in the group, we have now launched some 50 local initiatives or really have some initiatives going in each company, and we will follow-up on one goal per company in our follow-up to make sure that everyone is involved, everyone is taking this seriously, and people are really sort of changing the way they're doing business to a more sustainable way of working. And that, I think, is very promising for us going forward. Last but not least, in this program, on Page 17. We also feel that we should increase our capacity within M and A. As pointed out earlier, we see some onethree of our growth coming to from organically, while twothree should come from acquisitions then. And as the group becomes bigger and bigger, of course, we need to make bigger and more acquisitions along the way. So that means that we are now aiming for 5 to 8 companies to acquire per year. And in order to do that, we will expand our geography as we're looking. We will look a little bit more into Central Europe. We will continue doing it in Nordics, of course, but we will sort of reinforce and strengthen our capabilities in other markets as well. And we will look mainly at Germany, Poland, Benelux and the UK, all those markets that we will look in as a little bit unusual with this when it comes to acquiring sort of we have made more Adam acquisitions previously, but we will look for new companies as well now when we go into these markets and feel that we have the strength and the size to do so. Looking at the acquisitions lately, I will round off with a chapter here around acquisitions. We have during the last the year or so. We have made some 8 acquisitions and especially so now here in the winter time. We took a pause here in the when the pandemic hit us here last summer or spring summer, this time around last year. And but since then, we have made quite a number of acquisitions here in the last quarter or so and some really important ones as well. So I will cover them a little bit briefly here. There are quite a lot of ones, so it's difficult to but what we try to do is put together a fact cheap for each of our acquisitions when we make them. And the first one we made here or the first one I'd like to brief you on is the Vipa Nepal, which is a Norwegian company. This is at a good fit with a good strategic fit with our ElectPress, which, as you know, is our biggest company previously. They're also making electrical connectors, but both companies are making electrical connectors. But this one, the different tiles is based on what we call enclosed connectors, and those are primarily used for high voltage applications. A very strong company, a very niche oriented company. It has a very strong market position in Norway, somewhat in Sweden and Finland and Canada as well. And our ambition here is to make them more international and build that company geographically into the very strong niche oriented products that they have within that company. You can see down to the right there, I tried to put together some numbers when we make positions. And as you can see, we have a strong EBITA margin with some 23%. Growth here, as you can see, has not been great. But given that we see some opportunities internationally for this company, we expect the growth to pick up here under our ownership. The second one I'd like to cover is the ESRD, that is the Finnish company, and then making these type of equipment shelters and technical buildings or technical houses, you can see over to the right there, and building those have a very strong, solid performance at the with some €5,000,000 of sales, very strong in their market in the north of in North Finland and also expanding into Sweden, have had some projects in Sweden as well and also some really good performance that you can see down to the right there. This company has a clear connection also with the yield caps thing, which we already have. And we plan to sort of they have slightly different product ranges, and we plan to bring yesterday a bit to Sweden, and we plan to bring eL Capstone a bit to Finland. And that's how we will sort of expand together and find growth for both companies, some cross selling opportunities we see there. The third one I'd like to comment on is the Hobicon. Hobicon is an Allen acquisition for ESET, which is within the niche products division. And this is a very strong company in Central Europe, especially in Holland in France and with Benelux with these type of dispensing solutions. And for those of you that looked into ASEP's homepage. You can see that these are similar products, even though this is more a little bit more of trading products and a little bit more products that are sort of not passive in it always, but so it complements also product wise the ASAP business that we have. And as you can see down to the right, there is very strong performance as well when it comes to the margins and also some growth in that company. The 4th one I'd like comment is the Fayas. Fayas, we acquired Hillestip for Christmas or it was even a little bit earlier than that. And they're making the brushes. This is adding to the SIB business with the brush systems for airfields. Here, we have a brush assistance for load sweeping and have a clear market leading position in Finland than in Sweden, but also have some strong volumes in Germany and the production facility in Tallinn as well. Also, some strong performance, even though we plan this to bring this higher up, This is not living up fully to our standards, but we see some good opportunities to develop this further and to bring the margins and the volumes up here given that they can also work together with the SIB business that we already have within the group. Last but not least, I would also like to cover the CW London, which is the company they acquired in Sweden in Mugra, in Gala now in Sweden. And again, this is a very important acquisition for us. Here. We have a little bit more sizable business and some really strong performance, as you can see down to the right there, with close to €200,000,000. This will be a very strong company within the Tech Spec and a very important part of building the Tex exhibition going forward. And they see. We will undertake it. It's the leader in safety products for loops. You can see the bridges and the other type of products, Snow Raw Sweden, Swedish, preventing snow from falling down from roofs. You can see the barriers that we put up there. And that type of product they have and are a very strong player in Sweden. But I also have some export ambitions in Poland, but I have a subsidiary. And also in Norway, we also have a subsidiary. For this. I think we'll be a very strong company for us going forward. To round off, I think that it's been great to be able to present all this to you. It's I think we concluded a very strong year. I think we concluded some of the best margins we have we've had. We went through the pandemic in a very good way came through the pandemic in a very good way. We have now landed some good acquisitions. And we also have the new program, Volley Crans, toward €1,000,000,000, which I think is very exciting and promising for the future. We know where we're heading. So yes, that was sort of in the presentation we had for this morning. Cristina, would you like to add something or before we open up for Q and A. In order for you guys to unmute yourself, you should maybe I should you should unmute yourself by pushing star 6, and you can unmute yourself and go ahead with Q and A, if you'd like. Can you hear me, Juergen? Do you want to hear it, Danfel? Yes. Just a couple of quick questions. Firstly, on the, as you call it, fire right now. We're hearing some substantial investment programs, mainly in transmission Sweden. Can you just talk about what sort of visibility you have in this area? What you're getting from your main customers? And how you are sort of staffing this operation to cope with the growth, if you see it. I think there has been quite a lot of talking about growth in the newspapers, and we think that it's heading that way. But so far, we haven't seen that sort of explosive type of growth that we might see in the future or not explosive even, but a good growth. I think what we see is we are there are a lot of sort of official reports and stuff that you can read around it, and they all are quite promising. But for it to take off, I think we get we need to get through the pandemic and start and we will see some investments. What we are doing is that we are addressing this market on a sort of a broader perspective. We have quite a number of different products addressing both this market, and we are working mainly through wholesalers and also some OEM customers with sort of the wind turbine manufacturers and that type of so for instance, yes, those guys, but also ABB and those type of companies are customers of ours. So I think we're very well positioned, and I think it's very promising for in the years to come. But we don't see it happening sort of this quarter. That will probably take some more time before people are really starting to invest in this. Just a follow-up. What your ambitions to acquire companies outside Sweden, outside Nordics. To what extent is that due to the fact that you're seeing increased competition for deals sort of locally and domestically. Also, can you just talk about what sort of normalization you expect on sort of SG and A cost for the group as we head into a post pandemic type of world here in the second half. Thank you. Yes. Your first question around M and A, I think that we still feel that the Nordics is a very good place to be. I think there are a lot of good opportunities. We are looking quite a lot at companies, but we also see some increased competition. And there is we still see more business out there and people are sort of more aggressive, a little bit more aggressive. But we don't see it sort of, yes, really going the wrong way or we feel like it's and you can see that, for instance, I think we are a well established player, and people like to do business with us. And therefore, the CW London, for instance, I think it's a very sort of good example of where they choose us and we choose them. And we manage to sort of cope with also a competitive landscape. So but we also need to sort of I think it's important to realize that I mean, we are becoming more and more sort of Pan Northern European. And of course, the bigger markets in Germany and in the U. K, and we'll also see some of our peers going that way. And therefore, I think it is good opportunities for us to be there as well. So I think it will fuel growth, but I think we will still feel that we are making quite a lot of number, quite a huge proportion of our deals in Sweden and the Nordics. And that was maybe just Sampo, I'm going to answer the first one. And the second one, on SG and A. Of course, we see some effects from the pandemic in a positive way when it caused the SG and A. People are not traveling. People are we don't run fares or go to fares in the same extent that we used to. On the other hand, I think we also see this. So what we feel is maybe that some of it will come back. We need to have some positive what we call positive costs when it comes to sort of going out to customers, entertaining with customers, going to fairs and build business in the long term. So I think some of it will come back, but I'm pretty sure that not all of it will come back. And you can also see that we have due to the pandemic, we have also reduced our number of employees during the year with some 6% like for like. So we have also some cut outs on costs, and that I think is not a temporary thing. We plan for that to be sustainable. Thanks. Okay. Someone else would like to add some question? It is Neil Starn from Redeye here. Can you hear me? Yes. Can you hear me? Regarding electronics, The margin was really strong. Should we expect a level like this considering the restructuring? It's a difficult one. I would maybe add a couple of more quarters before we see it sustainable. It depends a little bit on what I got the same question really on the previous quarter when they were at the 12% level. And I put out the same answer basically that I think we should see it for a couple of more quarters before we see it as sustainable. I think that what we have done is we have carried out some lower margin business and therefore should be. But I think the 12% to 13% range is more sustainable or something I would sort of expect rather than then maybe 14% is maybe a bit on the high side. Okay. One more question from me. Mechatronics also had quite strong margins. Was that mainly a sales mix effect? Or have you become more Vision in the companies in that division as well. Yes, I think it's both. We see that some of the higher margin companies would be addressed. And I think many of the companies are doing quite well within Electrify within that division of Mekrotomics. The ones that have been slowest, really, is the fixed rate at the moment. And that, we're moving now to stick. And I think that will come back once the pandemic is we're through the pandemic. But so it is, I think, a mixed effect mostly. But still some of the yes, some of the companies are doing really well, but I also have a few others that are not fully running on the full year. Okay. Thanks a lot. That's all for me. Hi. This is Markus at Panther. Can you hear me? Here. Hello, Martes. Welcome. Yes. Sorry, I wasn't too hard to get onto the line. A couple of questions for me. First of all, thank you very much for giving us the order intake growth of 5 sent. Can you tell talk a little bit about the book to bill, so where you are right now? And also, I would assume that your intake is higher then sales. And then how does the component shortage play into this? And do you see any impact from this on non sales? Yes, I think that the we do see some shortages in some areas, and we see some, or I would call it imbalances when we're talking about sort of the different types of components. We see some price inflation as well when it comes to we see some raw materials that the prices are fluctuating quite a lot and moving up. So it is somewhat of a turbulent time that we're going through. But I think all in all, in a group level or a value account level, we see that, yes, it levels out. And we also I think we have very strong pricing power. I think we proved that so many times. But by being sort of very niche oriented and being very strong in specific niches, you also have some good price power when it comes to adjusting the prices, if you're hurt by increased raw materials or currency effect to something like that. I think also what you're pointing out is that we see some I don't like to comment on the book to bill because I don't think that's fair to everyone else. But we see some order intake and some order bookings that we've that I think people are out placing just because they see shortages and make sure want to make sure they have their raw materials. But on the other hand, I think that's also in the end driving growth. So I think that, that goes very well, really. Okay. Okay. And Continue on the margin. So I mean very, very good margin. Can you just and just to make sure, there are no special items in there which is lifting up temporarily or anything like that, but you are at a higher level this quarter? Like that. But you are at higher level this quarter. Not really temporary. No, we don't see any really temporary, right? Yes, we had one we the TLX, Schapfilling, the additional we released a reserve of that from SEK 5,000,000. That is on group level. Okay. But I will also comment then. But other than that, we don't have any temporary effects or sort of projects related or anything like that. I think it has to do with yes, improving some margins and doing a good job out in the company, but also them having somewhat of a lower cost base than normal due to the people who can't travel. And we can't do the sales work as we normally do. Okay. Okay. Okay. And then moving on to acquisitions. So I mean, very, very good level, especially at the end here. Is it I mean, is this what you want to do? Or is it I mean, are you did you aim to go this way? Or is it just because I know that you thought one of the thoughts is more on acquisitions, right? That's a clear target of yours. But is this an effect of that? Or is it also pent up demand from the pandemic and a bit of a catch up? Yes. I think we are constantly running the M and A. We have one team going basically, we have our M and A team going in Sweden. We have one in Denmark. We have on. In England, we have basically a guy in Germany. We are looking more and more into the UK. So it is like we are broadening our capacity and increasing our capacity. When it comes to sort of concluding deals, it's also very much a matter of whether you have sort of, yes, manage to get all the way through and make sure that we would like to be sort of yes, we're doing our due diligence, and we are running our this is and it happens quite often really that not quite often, but sometimes it happens that we are all the way to the sort of finish line that we don't end up good in the deal anyway. So it's a matter of rules, some sort of ups and downs when it comes to running the processes. And I think during this winter. I think it was a bit of a sort of stuck up a little bit due to the pandemic. But after summer. We have seen quite a number of processes sort of picking up, and we haven't managed to conclude these deals. I think the addition that we're putting out here is the 5 to 8 acquisitions per year. Now we managed to make 5 acquisitions in the last quarter. And I don't think we will make 5 acquisitions every quarter. That's not what I'm saying. I think the 5% to 8% is more reasonable looking forward. But on the other hand, also I think we expect us to do it make a little bit more sizable deals maybe along the way. Yes. Because that was my second question. But first, it's because I know the timing is very difficult. I mean, of course, it's a negotiation between you and the seller. And you can never predict when these are going to come in. But at the same time, I also know that you are focusing more on actually making acquisitions with a clear targeting, I mean, express target that you have that you are focusing more on it. So but it might be too early also, so that's hence my question. Yes. And then on the larger targets, just a bit curious to see your thoughts about Because you move abroad, right? There were some other questions about you moving down to more towards the continent. And do you expect at the same time we usually see targets in the UK, in Germany, in the Netherlands being a bit larger. Do you expect the same thing here? So as you move kind of from the Nordics and more south, that we should also expect targets to be a little bit bigger. A little bit, yes. But on the other hand, if you look at the ones that we have concluded. You can see that they are right the same size that we have previously done. You can look at the HUV Conference that I mentioned on earlier here. So it is but some I mean, the markets are bigger, and I also expected some of the targets to be a little bit bigger, especially if they're sort of for sale for an international buyer, which we will be then coming there, right? But it's I think you could expect this slightly to be a target or deals down there. That I think is Okay, okay. Excellent. Thank you very much. Thank you. Do we have some final one, Edward, or yes, additional one? Any questions? Okay. Yes. Once again, you unmute yourself by pushing star 6, if you'd like to unmute yourself. To remind you of that. Yes, hi. Can you hear me? Yes, I can hear you. Yes, perfect. So then just one more question regarding your new acquisition strategy. As you say, you're a well known name here in the Nordic market and companies tend to choose you. Do Do you think it will be more difficult to enter relationships with companies outside the Nordics? And do you expect longer processes, M and A processes in these regions. And should we expect a bit slower structural growth in the international divisions going forward here. I think not really. I think yes, we are a bit more unknown, that's for sure. But we also have been entertaining and working with M and A, companies and firms for the last 6 to 5 years. So we are building our networks, and we have come somewhere with that. So it's I don't think it will take us that long time really. But of course, we are more unknown. And it's also arguing to the sellers that the business model that we are running and being here as sort of more of a Scandinavian type company with its Scandinavian type culture as well. I think it might take us a little bit more time to sort of convince everyone that it's the right way right path to choose to go with us. But on the other hand, I think when we get into sort of discussions, we that's happened to us a few times. I think they like what they see and they like our concept. But also, when we look at some of the companies here, the Ovidcon, for instance, is a good example. That company, I mean, that is something we've been working together with and view them as a partner in the industry for quite some years. So it's also more that we are also addressing areas where we're already in when we will go for that. In the International division, however, we will to look at new things, new type of companies. So it's a little bit a little bit of mix there. But I think the main thing will still be to work between the electrify, the Tech Tech and the Control divisions and the Nisko Rx division to sort of also build the clusters and the areas that we're already in start doing it now in mid Europe, Central Europe. Perfect. Thank you. Good. Christina and I will be available if you would like to stage a call to us. Please, I think our contact info is available on the website if you would like to sort of have additional questions or so. But thank you, everyone, for listening in, and have a good day.