Earnings Call: Q1 2022

Jul 16, 2021

Good morning, everyone. Jorgen Liebig speaking, CEO of Lagerkron. We will start the presentation in just a minute. I'd just like to introduce myself and also Christina Elstern, Lagerfeld, our CFO, is also with us on the line here. We have from Logikram, we have released our numbers this morning, and we will try and run you through the presentation that is available on our website. We will start by meeting everyone, and we will open up the so a warm welcome to everyone. Again, our the presentation is available on our website, the lagerkram.com, and you can follow it through. And I will try to highlight where we are on every page as we go through the presentation. This and again, we will open up for questions at the end of the session. And hopefully, we will try to keep it brief and be done in 45 minutes in an hour or so with all the questions as well. So we released our numbers for the Q1 here this morning. As you all of you that have been following us, you know that we have a year ending the end of March. So our Q1 is the April through June then, which we, again, released this morning. We feel this a very strong report. We've had a very strong quarter. And I think we also, compared to what the market expectations were, had a very strong quarter as well. But before we get to that, I have divided the presentation into sort of 3 chapters. The first one is a short introduction to the group, and then we will look at the numbers. And at the end, we have the Chapter 3, which is then going over some things that we feel are important to know about us as we go forward. So and we will then round up with the Q and A as well. Looking at Page number 2 of the presentation with a short introduction. I mean, LagerKraun is and has been for a while a tech group, and we work very this thinking in the initiatives. So we have a group of some slightly less than 60 companies, which are basically working in their separate niches, trying with doing business to business technologies in different niches, trying to do a lot of value creation for our customers primarily, but also for, of course, for the suppliers that we represent in some instances this as well. Revenues in the group exceed some SEK 4,000,000,000, and we have some in 1800 employees within the group after our last latest acquisitions with a few more joined us within the group. The 1800 is the current number. You can see where we're present over to the right on the slide there, where we have our pins, our needles, where we are located. And as you can see, Sweden is our biggest market, but we also are strong all through the Nordics, while we also are strong in some Northern European countries with Germany and the UK and the that region and also Poland. And you can see all over to the right, but we're also present because most of our companies are also going for exports. And therefore, we also have some footholds in other parts of the exports, and therefore, we also have some footholds in other parts of the market of the world, with especially U. S. And China and the I'll say India, as you can see that over to the right. We as said already, we work in a very decentralized way, running it through decentralization and management by objectives. So each profit center have their own sort of profile. They have their own work under their own brand name, their own company name and addressing the specific market with some specific technologies and specific products. And as of now then, 1st as of the last quarter here, we are working in 5 divisions. It used to be 4, and you can see the 5 divisions that we have up there. I will comment on that later, that reorganization that we made starting at 1st April. Acquisitions as is a very key thing in our DNA, and we try to make 5 to 8 acquisitions per year. And in the last 12 months or so, we made 10 acquisitions. So acquisitions this is a really important thing for us as we as we grow the way of growing the business. We have been separated and listed since 2,001. And before that, we were part of the Berlin and Berlin Group. So we have been on the stock exchange since 1976, really, under another name up until 2000 and 1, but under our own name since then. So that's an introduction to the group. Looking at our performance, you can see here on Page number 3. We started out some in 2005 or so with with some lower margins and has since then really been growing our profit. We had a down shift in the financial crisis in 2,008, but otherwise, it's been growing nice and steadily. And now that we can conclude that we had an all time high in our profits and a very strong quarter, as you can see, all over to the right there. You can also see that the scales here are proportionate from the left to the right, and you can see that the margins have been improving along the way. And we've been since quite some years now about 10% in EBITDA margins. And that has also in force now by the strong last quarter we've had. And you can also see over to the right there, we also have some significant sales growth here in the last quarter. We have been affected by the COVID-nineteen, but since now 3, 4 quarters, it's been improving again, and we're coming back. And now we're also growing the business on top of that with both organically and through acquisitions and then concluded a very strong quarter here with this $589,000,000 I think is the moving 12 month figure for our profits at the moment up quite significantly here in the last quarter. So it's been a a good performance for us. A few more comments on the Q1 report. You can see them on Page 4. I mean, we have already pointed out, we have set up the new structure with the 5 divisions. Previously, we were 4, and before that, we were in 3. But since now, 1st April, we have 5 divisions. And our focus in doing that has been to clarify the attractiveness that we see in some of the segments that we are working. We have some companies that are really addressing the electrification of the whole society. We have a couple of other segments, which I can come back to later. But we would like to highlight that both internally, but also externally towards the stock market and the M and A market, we would like to highlight where we would like to be and what segments and what markets we'd like to address. And in order to do that in a better fashion, this we have now put together the new structure and reorganized the business. I will come back a little bit more to that later on. What was good with the quarter was really the strong organic sales growth with 18% organically. We had just as much coming from acquisitions. This and then we had an FX effect that was basically slightly negative. But underlying, the sales growth was very strong, the 18%. That is a new very strong number from us. We have been much lower than that before, but it was great to see that way that we managed to get to 18%. That came from both that recent recoveries in some of the markets. We had some easy comparables to some extent. But on top of that, we also had significant growth coming from many of the companies, broad based in the group. Some companies in Germany and Denmark have been doing it quite much better with some stronger underlying markets, but also with some restructuring taking effect along the way and come where some companies have come back to growth here after some restructuring in some instances. So a general improvement recovery during the quarter in most markets. So it was we concluded it was a strong market. We see it going moving forward. And also in this quarter, we saw some components some effect from the component shortages. Many companies are now talking about the prices rising prices in raw materials and shifting the cost as well and that we saw some effects of. I think that it's on a broad base, I think we've dealt with it, very well in our companies. We are very niche oriented, and that means that we see some effects in some instances, but it's not very rarely sort of affecting us on a group level, but it might affect some specific profit centers within the group. And we also feel that being by being niche oriented, we can also have some good pricing power because we are the specialists this that basically, yes, are delivering some clear values to the customers. And therefore, I think we've been pretty good at also raising our own prices this to compensate for higher positive goods sold really in our in our businesses. Nevertheless, that, of course, constitutes an uncertainty going forward. I think we see price changes quite a lot in a lot of markets right now. And we are basically there to compensate and to compensate in most cases. But of course, it's a volatile market, and it might affect us here in the quarter to come or so. So I think it's something to be aware of when we work when we go forward. The new acquisitions during the quarter was also coming in very nicely. The CV Landberg, which is the CWL and also lead by Norway came in very nicely. So they added to the numbers. But again, I think 60% of the profit growth came from organically and 40% from acquisitions. And while on the sales growth, it was 18% both from sales growth organically and 18% from acquisitions. That I can get this fixed. We can also see down to the bottom here in the charts on Page 4 that we can also nicely that I mean, we are really developing our group. We see some improvement when we're looking at the proprietary products. It came out to the 68% there. I'll have another slide of that later on. But it's improving as we are aiming for the 75 the which is a key strategic target for us. And we also see that we are also becoming more and more international with more and more sales coming as at exports. We feel that we have very strong provide companies within the group, and the aim is to go more for sports where we are really pushing some of the companies to go that route, and that is also affecting the growth and opportunities for the group in the long run, which we feel is important. And you can see that over to the right there, that it's slightly growing along the way. Looking at the Q1 report figures on Page 5. I mean, we had the net revenues then increased by 33%, and it reached EUR 1,031,000,000. And that was really strong number with the organic growth, and part of that was 18%. And as again, the addition from M and A was 18%, and then we have a slightly negative FX effect in sort of the split in the revenues, how that was sort of developed. And then we had the EBITA then reached the 212, it, which is a very strong growth of some 70%, and the EBITA margin was then 16.3% as opposed to 12.7% the same quarter last year. And then the profits after financial license then almost doubled, the 94% increase and amounted then to SEK 180,000,000 for the quarter. And you can see also the profit after tax, the multiyear SEK 139. As already highlighted, we made 2 significant acquisitions really. Those are slightly bigger than we normally do. And therefore, they are very important to us both the civil numbers, which will be part of the TechSec division and then the Libra that will be part of the international division. And they are groups really. So they have businesses in different parts of the world. You can see where they have subsidiaries here from with the silver lumber having it in Sweden, Norway and Poland, while Libra has it in Norway last year and Vietnam. So that was also important for the quarter. The return on equity amounted to 25%. That is meeting our financial at 25%. We have been in that neighborhood for quite some years. But in the last year or so, we've been slightly below. So the 21% was the number for last year this or yes, the same period last year. And that was and but now we reached the 25%, which is also, I think, it's a positive sign from us. The operational net debt increased to the SEK12.93 billion as opposed to the SEK992 billion, which was the end of the last fiscal year. That is the sole thing there is really the acquisitions we made during the quarter, which affected that number. So we have put make some good acquisitions, but it, of course, has also increased our gearing a little bit. And as already communicated earlier, the Board of Directors will be proposing the SEK 1 per share in dividend. The Annual Shareholders Meeting will be here in August 24. So that is the proposal for that at the Annual Shareholders Meeting. Looking at the Q1 report by division, we have that on Page 6. You can now see the 5 divisions as opposed to the 4 we used to communicate around. I think we have really 5 very strong divisions here. You can see that the EBITA increased in all divisions. Year. We also had some good growth in basically all divisions as well. And you can also see the EBITA margins down there, how that has evolved in the different divisions. And especially, I think you have been keeping your eyes on the international division, which was lower a year ago, and that we communicated quite a lot around. But they are now up to the 12.1 and I've been doing it better now for a couple of quarters, which I think is very promising. We can also see the niche product division where we have most of our product companies, the niche oriented product companies, and they are slightly above 20%, which I think is a very strong sign as well, but also we see Tech Stack and Electrified being very strong as well within 19.4% 17.8%. So I think we have a very good portfolio of companies, and the quality of the companies are improving all along. And we also see the share of proprietary products and the opportunities for exports being developed quite a lot along the way as well. So I think we are really building a group in the right way here. And that, I think, is very promising for the future. If you comment by division, we also have on Page 7 and 8, and we can see that all divisions really through their profits or the EBITA. Within the Electrify, many companies did very well. Our biggest company, ELPRESS, is within this within this division. And they did it very well again, I would say. And we also have the QD division the QD company providing the brackets for the antenna systems. Also did it very well, but also had some projects more project related transactions during the quarter, so that also added to the number here in the Electrified division. We also concluded that the Wipemetal and Inderstaj, which was the positions we made here this quarter and also added a good quarter from the Electrified division. Also the Control division did it very well. Here, we saw that the EBITA margin reached at 14.5 and EBITA was EUR 200,000 as opposed to EUR 15,000,000 last year. And here, we can see that many units showed a good earnings improvement with especially in Presa Metering and Garcielikio reported some particularly strong quarter. So a very strong quarter there as well. They don't they didn't have any acquisitions here in this period. To add it to the numbers really. So that this is a pure organic change along the way. The Tech Tech division increased the EBITA by 100%, so they doubled it really. And that came from a lot of companies doing better than last year. Archon, which is the biggest company within the division, but also IHC Nordic and IDESCO did very well. And then we added the steel lumber, a new business that we acquired here in April that also came very nicely and added to the very strong development of the TechsEx division. To move on the niche products division on Page 8, and we can also see that increased the profits by 31%. Here, we have some companies doing it very well, while others did it very well also last year. So and you can see there's a very strong EBITA margin of 20%. So it's here, we saw some acquisitions coming on board as well in a very nice fashion. We can also see that as the countries and markets open up after the closure of the pandemic due to the pandemic. For the ASET business is coming back. That was more severely hit by the effects of the COVID-nineteen, but they're doing it better again, and that's really looks very promising. On the other hand, the toolmaker business did it very well this quarter as well, but we also see that they were positively affected by the COVID-nineteen closures and that effect is also declining a bit along the way. Last but not least is the international division then, increase EBITA by 125%. Here, we see that both Germany and Denmark, which is there as opposed to within the international division improved. And we also see some good effects on the action that we made a year ago coming into the numbers here. We see the Smitsknechke Unit Honing, for instance, which is the German unit the digital A1, but also the Danish unit, Acte, Eispek and Skoomi Digital and also the acquisition from Wiedebak came in very nicely here as we have planned. So that's a few comments by division. So that was basically the comment I would like to make around the report. Looking ahead. I think it's important to know about us is that I mean, we have clearly communicated now that we are aiming for the SEK 1 €1,000,000,000 in profits. We feel that we have a very strong business concept, and it has been successful for many years. So we plan to sort of move along those lines and continue developing the group the same way we have been doing really, this but also pushing for some focus, pushing for some greater ambitions along the way and doing it even better in the coming years. So and then really to build the a strong business to business tech group and reach the EUR 1,000,000,000 in profit. And what are the key themes in this new strategic program then. Well, it's the clarification of the strategies and financial goals. We having been doing the reorganization. I've touched upon it already. I will give it a couple of more comments. And then we're also looking at M and A capacity that we have within the group. We plan to increase that and are about to do so already. And we also have the focus on sustainability where we have put some clear goals and targets around that to make it even more viable and even more sort of working into our processes and into our group and the way we work. So with a lot of those things, I think, we are pushing in order to escalate a little bit further and push for better growth along the way. And looking at those key themes, I mean, we plan then to work with our vision and financial goals, and we have altered them a little bit and developed them a little bit here. For those of you that have been with us, you have seen this slide many times. I mean, we plan to be a very strong and sustainable supplier of value adding technologies with market leading positions in several expansive niches. That is our vision statement. And we plan to build a very strong group with these sort of very sharp and specialized companies, very specialized a very sort of strong in this respective niches. And through that, we plan to grow our profits. The earnings before tax is a bit more than 15% per year. And we have clarified and that we feel that at least onethree of that should come organically, but M and A will remain and be very strong, very important to us. And we are pushing the number of making a little bit more acquisitions that have been doing. So 5 to 8 is the current number, 5 to 8 new companies coming into the group. And by that, basically grow the business by some 10% 30 years of acquisitions. And we would like to continue our good path of high returns and high return on equity. It's the return on equities as a financial goal, which should exceed the 25% that we and as pointed out already earlier, we are currently at the 25%. So we improving from last year. So we are basically already there but would like to push it even further along the way. In doing this, we aim then on Page 11, you can see that we are aiming for the 75 proprietary, so proprietary products. We used to be very much more of a trading company, very much more of doing value added distribution. And as you can see here, all the way since 2,006, 2007, where we acquired the Yieldpres group, we have been pushing for more proprietary products. That gives us better opportunities for I mean, those companies that have that have usually better margins, and they also have better opportunities for organic growth with especially exports. So therefore, we put it at AFS as a strategic aim for us to move to 75% proprietary. And you can see from the slide previously that as we have been doing this, our margins have been pushing and we have been the performance of the group has improved as we have moved this route this way, and that we will continue to do. So that's important to us. And the latest number there is the low in 12 months. At 68%. So it's been increasing again with the latest acquisitions we made here during the quarter and previously as well during the winter. We will in this Lagerkran towards SEK 1,000,000,000 also. Course, to remain our focus on value add. Here, you can see how that's evolved over time. And this has also been a very strong sort of the important thing for us to basically being very focused on value add and push for higher gross margins. Early on in this time series, we did that reorganizing and also some pruning and cutting out sort of businesses which we didn't feel was profitable enough. And but we have to continue to push that. And here in the latest years, it's been also been pushed quite a lot with the improvement on more or proprietary products within the group. And that we would like to continue. And again, in Q1 here, we pushed the number a little bit further from the 38 point we had moving 12 months from over the fiscal year 2021 to the 38.8%. So it's definitely a step in the right direction here as well. The reorganization is another key thing in the strategic program. We have the 5 divisions here, as you can see from Page 13. Here, we have basically been moving around companies. We used to have 4 divisions with some headlines for some that have been that we felt that we needed to develop, that we felt that we should push for finding areas with more structural growth and highlight that to everyone. We have a lot of companies addressing these different segments and these different markets already. I would like to also highlight which way we would like to go. So in the Electify division, we are pushing for products that sort of enables the electrification of the society, for instance, development of electricity infrastructure in components and network products and that type of thing. And we have a number of companies within that area already, and we plan to grow that further, both organically but also through acquisitions. And here, we are expecting some structural growth along the way. And within the Control division, we are basically looking at the same. That is a very area of very high yes, around sustainability, also with measure and control, doing things remotely rather than to travel, using a lot of sensors and communication devices and solutions around that. And also, lighting control is also an area within the control division. The Tech Tech division is then having solutions within for increased security in society, such as passage control, surveillance system, fire security, also an area which has some underlying growth and that we also feel that we have some strong companies within that area. And now we added also the Stiebel Lundberg here, which is then I will come back to that acquisition, but that will be important also for the exit division. The niche products division is basically having they have been very successful for many years. So we try to keep or we'll keep the sort of the recipe or the strategy that we have within the niche products and doing it very well. You can see they have been growing quite significantly, and they also have a very strong EBITA margin here and doing it very well for it. And within the International division, we are taking the companies that we already have in, especially Denmark, in Germany, in Poland, in the UK and trying to build something more around proprietary products without the division as well. So we're basically taking the concept step we have been doing in the Nordics and taking that abroad really. And that is a bit of a new thing, and we will push for that. And the Libra acquisition was sort of the first thing going in that direction where we already have some companies within the marine sector, but Libre is now adding to that cluster of companies as well. So I think it's very promising to have this different new reorganization and a new divisional structure here, this, which is which we feel is having a good effect already here, working with it only for some 3, 4 months or so. That's good to see. Another thing within the LagerKran's 2 World 1 billion is the increased focus on sustainability. Here, we are working both on a group level, which is what's illustrated here over to the right on Page 14, where we're working on the with the 3 areas, the ESG goals and the UN stipulated different types goals that we're working with. You can find that in our sustainability report as well, which is very sort of extensive and put into our annual report, which was made public here just a week ago or so. You can read more about that. On top of that, we will also put in some 50 plus local initiatives. I mean, we are working very decentralized. I would like things to happen out in our companies. So we have basically been working with this on all levels within the group and are basically looking quite a lot on making this a thing for us when we go for to offer new products and solutions for our customers that should be sustainable and that we are focusing on that when in our offerings with customers, but also, of course, taking care of our own and upstream as well with our suppliers and trying to doing it better. And in order to do that in a very local way, we have put together some local initiatives in all of our companies, and we are highlighting that also in our sustainability report. So this is, I think, is very promising for the future and important as well. Last but not least is then the increased capacity within M and A, which is also part of the LagerKran's towards SEK1 1,000,000,000. Here, we have been working quite a lot within the Nordics and have been doing some M and A also in lately in Germany and in the Dutch region in Holland but also in the UK. And here, we plan to do more of that. We are putting together the organization. We are stipulating putting together the international division is one thing, like we're also addressing with some new resources and doing it in this more broad base that we have been doing in order to increase the capacity with the M and A. We would like to have multiple acquisition processes going at the same time simultaneously, and that this is the way for us to do this. And I think it's been very promising. And you can also see from our latest acquisitions, which we have here on Page 16 that we have or in 2021, basically made 8 packs or 7 acquisitions that add approximately EUR 580,000,000 to our sales volume. And you can see that's more than 10% in just last year in 6 months or so, 7 months. And that, I think, is very promising along the way. And we also then concluded, as point it out with CV Lundberg and the Libra, which we I would like to comment here on Page 17. The CV lumber will be very important for us. That is a clear market leader in the safety products for roofs and facades. The very strong in Sweden, but also have some clear export ambitions in Norway and also step up a business in have from their own premises in Poland. And you can see down to the right there, they have been growing and also producing some nice EBITA margins and profits along the way. And this will be a very strong company for the buildup of the TechSec division along the way. And they have doing a very good Q1 here for us, and it came in very nicely. So it Friesland promising for the future with the steel lumber company. The other company we acquired here during the quarter is the LEEDA company. That is a Norwegian company producing or a leader within premium quality doors some hatches and storage units for the marine industry with also some good numbers in terms of sales and profits. You can see that to the down to the right there. They are very strong in Norway, especially, but also have a strong within their knees, they're also very strong in Europe and North America and also with some sales in Asia as well. They have subsidiaries and production facilities in Norway and in Latvia, but also to a minority shareholding in with the company in Vietnam. So this, we have just sort of came into the group here in, was it April or so, May even, and have been coming in very nicely within the group. And the family and Lilibar here will remain as the shareholders of 25%. So this will be and they will be with us here for the future as well. So and that will be part or is part of the division international here as of last quarter. This. So to round up, I think the financial overview says that this is really our long term trajectory, and you can see how we have been growing. On Page 19. You can see how we've been growing. We haven't updated it last quarter here, but this is the last fiscal year. And you can see that we are have a long history of improvements and growth and also some strong margins and also some strong return on equities. So and that is basically what we have been doing and plan to do for the future as well. So with that, I think we should open up for some Q and A. Cristina, would you like to add something before we open up? Or in order for you to or for you to if you would like to unmute yourself, please use star 6 and you can put out your questions. This Can you hear me? Yes. This is Victor Hansen from the Axanelis this So you've completed 2 relatively large acquisitions recently in Sivelun, Berrij and Delbla. And you mentioned that they are slightly bigger than what you normally do, Jurgen. And I'm wondering if you have shifted your focus somewhat towards larger platform the And for the larger acquisitions that come or come in in the future. Yes. Yes, I think the simple answer to that is yes, somewhat. I think that we will try to do both. I think we will move up a little bit, but we will still sort of make a lot of acquisitions. So the 5% to 8% is still the relevant number. But to some extent, I think we will look for some bigger ones as well. I mean both Sibylundberg and Liba are a little bit bigger than we have been doing, but it's not like it's a huge difference. So it's but we're moving up the scale to some extent, yes. Okay. And regarding your M and A pipeline, what does it look like now that the site is reopening? Maybe are there negotiations that can now enter the next Space and due diligence that can start now the traveling becomes easier? Yes. Yes, it is. I think it has been good for some time now, we feel, as of last August or so last year, I think it's been picking up. I think it's a lot of these being done. And we also see as markets open up, we have the opportunity to travel this and visit the company. That has been difficult for some time. So I think that will also add to the sort of the speed of the market and that I think is promising. So for instance, we have been now visiting a company in mid Europe and another company in the UK, and we've been able to do that after societies have been opened up. And I think that will be happening more and more here in the fall as well. Okay. That's exciting. And you mentioned planning on adding more M and A capacity. And I'm just wondering, do you refer to expanding your M and A team headcount? Or could you clarify that? Yes. To put it simple, I think that's what all it's about as well. We have been adding we are adding people on the divisional level as we're putting together the new division. M and A focus will be very strong also on a divisional level. That has been so for some time, but it's being enforced year along the way. And we're also adding putting up some resources and finding by some sort of key people to work with in markets like Germany and the UK. It. It's also expanding some resources and being able really to run more processes simultaneously. Okay. This. And regarding the business areas, if you could add some flavor to control, would it be possible to give a guesstimate or maybe you have the numbers on how much EBIT improvement comes from restructuring and good business momentum. I think most of it is better business momentum, but we also had some smaller units that had or struggling last year. We had especially one in Sweden that turned a small loss into a good profit this year. But most of it was sort of a stronger market. Okay. And my final question. This. For international, you mentioned the reopening of Germany and Denmark. Was the strong results and the strong margin due to temporary pent up demand? Or is this More representative of the run rate going forward? I think it should be viewed as more representative of the margin going we are aiming for the 12% or so. That level we feel that we are on at the moment. So it's this that we hope to be able to continue on. Okay. That's all for me. Thank you, Jorgen. This. Hi. So starting out to ask a little bit about underlying demand because it's The feeling I get from reading reported listening to you is that the market is actually quite strong. I'm talking the underlying market. So this. It's stronger. It's not just pent up demand, but it's actually underlying strength that is going on. Do I read you right? And could you talk a little bit about segments or industries which stick out here, which is driving this? It is a strong underlying market demand, I would say. I mean, in looking at LagerKron's portfolio companies, I mean, we are working quite a lot in niches. And that means that we see it on a broad front, and we see it a little bit here and a little bit there. But all in all, it's sort of conclusion is that it is a stock market. We see some within the sort of more electronics related sectors. We see some strong demand due also to the shortages that customers want to place extra orders and that type of thing. That is driving the demand there. But what I think is more important to us going forward and now as well with also the electrification of society. I think we are seeing some good growth coming in from that. We are building networks. We are building more electricity infrastructure around the world in the markets we're present in. So that's also driving it. So I think it's really a broad based strong demand that we see in many, many different parts of the business, and that's adding up for the whole group. But you would agree with me that it's just it's a broad based recovery. It's not just end up. It's just the market is quite strong. And that's all the kind of communication that you get when we talk to your customers and your subsidiaries. I would say so, yes. Okay. And then the second question is, so the earnings growth was quite impressive. And I mean, the margin expansion was very, very good. Now you had, obviously, with 18% organic growth, you did quite good leverage. If I look at the drop through rate, our incremental margin is still just 30%. So it's not You still have the impact from the acquisitions, etcetera. So what is the main driver, would you say, on the margin side? What's driving the margin in the way it is right now, if you could just give a little bit color about the components. I mean the demand growth and the volume. I mean, we have some share of fixed cost, right? So of course, that's driving it as well. But we also see the and I think the shortages and sort of the freight prices is working the other way. But I think also that we have been good and are good at pushing that over to our customers. I think everyone is realizing that it's in this sort of situation, it's a bit extraordinary that we need to push price this as much as we do and also what our suppliers do that everyone does in the market. So prices are on the way up. This and it's difficult also to judge what is what because we might end up with sort of having a price increase from our suppliers starting the 1st May, and then we get we erase our own prices 1st June. And therefore, it's sort of a bit different difficult sort of give an overall perspective on that. But I think we as we are getting more and more proprietary Ixina into our group. I think we are definitely pushing for better both sort of gross margins but also operating margins in the group as we go forward. Okay. Thanks for that. Then just a housekeeping question. So Your acquisitions, when were they consolidated? So the Libra and The Libra, 1st April, also number. Okay. And CW Lundberg? Yes, 1st April as well. Okay, okay. Perfect. This. And then my final question is just on the and maybe you've said this before, but this. The EUR 1,000,000,000 in profit, have you said or quantified in any way what part of that is margin expansion and what Party sales or if you expect to if most of it is going to be top line or there will be mix. Have you quantified that in any way? No, we haven't. I think we need to be opportunistic on that one because it depends on what type of acquisitions we find. And we would like to push a little bit of both, but I also feel that it's important for us to not get so sort of tied up with the margins that we only can acquire companies that have 25% margin. And then I think this the hunting grounds becomes too small. So I think it is important for us to realize that we need to push for organic growth and do that also to build profits, but not necessarily every time pushing for the better or better margins. It. It will be both, but I think it's important to realize that we are planning to build earnings per share. This. That's the key thing. This. Okay. Someone else? 4, if you'd like to unmute yourself to put your questions. Okay? Maybe that was Oscar. Let's say star 4. Say star 6 was the for the participants. This. Yes. Hi, can you hear me? Yes. Perfect. Thank you. So Hermann Ericson here from Danske Bank. I just have one question regarding the Control division. I can see that it's quite large rotation in the EBITA margin. So I was just wondering if you can provide some color on what is driving this large rotation in the margins for the control division. The improvement in margin, is that I didn't hear you really. I mean, Yes. Looking at the previous quarter as well, it's quite large fluctuations in the margin. They jump quite a lot between the trail from quarter to quarter. So I was just wondering if you can shed some color on that. Yes, I think it's I think we have some seasonality here. So for instance, one key profit the incentive within that division, the control division, is the Lada Nova business. And they have a very strong winter period. So they usually coming very strong. And if you look back in our numbers 2, 3 years back, you will see that especially the Q3 and Q4, our Q3, Q4 4, it's usually very strong, while the summer quarters are less strong. What happens here now is the pressimeter this coming in, and they have more of a sort of a project related business. And they have been doing very well and have been also been doing very well, both the sales in order YCL lately. So I think that we'll sort of balance it a little bit. This, but especially the Control division will have a stronger winter season than the summer season. It. But again, also as pointed out, we have also made some other acquisitions within the Electrified division, so which is the seasonality is different. So All in all, I think the seasonality has pushed us to having a very strong Q1, really. That was reported in our end. This time to show the seasonality. Yes. Great. Thank you. Good. What do you think? Should we leave it at that? You can still if you unmute yourself at star 6, there is room for another question maybe. But otherwise, I think both me and Cristina will be available here today. So if you would like to put a if you would like to call us, feel free to do so. Stu Lema. So thank you all for listening in. Have a good day, have a good summer. Hope for everyone to have some summer holidays as well. We plan to take a few weeks now. So thank you all for listening in, and have a good time there. Thank you.