Welcome to the presentation of our Q4 and full year results for 2020. I am Ann-Sofi Jönsson, and I'm head of investor relations. I want to say welcome to those of you who are viewing on the web, those of you who are listening in on the telephone conference, and I would like you, the ones that are listening in on the webcast, to know that you can post your questions throughout the whole presentation, and we will take them afterwards. With me today, I have Annette Kumlien and Klas Forsström, our CEO. Now I hand over to Klas.
Thank you, Ann-Sofi. Once again, very much welcome to this Quarter four and full year presentation. Before I start, I would like to say like this, that Q4 concludes a year that in many ways has been unprecedented in society, for business, and for Munters in regards to COVID-19. In summary, Munters has delivered solid business performance, operational improvements, while supporting our customers, resulting in improved profit and a strong cash flow generation. All in all, creating a stronger base for our future growth journey. With that, let's move into agenda. The agenda is highlights for the full year. Myself will present that, as well as the implementation of our strategy and the progress that we're making there. I will hand over to Annette to talk about the fourth quarter and the full year 2020 result summarize, and then open up for Q&As.
A stronger base for the future growth journey. If I talk about the year, order intake increased, FX adjusted by 2%, and net sales increased with some plus 1%. We had an EBITDA adjusted improvement of close to 5%, reaching 906 million SEK, and that despite of an increasingly stronger headwind from currency during the year. Both AirTech and FoodTech showed good progress, and we ended up at close to 13% adjusted EBITDA margin. What was very pleasing was that the leverage went down from 2.9 down to 1.9 during the year. I'm happy to say that the board proposed a dividend of 0.7 SEK per share for 2020. The year has been challenging in the market conditions. The pandemic had mixed impact for us. The largest impact has been during the second and the fourth quarter.
There has been delays in deliveries to customers and postponed investment by customers. All production units have been operational during the year except one minor unit. I would like to say as well that our focus when it comes to production units, that is to keep it safety first, i.e., have a safe workplace for our employees. On and off, we have closed some production units and then open up after clean up and so on. There is still a low visibility in the market demand due to lingering COVID-19. What I can see during the quarter that it's more and more constraints both in customer supply chain and also in our supply chain. Now we're entering the next phase on our journey. We have an organization set up with clear responsibility and accountability in place.
I feel that we have achieved growth in the prioritized areas with great focus. We are moving ahead with the product rationalization and investments in R&D, and we have created a better way of working. Now, it's a strong focus on turning Munters into a more customer-centric company with zero impact on the planet and growth drivers to be captured. A little bit more granular into the quarter four. If I summarize it's a decline in Americas and growth in EMEA. Data center in U.S. had a weak order intake on the back of a strong 2019. That was partly offset by good development in pharma, lithium batteries, and supermarket subsegments. I'm very confident that data centers is on the right track.
That is the area where we have the largest project type of business, and one quarter will be lower than other quarters, but I see strong progression and have strong trust in all things we do in data centers U.S. What was very pleasing was that service had a positive development in U.S. You will hear me speak later on our long-term targets, but I am pleased both with the parts of service, the size of service, and also the result that it has delivered to the bottom line, in particular in U.S. FoodTech had a weak development, mainly driven by an overcapacity in the swine market in U.S. Nothing has changed there. EMEA, AirTech, weak development by mist elimination that was partly offset by the lithium subsegment. FoodTech, some weak development from the effects of the COVID-19.
It was customers that didn't open up for us into the forms, et cetera. In Asia, we had growth in APAC, driven by strong performance in pollution control, connected to mist elimination. FoodTech continued to deliver stable development in the swine segment in China. If I summarize it, growth in EMEA and APAC and decline in U.S. Americas. More detail will come later on when Annette talks about the quarter and the full year. The implementation of our strategy. You have heard me speak about this, and we are here for the long run. Everywhere in many customer-critical operations, Munters is part of the success. It is about innovation. It is about both driving the right markets and services to the market, but also to take out non-well-performing products and lower the assortment.
In the markets, we focus on markets where we can gain market share and we can generate profit. Customers, it's all about value selling. The continuous improvements, and when needed, cut off non-value contributing parts. People is at the center, and setting them in the right organization. All of all, it delivers on the purpose, customer success, and a healthier planet. I will not go through all of those details, but let me highlight on this slide that I see good progress in each and every one of those areas. For the long-term ambition, I'm confident that we will deliver on those. Especially when it comes to innovation, I see good progress in the portfolio reduction, that we are now above 30%. The ambition is now set to reduce the components with 25% end 2023. Here we talk about fasteners, metals, electronic components, et cetera.
If I summarize this is a three-part type of story. It is about driving innovation and products. That is done by cleaning up the non-important product portfolio, taking out and simplify the components, and then when you develop products, have them modularized and make them then easy to use for the customer. When it comes to markets, excellence in everything we do, and people, let me drill in a little bit on the coming slides. You have heard me talk about the need for customers to trace their food, from the small chicken all the way to the McDonald's or the Kentucky Fried Chicken. I'm so happy that we have joined with JBS Pilgrim's, the largest animal protein producer in the world, to implement an artificial intelligence supply chain system.
The platform will provide centralized end-to-end planning, and you can follow what a chicken eats, how the chicken moves, and you can predict the weight of the chicken, and thereby generate a lot of customer value to the end user. I think here we have the opportunity to jointly with the industry, change that industry moving forward. It is setting the base for traceability in the food chain. You heard me talk about expanding our service offer, and that has happened during the pandemic. Our long-term ambition is to reach 30% our net sales. I see strong progression here. We reached 14% of net sales for the full year, and we landed on 17% on net sales during the fourth quarter, and that despite all the challenges with the pandemic.
As I said earlier, I see strong progression in North America and U.S., both when it comes to how much of the sales is driven from service, but also development in the profitability. Also here, it is a three-pronged approach. It is about having a better mix with more service, securing a more stable long-term company, but it's also about generating improved profitability from the service that we have. Focus on excellence and efficiency. It is about creating a playbook. It is about creating systems, introducing leading ways of working, and that has happened during the year. It is about commit and deliver on decisions that we have taken. All the measurements that we announced when it comes to sharpening the customer offering and the footprint optimizations are delivering according to plan, and implementation will be complete during 2021.
Very pleasing is also that it generates good result. The move in operating working capital going down from 14% a year ago to 10% now sends the signal to me and to our organization that we are delivering on what we have committed to do. I am very happy here. The new organizational structure is completed now. It is a clear ownership in the business areas when it comes to the business. It is about supporting them with different areas of strategic importance, like strategic operation, like innovation, and like commercial excellence. I think we have a team set to deliver for the coming years. Sustainability. Sustainability is fully integrated in Munters' strategy. It is about resource efficiency. It is about responsible business practice, and it is about people and society.
Resource efficiency, how we use our own resources, and how we help customers to deliver on their targets. During the year, we have set higher ambitions that we will start to deliver on during 2021. We are focused on understanding and analyzing from where are we going and what do we have to do, especially when it comes to carbon dioxide emissions and safety, diversity, and general environmental work. What is pleasing there is a company is based upon their people and the belief in what management says. Here I think we have made good progress, and I'm so happy to see that our people tells us that they see what we see. With that, I hand over to Annette to deep drill into the fourth quarter and the full year.
Super. Thank you very much, Klas. Let's look into our performance versus last year and our midterm targets. As Klas said, we have had a very good performance in spite of COVID-19 impacting us. There's been a lot of hard work, obviously, behind it, but all in all good. We have grown, particularly if you look at Q4, it was very strong, and also which led to then that we had a full growth during the whole year of 2020. When you look at the margin, we're at above 13% in the quarter and almost 13% for the full year. We do have a negative FX impact, which actually would have led to almost a 1 percentage higher adjusted EBITDA margin in the quarter and above 13% for the full year.
We have worked very hard also to make sure that we make Munters financially strong. Leverage has now come down below two times. If we look at the growth in the business, it has been rather good. It comes basically from China and FoodTech, where we have had a growth during the quarter in the order intake, which was quite substantial. Also if you look at AirTech, it has shown good performance. If we look at the FX-adjusted order intake for Q4, it was just below last year. One of the impacts was obviously that we had data center in the U.S., which had a very strong quarter in 2019. That impacted in the wake of this. Then also we have actually taken out, as you know, the commercial non-Walmart business in the U.S., which also had a slight impact.
If we look at the full year, it was actually above last year. It was mainly driven by AirTech for industrial for U.S. and also China, then for FoodTech again. When you look at the impact that we have had from COVID-19, actually the biggest impact has been during Q2 and Q4. All in all, when you look at the demand side of it, and also if you're looking at the backlog, it's been quite strong for us during the year in spite of COVID-19. Sales in the wake of the order intake has been good, obviously, particularly when you look at the FoodTech side, continued growth in China. We have also seen some growth when it comes to EMEA and the broiler segment.
When we're looking at AirTech, we're again coming back to services having a good performance, for instance, and also lithium batteries, just to mention a few. If we look at the net sales for the full year, as we said, slightly above last year. Services is actually having a good development, and we can see now that services in the quarter was 17%, which led that it grew one percentage, basically, compared to what we have seen before. If we particularly dive into AirTech, one can say that one of the areas that have grown a bit also is pharma, and that is in the circumstances when looking at what's going on with COVID-19 and the testing, where we have seen a demand coming in from our side.
Obviously, when you look at AirTech, we have mist elimination, which has been coming down quite a bit during 2020 because of the market situation, although we had a nice order intake coming in the Q4. When we look at the full year, basically same level as last year. Again, we have lithium batteries and services and also industrial, which had a good performance. Also remember that we're taking out non-core commercial segment in the U.S., which actually has an impact of a couple of percentages, as said before. If we look at sales then, above for the quarter, good growth in, for instance, pharma then. Also services in the supermarket segment in the U.S. was very good. Weak mist elimination and also data center declined a bit, again in the wake of having a good performance in 2019.
If you look at services then for the full year, actually, if you look at it in the AirTech setting, it is about 20% of net sales. If we look at FoodTech, again, the performance is as you have seen earlier, good growth when it comes to China, and you have seen also that the broiler in the EMEA is coming up. Whereas when you look at Americas, it has been sluggish, so to say, and also that in the wake of the COVID-19 pandemic. Order backlog also for FoodTech, quite good going into 2021, and hopefully we will see that coming through later in the year. When we look at the net sales side, again, very strong in quarter two, again, China driving it. Although what we can see now is that the growth rate in China is coming down compared to what we saw in Q4 2019.
Full year, again, very strong performance with +8% in spite of the COVID-19. Also remember that this is in the wake of also having the African swine fever coming in in 2018, and particularly impact in 2019. If we look at EBITDA then, again, we have worked quite hard, as Klas have been saying, to make sure that we set the foundation for future growth and also working with improvements in our value chain. Part of that is coming through now when you look at 2020. Obviously also when you look at, for instance, FoodTech for the full year, you also see obviously that the volumes are coming through. Again, we had a big FX impact during Q4 2020.
Basically, the whole FX impact we had for the full year actually happened in the fourth quarter, and it took down our performance for the year with 0.3% basically for the full year. It's about SEK 20 million that was cut off from us. What we have been doing is obviously that in the wake of setting up the strategy during the early spring, we're also obviously starting to deliver on it. We took also in Q2, if you remember, a decision to sharpen our organization and also to take out some non-value-added businesses like the non-Walmart commercial business in the U.S. That whole program was estimated to cost about SEK 188 million with about SEK 136, which was IAC.
When we look at the performance during the year, we have been able to implement certain measures, and also in parts of it we can see that the cost was a bit lower than what we expected from the beginning. We're down to the SEK 124 instead of SEK 136. At the end of the day, as earlier said also, we're looking into savings of around SEK 70 million, being fully implemented then at an annual run rate end of 2021. We're all in all delivering so far according to the plan. Again, very strong cash flow development. It has continued, and it's about getting into the DNA on how we work with operating working capital, which is setting through. Q4 was extremely good, and we have come down, so operating working capital is about 10% of our net sales, compared to about 14% in 2019.
Yes, in the wake of actually having a negative EBITDA impact on profits, we had a slight headwind actually on the development of the debt valuation. Again, the biggest impact when you look at how we have performed on leverage is really coming down to our own work of setting the right DNA in working with financial balance sheets. Cash conversion, very good. As you can see, we were actually quite high, the highest we have seen, and we have particularly certain areas that were delivering good on the American side. The leverage, as we have talked about, has thus consequently come down to 1.9, and this is really also about setting the foundation for the future growth, which is not only related to obviously organic growth, but also making sure that we can prepare ourselves for also M&As further on.
With that, I would like to hand over to Klas to do the summary and also conclusion.
Thank you, Annette. Let me summarize the year as well as the quarter. Strong performance despite the challenging market. We have focused on executing on our strategy and create a stable base moving forward. I see continuous efficiency improvements and cost control that resulted in increased profitability for the year. As Annette said, a good improvement of the leverage. Moving forward, digitalization is a key enabler for overall efficiency internally, but also for enhanced sustainability and growth towards our customers. The market visibility continues to be low. We will do our utmost to keep our supply chains open and keep our operations up and running. It's tougher in the supply chain at current. I truly feel that we are so well-positioned in the long-term growing markets driven by climate change, energy efficiency, and digitalization.
By continuing investing in innovation and efficiency improvements, I feel that we can capture this moving forward. With that, over to Q&As.
Thank you, Klas. I would actually like to encourage everyone on the webcast to now post your questions, and I would like to start with opening up for those of you who are listening in on the phone to see if we have any questions from you.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad and you're entered to queue. After you're announced, please ask your question. Our first question comes from the line of Karl Bokvist from ABG. Please go ahead.
Yes. Thank you. Good morning. First question has to do with perhaps something that you choose to highlight in the fourth quarter here when it comes to COVID impact. Overall, it's fair to say that you managed the pandemic quite well during the entire year. Are there any particular things or any particular regions where you've seen that the effects of the pandemic on your operations have materially had a more negative impact than compared to Q3, for example?
It's a good question. Thank you for that. If I generalize, you can say like this, that the widest spread of COVID-19 at current, that is in North America. It has also been tightening up restrictions from government and so on. The other part that is in Eastern and Central Europe, where it's also spread. I would like to underline that we have a tight ship that we run. It is more about what is happening in the society in general, and that of course affect us. What we can see also, it's spreading into delivery time from our suppliers, et cetera. All in all, as said, it is tighter. It was tight in quarter two, and it has been tight in quarter four. I hope that explained a little bit more granular where we see the largest challenges.
Understood. I appreciate your outro comment on low visibility, I understand that. Still, if possible, would you say that if things start to improve because of vaccine and so on, do you feel that the impact on your operations would also improve? Is there any kind of late cyclicality effect of a pandemic as well on you?
I don't think it is a late cyclicality effect. We used to say it like this in Munters right now, "It is not over until it's over." I think it's very wise to say that the vaccine, it will take some time. It is a matter of running a tight ship and keep it tight as well. At the end, deliver on customer expectations and be close to them. Generally speaking, my conclusion is this is not over. I expect the pandemic to affect not only us, but also our customers for the coming months and quarters. That is no change since before.
Understood. This particular quarter's order intake, if we're very short-sighted here or short-term focused, it's back to quarterly levels back in 2018. Do you think it's mainly because of timing effects, or have there been any notable changes to any particular demand environment that will also be lower going into next year?
If I start and then if Annette has something to complement. As you heard, one, when it comes to order intake, it was linked to comparables when it comes to data center in U.S. Here I have no worries. We will have quarters up and quarters down. That is the cyclicality that comes with that type of operations. Then another part that has been also offsetting us in order intake, that is of course that we have exited also the commercial side except Walmart in North America. Beside that, it's nothing more than normal, call it sequential changes. Annette, anything to add?
Yeah, also to remember is that when you look at FoodTech, it has been driven quite well by China during 2020 in the wake of the African swine fever. That also has to be taken into account when looking into the future.
Okay, thank you. My final one was just, you mentioned that you booked lower cost than the initial expectations on restructuring program. Would be interesting to hear why that is. Is it that you were able to achieve the same kind of efforts that you targeted, but just happened to be at that lower cost?
No, obviously when you close down a business like we did with the non-Walmart commercial business in the U.S., the question is how much of your inventory you can sell out if you're stuck with old inventory. Actually, we were prudent enough to make sure then that now in Q4 actually came out better than we thought on that activity.
Okay. Sorry, final follow-up. Is it possible to quantify the kind of effect on either orders or sales that exiting the commercial side had in Q4?
If you look for the full year, I would say when it comes to exiting commercial in the U.S., it was an impact of a couple of % on the order intake. Obviously when it comes to net sales, no real impact so far because we were delivering on earlier order intake.
Okay. Thank you.
The next question comes from the line of Lucas Ferhani from Jefferies. Please go ahead.
Hello. Thanks for taking my question. I just wanted to come back on the services segment. What do you think is the biggest driver of growth in services in your strategy? I think there's one part which is gaining service contracts from customer, also penetrating your install base and M&A. I just wanted to know what would be the biggest driver. Obviously, there's a long way to go to get to 30% in the medium term. Thank you.
Thank you for the question. You are so right. Service is an important part of our strategy and business moving forward. It is three components, if I generalize, and you highlighted one of those. It is of course always to attach a new service contract when you set an OEM order. I can see that that is now starting to happen. It is really good to see the progression, especially in North America, but also in Europe and in Asia. Of course it is about revisiting the customers that we have not been able to work so closely with in the past, where we have lost business. Thirdly, it is can we then convert competitor business into our own service? If you combine that, I think that is the operational mode to drive. You can complement it with M&A activities, finding the right service companies.
As I've said earlier, I think generally speaking, when it comes to M&A, it takes roughly two years to build up a funnel. I hope that moving forward now with the strong financial improvement we've done, that we can start to progress on that. Finally, it is more towards software as a service. Here I think that I can see strong progress when it comes to especially FoodTech, the Pilgrim's business that I talked about, and that generates a more stable business also there.
Great. Thank you.
We have one more question from the line of Mats Liss from Kepler Cheuvreux. Please go ahead.
Hi. Maybe a follow-up there on the service question. Could you give some color there on the mix between labor and
spare parts on the service offering, also maybe give some flavor on the mix between proprietary and commercial spare parts in your service space, please.
Yes. In this area, we will become more and more granular moving forward. The service part is very much brought up with the component supply, and that is the largest part. When it comes to service agreements, it is about setting those, and that is the second largest part then. The smallest part in our total service, that is the software as a service ingredients at current. The software as a service, just to give you more granularity on that then, when it comes to FoodTech, and here we talk, it's only at current in FoodTech, it represents roughly then 2.5% of the total turnover of FoodTech.
Okay, great. We will get some more information regarding that going forward.
Yes.
Yeah. Then you're talking about the supply chain issues or potential. Could you give some indication what the impact was in the fourth quarter and maybe what the issues are going forward? Is it semiconductor scarcity for you as well, or something about those?
Question. For us, it's not semiconductors particular. That is not the large part of our supply. It is more a general supply question that when it comes to freight, it's starting to tighten up. When it comes to customers as well, it's not only what we need to have, it's also what customer needs to have to run their sites, et cetera. I would like to summarize it as a more general tighter ship in supply. It's well managed. I'm not alarmistic here. I think it's wise to say that this is not over yet.
Okay, thank you. Finally, just about raw materials in some segments have come up a bit. Could you say something about the potential impact going forward?
The largest raw material content that we have is when it comes to metals, and there we have seen increases in the system, and we are constantly working with both mitigating that in negotiations and, of course, to push forward when it comes to price increases. During the last year, we took price increases as a precaution, and then we need to be on this step by step. Annette, anything to add on that more in detail?
No, I think it's, as you said, it's coming back to how we work with our pricing strategies that we need to continue focus on going forward to make sure that we capture raw material costs through our customers.
Okay. Thank you very much.
The next question comes from the line of Max Fordin from Danske Bank. Please go ahead.
Thanks so much. Good morning. Just on the margin progression, if you could break it down a little bit, because the gross margin improves almost two percentage points, I guess then that the OpEx is growing one percentage point if you adjust for the positive extraordinary items, et cetera. If we were to look forward here, could you just help us understand what of that OpEx increase is something that you will keep, or what is it that you can do to take down that delta going forward?
If you look, in general, what we have said, that we are building Munters for the future. Obviously certain things is about relating to mix and obviously taking out then the non-Walmart commercial business in the U.S., which actually improves the margin as it was low performing. It's about the whole value chain throughout the company, both from an operational point of view inside of the factories, but also from a general value chain point of view throughout the whole company. That's what we're here to do. You know our midterm targets also when it comes to our EBITDA margin, which we're working towards. Obviously, too, as we have said earlier on also, it requires certain investments to do that from a resource point of view as well. You can probably see some movements on that also in the company.
In general, we have our midterm targets that we're steering towards for the moment.
Is it so that we have been, from our side, a little bit too optimistic and extrapolating the OpEx decrease we've seen in relative terms, and now you need to invest a little bit more in cost going forward as well?
If you look at digitalization, if you look at building people inside of the company, if you look at building the value chain, obviously there are certain resources required to do it, which we have also flagged for earlier on. That comes in play. Again, we have the midterm targets that we're steering towards, and we haven't changed them as of yet.
All right. Okay. I will stop there. Thank you.
The next question comes from the line of Anders Roslund from Pareto Securities. Please go ahead.
Yes, good morning. I would just like to ask two questions regarding the demand in AirTech in the specific areas of data centers and lithium batteries. How does the order pipeline look like in those two areas? For the FoodTech, how does the growth scenario look like in China and also in the U.S.?
When it comes to the order pipeline, I'm satisfied with the order pipeline that we have in data centers. It's sufficient and strong. Of course, as I said, and we highlighted, one quarter it's up and another quarter is down due to the type of business that is more project driven. We have our pipeline at healthy levels when it comes to data centers then. The second question was in regards to
Lithium batteries also in the AirTech.
Yeah. Thank you. I was on FoodTech. Lithium batteries, what I see there, we are gaining a lot of, let's say, questions. We are getting interest, and I'm also here very confident that we have a strong backlog when it comes to that. Both those areas are strong future growth areas, and I'm very confident in that.
Just to emphasize, DC had very good orders coming in in 2019, obviously then that could be hard to match when you're project business from quarter to quarter.
Coming back to China. As I said a couple of quarters ago, we cannot expect that this strong growth year by year is going to continue. It came back from a very low level affected by African swine fever. With that said, also moving forward, China is more and more focused on be self-sufficient and supplying their own type of food, and also moving into more modern way of chicken and swine farming, so to speak. I don't expect that the strong comeback from African swine fever will be that strong this year.
Okay. The U.S.?
In the U.S., it is a different cycle.
Yeah.
Really, if you follow the long-term predictions, when a business cycle ends, we should be close to the end of that business cycle. Once again, then we have to put on the COVID-19 pandemic on top of that. If we follow the normal patterns, we are coming closer and closer to the end of a tight business cycle in U.S. Annette, anything to add there?
No, I think that covers it.
Okay. Thank you.
We have just a follow-up question from the line of Lucas Ferhani from Jefferies. Please go ahead.
Hi. It was just on the financials, if I could confirm two points regarding the tax rate. It seems slightly lower than what we expected. Do you think that 22% can be a normalized level going forward? Also I just wanted to come back on the other elimination and other cost line, which seems much higher. Can you give us an idea of what's behind that big increase in Q4? Thank you.
First of all, when it comes to the tax rate, that follows obviously where we sell, so it depends on the country mix. As we're talking about, we're not really giving guidance forward on this. Again, country mix impacts what tax rate we have. Then when you look at the cost in the other area, well, as I said again, we're building Munters for the future, and we're setting a foundation, which is a lot about looking into the value chain throughout the company. For instance, digital side, but it's also looking through everything from how we create a product actually to how we sell it and get our money back from it. That requires resources to actually organize around it and in various areas. It's important to do this right and take the time to do it.
The other part of it is actually, what you could say, it's related to our long-term incentive program, which is, as you know, based on stock options. Obviously when the Munters share price goes up, then obviously we have to value the impact on that into our P&L, and that's part of what has come in. That's actually a major part why the cost in Q4 was higher than in others compared to earlier quarters.
Perfect. Thank you for the detail.
There are no further questions from the phones.
Thank you very much. I will take one question that we have received from the web, and that is from Philbert Vessier. I'm sorry if I'm not pronouncing the name correctly. It is regarding acquisitions, and if you can comment a bit regarding your pipeline, Klas.
Thank you for the question. For those of you that have not listened in in the past, first of all, what is our target universe when it comes to acquisitions? It consists of three main parts. One part that is a string of pearls when it comes to service companies, predominantly towards AirTech, but also when suited into FoodTech. Secondly, it is about, call it digitalization or smaller add-ons when it comes to products, but especially digitalization, like the MTech that we have already in FoodTech. Thirdly, it is about then larger possible targets that can also complement our business and our footprint, and that could be then both to FoodTech and AirTech. If I generalize, that is the three ones. What we've done then since day one, that is to work with those three areas and building up the funnel of it.
Then of course, as always in M&As, first, it's a couple of things. First of all, you need to have the financial headroom to make it possible. Secondly, when you have a target list, then you need also to, I call it, start dating and asking and understanding, et cetera. When that is done, then normally, then it starts to come through. If I generalize from my experience, it takes roughly two years to build this up, and then it's up to how successful we can be and how well can we attach to then possible M&A targets. Annette, you have put in a lot of energy in this as well. Anything to add?
Yeah. It's about time at the end of the day. Time and financial stability, and I think we've tick the box for the second one. Now it's about time to get a target in.
Thank you very much. With that, we have no further questions from the web and no further questions from the telephone conference. I would like to thank you all for listening in. We will release our first quarter result in April, and we look forward to see you then. Thank you for today.
Thank you.
Thank you.