Sandvik AB (publ) (STO:SAND)

CMD 2019

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May 22, 2019

Good morning. It's a great pleasure to have you all here today in the Test mine in Tampere. This is actually my 3rd Carrier Capital Market Day since I started. We have had, as you all know, the ambition to take you around to different places within Sandvik to give you a little bit insight of how we operate and what we can offer in the different places. The crew here in Tampere has done a tremendous job to prepare everything to make this feasible for the day, and I'm really pleased for that. We're going to have an exciting day, as I mentioned. I will first do a little bit of a presentation telling you where we are, a little bit about the future, where we're heading. And then we will have good presentations from each of our business areas and a little bit in-depth when it comes to automation in the mining world, which is the focus going forward. You look awful orange today, but you look good. I like it. Safety, as you know, is very important for Sandvik. And this morning, we launched some of the new financial targets. But also this year, we launched the sustainability targets, where safety, which has been on the agenda for a long time, is extremely important. We see that it is important for every employee in Sandvik to be able to go to work, either if you buy a customer, buy a sub supplier or within Sandvik and come home safely in the evening. That's the priority number 1. Let's take a little bit of a recap. As I mentioned, it was about 3 years ago we put up the strategy for the journey that we have come to so far. As you might remember, I had an ambition that Sandvik would be a so called 15% company, meaning that our EBIT level should be above 50%. From my perspective, that is a quality company. The journey has been exciting. We've had good demand, stronger demand than we anticipated when we put up the first targets, and we reached last year 19%. Let's do a little bit of a recap what we have done during the 3 years. Starting up with the decentralization, which is the foundation of the strategy that we presented 3 years ago. It was moving the responsibility from central out to our operating entities, making sure the decision was taken as close to the customers as possible. Today, we have 30 business units, and we have 19 divisions where all of them are the highest operational level, meaning that all the important decisions are taken there. When you work in a decentralized structure, it is important that you have a strong governance, but also performance management, meaning that you need to follow every business you have and know exactly what the performance is. Our co pilot, he and his team, they introduced the scorecards. And the scorecards were put in the market pretty quick. Today, we have approximately 15 of these scorecards helping us analyzing the business and making our businesses taking the right decisions at the right times. The third part is we looked at the group unsentimentally and said we need to focus on the core businesses. We decided that the core of Sandvik was the 3 business areas where we have present today. And businesses that were noncore, we decided to divest. Some of these businesses were underperforming, but some of these businesses were doing quite well. But we are with a strong belief within Sandvik that every business should have the right owner to be able to create value going forward. SMT has been on the agenda for many years. I think the first time the discussion came up is SMT part of Sandvik or not was approximately 15 years ago. That's a long time. It's been going back and forth. Is this going to be or not? There is, of course, a reason for that this has come up on the agenda so many times. And the most important of these reasons is that we believe that the best for SMT is to be a separate company. Let me explain a little bit about this. When you look at the group, we have 2 business areas, which are so called high performances. When I talk about high performances, yes, they are they have a return on capital employed, which is over 30%, close to 35%. And then we have SMT, which have a return on capital employed at 10%. That doesn't mean that SMT is a bad business because if you compare the business with the peers, it's a star. It is performing better than many of its peers, and it has a good position in the market. I will let Joran talk about this and convince you all that this is not a bad business. But it doesn't matter how good SMT performs. It will never be good enough for Sandvik. That's why it come here. You as investors, when you are investing in Sandvik, a company with a market cap of around SEK 200,000,000,000 you expect for every investment you are doing to get a good return, which means that if we start taking this money and investing more to grow the SMT business, I think many of our investors will not be happy. This is the reason for that we have taken the decision. You can also see that S and T is not a big part of Sandvik today. So the effect on the group is quite limited. Today, it's approximately 16% of our sales, and the profit is around 7%. But it's a pretty capital intensive business if you compare to our other businesses. So the CapEx is about 23% invested and the capital employed 22%. Then comes the big question, why do we come out now? Not before and not in the future. We think that today is an excellent time. Why is this? Yes, number 1. If you remember 2 years ago, we had the objective that SMT should reach the 10% EBIT margin, which is good performance for that business. That is being fulfilled. And has promised me he has proven it the Q1 and he has promised me that for the full year, we'll reach the 10%. And I'm a strong believer in Goran and his team, so I think he will reach it. The second reason for why it's good, it's because what's it? Yes. Number 1, the Sandvik Financial position is very strong at the moment. We have today taken down the net debt ratio from over 100% down to we are going probably in the end of this year being debt free. This gives us an opportunity that if we take the decision to put to list the company, we can do a debt free, which means that it will be a very strong position in the market. And the third part is that we have a strong management. The management is today the right management to run this business separate. So we decided this is a good time to do this. Of course, it's a big job today to do the separation. We have a legal structure which is complicated, which has to be aligned with the operational structure. This will take approximately 1 year. But we have to also make sure we call it pressure proof the business to make sure that the business can stand on its own feet and generate the right profit and cash flow, which is necessary to be an independent company. So we still have a little bit of a journey. And the final decision for a listing will not be taken by the management, but by the owners at an AGM. That's how the process works. If we look at Sandvik here, I said, yes, we have improved the profitability. We have come up to 19%, which I think is a world class performance. But what maybe what I'm the most happy with is the strengthening of the financial situation. During the 3 years, we have had good operational cash flow from all our operations, but we have also managed to generate good cash from the sales of noncore assets. Today, we are reaching we're going closer to a non-depth environment, which gives us a lot of exciting opportunities going forward. That's moving in. We say in the strategy, stability and then profitability. And what comes after profitability? Growth. When we talk about growth, we talk about organic growth, which is always the most healthy way, but we also talk about acquisitions. And when we talk about acquisitions, we have started the journey. During 2018 2019, we have managed to both to present and complete 8 acquisitions. Many of these acquisitions are very exciting. And the good thing is that these acquisitions are actually part of all three of our business areas. Even SMT have made an acquisition, and that's been within the Cantal division within the business area. Very exciting stuff. We'll talk much more about these acquisitions when we come into the business areas going forward. Our world. Let's talk about something that we can't influence. That's the market. The market goes up and the market goes down. And it's being influenced by a lot of factors, which we have not any chance at all to affect. But if we look at the last 2 years, we've seen a very strong market. And we've seen strong growth in all our segments, which have supported the good development that we've seen in our businesses. Just for instance, S and T has grown 10%. Some of the segments within SMRT, we actually doubled the volumes. It's been a strong market. Moving forward, of course, we don't know anything about that. There's a lot of speculations. And looking to pre action in the future, yes, it looks like we're going down to more plateauing or less strong growth going forward. From my perspective, I have no idea. And it doesn't really matter because our job is actually to adapt ourselves to the present market situation. That's why we have good managers within Sandvik. When we go forward, we will look for growth opportunities. When I say growth opportunities, yes, we are looking for areas where we think we can grow even in a slower environment. One of these areas we'll be looking deeply into today, and that's automation within mining. The whole mining market is going through a huge change, and we have committed to take a lead in this change. We will look for opportunities in SMS, round tools, where we have smaller market share than we have in the inserts, but also to technologies around the manufacturing process, giving exciting growth opportunities. But at the same time, yes, we have to make sure that we adopt ourselves to these tougher market conditions. Sometimes we even say in Sandvik, we're even a little bit excited about going into tougher times because some of the companies that we would like to target are a little bit high value today. So a little bit lower could give us some great opportunities. And you all know the best time to make a good acquisition is actually in a downturn. When I started here, I said I knew that Sandvik was a great company. I followed the company during many years, and I've always been impressed with their performance. Sandvik has a very strong foundation. And I think the strong foundation is basis for the success that has been created. Let me look in to some of these areas, which I think is key to this success. One of these areas is that Sandvik is always working close to our customers. We don't have any middle hands. We are working every day with our customers in the mines, in the construction sites, but also in the factories. You probably heard about the yellow codes and the green codes, working every day, helping our customers to become more productive. That's the job. But this also gives us an enormous opportunity. And I sometimes say I put my ear on the track because you can always understand when changes in the environment by our customers changing, we are the first to pick it up. So strong position close to our customer is one of the key areas of success. The other part of the success story is Sandvik, is that Sandvik is always focusing on product developing, developing new products, new technologies and being in the forefront when it comes to Industry 4.0. Yes, we are a traditional engineering company with traditional products, but we are also investing in the latest technologies, combining Industry 4.0 with the traditional products that we have within Sandvik. Never have there been a bigger tunnel of exciting projects, technologies that we are investing in the future. Just give me a small little example. SMS is today investing approximately CHF 300,000,000 of the profit into Additive Manufacturing and Digital Manufacturing today, which today is not giving any profit, but it will be the profit generators of tomorrow. The same is that Sandvik actually started with automated mining already in the end of the 1990s. I remember I saw the first loader up in LKAB running without an operator, 1999. Today, during 20 years, we haven't been making any money on automation. The last 3 years, the market starts exploding and we finally start making good money on this. And this is actually the future for the mining industry. When you look at Sandvik, yes, we are a traditional engineering company, but we are working with the latest technology. Some of these competencies we can find inside the company, and we are employing more and more people that can handle Industry 4.0, data processing and so on. Just a little example. Here in Tampere today, we have 20 data scientists only working with crunching numbers from data that we are collecting from mines and equipment all around the world. This is a unique situation. So combining our competencies with the future competencies of digital manufacturing, digital technology. We are doing that both by employing our own people, but also working together with our companies. We have today agreement with IBM. So when we work with artificial intelligence to be able to predict the maintenance of our products in the future. The IBM computer Watson, I think all you know, are trying to crunch our numbers every day. So the combination here is vital. But we have also decided that we will buy companies within this area. And maybe you remember that the last month we bought NewTrax, which is one of these companies that are working with the digital part and will be presented here later, which is actually connecting us closer to the software in the mines. And together here, we are creating the solutions for our customers, which will be the leading technologies for the future. And we are committed to stay in the lead when it comes to this development. And this is the foundation of Sandvik, always being on the frontline. Let me show you a couple of movies proving this. Basis of all profitable decisions. This is why we at Sandvik developed a new foundation for Optamine. Optamine Analytics. Boosted with new capabilities, Optamine can offer even more performance enhancing features to improve up up time, availability, safety and asset performance. Along with processing data gathered directly from your fleet and operations, Optimine Analytics utilizes global Sandvik fleet data and engineering expertise to provide you with up to date suggestions on how to improve your productivity. Through the easy to use dashboards, you can access a and then continuously optimize your production cycles with real time data. This leads to an increased overall equipment with IBM, make process optimization easy. As the productivity enhancing actions can be implemented due to transparency of machine and operator actions. Optimine Analytics integrates with all of your mining process optimization. Together with mining experts, Sandvik analysts will help you find the critical points of your process and turn findings into action. Optimine Analytics, exploring the Exciting stuff. And we will show you much more of this further on today. I hope you're looking forward to that. If you summarize it, yes, Sandvik wants to be close to our customers. At the same time, we want to be able to help our customer to become more productive. For us, it's important to be number 1 and number 2 in all our businesses because by being number 1 or number 2, being a market leader, we can get premium pricing for our products. But it also helps us to invest more money than our competitors in R and D and product development, which is core. Better prepared. Yes. Sooner or later, there will be tougher times. We know that. This has never changed. It goes up and down, and we are a cyclical company. So what have we done to prepare ourselves for tougher times? This is important. We believe that we are less resilient today than the history. Let me give you some example. Yes, when it comes to our net working capital, strong focus on that, making sure that our net working capital for the group is under 25%. That's important. When we invest in CapEx, yes, we do invest in many exciting, but we do it carefully. And we've decided not to exceed the 4%, which is historically a very low number for Sandvik. And I can assure you we are not under invested. In all our operation, I'm talking about 30 operating entities are all focusing on productivity. That means that in every year, in good years as well as in bad years, you might at least reach 3% productivity. What do I mean with 3% productivity? I mean that we the sales per employees need to improve with at least 3%. That means if we don't have any growth, that means we need to reduce our personnel by 3%. In good times, yes, we have been running over 10% for the moment. But in the downturn, we have to make sure that we stay over 3%. And this is incentivized in all our businesses. When it comes to the mining and rock technology and especially where you have equipment, which is more sensitive and ups and down in the market, We have said 3 years ago, we build no more factories. We have doubled the volume since then, and we've done it through satellites. The satellite is helping us to assemble the products and to deliver them out. That means that we outsource all fabrication, but also final assembly. Today, we have approximately 40% of our equipment today is assembled by satellites. This means when the market gets softer, we can take home the production and make sure that our production units do not run with under absorption, which is the normal thing that is killing industries in downturns. This is a proven it's a proven technique and it works. And not least, during the last 3, 4 years, we have been closing 40 plants, the majority of them within SMS, meaning closing smaller unprofitable plants and moving into our larger, more efficient plants, investing in automation and efficient production. These together have made us more resilient than we have been before. Adding to this is the decentralized organization where we very quickly adapt to the market situation. So yes, I mentioned we are decentralized. And our managers, they focus on their strategies to drive their businesses. But there are certain areas where we all have a common focus on. Number 1 is that we develop our core, and we divest noncore businesses and products. We focus on developing products and systems in a broader value chain, meaning the digital manufacturing that you have seen lately, we have to be on the forefront when it comes to Industry 4.0. And the third important part, that is the capital and cost efficiency in all our operations. We need to have a strong focus within all of them. This is common among all our managers within the group. 3 years ago, we presented the financial targets for the group. These targets was based on where Sandvik was at that stage. The focus in the strategy we had was stability and profitability. That's what we needed to do. That's why we said that the targets need to be EBIT approved and improvement of the return on capital employed. So working efficient with the capital and the cost and making sure that we become a profitable company. Today, Sandvik is both profitable as well as stable. This means that our target has to be reflecting the situation we are now and going forward. This year, we have also decided to take a broader view when it comes to targets in the group. We are, for the first time, combining sustainability targets with financial targets. Sustainability is an integrated part of the way Sandvik works today and has been for a long time. We have also been well recognized about this in the market. And when we look at sustainability in the group, I mentioned this many times, we'll see it from 2 perspectives: how our products affect our customers and the market and the other part, how we work in our operations. Both of these are the common way how we work with the sustainability. We have had a lot of targets. Every year, we've been setting the targets and we've been fulfilling the targets. We have also been recognized for good sustainability work bought by the Dow Jones Sustainability Index, where we're part of, but also been recognized as one of the most sustainable companies in the world. This is important. But U. S. Investors, our employees, our customers wants us to become even more tougher when it comes to setting targets, more ambitious going forward. So we have decided that it is time for us now to set our long term targets when it comes to sustainability. So our target time is 2,030. This is a big thing for Sandvik because when we set targets, we mean we want to reach the targets. We have to be able to do it, which meant it's been a long process for the group because we have to adopt all our 30 operating entity, making sure that they are committed to the targets that we are setting and are committed that we are going to reach these targets. And today, we have a full commitment in the group to be able to reach them. And when we look now at the sustainable targets, we look over the whole value chain. We look from suppliers, our own operations and also how our products are affecting our customers. Based on this, we have said we want to make the shift. We call it the shift. And within the shift, we have 4 target areas where we need to reach. The first one comes to recycling and circularity, we say in English, actually making sure that 90% of our product will be possible to recycle. Already today, we are working with circularity by in SMS, for instance, we have our own plant and 50% of all Wolfram powder in our cutting tools are actually coming from recirculated inserts and round tools. This we can take further. But we also see this within the mining area. Also in SMT today, we are using scrap in our smelters being recirculated. 90% of our product shall be recirculated to year 2030. That's one of our targets. The second target, it's related to climate change. I think we all are affected by this. We do have a strong belief that technology will help us take us to the next steps. And Sandvik is committed to participating in this. But we will also make sure that our operations around the world are using the right techniques, the right energy levels to be able to reach our targets. And we have said that our footprint of CO2 should be halved within until 2,030, which means that there is a lot of activities, change in ways of working, but also making sure that our products that we launch into the market will be much more efficient and less giving less CO2 emissions. That's the second one. The other one is focusing on people, and that's the safety which I started with. That's the core of Sandvik. We have a zero vision, meaning that we should not have any accidents within the group. And the 3rd area is the fair play. It's important that Sandvik is acting as a great company in the market. No corruption, nothing like that. And we have to work in the right way, setting the standards for ourselves and for the other companies in the market. These targets have been introduced today for the first time. Now during the next 10 years, we will be working hard, first setting up how we will measure all the different targets and then making sure that we will reach the targets year 2030. We are excited about it. I think the most Sandvik employees today feel very encouraged about us setting these targets. And I hope that you will support us during this journey. Then we move to the financial targets, which I think many of you have been focusing on. And this morning, we also presented them in a press release. And I said it has to reflect the situation where we've been today. We are profitable and we are stable. Going forward means growth. Yes, we say that growth, we should have a business cycle grow with approximately 5 organic growth. That's the underlying growth that we have in the group. And 50% comes from acquisitions. And of course, we want to exceed this if the possibility to do. But 5%, we feel is an ambitious target that we think is correct for us. Last year, we made 5 acquisitions. We have made 3 acquisitions this year, and I think we can run with a pace of at least 5 acquisitions every year. And most of these acquisitions are so called bolt ons. The second part is that you who have been listening to us during the years is saying that we are a more resilient company today than history has proven. And we want to also challenge ourselves and everybody else that Sandvik should not go under 16% in a downturn. That's our target. That means even in a soft market, Sandvik should not go under 16%. If we decide to list SMT, that will be a later decision. This number will go up approximately 2 percentage points, giving you just an indication of the levels we are talking about. Then with the net gearing, the net debt ratio, we said 0.5. We want to maintain a strong balance sheet going forward. But this still gives us a good headroom, especially now when we're becoming debt free going forward, to make these acquisitions. We will also, in the future, continue to generate strong operational cash flow, which will, of course, strengthen us in giving us more opportunities to grow going forward. And in the end, no changes here. Sandvik is a generous company when it comes to dividend. 50% of our earnings per share is going to be paid out in dividend. This might vary a little bit between the years. Some years, it might be a little bit more and some years, a little bit less. But of course, our ambition is not to lower the dividend. That is, of course, important. I think my Copa surely can give us some more in-depth when it comes to our financial targets. There you are. He's very orange today. I'm not used to seeing him like that. Please. Okay. Thank you, Bjorn. And I'll do my very best, but you really have to stop calling me, Shirley. Okay. Good morning to you all. I will start by shedding some more light on the financial targets and especially the first two ones, the margin target and the growth target. And what you see here in the graph here is where we have or where we are right now and where we have been, the group, so to say. You have the growth on the x axis and you have the margin on the y axis. So right now, as Bjorn mentioned, the organic underlying growth in the group is around 2.5%. So we need another 2% to 3% every year in acquired growth to reach the 5% growth through cycle. And I will talk about the funding of that later on in my presentation. So that should work out. If you take a really long perspective on the Sandvik Group, if we look at 20 years from 2000 up until now, the group has grown from SEK 40,000,000,000 a little bit more than SEK 40,000,000,000 up to SEK 100,000,000,000. And if you CAGR that, it's close to 5%. And that includes everything, includes acquisitions and divestments as well. So I think it's actually 4.7% to be exactly right. So 5% is what we should be able to do at least. On the margin side, the previous trough reported, that was in 2016 or 2015 really, end of 2015, was 12%, 12% EBIT margin. Now of course, if we look forward now, we should adjust that number a little bit because we have divested some of the businesses and are about to divest some of the businesses which we had back in those days, like Varel, other operations, which were dilutive to the margin. So if you put that back or take that out, the trough was 13.7%. But it's still more than 2 percentage points up in trough margin. So 16% is ambitious, and it's a level that we haven't had before. Okay. Now I will move into the income statement and the balance sheet. I will give you a little bit of an update on where we have been over the last 4, 5 years. I will talk a little bit about the previous financial targets and connect them to the new financial targets. I will venture also a little bit more into some areas we normally don't talk so much about. And of course, just to mention, if I talk about market trends and sales and current trading and all that, that's all March 31, okay, Q1. Nothing refers to today. As we're 2 months into the quarter now, we can't talk about the current trading. We're not allowed to do that. So everything is Q1. So anything which sounds like guidance is not guidance. Okay. Let's start to talk about a little bit about planning because this also has to do with resilience. It has to do with agility. How do we run this company from a financial point of view? We don't do budgets. We don't like budgets. We stopped it 3 years ago and haven't heard one single question asking for a budget over these 3 years. We don't measure deviations against something we believed last year with assumptions on currency inflation, GDP and what have you. We measure real performance. And real performance is actual over actual. How is the company doing right now? And are we doing the right things? And where do we have to step in and be a little bit more sharp? However, we do have scenarios all the time. Every division, every business unit has a scenario, base scenario, where are we going, what is happening. We always have a 0 case scenario with a linked contingency plan. That means 0 in order intake. And we always have a worst case scenario, which is double digit negative growth with contingency plans linked to it. That worst case scenario, that is the 16% that we talk about. And it's a bottom up process really. So it's done by every business unit, every division and aggregated to the business areas and then up to the full group. And of course, what we want to achieve with all this is to be more resilient when we go into a weaker market and a weaker economy. And as Bjorn mentioned as well, we have a scorecard based system for quick analysis, easy, quick, straight to the point. Now let's move then into the numbers and of course start with the top line. Now the screen doesn't work for me here, so I have to take a look. Yes, that's the right slide. We are now on a very high level, as you know, you follow us, very high level. Now it works. Thank you, Anssen. The magic touch. Of course, and we're meeting tougher comparables, of course. So the growth rates in percentages will come down are coming down. Of course, SMS, as you saw in Q1, the growth in SMS is sort of flattening out a bit. SMRT and SMT has good order intake and very good order backlogs, of course, driving revenues. Now gross margin. Gross margin development has been strong and good over these years and continues to be good. You can see it's 300 more than 300 bps up in gross margin. Factors behind this is, of course, pricing, starting with pricing. We are market leaders basically everywhere in the world where we are, number 1 or number 2 where we should be, which means we are price leaders as well. In the worst of times, price is 0 or close to 0. In good times, it's like 2%, or maybe a little bit more than 2%. So 0% to 2%. That's extremely important for us, extremely important for the financial performance. Productivity has been mentioned here as well. We have the 3% productivity target for all our businesses. We also have for SMS and SMT what we call cost productivity to make sure that we have a good product cost performance as well. And then of course, the ever the never ending, I was going to say well, I said it, a never ending footprint consolidation, which has been going on and will continue in the future. And this drives gross margin. Now SG and A. If we go back to the Capital Markets Day in 2016, we talked about SG and A. Previous peak, we had 23%. Then we went into a downturn. It boomed up to 20% or boomed, well, it sort of slid it away up to 26%, 26.5%, which was not good. We said we have to come back to 23%. We are back on 23% right now, as you can see on the chart. Of course, in money, that's the bars here, the columns, we spend more, of course, driven by the strong markets, etcetera, but the ratio is okay. But we have to be a bit mindful here going forward. We really need to be on our toes and manage the SG and A cost if the market weakens. But we feel that we have a system to deal with it. Now gross margin and SG and A gives an EBIT margin. And this beautiful chart shows the journey from 12% to in excess of 18%. That's 600 bps up. The good thing with this is that half of this margin improvement comes from gross margin, half of it comes from SG and A. And this is kind of a little bit, let's say, rule of thumb we have that at least half of your margin accretion has to come from gross margin because gross margin sticks. It's pricing, it's product cost improvements, it's other productivity measures, etcetera. And that sticks even if you run into a downturn on the market. The other half, SG and A, of course, you have productivity there as well, but quite a bit of it is just cost absorption. And cost absorption just goes away unless you cut out exactly the same relative amount of cost as such. So it's very dangerous just to inflate your margin with SG and A and nothing from gross margin. You can see the blue lines here, the blue dotted lines. That's the, let's say, the previous financial targets. We were at 12%, and we said we should, within 3 years, reach 15%. We reached a little bit more. You see the brownish line, that's the new financial targets for the margin. That's 16% in a trough market. Of course, you can ask why don't we have a peak? Why don't we have a range? Some companies have a range. Should we say 16% to something? But we decided not to in the end because we didn't want to cap the EBIT margin as such. Now you could question, okay, is the peak 18.5% or where are you? Well, you can always do a little bit better. It can be a little bit higher than what it is today. We still have things to do. If we then move over to the 2 big business areas, SMS and SMRT, same time period. And please mind you, it's not exactly the same scale. SMS stops at 25%, 26% and SMRT stops at 18%. So but anyway, you can see the journey is approximately the same for these two businesses. SMS started to pick up in margin even before the volumes came in, in early 2017. Now the demand or the sales the top line level is sort of flattening out, means that we are more like defending the margin. And then as you know, lately, we've had some issues with the Tungsten Powder business, which has diluted the margin a bit. On the SMRT side, you can see how the margin started pick up very dramatically second half of twenty sixteen, and that was when the equipment sales started. And that continued and they're still continuing. However, sort of slowing down a little bit in early 2018, but what happened after that was that the aftermarket business in SMRT really picked up with a very strong and good margin accretion. And that has been fueling the latest, let's say, 4, 5 quarters of margin accretion within SMRT. So that's where we are right now. Now let's move then beyond or below the operational earnings and talk about something which I find very interesting. This is the interest net by quarter. You can see where we started in 2015, we had SEK 400,000,000 per quarter. That's SEK 1,600,000,000 per year. We have over these last 3 years, we have reduced the debt, and we have recapitalized our subsidiaries. We have taken out all high interest rate debt in various countries in Latin America, in Africa, in Asia and replaced it with equity instead. And then of course, we have strongly or heavily reduced debt situation as well. It's about fifty-fifty here. Half of the debt interest rate reduction is from recapitalization and half is from reduced debt. So we have taken it from SEK 400,000,000 down to below SEK 200,000,000. Now going forward, we have exciting stuff, which we talked about in April when we released the Q1 report. We are going to prematurely repay in advance some bilaterals. I'm not and I have to say this, I'm not talking about publicly traded bonds now. Of course not. We're not touching them. So this is bilaterals that we have as well. We have both public bonds and bilaterals. So we're going to pull the string on a big chunk of the most expensive bilaterals running with interest rates on 5%, 6%. So this means that when we've done that, we're going to push the quarterly interest rate interest net down to below way below SEK 100,000,000 per quarter. That's quite a journey, from SEK 1,600,000,000 per year down to below SEK 400,000,000 per year as from the second half of this year. And that means a lot, as you can understand, for earnings per share and shareholder value. Tax rate. Now the screen is not working again, but I think I can survive. Look at the brownish line here on the left hand side. That's the underlying real tax rate because it's been kind of on 27% for a few years. Now what's happening here is that in 2018, 2019, I mean, you had the U. S. Tax reform that had a 70 bps impact on the group tax rate. We have positive mix effects in the tax rates. We make a lot of money or we do good, I should say. We have good performance in a number of countries like Czechia, Finland, Sweden and the U. S, of course, where the tax rate is around 20%, and that sort of drives the tax rate down. We have a new guidance, which is 25% to 27%, and we're right now, we're at the start of the year running on 25.0% exactly. So we're really at the bottom end of that range, but we're not changing the guidance right now. Okay. Let's move to the balance sheet and the cash flow. On the left hand side, you have the cash conversion. Cash conversion, we feel, is the right way to measure cash flow to decide what is a good cash flow. Everybody understands that higher cash flow is better than a lower cash flow. But what is a good cash flow? A good cash flow is your ability to transform earnings into cash at the bank. We had some issues in 2018. In the inventory situation, we sorted that out. And now the cash flow is developing according to how the earnings is developing. On the right hand side, we have working capital. We have been historically up to close to 30%, and we don't have an official target for this, but we want to keep it on 25% or lower, and that's where we are. But there's a little bit more to do here as well. Returns. On the left hand side, you have the relation between capital turnover and EBIT margin. I mean, the two sides of the DuPont equation. And you can see how the turnover has increased as well as the margin. But now lately, over the last two quarters, margin is up, but turnover is somewhat slowing down. That's driven by a little bit more of M and A, a little bit of working capital and a bit of excess cash, but we'll deal with that, as I just mentioned here on the previous slide, and also currency, of course. And you can see that on the right hand side. There you have 2 brownish lines. 14%, that's where we started 17%, that was the target and we have reached in excess of 20%. Now going forward, of course, we have to manage this as well. We will continue to have a high pace of acquisitions. That will, of course, have a dilutive effect on the returns, but we will try to sort of manage it on these kind of levels. Now to finish off, I will talk about capital allocation and what we will do with the free cash flow going forward. And this model we have used for a few years. We will manage the debt. We will maintain the dividend policy, and we will continue to use M and A as a growth vehicle for us. So let's quickly touch on these areas, starting with CapEx, as Bjorn mentioned as well. I mean, we have taken the CapEx down to 4% or below 4% of revenues, and that's where it should be. The investments we need to do will be contained in this 4%. We have not invested in any capacity over the last 3 years. We will not invest in capacity going forward as well because we don't need more capacity. What we invest in here is new products, new technologies, new powder plants, etcetera, but not pure capacity because that we do have. Now M and A. Again, we've talked about quite a bit, both Bjorn and myself here. We have 2 mainstreams here of M and A. Grow in the current core, I mean, that's like round tools or what have you, drilling equipment like Innrock, for example, let's say, easy bolt on acquisitions with more, let's say, normal multiples should be accretive to return within 5 years or at least 5 years. And then we have adding to our DNA. That's digital connectivity, automation, electrical vehicles, all of that, where we sort of go into these new areas. And of course, these multiples are, I don't know how to express it, a little bit different compared to the bolt on acquisitions. And this means that it will take quite some time to be accretive. They will drive growth because they normally have a growth rate of sometimes more than 10%, like 2, 3, 4 times higher than the basic organic growth for the group. They will be accretive to the margin in many cases, I mean, if they are up and running and make money. But they will have an impact on the return on capital employed. That's just how it is. Of course, when we do this, we want to pay attention to our investment grade credit rating, of course. We have A- right now. We come from BBB Flat. We have gone to BBB Plus. We are now on A- with stable outlook. And speaking of the credit rating, this is the balance sheet or the net debt, I should say. And as you know, we have 3 components here. We have the lightish gray part. That's the financial net debt. That's what will go away pretty soon this year. I mean, that will transform itself into a net cash position. It's only SEK 4,400,000,000 left, not much compared to more than CHF 30,000,000,000 not too many years ago. You have the bluish, which is the pension debt, and that will continue to swim around SEK 5,000,000,000. And then we have the capitalized leases, which is just accounting. You don't really have to pay any attention to. The gearing, 0.2. You can see the bluish line here, that's 0.8. That was the previous financial target. You see the new one, that's 0.5, percent new financial target. On the right hand side, you have net debt over EBITDA coming from 3 percent, now down to 0.7 percent here. Now question we always get and what we discuss internally as well is what kind of firepower do we have then for M and A in the balance if we would like to do something bigger. And this varies, of course. This is an equation which has 2 components. It's either 1st of all, of course, the shape of the balance sheet. The second one is which credit rating do you have. And it's a huge difference. With an A- credit rating, which we have today, but with a good balance sheet, we can go to 0.5. I mean, that's our financial target. We have SEK 60,000,000,000 in equity. Half of that is SEK 30,000,000,000. But SEK 10,000,000,000 is already, let's say, occupied by pension debt and capitalized leases. So that leaves 20%. Now if you would have a BBB plus or a BBB flat, that number 20 would be instead 50. So that's the difference. I mean, in a BBB flat kind of rating situation, you can go up to a net debt EBITDA of 3. On an A-, you are between 1 and 1.5. So it's quite a difference here. But it's still investment grade we talk about. So concluding here. On the current rating, the firepower is a little bit in excess of SEK 20,000,000,000 right now. So that's if we would gear up the balance sheet. Finally then, dividend policy. Look at the right hand side here now. This or at least last 4 years or 3 years, the dividend has sorry, the adjusted EPS has gone up with more than 100%. And the dividend, of course, follows through. And you saw the target 50% payout ratio through a cycle, of course. We have to be a little bit careful here as well. So it can vary between something less or something more. We want to maintain the dividend. You don't want to end up in a situation where it has to go down. So you have to be a little bit careful. Okay. Very last slide here. Now how does the math work here now? Debt reduction, dividend and M and A. Well, we don't really have any financial net debt very soon. So we don't have to sort of spend any money on that. Dividend, that's SEK 5,000,000,000 annually. How much free cash flow do we have? Well, right now, as the company is performing, we have SEK 10,000,000,000, SEK 11,000,000,000, SEK 12,000,000,000, SEK 12,000,000,000, SEK 12,000,000,000, SEK 12,000,000,000, something like that to spend on these three areas. That's an annual cash flow cycle, not talking about gearing up the balance sheet. Now this is what comes in every year. So half of it would go to dividend. The other half, let's say, SEK 5,000,000,000, SEK 6,000,000,000 would then be available for M and A. That is enough to acquire the 2% to 3% in acquired growth that we need to reach the 5% growth through cycle. So the whole thing works. Okay. I'm sure I missed something. But anyway, I think I'll hand over to captain my captain again for a conclusion. I think I'll stay for Q and A, I guess. So thank you, Thomas. It was a little bit in-depth when it comes to the financial performance. So just a short summing up of where Sandvik stands today. I think we are happy with the financial performance of the group. You know my viewpoint of this. Sandvik is the sum of our 30 operating entities' performance. So if our 30 operating entities are performing well, Sandvik is a great company. I think so far, we've done a good journey. That's great, but we have more to go. We have a strong foundation. I think Sandvik is a great company in many ways. The way we operate in the market, the way we work with product development, the way we develop the group in a way, it is a great company. It's a strong foundation to build the business from. The third thing is, yes, today we have the financial means, but we have also the ambitions to take the next step. And here, we're talking about the new industry 4.0, core plus, new, making sure that we are in the front line when it comes to technology and products and technologies to be there. This is important for us. We are there today, and we will continue to invest within this area. And in the end, yes, there is still a lot to do to be done. We can be more efficient in all our operations. We can do more organic growth, but we can also do more when it comes to acquisitions going forward. I think the future looks bright. Thank you very much. We have a couple of minutes for some questions. We'll have a big Q and A in the end, but it gives you an opportunity to hear so. It's Claus from Citi. So first, maybe a question for you, Thomas, on the trough margin, equal equal or above 16%. Can I just ask you a little bit on the divisions? So are we thinking maybe 20% in SMS, 15% SMRT, 5% in SMT? And could I ask you about the volume assumption in SMS? I know that you've talked before about a normal mining downturn for SMRT. But in SMS, I know that a lot of people are interested in how you get to the divisional trough if that is 2020. Well, I You want to answer? Sure. I mean we haven't really broken down the targets on divisional level or business area level. The targets are the result of the contingency plans, the worst case, double digit downturn on the top line sort of contingency plan from the divisions. That gives 16%. But we have, on repeated occasions, said or our captain here has said many times that SMRT will not go below 15% in a downturn. I mean, when it comes to we know that the volume for equipment goes up and down. And in the downturn, you're halving the volumes. That's the reality of that business. But the great thing today is that the aftermarket in SMRT is about 61% or 62% today. In a downturn, it can be as high as 75%. And that thing is very steady in the you look at the long term in the mining industry, if it's downturn or upturn, it doesn't really matter. It goes 1% to 2% to making sure that we are flexible regarding our equipment, and that's very much dependent on the way we work with satellites. I said that there is no reason why we should go under 15% on SMRT. And for SMS and SMT, we haven't given any specific numbers other than we've said that it will be higher than before, both for SMS and for SMT. I mean SMT has been down to 0. That will not happen. SMS, well, previous trough, 'nineteen, 'twenty, something like that. Next time, better. But I mean, it's no secret when we look at SMT. It's between 5% 12% somewhere where that business is moving. And with a good management, I think you can keep it to go above 10% somewhat. And I think Joran will talk a little bit more about that. But of course, that business is more volatile, of course, than the other two businesses. That's pretty clear. I have one follow-up. Also for you, Thomas, in terms of M and A and thinking about the net gearing target of 50%. You want to buy into round tools? You want to buy into additive manufacturing and industrial software. I get these multiples to roughly 5x sales on average. And then considering the 2.5% target from M and A at the current base, that's 2,500,000,000, that would give us to obviously €12,000,000,000 to €13,000,000,000 of cash outflow just at those multiples. Is that roughly how you're reasoning? And does that mean that you could start to do M and A more already today? Or do you want to wait for the next downturn? I think this is a combination of that. I mean, we have identified, as I mentioned, we're probably working with approximately 100 companies at the moment that we are looking into. And some of them is correct. Valuations are a little bit too high that we in the end, we have to get a good return on these investments. So there might be different timings with it. But we are both investing in core as well as in these more digital kind of course, not those multiples that we are working with. But it will be a combination. And we will be moving around. And when we can catch a fish, we'll do it. And but I can assure you, we'll be on our toes to make sure that when the opportunities arise, we'll be there to snap it up. But I mean, you could do a simple math on that. Let's say you do you spend SEK 1,000,000,000 on bolt ons, which is onetime sales. That's SEK 1,000,000,000. And then you have SEK 4,000,000,000 to go. SEK 4,000,000,000 okay, let's say it's 4x sales. That's the other SEK 1,000,000,000, that's 2%. If we would make a little bit more a sizable acquisition, of course, we would probably exceed some of those targets. But of course, ambition would be immediate to get back to the levels that we have set. So these are not the limit that we cannot cross. These are financial targets. No. So maybe we have like 3 buckets here. The first one is the SEK 5,000,000,000, SEK 6,000,000,000 I talked about here in the annual cash flow that we can sort of use without changing the net debt. And then you have the SEK 20,000,000,000 if you would gear up. And then of course, as Bjorn says here, if we would find something really interesting, you can that's the 3rd bucket, but yes. So we feel pretty flexible in the way to operate, yes. Thanks, Bjorn Thomas. Lars from Barclays. Two quick ones, if I can. Just with reference to Claus' question, am I right in understanding that the like for like trough margin, Thomas, was 13.7%, excluding announced and prior divestments and M and A. So that 230 basis point uptick from prior trough margins, I wonder again whether you can give a little bit color around SMS. And I say that because, obviously, we've seen big improvement as far as margin resilience or uptick in margin resilience for SMRT, SMT as well, I would argue. But what is embedded in that uplift to prior trough margins for SMS is concerned, number 1? And then I had a quick question on return on capital, which is obviously omitted from targets. I wonder whether you can talk a little bit about what return on capital for the group looks like ex SMT. There's a bunch of cost and capital employed at the group level and to what extent that how we should think about an uplift to return on capital ex those unallocated cost and capital? Thanks. I mean, just I can maybe answer on the TRAP margins on SMT a little bit that there's been a lot of works with SMT during the years. We closed more than 15 factories moving from these low performing into the higher performing factories running with a on a higher level straight over. I think also with the fully divisionalized structure, adopting their costs in relation to the demand much quicker than before is some of these levels. We made contingency plans for all our operations, and that's what we're actually basing these on, what can we do and what can be done to be able to offset lower volumes within the different businesses. So we feel pretty comfortable. It's very difficult to go in exactly in the trough with the different businesses because we don't want to go business areas is a combination of a number of divisions, and all divisions are a little bit different. So if you really want to go down to details, you have to boil yourself down into all our operating entities, and we really don't want to do that. You have to trust us. We said 15% 16% is the trough level that we have for the group. It can vary a little bit between the division. It could happen that one managed a little bit better than the other one because this is you have to manage these targets. So they're still challenging going forward, and that's what we're going to be fighting for. But we'll keep the group over 16%. That's our ambition. Yes. We wouldn't talk about 16% if we didn't believe in it, of course. Definitely. And the The returns, yes, of course. Now we have to remember that there's no decision on an external separation. It's only decision so far for an internal separation. So and the Board decides and the owners decide. But of course, we've done the math. Of course, we have. And if you would take out SMT, the return on capital employed would jump up to in excess of 25%. A we don't have everything in the balance sheet allocated to business areas. You have big chunks, which is sitting in group common, like deferred taxes and other stuff, so which sort of dilutes it. But 25% or a little bit more. And we have all the cash at the moment. And the excess cash, yes. Which is sitting there on the Which I'm trying to see Which is not helping our returns at the moment. So if you put it that way. It's not bad with cash, but doesn't really look so good in the financial numbers, as you all know. Yes. Good afternoon. Is it an amazing place? I have to say like this that I'm deeply in love with the metal cutting business and whatever we deliver, but I have to admit that mining has larger drills, larger machines and nicer looking mines. With that said, in my presentation today, I will be joined by Lars Bergstrom that will succeed me from beginning of July. I will talk through what Sandvik Machining is about, our markets, our product offers, how we perform. I will talk about what we did say last Capital Markets Day, what we have delivered until today and then also about strategy execution moving forward. And then Lars will talk about the journey moving forward. In and out during the presentation, I will also touch upon sustainability because sustainability in my book, in our book within Sandvik Machining Solutions is part of our DNA. We have always delivered productivity to our customers, less use of resources, improved cost efficiency, and we're also doing it in our own operations. So I think you know the numbers, most probably better than myself in some aspects. Sandvik Machining Solution is a SEK 40 +1000000000 operation. We generated an EBITDA of 25 percent plus. We have roughly about 19,000 employees when decentralization has moved into our operation. We are grabbing a market that represents some SEK 200,000,000,000. The core of our operation is all about our divisions. There are 4 different divisions, the core division aiming for the metal cutting market or the machining markets. 3 of those are true premium, and the leader of the pack is Samvik Coromant. Those 3 are among the 6th most valuable brands in the marketplace. Dormer Paramed, an operation aimed for the mid market, very much about growth moving forward and expanding on that. And then we have 2 additions, investments for the future, Additive Manufacturing that consists of powder and additive manufacturing services that we're building up and then as well in applied manufacturing technologies. And if you have not seen it, if you have not touched it, I mean, please take a look in the coffee break as well and talk with our people over there when it comes to how we're expanding into the arena of digitalization and connecting our industry. And in between then, we have Sandvik Machining Solutions Supply, providing them DC operations and powder across the different divisions. The products. The most important products, the consumable and the value created in metal cutting, the inserts, representing more than 50% of what we are selling then. Round tools, something that we have talked a lot about and as you can see if you go back in the numbers, have expanded in share, driven by own development, driven by our clear focus of expanding and also bringing smaller bolt on M and As. When it comes to round tools, we have a lower market share than and then what we have on average. When it comes to round tools, electrification of vehicles are driving a higher consumption of round tools. When it comes to round tools, also near net shape, higher speeds in machines, 5 axis machining is driving that, and that's the reason why we constantly focus on round tools. And then we have tool, the tool holders, the insert carriers and the investment product, the tooling system. And then we have the future, the evolvement of new businesses. Geography and segments. I don't think that much have changed, but at least a few observations. You may remember that we talked about automotive being representing roughly 30%. It is a little bit less now than in the past. And the main reason for that, that is we have moving been moving forward more and more towards both general and engineering, but even more so towards aerospace. So we are growing the shares in those areas. Energy has also bounced back to some extent. It is not only oil and gas, but it's also other parts of the energy sector as such. And I think we have a fairly balanced geographical outlook. We are in the northern hemisphere of the market, I. E, we are in North America with some 20 plus. We are in Europe, both when it comes to footprint and when it comes to market exposure, around 55%, and then in Asia, predominantly, of course, China then around 20% as well. So that is the overall description. And I think those of you that have followed us, it is not any big surprises. And when I later on, we'll start to move into the strategy, don't think that you will see a lot of big surprises even there because we are committed to the strategy that we launched a few years ago. But just to move into that and then moving back to what myself and others talked about during last Capital Markets Day. Our strategy is built up around 4 pillars. The pillars are all about we are a customer centric operation that sells value to the customer. Sometimes I said if we would be a pen manufacturer, what we are selling is not the pen, it is the writing the art of writing with that pen. And that is the essence of value selling. It's about being close to the customer. It is about technology, if I may say so. Old technology, inserts, coatings, what has brought us to where we are, but it's also about new technology moving forward. It is the conviction about we can always do it better, operational excellence. And then the other conviction that we cannot do everything ourselves. We can collaborate, we can acquire or we can work with others in various ways. And I think we have actually been delivering quite well on this. And going back a little bit to the end of last quarter and perhaps back a little bit further on, if I go back to 2016, I think on average per year, the CAGR, we have been growing around 4.5%, give or take a few tenths. When it comes to EBIT improvement, it has been around 19% plus during this period. But even more so, I think that during last quarter, we also showed that we can start to handle then if we have if we see a forthcoming leveling out of the market or if we see that we are a little bit overstocked, we can also start to move that down in a controlled way. So talking about the strategy execution moving forward then. It is all about, let's call it a vision, let's call it an ambition, let's call it a target. It is about that Sandvik Machining solution can become a world leading provider to the wider component manufacturing industry, I. E. Not only machining, also go into pre machining and post machining and expand the offer that we bring to the market and the market that we serve. And I think those of you that have seen it already, we have talked about it, the component manufacturing value chain consists, generally speaking, about 4 different parts. It is the component design where you start to decide what type of methodology you should use, what type of should it be additive, should it be subtractive. It is about preparing yourself for how you should produce it. It is to execute and machine, and then it's about verification. And in the coming minutes, I will explain how we look upon this market and how we see that all this is becoming more and more connected, not only touching itself, also connected through digital means. But if I start with the core of the core, machining, this is something that there is still a lot to be done in this area. It is about the products that we bring to the market, but it's also the expanded products that we bring to the market. Industry that we serve. And I think you have seen a few examples of that during the walk around here. I hope that you saw in the production of SMRT products, It was Sandvik Coromant tools, and it was Metrologic agnostic metrology software that were used, I. E. Driving that through in our own production, not only touching top line, but also working with the bottom line. The 4 pillars that has generated 20% market share at current, consisting of more than 150,000 different products, 19,000 employees worldwide. But if I drill down a little bit more, and I think this is essential, Future success in my book is very, very much built on the success of the past that you continuously evolve moving forward. The customer centricity is all about we do not sell on price. We sell on value. It is in bold in our DNA. Our all people joining Sandvik Machining Solutions and the different, they get it with the mother milk, so to speak. 93%, of all customers do recognize Sandvik Coromant and do use a lot of those tools. It's the 5,000 sales engineers that drives that knowledge, brand recognition around the globe. In our centers, similar centers like this, not underground, you'd have been in other centers, a little bit more glossy, a little bit more light coming through the windows, like the one in Sandviken, more than 38,000 visitors coming into those, being educated, asking questions, being given answers, working together to form an industry. 100,000 direct customers being either touched face to face physically, But perhaps even more important, 44% of our customers today, we are not touching physically, so to speak. It is sales over the web or through other electronic means. Here we have advanced fairly much. I think you've heard me passionately talk about technology and innovation. I think that is the essence of the company moving forward. Technology, there is still so much to be done within machining and metal cutting. And here comes it into sustainability as well. All those three examples are delivering at least 30% productivity to the customer compared to the product they used in the past. It goes from the SECO tool, the face milling cutter, less energy consumption, less vibration. It goes to round tools, our advancement in round tools. Just by tweaking the tip of this, I mean, how difficult can it be? It's really difficult. By tweaking the tip of the drill, you can improve the hole quality with more than 30% and thereby having safer airplanes being produced. In the middle, prime turning that you saw in action out in the workshop, but also program and technique linked to physical products, some of those products delivering 90% productivity and 300% higher price that customer would like to pay for. A lot more innovation and value creation still to be done in the core of the technology. M and A, I said it in the beginning, the conviction that we cannot do everything ourselves. And M and A predominantly in the core dedicated towards round tools and niche products, areas where we are not strong enough and where we can grow much faster than in the past. And I think we have been decently successful. We are not satisfied yet. More to come, I hope. Ozk, Duramill and HP Wetmore, different markets, different divisions driving that through. A favorite of mine, operational excellence. And why is that a favorite of mine? I think that we have tweaked our DNA to some extent. If the DNA is customer focused and innovation, now we have adjusted it a little bit to be operational excellence. We can always do it better. It's the daily improvements, but it's also about larger programs like closing a plant, and we will continue to do that, as Bjorn said in the beginning, whenever it's needed. It is also about efficiency drives also lower volatility. Since 2016, 2015, more than 10 different production facilities have been closed. Since 20 17, 4 production facilities have been closed. It's also about being better in planning, being earlier on the ball, I. E. Sales and operational planning, lowering the net working capital, not overstock, constantly beyond that. And by doing that, the readiness for an eventual downturn or eventual upturn makes us more agile as such. Operational excellence is also about sustainability. As an example, we recycle roughly 50% of sold carbide. And what is the result of that? If we use recycled carbide, 40% less carbide dioxide is used in the production. If we use recycled carbide, 70% less energy is consumed making the product. In GMO, you may have heard that it was recognized, a production plant in GMO, not only when it comes to light house in digital, but we are also working with GEMO to become a green plant, I. E, to be in the forefront of what it means to be sustainable. And for me, all this goes back to we are part of the industry we serve. How many other companies can say that exactly the same type of products that you sell to your customers you can use in your own operations producing those products. And that is not only the drills and inserts. It is in the future, the metrology equipment, the digital solutions because we are in the wider component manufacturing industry. If I leave what we are today and try to expand a little bit into what we're starting to become. Component design is all about deciding what type of methodology you should use. It could be additive. It could be subtractive. It could be something in between. It could be to start to preplan how you should cut the metal. 2 very concrete examples that we have delivered during this year, that is this 3 d printed 390, delivering more than 80% higher productivity and a heavily reduced weight by using the methods that we are going to bring to the market in our own products. And it's also about UFAB, something that you can see over there. How can you speed up a customer's quotation process? Simplify the productivity to quote products for customers. So touching productivity very much outside machining. Production preparation, it's coming closer to the machining, closer to the production. It's about deciding the strategies for how to machine or how to produce. 2 different examples there. 1 is about Prism, and I will come back to Prism a little bit later. And the other one is about TDM system, how to handle logistically your tools, your tool data and so on. And then moving into verification and our first step, as I think we said roughly a year ago on a journey that we set ahead, metrology and metrologic. It is going pretty much according to plan. And what I mean with that, we didn't put a hockey stick in the beginning. We do understand that it's bringing something new. You have to work with it step by step. A clear evidence that has convinced me that we have really done the right thing. That is, I think we have one of some of the most stubborn production manager in the world, the production manager of the SECO plants and the Samvik Coromant plants. And they have now judged if Metrologic as a software is better than what they have. And they have raised their hand and say, we would like to exchange the software that we have to this agnostic system. And in my book, nothing else could be more rewarding. They ourselves have decided that this is the tool that we should use. This chain is coming closer together. It is overlapping in between component design, the production preparation, into machining. It's overlapping when it comes to verification. In the past, as you've heard me say many times, you produced and you measured and you scrapped. And then you started to statistically take out samples. And now it's moving into machine cells and more and more into machines. And that is a development we would like to lead because we own the machining. It could be through own developed solutions. As I've talked about, as you can see over at the end. It can be about acquisitions because others know this better than us in some areas or it could be through partnerships, collaboration. This digital chain this chain, I should say, is also digitally connected. It will be a closed loop. So different data that is produced, created early, should we print, should we subtract, how should I quote, is stored and being brought forward in the chain and then reused or reshaped in the later stages. Production Preparation, as an example then, Prism is a brilliant example here. And in plain languages, what is Prism then? I have to look out and see here like this. I mean, I see at least a few gentlemen, I think, that is in my age. And if you have the same type of model like myself, Jumhe recognized that some of your models then subscribed on recipes 30 years ago, we talk about now, how to make a cake, how to make a starter, how to make a main dish. And in the beginning, you bought the binder. And then you subscribed on recipes. The binder is Prism, the program Prism. The business model moving forward is the application knowledge, the recipes in how to produce. And the brilliant thing with this is it is not only a recipe how you bake the cake or how you produce. The ingredients that are provided is our tools. The recommendation tells to bake this cake, to make this recipe, to make this product produced, you should use this sugar or this drill. So a program that is simple to use, that is fit for the youngsters of today and the engineers of tomorrow. You program it, you bring it in, and you can start to work with the machine. We have started to move this forward. And I should not exaggerate that this is something that is selling rocket high, sky high, but I think it is a very, very tempting example, and we are giving a lot of good feedback. TDM, expanding into logistics and other areas, connecting tool dates back and forth. Machining, as I talked about earlier, yes, I was trying to be so excited, so it slips off here. How to program? This example of back turning. I mean many, many years ago, I used to be a development engineer, and I blame myself to some extent to say, why couldn't myself and my fellow colleagues at that time come up with, if you turn backwards, then you can increase the speed and feed with 300%. You couldn't do it at that time, and most probably I was too stupid to even think believe it was possible. But with new programming technique, that is possible. You sell the tool and you sell the program, and you have 2 revenue streams. Verification, as I talked about earlier, I mean, this is linked together. Metrologic being a first step in many more steps to come. If I'm a little bit more visionary, I mean, when you're moving this into the machine, I think that in the future, it will go from, as I said, the machine cell, then coming more into the machine and not too far away during machining. You have a sensor and you machine and at the same time you measure the surface finish and it's a done deal, at least in theory. I think that is what we are aiming for moving forward. As you know, I believe not too far away, but I have a fellow companion that I would like to bring up on stage. Lars and myself, we have worked together for 7, 8 years now. 7 years, yes. We have been working with the strategy. We feel a mutual ownership. So maybe I will give Lars a call then a few years ago and said what a great success or what have you done. No. Okay. Over to you, Lars. Thank you. Thank you very much. Thank you, Klas. Well, it's really a pleasure and a privilege to take this role and take over Sandvik Machining Solution. And as you said, we've been working together for 7 years in the management team. I met quite a few of you when you've been visiting Fagersta and in previous other events as I've been running SECO for 8 years. So it's a pleasure to take over the relay stick. And I think we do that running because we have actually developed this quite a lot together. So if I look into the future then and we start to talk a bit about the journey ahead. Had a slide this morning where he described grasping the opportunity whilst growing. And it was an X curve where he had a merge in, take off and mature technology, and then it plotted in different areas that affects us in our business. Now if we relate that back to this slide and this value chain that we are working with and trying to kind of further develop ourselves in, If you talk about what we call subtractive metal removal, For me, it's metal cutting. It's easier to say. It's a mature technology. But we can still do this type of invention, as you talked about, this turning grade that actually go backwards and suddenly we get a lot of more productivity. And there are areas of growth, and we need to be there and grab those opportunities. There's another thing that you also touched upon on that slide, which says net shape forming sorry, near net shape. This is something that has affected our business since, I would say, 30 years back. And the simple thing is that it's better to preform a part and then machine it than to have 1 big block of metal. And I take this as an example because sometimes we kind of think that things are going to change just overnight, but near net shape started like 30 years ago. Still, we see some effect of that. Think of that next time you board an Airbus 340. I was down in Toulouse visiting Airbus 6 years back. Above the door and under the door, there is a beam, a 2 part beam, 1 upper and 1 lower part. That piece, 6 years back, was manufactured out of a solid piece or well, it was actually preformed in this U shape of titanium. And we machined away, believe it or not, 96% of the weight, 96%. So it's 4% left, and it's still held together. So it's a solid part. So believe me, it will hold. And how do they do that? Well or how has that changed? Well, today, they forge it instead. So they're still machining, but a lot, lot, lot less, just a fraction of it. And you can imagine the waste for the in sustainability terms and so on. Now what has happened with that then? Well, at that time, we were doing a lot of roughing applications, as we call it. That's to remove metal very, very, very fast. But we don't do that anymore. Now we do more finishing operation. The funny thing with finishing operation is that it requires more delicate tools and also more round tools. So one of the reasons why we sell more round tools than inserts percentage wise is actually near net shape. And this is going on for 30 years and continue to develop in that way. So that's one technology shift, but it's been very gradual. If you move down that curve that Bjorn showed, you see smart factories. And of course, this is this fantastic Industry 4.0, been ongoing for quite some years, will continue. It's not going to be like a very quick shift, but we see it developing gradually. And then further down, you have additive manufacturing. And additive, as you know, is very a lot of attention around it. Still, it's a very, very tiny fraction of parts that are being made by additive today. But also there, I can take one example. 1 of our biggest customers in medical area, they are the big they have the biggest installed base of additive machines today, probably some 60 machines in one plant. And then you believe and we were they were one of our biggest customers, and you would believe that, that business disappears. But actually what happens for us is that the business is going up instead. And why is that? Well, even when you manufacture a part with additive manufacturing, you have to trim it. You have to give it the final touch. And we were grasping that opportunity some 5, 6 years back when we started to do tests for them, and we today have an optimized solution. So it's about grasping again the opportunities in this growth. And then finally, at the very bottom of that curve that in that grasping the opportunity, it says closed loop manufacturing. And that is actually to take what you saw today out here in the shop with that robot, what's feeding the turning machine and then you saw this measuring machine. What you do instead is you bring that measuring into the machine and you close the loop between the measuring and the machine and adjusting while you are machining. So you don't have to have this extra to take it out and place it in some measuring machine. You can do it online. Why is that important? Well, as you said, we have 100,000 direct customers And we serve them over the web, but we have physical contacts with them obviously also to talk about what tools they need and so on. But we can do that also a bit more automated. 5,000 sales engineers. And we understand machining. I had a discussion with some of you last night about what is happening right now and why are you doing this. And well, there's a huge number of lean consultants out in the industry to trim the production. The problem with many of these lean consultants is that they can find a bottleneck. And often they come and say, well, the machine is the bottleneck because in the machine shop, added value is in the machine. But how do you cure that? And then they can put a finger on that and give you all these fancy reports and so on. What we actually can do is to help them not only with selection of the tool, but we can also help them with the programming, the sequence of machining, the feeding of the tools, the tool data management, and it's all there. And we are legitimate to talk about that because we understand what happens in the machine. So that is what we say when we say we are trying to expand from machining upstream towards design and production preparation and downstream to also get some of the measurements into closer to the machine in itself and our own development. So with that in mind, when we then come back to this target of 5% growth, as Bjorn said, the organic growth is perhaps 2.5%. And then, of course, we need to add M and As acquisitions to that, and we also have to find new offers. We believe that of the growth in SMS going forward, about half of that will come from the traditional, as you would see it, SECO tools, Walter, Coromant business, tools in the machines and all that, while the rest of the growth will actually come from tool data management, these type of things that you talked about, the Prism and tools like that, which are kind of a programming tool and at the same time also a recipe tool. It will come from also verification side like the MetroLogic, which we will also ensure that we tie better back to our core office, so to say. And by doing that, also further expanding our offer outside what is the core today. So how do we do that then? And what's the journey we are on? Well, we are right now building the base. We've done that since many years back, but we continue with it also. So it's kind of an ongoing journey. To digitalize the offering, 2 things. One is that we are working with smart tool holders in the like the CoroPlus and these type of connectivity in smart devices. We have since, I would say, 10 years back, we're working relentlessly with digitalizing our product information, digital catalogs, it goes far beyond that. So for instance, if you go into Seco Tools, which I, of course, knows the best myself, we have a functionality called suggest. And that is a function that actually suggests not only what tool our customers need, but depending on the operation, exactly what cutting data they would need to have, speeds, feeds and all that stuff. And it's not like just a kind of Excel thing. It's actually built in algorithms and so on. We spent a lot of energy with that. It's been ongoing for years with this digitalization. Building the additive manufacturing platform, which we have been doing since quite some time. This is again the powder. It's also building our additive manufacturing center up in Sandviken, where we are actually able to advise our customers how to move from subtractive metal removal to additive manufacturing. And then the agility, and that is, of course, for us to be able to be more resilient against swings in our profitability when the market goes up and down. We've done a huge restructuring of our footprint. We've taken down the net working capital quite a lot. We are working also on our product range, and we are working also with the flexibility in our own force. We are looking at and we are doing outsourcing so that we also can balance and not only have our own resources to take up the swings when we have peak loads, so to say. So there's a lot of things ongoing to handle that. Moving forward and how to accelerate. Well, round tools, as I said, the ratio between inserts and round tools are bit, and it's a growing area. On top of that, we have lower market share in round twos than in inserts, and it's definitely an opportunity for us. Footprint optimization. Well, I think it's an easy thing to just describe us. It's just to continue to ensure that we have very, very efficient plants, and we continue to work down that path. Digital sales channels goes without any further explanation. It's also a journey. And then coming back to additive. Additive in itself requires a lot of it's not only to take a part and say, okay, let's do this now with additive manufacturing instead. You have to do a lot of reengineering of the part and also the material in it and so on. And also with the new investments we are right now building in Sandviken for titanium super alloy powder, we will be able to address both aerospace and medical in a better way. And then we are growing into the design preparation and all that. And again, Prism is an extremely interesting thing we are launching now. It will take time to get it, you know, the up in volume and so on, but it's a combination of a very intelligent programming help for smaller and midsized customers. And on top of that, also a possibility to get advice recipes on how to do different type of machining. So all this again, I would say the journey ahead for Sandvik Machining Solutions is, as Bjorn said this morning, to grasp the opportunity of the shift that is ongoing in the business, build on the core of the core that we have, which is the fantastic tool divisions and their core and then also ensure that we get this connected together through our sales network and our customer contacts. And then at the end of the day, of course, the vision is that we are looked upon not only as a tooling partner helping with just the machine, but also to be part of the journey towards more smart factories and everything that is happening in the world. So now I have to ask the SMS captain because I'm just a copilot. I'm trying to adopt this new career path that we have in Sandvik. So being the copilot, Mr. Captain, was that the proper description of my I think that that is sort of the exam to me moving down to be only the co pilot very, very soon then. All right. With that, I think we open up for you're still the captain, so you Well, I'll be the Q and A captain. Yes. We have questions here from Lars. Yes, please. Thanks, guys, for a good presentation. I was intrigued by the example you gave, Lars, with regards to a customer that's moving to additive from subtractive 60 machines and that actually being a revenue opportunity that's growing as opposed to contracting for you. Could you help us to decompose that? I mean, I would have thought as we go from subtractive to additive, a GE fuel nozzle was built on 20 different parts 5 years ago. It's printed in 1 today. Am I to understand that, that core business that's gone away in that example is being more than made up by post processing, by powder, by tool management, etcetera. It seems a bit counterintuitive. But if you could sort of give us and again, I don't know whether that example you gave was sort of an to apples comparison, but what does that addressable opportunity look like for you in an additive world versus historically a subtractive? Thanks. Well, I think it's a combination because it's a very good it's a classic example, this fuel nozzles from GE that it's really one of the first parts actually that is done really using all the opportunities. For that typical part, first of all, it's a quite complex final machining you need to do on the parts. There are opportunities on the part itself to fine tune it, which you have to do. So it's still machining to do on a part like that. And then secondly, of course, now GE has a huge organization today within Additives. So they are kind of self servicing themselves. But there are so many today that actually when they take a process like that, they need advice down the line, consultancy work and so on. How do you actually do that? And then once you start to get into it, unless you have your own prototype machines, you will have to buy prototype services somewhere, which is something we actually can offer today or we do offer from Sandvik from Sandviken from our center. And then eventually, once you are there, you need to get very high quality powder, which is something we have in Osprey. So it's a combination of actually our traditional yellow coats from Coromant, together with our new additive team, together with our powder team where we actually managed to blend this together in a way that no other competitor in our industry can do. Now at the end of the day, I mean, a part like that might have been 10 parts before and now it's 1. Of course, the total of it is less machining than it was before. But there's nobody else in this actually to do what we can do for that type of customer type of servicing them. And then I also believe myself that once being there and having that opportunity, there are possibilities because the thing with additive, if you look at additive today, the best analysis I've seen says that probably somewhere between 3% 5% of the parts being machined today can actually be done by additive because there are physical limitations. It's a very costly method. Today, it's very I mean, today, it's many very often not competitive at all. You do it because you want to be part of the technology development. But it's still a fairly limited part. So we believe that this will help us to strengthen the rest of our offer. Answer fair enough? Thank you. Yes. We have one question there with Andy on the left hand side, and then we have another one here on the right hand side. It's interesting you've got a fairly well defined view, I think, of kind of how you see this market developing outside of that core. Can you just talk a little bit about, I guess, what you're seeing in terms of your competitors doing along the same lines? I mean, is there any sign that they're seeing the market developing the same way? Are you seeing kind of them introducing similar, I guess, competitive models that you've obviously talked about there? Just interested how that's developing. Also very good question. If I divide the competition into 2 pieces, so to speak, 1, the traditional competitors, I. E. The Kennametals, the ISKARS, the IMC, the Japanese, etcetera, analyzing. As you know, I mean, Niedel Bosch and myself normally like to talk so much about competitors. We would like to do it ourselves, so to speak. But I don't think we see anyone or the traditional competitors either neither being into additive and that type of approach nor being into digital and metrology. And I think that is an evidence that we are leading this. A few years ago, North American competitors tried to move forward in that area, and I think they brought themselves back again later on. The Japanese competitors are not doing much at all. With that said, I mean, we should have the highest respect for competition. Always. Then we have others, the machine tool builders that are part of our industry. When it comes to connecting, etcetera, I mean, they are moving forward, but they are also very much collaborating, cooperating with us in that range. Thank you. So I had a question on the mix between what we could call new growth and old growth. Obviously, you say that half should come from digital, additive, metrology in the future. What is that share today? That is my first question. Linked to that, do you include round tools in the new growth? If I start and then you I mean, first of all, if we take machining as such then, and if the definition of machining is sometimes only the inserts as such. But Coromant, CECO and Walter are also progressing in this. So we should not look upon it as expansions only outside the existing 3 top brands, so to speak. So here you have the CoroPlus. Here you have other areas as an example. It is a smaller part of what we have today. It is just you can do I don't have it in on top of my head, but I mean take the percentages that we present and then you see the residuals. So SEK300 the SEK300 1,000,000 that mentioned and said that, that we are committing to on top of everything else we do, but then, of course, also to work together or to acquire companies. So it is a small part, but it's growing fast. Final follow-up on the same topic would be on the multiples or our evaluation. When you look at round tool manufacturer today, obviously, 10% market share, market is 30%. You want to expand there. I understand that multiples here are also quite hefty even if not as high as on the industrial software side. We're talking 3 to 4x EV sales? Or could you give us some indication in terms of to enable us to model this a little bit better? Thank you. Maybe you should start, Lars, because I mean, you have been the driver for one of our Yes, sure. And we don't normally talk about the consolidation for individual acquisitions. But we as you say, there are different multiples compared to the high-tech areas. And what we typically try to do is to find companies that really want to become part of us and then negotiate from there and try as good as we can to lock them in through relations rather than to be part of a bidding process. So all the not all, but most of the offers or well, the process we've been into, we have gone into exclusive negotiation, and then we try to find best way then to build in also earn out structures to kind of reduce our own risk because of ensuring that we get a good return. And it's very much on individual basis. And I would say we look at each acquisition with on its own merits. And I think it's absolutely correct, Lars, and I think it's fair to say as well, if we talk about bolt on acquisitions, if you bring them in, I'm very convinced we are very convinced that we can create we can deliver value on that, I. E. We can improve the profitability, we can improve the growth. And at the end, I mean, it's a value creation for Sandvik and thereby and Sandvik Machining Solutions. Welcome back, everyone. Great to see you back. I think you're all here. My name is Henrik Heger. I'm the BA President for SMRT. And I'm going to take you through on SMRT and our focus areas and with a special attention to what we're doing in the digital space. So Pat's going to help me with that. Before I do that, I just want to say, well, thank you to Bjorn for allowing us to have this here. But more importantly, thanks to all of you for making the effort to come. We're really excited about what we're doing here and it's great to see that you've all walked around and touched and felt our equipment and what we're busy with and what we're really passionate about. I will start as we normally do with safety and show you a brief overview of one safety statistic. We follow a lot of safety statistics and keeping our people safe and our customers safe is a top priority for us. What you're looking at is something called lost time injury frequency rate. So it's the number of accident per 1,000,000 work hours. What this translates into though is that during last year, so you can see for 2018 we're at 1.0. That is 30 accidents when somebody came to work and left work without being able to go back the next day because they hurt themselves. And that's never okay. All accidents can be prevented. It's a question of how good we are at implementing safe working practices and following them. And that effort never stops. We are with a 1.0 or a 0.8 where we're at, at the moment. That is a remarkable achievement if you look at the history. It is also a very strong performance if you compare us to our peers in the industry or our customers, significantly better than most of them. But that does not mean we stop. We continue to go after this. One good reason for that is safe operations are productive operations. These go hand in hand. You do things the same way every time. You do them the right way every time. That is also productive. So it helps us in that way as well. What I'll do is give you a bit of an overview of the SMRT business, a little bit of view on the market and the trends that we see and then go into the focus areas that we have and so that really characterize the direction that we're taking with Sandvik Mining and Rock Technology. If I just start with our exposure and you look at the sales by segment. So mining is a big part, 3 quarters of what we do. Mining has had a stronger development than construction in the recent years, so the share has grown a little bit. Construction is a very important part of what we do. Close, I mean construction and mining are close. A quarry is a rock mine. Whether you develop a tunnel for a road or for a mine doesn't really matter that much. So they're very close. If you look at by geographical area, no major changes. What we've seen recently is stronger performance in APAC in South America and a little bit weaker in North America and in Africa. That's the recent development that we've seen. And you can see we're almost 40% equipment, 60% aftermarket currently. These are 2018 numbers. And if we go into that offering, let me take you through that quickly. So these are our applications, if you will. And at the top, you have the drilling and blasting cycle and what we offer that. So obviously, it's the drilling and it's the rock tools, but it's also the load and haul application or loaders and trucks. In the middle, we you have our crushing and screening offering, both the stationary and the mobile and also the breakers. Think you saw the rammer hammer outside. That's a big piece of steel that is good at breaking rock. And then of course, our parts and services and our automation parts and services serving all the equipment divisions. Automation that we'll talk a lot more about. And then finally, mechanical cutting. And there'll be quite a few questions around mechanical cutting, which is 90% into coal or 88% and then into other softer rock like potash and phosphates and salt. But coal is dominating, as you heard, for mechanical cutting. That's also where we do the development for our hard rock mechanical cutting, which is in early stages for us as it is for our competitors. If we can make it work, it will be fantastic, but it will come piece by piece and slowly moving forward. We have a machine, as you may be aware, working down in Austria, and it's going to start cutting again today or maybe tomorrow. And we'll see how we move forward with that machine. So if we then look at the exposure that we have to different commodities, gold and copper is clearly dominating for us. So we are really the core of what we do is in hard rock. And we have most of our businesses in underground hard rock, so and that's predominantly in copper and gold. So that's the biggest for us. If we look at construction, it's mostly in aggregate. So mentioned quarries, but also tunneling and then demolition and recycling, that's our mobiles business. So mobile crushers do that when you tear down buildings and that type of thing. Now if we go into a little bit the our if we look at that over time, what we look at is a commodity index that is in accordance to our exposure. So again, copper and gold being about 50% of that commodity index that you see here on the chart. And I wanted to give you a flavor of the longer term development. So we had a peak in 2012. That then tapered off and went into a trough. We went to 76 on this index, started so 100 is then at 20.10. And during the last year, we've been hovering around 100. Now this is the dollar denominated commodity prices. We have done the analysis to look at, well, what does this mean for our customers? So we I mean, half of the copper comes out of Chile and Peru. What does it mean for them? Well, then the development is a little bit different. And the current index starting at $120,000,000 and the current index is sitting at $136,000,000 There's actually a better environment for our customers in their local currency than it is in a dollar denominated currency because the dollar is appreciated. But these are somewhat uncertain times. We've got Trump and China going after each other and that's not necessarily helping the global economy. But currently, we are at good levels. One other thing that has happened, I'll come back to that in a second, is that the productivity of mining companies has improved in the last 5 years. Before that, we have had 10 years when it worsened. So there's been a trend break for mining when it's become more productive. It's become more productive because they are adopting new technologies. They are using more information, analyzing and improving their operations. More of that in a second. If we look at mining and how much is surface and how much is underground, if we just look at the material moved, so all the rocks that are moved, regardless of whether it's mineral containing rock, which is called ore or if it's overburden or waste. Well then, if you look at all of it, about 25% is underground and 75% is surface or open pit. If you look at the amount of money spent, so just looking at CapEx, then underground is bigger. It is more expensive to mine underground. You need more machine, you need more infrastructure to mine underground. And that's where we play. Predominantly. We're also in surface, but predominantly we are underground. That is our sweet spot. If we look a little bit at the trend, one that often comes up is, well, aren't we shifting more and more underground? And we've looked at this and it's remarkably stable. And here you see copper, which is the one mineral that is increasingly going underground. But between 2018 it didn't move. And if you look further back in town, it's remarkably stable. Now the estimates to 2,030 is that it was going to increase the share of underground mining is going to increase to 14, which is a big change compared to what has been recently, which is good for us. Now this also assumes so we have a few big underground projects that are important. So we got Chuquicamata in Chile. We got Oyu Tolgoi. We got Freeport in Indonesia. You got Kaumoa or Ivanhoe in the DRC. Those are 4 big copper projects that are all underground that's going to expand production. And that drives this development. It assumes that a number of surface mines are going to close. And the one thing I know about mining when you look at it over a long period of time, mines stay open. They find a way to keep operating. So I think maybe we'll see that go to 12% or 13%, but I don't think we'll get quite to 14%. I mentioned productivity improvement, and here is the average cost per tonne. So this is AISC, it stands for all in sustaining costs. It's think of it as cash cost for mining. The average cash cost in copper has gone down 19% since 2012. That is massive. Before it was increasing a number of percent every year from 2000 to 2012. So that's a trend break, which is important because mining companies see that it's possible. It's important for us because it comes from deploying more technology, better performing equipment and using data more. So capturing more information, analyzing it better. And that's what we want to work with our customers on. So if I try to summarize again in Mining, steady slow demand growth. Bjorn mentioned it's about 2% per year in production growth. Yes, it can go to 1%, it can go up to 3%, but that's where we operate normally. If it's 1 or even less, then commodity prices are low. If it's 3, then commodity prices are high. Share of underground is slowly growing. Again, remarkably stable over time, but slowly, slowly growing, which is good for us. Mines do extend. They find a way to stay open. They go deeper. They find a way to keep operating. We do see ore depletion for sure. That means our customers need to move more material, which is also good for us. And then productivity gains, we they are significantly driving costs down. And again, we've seen that in the last 5 years. We didn't see that before. So that's exciting. What customer wants from us is safer and more sustainable products. So sustainability plays a role. Now again sustainability and productivity go together for our mining customers. If you look at CO2 emissions or greenhouse gas emissions, they come from the energy that they use. And if they can be more energy efficient, they save money and they save on the environment. So they go together. They want more automated equipment, more productive equipment and more electrified equipment. And we'll get back and talk about electrification in a second. If we look at construction, now this is somewhat forward looking page where you see the expected growth in construction. Construction tends to be a little bit more stable. What's exciting here is the tunneling is expected to grow faster, driven by China, Japan, India, the main markets. I'm sure you've heard about the China One Belt, One Road project, which is a massive project to connect China to the rest of the world. This is driven by urbanization, GDP growth and etcetera that's driving these infrastructure investments. And drilling and blasting is and we believe will remain the dominant method for tunneling. So it's about today, it's about 80% of road tunnels and 90% of rail tunnels are drill and blast tunnel development. If you look at our performance, this is what it was in Q1. So this is SMRT performance with almost 10% order intake growth compared to Q1 in 2018. Revenue growth a little bit less. We also show the numbers here excluding oil and gas, so excluding barrel oil and gas. So the oil and gas part of barrel that we're busy divesting. And this is to give you a flavor and you can see the big jump in return on capital employed. Now if we then so that was the state, if you will, of SMRT and our business right now and a little bit what's going on in the market. If we turn our eyes forward and where we want to go and what we want to focus on, If I start with our ambition and obviously then meeting the overall financial targets for the group is number 1. But to do that, we want to ensure we deliver disciplined profitable growth. So stability, profitability, growth, in that order is how we operate and how we look for growth. We want to be the industry leader in EBIT and return on capital employed through the cycle and do that by being number 1 or number 2 in the applications and the customer segments where we choose to participate and then gain market share over the cycle. So that summarizes our ambition. What we will focus on and think of this as the next 18 to 24 months. Then our focus areas will be and I'll go a bit deeper into each of them, but deliver customer value, B, take our customers to a place where they're more productive, work with them over time to make them more productive, introduce new services, new products to make that happen. Shape the industry ecosystem. A lot of the things that are happening in automation, digital and electrification in our industry is early days. Even though we've been busy for a while, it's still early days when it comes to penetration in the industry. And we are taking the position that we want to shape the ecosystem through our own development, through making acquisitions and through partnering with companies. And you've seen some of that today. Safe and sustainable. We have to be safe and sustainable, but also we want to help our customers be safe and sustainable. Have the best people and be agile in our execution. So that comes back to managing with the cycle. If the cycle turns and the market slows down, we need to be quick and on our toes. We're going to defend that 15% EBIT margin. We got to be quick to act. And finally, of course, continue to work with our portfolio, which includes both divestitures, acquisitions and partners. All right. Let me start with the customer focus side. And we just made a very simple model more to explain and to talk about it. But if you look at this and why AXE being the perceived value of premium products, so the products you've seen today in our view are the best performing products in the industry. So the customers perceive value of that. And on the x axis, you have the perceived value of premium services. So capturing and analyzing information, training operators, having the best supply chain, those types of things. And we divided in our customers into 4 different groups. So bottom left, you've got the price hunters. Just give me the cheapest product. If it's a 45 millimeter drill bit, just give me the cheapest one. That's what I care about. You have the on the top left, the performance chasers that just give me the best machine, I'll do everything else. Bottom right, you have the people that are in remote places that want their operations to work. If you're sitting on a ton or a mountain of copper in the middle of nowhere in Indonesia, you want machines that work every day. You want the spare parts to be on-site. You want all the consumables to be on-site and you want the Ensembic people there to support you. Whether you are the most productive mine in the world or not doesn't matter as much. And then we have the productivity partners that want the best of everything. And here's how we target. So we selectively target in the price hunters and then of course everybody else. But we target them a little bit differently. So if you take this and this will shrink eventually, then we selectively go after the price hunters. The performance chasers, we can work with them to set benchmarks on new features and making new things work on equipment. It's very it's technology focused and then the service is basic, but has to be spotless. If we take the stability seekers, then they want availability. They want support on-site. They want a reliable supply chain. That's what we need to work with them on. And finally, the productivity partners, here's where we develop systems together. And Pat will tell you about a couple of those examples when we do that. If we look at a little bit at where we are on the X axis, so the aftermarket and the service, Then where we're coming from is bottom left. So say here again, you got customer value on the y axis and our share of the aftermarket on the x axis. We're coming from a situation or a place where we reactively deliver what customers ask for, what the order we delivered. We've spent quite a bit of time to get into a proactive stance where we can provide them and offer them what the fleet demands and what the fleet needs. What that means is what the average loader, LH 621, would need. And where we are going to now is that we start working with these machines as individuals. Depending on where the machine is, who operates it and who maintains it, it will behave differently. It will last longer or shorter. If it's automated, it will likely last longer. If it's driven by a woman, it will likely last longer. If it's driven by a man, it will last shorter. And how do we use that information to make sure we can provide maintenance that reflects that behavior of the machine? So here you see some of the things that we've done in that middle part and we've done over the last 5 or 6 years in our aftermarket is we've connected our fleet that we have out there, the 13,000, 14,000 machines that we have out there operating in the market, actively monitoring them remotely, so connect them, monitor how they perform, connect our customers to MySandvik, have them use our e commerce platform, etcetera. And then we're moving to having our not only our equipment connected, but also our service technicians to personalize the operator training. So help the man be a little bit smarter with the machine and treat it more nicely and proactively deliver recommendations to our customers. So that's a little bit on the service side. If we now move over to the product technology side and now shaping the ecosystem, I want to start with electrification. We talk about electrification as something new. And I just want to give you a flavor of the time line that we are on. So we delivered the 1st electric loader in 1981. And then we've delivered the 1st electric truck in 1988. And the biggest electric loader, which we have operating at Kiruna for LKAB is the 25 ton electric loader was delivered, the first one, 95. We're now working with them to deliver the next generation of those loaders. So we've been busy with electrified equipment for a long time. But now we're adding batteries to this. And you saw this hybrid where we have a cable and battery working together to produce a much more flexible machine that you can disconnect and drive to the maintenance shop or to a different part of the mine to operate over there. So it's a very practical way to solve the problem of we can't it's very difficult so far to have battery driven loaders that run a full shift. We're getting there and we're working with Artisan to deliver those solutions. But that is very challenging. But you do that hybrid of cable and battery, automation and do the same type of time line, you might have heard through the presentations that we launched the auto mine in 2,004. This was with Codelco. This is the state owned or government owned Chilean copper mining company. So we launched with them at El Teniente. Some of you might have seen we had a press release yesterday, thank you, Pat, where we got the order for El Teniente Automation again. And we also got their other big mine, Chuquicamata. So we're well entrenched with Codelco, which is great. And then over 15 years, we managed to break into 43 different mines. And the addressable market is about 700. So we have a long ways to go to grow this. And we're not fully penetrated in each of the 43 minutees either. So there's a long way to go. Having said that though, we've got 43. Our closest competitor has got maybe 5. This is underground. That's important. But that's where we are. So we feel confident that we're the industry leader. We know we got to be on our toes and move quickly to stay the industry leader, but we're really excited about where we are. So if we look at this, and yes, historical adoption hasn't been very fast, been quite slow, to be honest, which is how this industry works normally. Things don't go really quick, but it's sped up a lot and we have a lot more pull lately. And customers see that to continue on this productivity improvement trend that they managed to get on since 2012, they have to deploy new technology. They have to deploy automation, digitalization and some of them also have to get into electrified equipment. We deliver value today. So Pal will go into that in a second, how much value we can create. And again, this is the beginning. We got to be on our toes and move fast to stay in the leadership role and shape that ecosystem so we take as big a part of it as possible. Now if we talk about the ecosystem very briefly, if you just think of very simple value chain, explore and plan the mine, excavate the rock and then crush it. Now if you look at the digital side of that, that's got a number of different parts and we've talked about them. You've seen them in the different rooms that you've been in. And we're working with partners with the networks, with in the mining, Internet of Things. We mentioned new tracks. Eovent is ventilation on demand provider. Again, when you get more professional and you put electrified equipment underground, you can start managing ventilation much smarter and save tons of money both in CapEx and then in OpEx, and that's energy cost. So again, good for the environment. So EoVent is an exciting partner. We work with AutoMine and OptiMine to deliver the core of the automation and the digital solution. And then we work with IBM for the analytics part. If we look at electrification, then we're working with suppliers and partners across batteries, hybrid technology, how we engineer these things together, the charging systems, etcetera. But we integrate it. And now together with Artisan, we feel we are in a very strong position also when it comes to electrification and battery powered vehicles. So with that, digital transformation. Thank you, Henrik. Thank you very much. Okay. So, yes, looking at the digital offering here, we saw this morning, we talked about My Sandvik, we talked about Optimine, we talked about AutoMine for loaders and trucks and surface drilling and so on. So just to recap, I mean, there's 3 basic pillars here. There's connected equipment, which more or less pertains to Misonvik, analytics and process optimization, where we're more engaged with digital transformation type of projects with customers, which is more along the Optimine line of thinking. And then autonomous equipment and features where we mostly talk about AutoMine. But those aren't the only offerings that we have. You can see the rest of them here. There's just not enough time to go through them all today, but we're actually being very aggressive across a whole range of digital offering as well. Taking now the next slide, looking at our installed base, breaking this down a bit. You saw this in the OptiMine room. There was a map shown of across 4 offerings: AutoMine, OptiMine, My Sandvik and Nutrax. Which of those offerings have been implemented where in the world? So to date, we've had 43 AutoMine implementations. What's interesting to note is, yes, it has been slow to date. More than half of those have been implemented since the beginning of 2017. So when we talked at the last Capital Markets Day about automation and digitalization being on a growth curve, we were serious about that definitely, and it's really accelerated. More than 400 auto mine trucks and loaders have been delivered to date. Turning now to OptiMine. So you saw in the OptiMine digital showroom, I mean, OptiMine is a suite of software modules basically for improving overall equipment efficiency. These sites that are listed on the map are sites where we have at least one of those modules implemented. Again, actually more than half of those have been implemented in the past couple of years as well. So this is gaining steam. My Sandvik is about mass connectivity. Henrik pointed out the importance of connectivity of the fleet for the purposes of getting the most out of our installed base in terms of aftermarket penetration parts and services. So that's been our strategy with MySandvik. It's a mass connectivity cloud connected data collection service, B2B client portal for doing spare parts business, for learning more about what's happening with each individual machine, so we can be very granular and target those machines for different types of performance kits, spare parts and so on, getting closer to the customer, knowing what's happening with the machine before the customer rings us and says that there's an issue at the end of the day. Complementing all of these is a company called NuTrax, which was a partner. We announced the acquisition of NuTrax just recently in April, middle of April. I'm going to go more into that one in just a minute. But if you look at the entire installed base here, I mean across these four offerings, if you do the math here, there's 361 site deployments. So those are all not unique sites, as you can see by looking at the dots on the map as well. But in fact, only 2 of those sites have all 4 of those offerings. And as Henrik pointed out, even with those ones, there's different levels of OptaMine, different levels of AutoMine. So there's plenty of room for lateral penetration and growth on a per site basis, but then adding more sites as well. As Henry pointed out, we figured that the total addressable market for these type of solutions in underground hard rock mining is at least 700 minutee sites. And we believe the portfolio here makes us the leader in underground digitalization. But as Henrik also pointed out, we need to stay on our game and continuously innovate to continue to penetrate here. How does that work? Well, I mean, if we look at Optimine, questions we also we always get from customers when they come in to see us, well, what value does this create? Now when you create more customer reference cases, it's easier to explain the value it creates because you created reference cases, customers can go visit them. Most of our customers are happy to entertain visits from their mining colleagues to talk about the solutions that we've implemented and so on. But at the end of day, when we talk about OptiMine, we talk about the increase in overall equipment efficiency. What we're actually trying to do is we're trying to improve the effective time underground in the mine. What happens during a shift? This is actual data from a customer site. So there's 24 hours in a day. It turned out that, that customer had 9.4 hours of effective time. And then through the various steps in this OEE so called OEE waterfall, equipment insights, operator insights, production insights, which basically means improving availability, improving utilization, improving the quality of the work. Those three things together add up to OEE and we were able to demonstrate that we could lift the productivity there in OEE by 39%. So if your overall equipment efficiency increases, naturally your productivity increases. Those things are correlated, right? Might not be one to 1, but they're definitely correlated there. If you've got more effective time, you're going to get more tonnes out of the mine. And as a result, your cost per tonne is going to go down as well. Not to mention that if you get better visibility of what's happening in the mine, you can also improve health and safety at the same time. So for auto mine, similar concept. One of the main drivers for the value of auto mine is that you can operate more hours during the shift as well because typically when you blast underground, people have to clear the working area. And that typically means the mobile equipment is sitting idle depending on what part of the mine it's in. With auto mine, you can continue running the machines because the machines don't care if there's it turns out if there's noxious gases there from the blasting process. The machines aren't really concerned about that. Or it could be another case where there's a shift change and some of these mines are very, very big. It might take you an hour and a half or 2 hours to get to the working area from the head frame or from the portal. So this is actual data as well from a real customer. This customer had implemented auto mine haulage, so trucks. And they actually saw that there was a 59% increase there in utilized engine hours versus the manual case. So how much of those actually come out to increase production? Like I said, it's not one to one correlation, but definitely it's the case that your production is going to increase. If you're getting 59% more hours on automation where the trucks are running, you're going to get more production out of the mine as well. So here are a couple a few public cases as well where we can identify who the customer is that these customers have agreed to allow us to share this information obviously, and it's their information. It's not information that Sandvik has provided. These are interviews that have been conducted with these customers about the highlights of automation and digital and where they deliver value. You can see the common themes here on the left hand side, increased production, reduced cost per tonne, improved health and safety. So those are the common themes that typically apply to these solutions. The first two, Hecla and North American Palladium, both in Canada, involve AutoMine, the first one being with haul trucks and the second one with loaders. Both of those are actually YouTube videos as well. And then the third one is about autonomous trucks and also about Optimine Analytics here. We noticed that when we implemented Optimine Analytics at Petra Diamonds that there was an immediate 9% increase in fill factor as well of the loaders. So it's funny how all of a sudden the fill factor increases when people realize that they're being monitored as well. And you can see that coming out in the dashboards of the system. So that's all well and fine. So that's how our customer captures value. Hopefully, that's pretty clear by now. But how do we capture value from this? Well, for those of you that attended the Capital Markets Day in November 2017, you would have seen this slide. It's slightly modified now, but basically, we're sticking to our story here is what it comes down to. Premium pricing, we can get premium pricing when we have high technology solutions that improve productivity. We can command a premium price and allow it gives us pricing power. It allows us to go into mines and get a higher market share than we otherwise would have. Of course, then there's the digital add on revenue. So these systems, OptiMine, AutoMine, My Sandvik, NuTrax, I mean, you have to pay for these systems. Typically, there's the project implementation fee and then there's typically a yearly support fee or licensing fee that goes along with that. So that's additional revenue as well. Then of course, typically in these type of digital services, and increasingly so, there's contracts or service contracts associated with those and that allows us to capture more of the aftermarket in terms of spare parts as well. If I look at some of the autonomous haulage cases, we had a service contract to service those autonomous truck fleets. And of course, that allows us to keep out the pirates and get more aftermarket share. And then recurring service naturally, those things are recurring. And then to the extent that we have annual support packages and license fees for the software, it becomes an annuity that we also collect. And then, yes, we've been propositioned by many customers for gainshare or production related bonuses as well. We haven't actually widely engaged in those type of contracts. But customers are asking us, okay, why don't we lock in basically the cost per tonne here? And why does Sandvik take on more of the risk? We haven't actually done that yet. I would say because things are becoming more transparent with the systems and whatnot, we're moving closer in that direction, but there's still too many variables in the underground mine environment that we can't control yet. But we're controlling more and more of them as time goes on in terms of transparency and information. So it's becoming more attractive possibly to look at that type of logic. And then expanding market size, more mines are feasible. If you can lower the cost per tonne and you lower the cutoff grade, more mines are going to be in operation. And as Henrik pointed out, I mean, mines don't close that often. When they become more productive, this is extending mine life. It's putting previously unfeasible mines back on the map as well. And just some of our clients that we've deployed this commercial logic or business models across a few of them that we've already talked about. Codelco, Henrik mentioned, we've made a couple of recent announcements around autonomous loading and hauling at Codelco at both Chukhikamat and El Teniente. So we're very, very happy about that one. You heard about Hindustan Zinc also in the OptiMine room. But looking at the particular customers' summary of how they view this as well, we thought it'd be interesting to put in a slide. This is actually from the investor pack of one of our clients Resolute, who we've talked about before. But this implementation is now much further along than it was last time we discussed in 2017. And this is Resolute's own slide on their PowerPoint template regarding the impact of automation. So again, the same three themes there that we always talk about: increase productivity, reduce cost per tonne, improve health and safety. You can see them all there, and you can see the numbers that have been presented by that client to us and to their investors. Interoperability increasingly important. What does that mean? That means that when we deploy these software solutions, they have to be able to communicate with other equipment and other systems at the mine site. Although we would like to have the entire mine as an orange mine, as a Sandvik mine, that's a bit unrealistic due to procurement strategies and things like that. The competitors are always going to be knocking at the door there. So to make it easier for clients to invest with us as well, we need to be increasingly interoperable. And we also need to communicate across different types of wireless networks, okay? So we talked we had the connectivity question a couple of times in some of the sessions. But what we're doing now is we're putting our we're positioning ourselves so that we're fleet agnostic and we're network agnostic. So you see here narrowband, LTE, Wi Fi and 5 gs. Narrowband is basically sub gigahertz where you can transmit a little information on a leaky feeder radio system. Every mine that operates has a leaky feeder radio system at a minimum to communicate with walkie talkies. If you don't have Wi Fi, you at least have a walkie talkie. And we can also transmit data across those systems with our NuTrax acquisition as well. So there's no part of the mine that's dark anymore really for this. And I mentioned Hindustan Zinc a minute ago. That was kind of a big announcement we made back in November where we're connecting 166 machines at their SK Mine in India. Turns out only 75 of those are Sandvik and the rest are non Sandvik. So there you go. There's another real example of interoperability as well. So that was part of the logic that was behind the NuTrax acquisition. So to get to maximize the OEE, it's no longer good enough to just look at your own fleet A, but the entire fleet B. You need to look at people, machines and the environment because all of those things affect how much you're going to get out of the mine. And that's why we've cast the net a little bit wider here and why we've gone now with an acquisition of an underground Internet of Things provider that can measure where people are, can measure what's happening in the mine, can also collect data from non Sandvik machines as well and feed that data hopefully into Optimite, but in the interest of being interoperable into any system as well. And small company, 120 people, but growing very fast. And the reception from our customers has been excellent on this. So with that, I'll turn it back over to Henrik. You might remember from this morning, introduced our new 2,030 sustainability targets. And I wanted to touch on sustainability and show you an example of how sustainability and productivity go together with our customers. And I'll start with our SMRT sustainability strategy to put things a little bit in perspective. So first one is, of course, to work with our own operations. We can improve the energy efficiency and the greenhouse gas efficiency of our operation, minimize waste. Again, that makes a lot of economical sense as much as it makes sense for the environment. And also optimize our logistics. I used to be responsible for the Rock Tools division and we managed to half the amount of product or half the volume that we put on airplanes. And by doing that, we save the equivalent of 30% of our of the rock tools emissions in total just by shifting from airplanes to boats and trucks and trains. We want to have a greenhouse gas efficient offering and here is where we can make the most greenhouse gas emissions. So we are going to introduce greenhouse gas and sustainability as criteria in our product development, in our supplier selection, etcetera, to drive that performance, again, obviously linked to productivity and sustainability together. 0 Harm and 0 Tolerance, to some extent that goes without saying. We 0 harm is our vision. We do not want anybody get hurt at work. We have a ways to go as you saw previously, but that is our vision that we can and we keep striving towards 0 harm. Luckily, most of our accidents are not serious. It's fingers, hands and so on. But still, there are too many and we need to reduce in CEROS division. And obviously, being compliant in every aspect of our business is non negotiable, 0 tolerance for anything else. Now if you take the mining emissions and I'll get back to that in my example, but if you take the total mining industry, the CO2 emissions are about 800,000,000 tonnes. That's about 4% of the global greenhouse gas emissions of about 20,000,000,000 tonnes. So 800,000,000 tons. If you look at what we can impact, well, with give or take 25% market share that we have, it's about 200 of those 800,000,000 tonnes. If we look at sand mix emissions, it's about 380,000 tonnes. And if you look at SMRT, it's 70,000. So just to put things in perspective, where we can have the biggest impact is with our customers. Now I'll show you an example. We're going to take you back into the mining environment. So start with a short trip down back into the mine. So get you both get you all back in the mindset of being in a mine and drilling. So you saw a 3 boom tunneling jumbo. This is a twin boom mine tunneling jumbo. Now if you drill with unsophisticated tools and the wrong equipment, well, you're going to drill less straight holes. And you drill every hole 4 meters, but they're crooked. Well, the rate of advance you get, because you're going to fill those holes with dynamite, blow it up and then move the rock away and then you've advanced. The rate of advance you'll get on average is about 3 meters. So you drill 4, you get 3. And the profile that you get is crooked. It's hard to see. It's a bit light gray, but you get an uneven profile. So if you look at this profile is pretty smooth that we have in here. If you would have blasted it this way, you would need a lot more cement to create this, right? But if you then drill straight holes, something different happens. Then your blast is more efficient. And the rate of advance can go from 3 to 3.5 meters and your profile is smoother. This is maybe a tad exaggerated, but it will get better, right? It will get better then you need to move less material, you need less cement. And if we then combine that with automation, electrified equipment that can move faster, etcetera, then you get more out of your underground mine. And some of you commented and we've talked a bit about ventilation. Ventilation can be as much as 60% or 70% of the energy cost for an underground mine and energy is a big part of their OpEx. So and that's going to that's running regardless if you're advancing at 3 meters or 3.5 meters. That engine is running all the time, right? So if we do this, we get a better fragmentation and better profile. We go in faster, more energy efficient equipment. We go in with electrified equipment, etcetera. Well, the emission potential we think if we look at all of underground hard rock mining is 30,000,000 to 50,000,000 tons, but we could impact 12,000,000 to 20,000,000 of that. If we grow our market share, we can do more. But again, you compare that to our own emissions. This is where the bang for the buck is when it comes to sustainability. We have to do our own operations. That goes without saying. Absolutely, we have to do that. But here's where the big bang for the buck is both in money and in sustainability. And that's a key reason I'm excited about this. Now I mentioned being agile and managing with the cycle. Some of you who followed us for a while will know that in 2016, our EBIT margin for SMRT was not great. We're sitting at 10.5% and the year before that, it was even lower. Now in the last quarter it was 17% and last quarter last year, which is quarter 4 is usually a better quarter for us, it was even higher. Now, well, Bjorn kind of stole my thunder on this one, but our target is to stay above 15%. And the way we're going to do that is, obviously, we have detailed contingency plans and a trigger system to set them off. It doesn't happen at the same time in each division in every part of the world. So we have to be a bit more focused or surgical than that. Then we have a flexible manufacturing setup. So we have satellite factories around here in Finland that handle a lot of our assembly capacity at the moment. We have factories in factory where we have a part of our site here in Tampere that is operated by an external provider. Then we have 3rd party workforce, time banks, etcetera. And then we're going more ambitiously after fixed cost to stay above 15% in a down cycle. One of the things that we haven't talked so much about also because we're here in our pedestal drills, these are larger surface drills that drill with only with rotation. So you put a weight on top of the drill string and you rotate the drill bit and that's how you drill. Those drills look like this. And made in Alachua, it's been a not strong performing part of our portfolio. And coming back to this evolving our portfolio here is an area we're working to turn this division around. And we created separate focus on it by making a division recruited a new management team. And we have an offering underway that we are excited about and also our customers are excited about when we talk to them about it. So this is a focus area for us to turn this business around and take a leading position or recapture our leading position in this. You would have seen some of the acquisitions that we have made. So INROC and Horizontal Directional Drilling, Artisan in the electric vehicles and then NewTrax, as Pat talked about, in the process of divesting Vale Oil and Gas. And we'll keep looking at the portfolio. And if there are things that we are less excited about, areas that grow a bit slower, one thing that we're looking at is the development of the coal market. Now coal is going to be used in the world, I'm sure, for the next 100 years, but hopefully less and less for the sake of the environment. But if it's less used, then it's not so good for the business of coal or the coal mining equipment. So that's one thing that we are looking at and seeing if we should do anything different there. So a brief summary and then open up for question. We feel the markets are robust, maybe slowing down a little bit. We see some indications of that, but there are a lot of things that are positive and commodity prices have remained at strong levels. We'll drive for more customer focus, more customer closeness and drive those productivity improvements for our customers. We think that's going to gain us share. We'll shape the industry and work very hard in the digital space to shape that ecosystem. We'll continue with our decentralized organization and drive really hard to stay above 15% should the market turn on us and then continue with the selective M and A. And that brings me to a close of the presentation. Happy to take any question. Questions, if we have microphones ready. Yes, we do now. Very good. Wide awake. And do we have any questions? Claes is on the ball. Yes. We go for Claes, please. Right at the front. And then we have someone at the back. Yes, number 2. Thank you. I had a question on Optimine and open source. I mean, we talked about this before, but also want to hear from you, Henrik. There are 700 machines connected, seems to be around half Sandvik machines. You have now decided this is within OptiMine only. You have now decided to open up your systems more. You have new tracks. So you're becoming more OEM agnostic. When you look at other OEMs out there, are they also opening up? Because one of the key hurdles to see mine automation really taking off is that COMACIO has been sort of holding back, and obviously, they're also surfaced. But it would be interesting to hear if this is a trend with everyone becoming more OEM agnostic. I'll let you answer that, Pat. Yes. I mean, look, it's clearly things are headed in that direction. I don't think it's kind of if but when as well. I think some OEMs, us included, have viewed historically that holding the data and keeping that proprietary is an advantage for us. But what's clear is that the rate of adoption in the business in these areas is not increasing fast until these systems can be interoperable because the reality is that there's many OEMs at a mine and there's many systems at a mine and they have to be able to communicate with one another. And the other important just a couple more important points to follow that one up. First one is open source is different than interoperable, right? So our software is not open source, all right? So we no one else can change the programming in our software, but it does communicate with other systems as well. And then yes, that's the I guess the main one, the main point. I guess what I'm trying to ask is whether OptiMine can also not only in the duopoly become relevant, but whether it can be relevant also outside. I mean, when you look at CAT and Komatsu, whether Optime can take a bigger share as a platform for automation? Yes. And I think no, absolutely. I mean, our view is that OptiMine can be purchased or engaged on its entire scope, which is quite wide and the scope increasing all the time, but then some customers want bits and pieces of it as well. But I think what makes any software package in this business really become important in the industry is to the extent that it can be easy to implement, which means interoperability and then demonstration of return on investment. Those are the 2 things that are going to really determine who wins and who loses when it comes to the mining software, and I think we're well positioned for that. Good. My final one is on the portfolio. Obviously, Hendrik, you talked about mechanical excavation, coal, you talked about Varel, and these are areas that Bjorn and Tim have talked about before. The importance of being number 1 and number 2 sort of for the whole group and for SMRT. Obviously, crushing has seen a big improvement in the margin and a job well done. Where is crushing right now relative to competition? Because you have some quite big players out there. Is crushing still within the 1 to 2 position or below? For stationary crushing, we're I feel we're in the number 2 position and strong performance of that business. Mobile is much more fragmented industry. We are one of the stronger players. Our estimate is that we are somewhere in that number 1, 2, maybe 3 position, but strong. And like you said, the business has performed a lot better. And you look at from an aftermarket point of view, crushing is fantastic. A stationary crusher can consume the equivalent of 7 to 10 times its equipment value in wear and spare parts. So definitely see it as core to the business. Thank you. Yes. Do we have is that Graham? Yes, please. Yes. Graham Phillips from Jefferies. When you talk I take your point about coal and the fact that the market may be one that you don't want to be in longer term. What sort of products are you supplying to the coal market? And what implication do they have on the portfolio? And the second part to this is that, of course, your biggest competitors on the surface are very focused on coal and soft rock. Are you worried that they're going to start to develop products so they can capture this growth in the underground market that you've well and truly talked about today? If we start at our portfolio targeting coal, it's we call them bolter miners. So it's continuous miners that have bolters on them at the same time. We also make continuous miners, but they are part of developing coal mines for long walling production, but also their production equipment in room and pillar coal mining. So room and pillar you have in the U. S. And South Africa, a little bit in Australia. Australia is more longwall than that. And China is mostly long walling. So that's the equipment. And obviously, what we there is a spectrum between do we try to grow the business? It's well performing at the moment. Do we try to grow it aggressively and acquire? Do we invest a little bit less? Or do we look at reducing our position or maybe even exit? So we're looking at that spectrum. When it comes to surface and underground, I mean, the product offering is so different that and so you've got Joy Comazzo and Caterpillar dominating the surface space. And Cat is in underground with load and haul. Joy is in underground with coal for sure, but or Komatsu and Joy together trying to break into hard rock, but it's very different from what they know how to do. So from that point of view, a bigger challenge. So our biggest challenge when it comes to the surface players is CAT for underground load and haul. But they've been that for the last 10, 15, 20 years. So that's not new. They're big, strong and important competitor for us to watch. Welcome back from the coffee break. And now finally, what you've been waiting for, the to be separated business area, Sandvik Materials Technology. My name is Jarden Bjorkmann. Maybe you wonder why we have a guy in space on the first line and so did I when I received the phone communication. But obviously, these solar panels are produced using Cantal's heating technology. And we also have products in space. We have hydraulic tubes in the SpaceX. But with that said, the rest of the presentation will be much more down to earth. I will very shortly give you some facts about Sandvik Materials Technology, elaborate a little bit on the performance of last 2 years, go back to a slide that I used 18 months ago in the previous Capital Markets Day. And then end this presentation with my view on SMT, on our capabilities and our strategic direction. So last year, we invoiced SEK 14,300,000,000 that's restated excluding the Powder business that was moved to SMS at year end. We had an underlying margin of 7.6%. I will soon show you sort of the performance improvement, but this is in line with the targets we set up to meet 10% this year. If we look at the revenues and how they are spread geographically, We're close to 20, 60, 20, 24 in Americas, 57 in Europe and 19 in Asia. This is how we invoice. This is our invoice customer. Our products end up very often in different ways than this shows. We for instance, we sell umbilicals to Norway and most probably the umbilicals in the end end up somewhere else, maybe in the Gulf of Mexico or outside Africa. But this is our invoiced footprint. Look at other segments. Energy is important for SMT, and I think I will show you later on, I think energy is something good to be in. Oil and Gas, 18%. I will also describe a little bit how I view the oil and gas market development. But we're also pretty big in other segments. And part of the strategy that I will share with you is that some of these segments are also our focus segments when it comes to growth. And I will not bore you with organization charts, but I'll still show you that we are today 3 divisions: Tube, Cantal and Strip. They are very different in size. Tube is roughly 70%, Cantal 20% percent and Strip 10% of the revenue. All three of them have their own product development, But centrally, we share what we call strategic research. That's where we do alloy development since all divisions sort of share the alloy portfolio. This is the slide I will talk a few minutes about. I think I used this also 18 months ago, showing the S and T performance from 13 to 17. I added on the 18, of course. And I also think I said something like this is not at all a performance that we're proud of, and I think I also said that we were underperforming. All businesses has its up and downturns, but I think what we did not manage in the downturn with the oil price, 14%, 15%, 16% was we were much too slow on acting on that problem. I also think I said that I see a lot of potential when it comes to commercial and operation excellence. That was only 3 weeks into my position. So of course, that was a pretty quick conclusion from my side. But I have to say, more or less, I still have the same conclusion. I maybe found some more potential, but I have the same conclusion today. And sometimes I make a joke with my boss because at that Capital Markets Day was when the 10% target was launched. So that's also a way to have sort of the yearly goal dialogue. But it was a good target. Now when I came back from that Capital Markets Day, I gathered my management team, so it's okay, this is now the target. We debated, is it a run rate target? Is it run rate Q4? What is it? And so the simplest way to do the math is it's a full year target for 20 19, and let's see what we need to do about this. What we have done, and I think that has been good for the process, is that we have looked at the short term plan. But in parallel, we also worked with our long term strategy. The short term, a little more top down and the long term more divisions. And we have had one rule, and that is we are not allowed to take decision that would give us sort of meet the target in the short term period if it hurts the long term perspective. So all the things well done should also be sustainable and help in the long term strategy. So what you see, we have managed to turn the curve. We had a pretty good year last year, and this year will be even better. The 10% target is there, and we will meet that. So looking so what has happened then? And if I start with the market, I mean, the market has helped us. It part of the tube business came back in a better shape last year than it sort of had a few years earlier. Oil and Gas, and I don't think we have communicated that so clearly because a lot of the other business has improved somewhat. Oil and Gas was a pretty poor year 2018. It was actually worse than 2017. But now that is picking up. We have had an, I would say, impressive and very good order intake since Q4 and now also into the Q1. The trend of moving from gas furnaces to electric furnace is also important and is helping the Cantal improvements. So what have we done? And I've divided them in 2 areas. 1 is more sort of how do we manage and the second one is what have we actually done. And the first one, try to sort of build a better execution culture in SMT. I think we've had a tendency to act too late. I think we've had a tendency to when we don't meet our plans, let's make a new plan, try to change that. We've implemented a simple but effective performance management. Of course, we use all the numbers. And Thomas, your scorecard is they are magnificent. But we also implemented what we call a key initiatives review. So if you make a plan and you commit to a number, you also need to think about, so what do I need to do and what do I need to achieve? And every division has sort of their top list of things they promise to do in order to reach the targets. And we do that bimonthly. We follow-up these key initiatives. First, we check, have you done what you promised? 2nd, did you achieve what you expected? And that is now sort of there were some questions when I installed it, but now it's sort of part of our normal way of working. If we look on the initiatives as such, we have optimized or I would say cleanup part of the portfolio. We have sold off both wires, both the welding and the stainless wire. We sold the majority of our shares in FOGUSO Stainless. We have a little bit part left that we're going to sell later this year just to have a place in the board to check that sort of some contractual things are met. Also part of Cantal Components, that is also divested. All of these businesses where we could not be number 1 or number 2. We have worked with cost efficiency, both from spend point of view. And I've seen so many spend programs where you sort of measure what would have been if I didn't negotiate. This has been bottom line spend programs. So the money is out or the cost is out. Also reduced the number of people and then kept that at a decent level even with the growth. So we've driven productivity last year very much with lower number of people and increased volumes or not that much volumes actually. It's more value because volumes are not that much. We work with mix optimization, also price management. So in some of the areas where I would say we have improved or maybe that is too nice to say, we have implemented price management. Mix management mainly in the tube but also in the Kantal system, lowering the volumes on the less added value products, the lung products. In strip, we have we pushed a lot on having a price structure that reflects our market position, meaning we have stepped out of some businesses that didn't that were too bad. We've also done footprint changes or at least communicated. I think many of you might not know that. So I have a slide on that. That has not at all helped us so far, and they will not help us 2019, but we'll have nice effects of those going forward in 2020 2021. And we also managed to increase the manning flexibility. So I think we are better prepared for a potential downturn, and at least we will act much faster if that comes. So Tube division has worked through its footprint and to look for opportunities and not only from a cost point of view, that is of course important, but also from a market position point of view, both to help the decentralized organization, which in the tube case is very regionalized, but of course also to reduce costs. So we have taken a number of decisions late last year and the beginning of this year. So we will or we are right now closing a factory in Canada, in Envoy Canada, moving that volume and that business into Scranton Pennsylvania and U. S. We're also and that will be done end of the year. So we will have effects from that in 2020. We've also announced the closure of 2 factories, 2 production mills in Sandviken, one for heat exchanger tubes and one for instrumentation and hydraulic tubes. And we will move that to Komotov in Czech Republic. That will be done in phases, 2020, 2021. We also merged 2 production units in Europe, 1 in France and 1 in Germany. And we are increasing our capabilities in India. We do that also in phases. So Phase 1 is now done, and we will do that with 2 more phases in next year and the year after that. All in all, this will be nice effects after 2019. So if I look at Sandvik Materials Technology, what kind of company are we? We call ourselves material technology for a reason. We don't call it steel, even though most of the products we do are kind of steels, superalloys, stainless steel. But we are very different from many other steel actors. That graph represents the world market for steel. It's 1,700,000,000 tonnes. Out of that, a small part is stainless steel and a small part of that is where we act. So from a steel community point of view, in volume, we are extremely small. But in all markets where we act, we are big. We are normally number 1 or number 2. I will not share any numbers, but if you should check some other companies and you look for added value or price per kilo, you would see huge differences. And you can check some Nordic players. I think we are the innovation leaders, and I would soon show you, I think, an impressive portfolio where I'll see at least in the Tube division. I travel a lot, but I should probably travel even more and meet even more customers. But when I meet customers, I'm always impressed by the long term relation we have. It goes decades back. In many cases, we have developed solutions and product together. So the way we work with the customer is more almost like partners. And I'll also show you, I think, the world needs to be changed, and I will show you some of the trends. And I think we are very well fit for the trends of both sustainability and energy efficiency. I will go through 3, I think of course we have more, but 3 capabilities that I think are crucial for our success. And one is our supply chain where we are fully integrated company. I know some people, probably some in this room also sometimes ask me, shouldn't it would it be easier if you didn't have your own smelter? You would have a lighter balance sheet with less fixed costs. Sure. But I view it the complete opposite. This is, I would say, the key competitive advantage. With having a fully integrated supply chain, of course, we are independent. We control the quality from start to end. And most important of all, to be premium player, you need to constantly introduce new products. And to be able to do that as a material technology company, you need to have your own metallurgy. So having our own metallurgy is key for SMT. Our footprint, I think, is another capability that makes us strong. Sure, Sandviken is our main site. It will continue to be our main site. That is where we have the large steel plant. We have a small one in Hallstahammer in the Cantal structure as well. This is where we have the hot work in the majority of the extrusion presses, big part of tube production and the strip production. And of course, this is the main, main hub for R and D. But we also have a lot of production units globally. And we're also building some of those stronger. I would say with the as I said before, with the changes we do now in Tube, we are increasing also capability in North America. Scranton will be stronger after the closure of Anpyray. Komoto will be stronger after the move from Sanviken. And we are building Messana in India much stronger. Messana in India used to be just an extrusion plant. We put in some cold working capacity over the years. But looking at that, we have so many opportunities if we increase capability in India. There is a big growing industry that fits us well, but you need to be local to be able to compete with the prices. And you could do that with extremely interesting profit margins if you are local, and that's why we're increasing capabilities there. The global footprint gives us also sort of the feeling of that when you're out in the marketplace that you have your own production. So it's helping up the so that the governance structure and the decentralized structure we have in S and T. You feel you have your own production. It also helps with, I would say, backup flexibility. The same kind of products are produced in more than 1 unit. And also the opposite, with a footprint like this, we can afford to have few units also being specialized. And last but not least, as a world class capability, that is our R and D. I mean, I have colleagues in the industry that has sort of a different setup when it comes to R and D. I think we have most of our expertise in house, and I think that is a strength. We have over time developed sort of knowledge and expertise in our area that is world class. And with the long term relation we have with our customers, we know our customers very well. We understand the needs. We understand the processes. And to mix these two together, I think we have a leading position when it comes to develop product fits for our customers. Looking at the global trends, I mean, we all know those population. We get more and more people on the planet and they are sort of more and more wealthy. We would need more and more energy, more medical care. Globalization, we need to travel in a more environmental friendly way than we used to do. With more need of energy, we need to find other energy sources, and we need to work with energy efficiency. All of that puts higher demand in materials. So this is a perfect place to be with these trends if you are good in material science, which we are. The world will need stronger and lighter material, more heat resistance and in many cases also more corrosion resistance and fatigue resistance. So in my book, we are perfectly positioned for these trends, and it's up to us to work with product development in a clever way. Digitization also opens up for, of course, internal efficiency, but also finding new business models. I will show you one interesting example in a minute. So put this together in one way to describe our strategy. It would be much more interesting the slides come across then we will dig into the divisions. But if I look at SMT overall, with the capabilities we have, with the people and the products, we should have industry leading financial performance. We could have no other target. Our business and industry is volatile. That's part name of the game. But I think we have both when it comes to portfolio and also to how we manage things, we have both the ambition, I think we have the potential to reduce volatility and that's a strategic target for us. All of this, the main enabler is that we should be number 1 in Materials Science. We've put the strategic targets in 5 different boxes. I mean, you could do in different ways, but we have chosen 5 different boxes. Customer focus, of course, that's the highest priority after safety. And I will not go through a lot long list, but things like in sports, you should develop your talent. We are very good at long term relations. We should build on that and be even stronger. Then there are things we could do more effectively. There are potential to do sort of handle the customer relation in a more seamless way and a more effective way, and we have digital solutions ongoing for that. Moving into the innovation part. As I said before, parts of our business now has a very strong portfolio that we need to capitalize on. Other parts need to speed up its new product renewal. And to be really successful, I think there are things when it comes to innovation where I really think we can improve and that comes to commercialization, industrialization. We have good ideas, but we need to put them in the market faster and secure that our production technology and supply chain is efficient to produce those. Ability to industrialize, that's a lot of the things that we have done and are doing now short term, pushing operation and commercial excellence. After these 2 years when we met our target, of course, there will be more potential because every time you improve something, you find even more things to do. And in my visionary world would be that in the future when we should be so good, so when we do an acquisition, you have synergies from day 1 because we know how to do things. The 2 last ones, expand the segment portfolio and our geographical position, they go a little bit hand in hand. They are there for, I would say, 2 main reasons. 1, there are market shares to grasp. There are segments where we are not as strong as we could be, and there are geographical markets where we could increase our market shares. That is one part, an obvious one. Another part is also to help us and to support the target of reduce our volatility. If you have a broader portfolio, your volatility actually becomes smaller. So we will focus growth in areas like renewable energy, aerospace, medical, Cantal Gas to Electric will grow Cantal in the future. But as I said, it's more interesting to look into the division. So that's what we're going to do now. So we start with 2. But I think I have been around for many years now, and it was a long time if ever I've seen such an impressive list of new product introduction and interesting products. Tube is in a very good shape for introducing new products. Tube is also, as I said, focusing footprint changes. And what I'm probably most proud of and happy about is that we for once, we take decisions before we're forced to take the decisions. Last number of years, we have been forced to do things and we've done it sort of in the last second or too late. Now we're taking decisions and we can control it in a clever way when it comes to move equipment, handle our own personnel and most importantly handle and we take decisions before we're forced to. And Tube Division has a very strong market position in most of its products. Just a few examples and maybe you will feel it strange. Sanicro 25, I will follow Henrik's example and say sustainability, we will do our homework, but I think the big impact we can do on sustainability is through our products. And talk about sustainability and coal power maybe sounds strange, but this is a product that makes it possible to run coal power stations at much higher temperature. And with that, you get much higher energy efficiency, meaning less coal for the same number of kilowatt hours. And just to give you a visionary view on that, if all coal power plants in China would install this and use it to reduce emission. The magnitude of that is something between 1,200,000,000, 1,300,000,000 tonnes of CO2. That's sort of the same level as the total emissions from a country like Japan. So the potential is huge. We also developed the first in a long time own developed high nickel product, which is the focus area for Tube. We have increased our capabilities when it comes to nickel based alloys and have an interesting portfolio now of nickel based alloys coming out on the market. Also products for the hydrogen society, I think that's a growing market. And the last one, the 2 production on-site, it's a solution where we move a small part of our production close to the customer. And I will show you a homemade movie on that. So there is production in this container. So we have now one container with a customer who is at this Canton. Let's go in the other direction. That are building hydro station around in Germany. So they move this container and the amount of tubes they need, they take it from this container. We have then a solution that where we of course, that is connected to our production unit, and we do automatic replenishment of that container. So whatever they need, we serve that. Cantal, I think we, for some years, managed to should not use that word, but messed up Cantal a little bit. We put it together with strip, with wire, powder, God knows what. And if you have a lot of operation and you have a problem, you focus on the problem. And I think to some extent, we managed to not focus on all the opportunities there is in Cantal. My long term target is to really grow Cantal. I want to have Cantal at double size one day. They are, as I said before, very well positioned. They have global competitors in the heating material in the wire part, but their heating system, there are no global competitor. So their market position is, I would say, unique. And they are moving from focusing too much on the heating material and focusing forward integration into the heating system where we do finished elements, heating cassettes. We don't do the furnaces because then the margins go down. That's the overall strategy for Cantal. And as you know, Cantal is also a part of a medical business, extremely profitable. And there, we have both organic and probably also non organic strategy to grow that business in a very good way. Moving into strip sorry, some products for Cantal. As I said, going from gas to electric, that gives the customer normally more energy efficient, no emissions, it's easier to control. And if you go into the Cantal homepage, they have a CO2 clock. For every installation they invoice to customer, they have a calculation how much less CO2 we let into the air. And that clock is on their homepage. Semiconductor is important industry for Cantal. Additive Manufacturing, we have started to print heating elements. Traditionally, we do the heating of elements from a wire or from a strip, so that's the forms we have. But with the 3 d printing technology, we can print the heating elements to the shape which is best for the heating technology. And we have the first product coming out now. And if you look into the medical parts, this is example of online glucose measurement for diabetes patients. We have hearing control, heart control, a lot of things. And then to the smallest divisions, Strip division, I think looking at margin development, that is the most remarkable during this time period. They have over the last only 8, 9 months doubled their margins from very poor to pretty good. And with some simple measures, I would say, they managed to do a lean program and with a few simple mistakes, so we changed that. So now the productivity and output has increased. We also implemented a price management tool, so we're focusing prices in a different way, doubling the margins in Strip. Long term, they need to focus more on new product removal. That's the weakness in Strip, and they are addressing that. Some interesting projects, valve steel, huge part of the electric energy consumed in the world is actually for compressors. I think it's over 10%. And through strip, we I mean, the compressors get more efficient and now we're coming with the next generation of steel making the compressor even more energy efficient. HyFlex for Sterling Engines, life cycle assessments, all divisions are working with that. I think Strip is the one that come the furthest, helping customers with a life cycle analysis of the products. Also now starting to end up with scrap buyback programs from our customers. That will also help our steel plant. So if I should summarize this, I think we have done I think we've done well. I think the development over the last years has creating for us a solid platform to develop from. I think looking at our divisions, we have world leading positions in all our markets and with all our products. And we are now very well positioned for strategic growth. And that one tells me I have 4 minutes and 40 seconds for questions. Be quick. There's no microphones on roofs, so we'll use this one. Thanks. So I would like to come back to the operational performance. And looking at the chart you showed us, in 2018, you had revenues of SEK 14,300,000,000 and EBIT of SEK 1,100,000,000. 1,000,000. In 2013 2014, you also had revenues of around SEK 14,300,000,000, but EBIT of SEK 1,500,000,000. So it's a difference of SEK 400,000,000. Yes. What explains that? I think if you compare with this I mean, first, you have 5 years inflation you need to beat with improvements. That's one part of it. We're doing less volumes than we did 2013. And still, even though the Tubular business has picked up, the Tubular business was even at a better level 13. I just want to ask you, obviously, market observers are currently focusing a lot on Sandvik Group without SMT and what that means, but it's also interesting in terms of an own equity story if it would happen that SMT is a separate company. There are high margin areas such as in aerospace, powder, medical, oil and gas. And obviously, M and A would perhaps be a bit tricky within Sandvik for you to do, but outside, there could be opportunities. Could you talk a little bit about margin enhancing or mix enhancing M and A in terms of you don't have to mention any targets, of course, but are the decent targets within these high margin areas? And would that make sense for you to expand into? I will answer the question. I will just say I think I received similar questions in the coffer base, etcetera. I think we have done one mistake when we have communicated. The big tube, what we should call core and standard, which is a big part of our portfolio, that is not that much standard. So also in that area, we have nice pockets of premium products with nice margins. With that said, yes, to your question, I think first of all, I think we have a solid strategy for organic growth. That's the starting point. Then when it comes to M and A, I mean, M and A should support the organic strategy. And of course, we are looking into I mean, as I said, we did an acquisition in Kantar last year in the heating system part. And there are a number of similar companies and those are on my list. I think complementary acquisitions in the segments where we want to grow could be others. Do we have any additional questions? We have one here. Tina, please. Jan Lars here on Barclays. Maybe just a quick one on balance sheet in a stand alone scenario. I think we heard Thomas earlier talk about or management team talk about a sort of cash net cash debt free business at the time of the spin. Can you give us a little bit of your thinking around balance sheet? What's the kind of leverage you think you can sustain? Or should this be a net cash business on a stand alone business through the cycle? Thanks. Let me do it from sort of the different parts of it. I think first of all, we have reviewed our CapEx need for the growth we're looking at. And we have noticed with the high nickel development that we have much more capabilities than we thought. So actually we will I think we have communicated before that we need huge investments to do this organic journey. We will not. We will invest roughly in line with our depreciation. That will help the balance sheet. Then when it comes to net working capital, I think that's an area where we I'm not as proud as I am with the EBIT margin development. And the main focus now will be to stabilize net working capital. I think we are too much up and down. And once again, you need to do things does not happen just because you make a plan. So Tube has a I think they have a solid program now how to control the supply lines in Tubers. So we will have no surprises. So first, stability. And then I think we have room for reducing net working capital because and now that will help us grow. Otherwise, it's too costly. Does that answer your question? Any more questions for Joran? We have one here from Klaus. Yes. A follow-up to Andreas' question before. Can we just measure this from when you took over 5% margin going to 10%. I get the self help to be around half of the 500 basis points. And then you have volume and mix being the rest. Obviously, oil and gas growing from a low level is mix positive. So how much was self help volume mix from when you took over, Jorgen? First of all, we had I mean, we measure mix in different ways, mix in the accounts and between the accounts. And between the accounts, it was a pretty bad year last year because we had a much lower oil and gas business actually. I mean, we I think we all can make EBIT bridge calculations and so do we. What is productivity? How much is price? How much is mix? How much is volume and currency? But that doesn't say everything. So is if we push prices, was that only a performance? Or was it was we helped by the market, etcetera? So I mean, this is not science. My estimation is that over this period, something between 60% 70% is actually performance. The rest is market and also currency.

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