So welcome everyone, all the participants here in Stockholm, and also on the telephone line. My name is Jessica Alm, and I'm the Head of Communications for the Sandvik Group. I would like to let you know that this press conference will be managed in English, so we also include all the international participants at all time. And of course, you can ask questions in the Q&A session, both in English and Swedish, if you would like.
So, the conference will start with a presentation by Johan Molin, and of course, then our new president and CEO to be, Björn Rosengren, will also take the opportunity to introduce himself, during this press conference. After the introduction from Johan and Björn, there will be an opportunity for all of you to ask questions. After the press conference, we will have the opportunity for all the media present here to conduct also individual media interviews with Björn Rosengren and Johan Molin. But with those words, Johan, I would like to hand over to you to introduce the change just announced.
So thank you, Jessica. I think I'll take the opportunity also to invite the other two participants, Mats Backman and Björn Rosengren, at the same time, so that we have a continuous meeting. As you, as you heard from our press release, or you could read our press release, we have, the board has decided to release Olof Faxander as per yesterday, and we—which was announced in the evening, yesterday evening. Olof has had a rather difficult time when it comes to, 4.5 year of a very challenging surrounding market conditions. And we felt also with the, as you could see from our half year reporting, that the situation for Sandvik was also new continued challenges.
We felt it was a good opportunity then to release and change at the helm of Sandvik to someone new that can start all over with strong drive to go meet the future of the Sandvik. And in this case, the selection was on Björn. Björn, that I know very well from, we have worked a little bit together in previous years, and then, but I also knowing from what he has achieved during his career. He has had very good success now lately with Wärtsilä. And Björn will very soon also present himself to you. Before we move over to Björn, I'd like also to introduce Mats Backman, who has also a good rep track record within Sandvik. He will take the interim shift during this period.
Björn will start the first of November this year. Mats will take the three months in between and be interim, and together with me, and probably also some, to some extent, Björn, he will manage the company. And what his, the word from us is business as usual, so we, there are many good projects running within Sandvik. And the target we have here, or have set this, during this interim period, is business as usual and deliver on those projects as such. So with those words as introduction, we will open up very soon for Q&A. I would like also Björn to introduce himself to you here today.
Thank you, Johan. Yeah, my name is Björn Rosengren. I know some of you before from my previous, uh, years. Uh, first, I would like to say that I'm excited and, uh, privileged to have this opportunity to, uh, to be CEO of, uh, Sandvik, a fantastic company, and, and I'm really looking forward, uh, to this, uh, challenge. My, my history is, I'm an engineer from Chalmers, and I've been a number of 10 years in the ESAB Group. Then I spent a couple of years up in the north, in, Kramfors at the Nordhydraulic. Then I moved to Atlas Copco, where I spent 13 years, uh, where of nine years heading the mining and construction, uh, part of the business.
Then, last year that I spent one year in China, and, the last four years now, heading Wärtsilä, which also has been, both exciting and, fun, fun thing to do during these years. I, I'm 56 years old. I have a family. I have three kids, and, we've been living now in Helsinki for the last four years. Still have, though, my house in Stockholm, so I'm don't have to jump into this very difficult housing market as it is, but, I can just move back to my house apart, so looking forward to that. I will be continuing running Wärtsilä until end of October, so I will be doing the Q3, and then I will be handing over to, as you all know, to my colleague Jaakko Eskola, who is an excellent candidate to replace me as head of Wärtsilä. Good. Thank you.
Thank you. And with that, then, we open up for all questions. We can start with the audience here in Stockholm. Please.
Yes, thank you. Peder Frölén, Handelsbanken. Johan, first question to you, please. From your experience now in Sandvik, what are the most obvious and immediate actions that need to be taken for the group? Yeah, I'll stop there.
Well, I think what we have seen in the surrounding world, which you could see in the half-year reporting also, is that we meet another slight downturn in parts of the business that we haven't seen before. So, the short term is business as usual, but also to, of course, adjust to those, that new challenge that we see. So that is in brief what is on the agenda before Björn is coming.
Thank you. Any other questions from the audience here in Stockholm? No, then we go over to the— Oh, sorry, we can take one more question here in Stockholm. Okay.
Daniel Schmidt from SEB. I just want to ask you, Björn Rosengren, then, you are coming from a fairly successful journey at Wärtsilä. What's your feeling? What's the main attraction for sort of switching? Start with that.
It's true. I really enjoyed my time in Wärtsilä, and still do. I think it's a great company and great years. I think also when it comes to my age, I'm getting closer to the last part of my career, and I'm excited to do one more, say, job before I end. I would like to do that in Sweden. I would like to do for a Swedish company, and I couldn't think of any more exciting company than Sandvik.
If you sort of also take into consideration your history in Atlas Copco, and especially in mining construction, then heading up that for nine years. If you take that sort of experience that you have from that period, and also compare it to the main competitor, which you're now joining, and if you exclude mining systems, which is sort of a bit specific for Sandvik, do you see any sort of obstacles for that part of the business to reach the Atlas levels? Any structural sort of reasons to think that it couldn't?
You know, I'm planning to, you know, when I start to spend a lot of time out in the operation, get to know the company more in detail and dig into, you know, all the pros and cons and the opportunities in the part. And then plan to come back, you know, maybe, you know, a half year after I join the company, and then we'll come back with a strategy and what kind of actions we'll be taking. So but, you know, I think the mining and construction business is exciting, so I'm looking forward to dig into it again.
You have to try. Thank you.
Thank you.
Thank you. We go over to the telephone line, where we have opened up the first question there.
Okay, and we have a first question coming in from Mr. Guillermo Peigneux from UBS. Please go ahead.
Hi. Good morning. It's Guillermo Peigneux from UBS. Good morning, Johan Molin, good morning, Björn, and congratulations on the move. I just wanted to ask a question regarding potential restructuring and the shape of the group as it stands. I think one thing that we've learned since 2008 is that Sandvik has put cost savings efforts of around SEK 12 billion or even more Swedish krona. And you know, the operating profit in 2014 is just SEK 10 billion Swedish krona.
So it seems like a lot of restructuring initiatives have been put in place, but nothing has been seen. A lot of, you know, your predecessor, Olof, tried to actually change the structure of the group, but that was, that was not executed. And, you know, at the same time, huge management rotation, and I guess that impacted as well, you know, employees' morale. So, so I, I just wonder whether, you know, it is only restructuring that we can continue to do on Sandvik, or you're looking into other options to, to, you know, mark a turnaround on the company. Thank you.
I think it's too early to, you know, go into any details of what we're going to do with the Sandvik Group. But you know, you have to give me the time to look into it, and we have to. I have to get to know all the people in the group and visit all the locations and meet the customers. And I think until then, Mats will be, you know, focusing on the operation, making sure that we, the customers are happy and that we deliver what we should be doing, and I think that should be the focus in the near future.
Okay. Thank you.
We have another question on the telephone.
We have a next question online coming in from Mr. Andre Kukhnin from Credit Suisse. Please go ahead. Hello, Mr. Andre Kukhnin, your line is open now.
Try now.
Okay, it seems like we lost that, so see if we have any more questions from the audience here in Stockholm. Yep.
One short, Mats, for you. The book value SMT right now is at around SEK 12 billion or something like that. And secondly, to Johan, although before your time in the board, could you share some light over the discussions in the management team and the board, maybe regarding the SMT eventual divestment during last year, if there were any such discussions?
Since it's history, it's very easy to tell us, right?
I mean, it's, I mean, it's difficult for me to answer that. I mean, that is more kind of a board question, really. But the book value for SMT?
In terms of?
What's its value in the books, do you have that number updated?
A lot to ask them.
Exactly. No, I can give you that number later on.
Yeah.
Yeah.
Yeah.
So I'm not surprised. I would not have it in my head either. So, of course, there's been discussions, but I think that has not been during my time, really. I'm rather new as chairman for the company, and my first period within Sandvik is to learn the business. And so I spent a lot of time traveling, among others, together with Olof, and also meeting the business area responsible, and also the total management team. So I don't have much of a comment to that question regarding SMT's discussions. I have not participated in many of those.
Okay, thank you.
If any.
Thank you. Okay, we'll take the next question from the operator.
Okay, and the next question in line is coming in from Andre Kukhnin from Credit Suisse. Please go ahead. Okay, Mr. Kukhnin, your line is open now.
Thank you.
Okay, then, we just move on to Mr. Sebastian Growe from Exane. Please go ahead.
Hi, good morning. First question for you, Johan. I mean, you spent several months now looking at Sandvik, and what is, in your view, the biggest challenges the group is facing? Is it just end market weakness, market shares, cost base, portfolio? I mean, some color on this. And a second question for you as well, what was the trigger for the change? I mean, were the results not in line with board expectations, weaker demand trends in H1, or different views with Olof on how to lead the company?
First question, then. I think Sandvik is a great company. I have read the history of Sandvik, and that gives you a lot of respect. I see also the assets that Sandvik is sitting on, a lot of knowledge around across the company, both in how you go to market, on innovation, but also and in structure, which means that it's a very global company, so we have access to the global market. So I feel there is a lot of potential within the Sandvik Group, which I would love to see Björn release. And what was the trigger for change? I think for anyone that sees the development of the Sandvik Group, you can see that it has not really developed very well on the stock exchange. We, and the, and we have had a number of challenges.
I must admit also that the market conditions have not been ideal, far from. It has been very tough. Olof has done a lot of good things during his period of time, but unfortunately, it has not been enough. And now we saw the market is weakening a little bit again, as we saw in the half year, and it was the opinion of the board that we—it would be very difficult to retain Olof to take another round of what has been done during these four and a half years. So we felt it is better than to look for a successor that can take it with new eyes into the future of the company. And as I mentioned, that we think it has a bright future ahead, so I'm looking forward to this new situation.
Okay, thank you.
Thank you. Another question from the operator.
Okay, and we have our next question online coming in from Mr. [Nick Wilson]. Please go ahead.
Good morning, it's [Nick Wilson] from BES. Two quick questions, if I may. One, just to go back on something, just to check, can we expect some form of strategy review? Björn, I think you said maybe after half a year of you joining, so you have a chance to get the details in place. And then with apologies, second, very blunt question: Are both of you now incentivized heavily for an increase in the share price? I mean, I note where Johan's comment, obviously, that Sandvik hasn't developed well on the stock exchange. So I'm just interested in terms of, you know, how much of your kind of personal drive and incentive is now directly linked to the share price appreciating. Thank you.
I can start with the first question. Of course, we'll go do a review of the strategy together with the management team. So first, we'll be spending time, and I will be working with each of the person in the team and to get to know the business and their strategies for each business. And then we'll be reviewing it, and we will definitely come back with an updated. What the changes are today, it's premature to answer at this stage, but sure, we'll have a definitely a go through in details.
When it comes to incentivation to the share price, there is no direct link, but of course, share price is a link of the performance of the company. So, we first, I am at least shareholder, and I know that Björn will probably become a shareholder, at least I, I'm rather sure that you will. And that is, of course, an interest center that we take direct into the share value as such. But also then when it comes to management, the normal way or remuneration, short-term incentive, then performance per annum. Björn is, of course, under that and the whole management team as well. And there is also a share program, long-term incentive, which Björn and the rest of the management are participating in. So they have a direct link to the share value since they are shareholders themselves.
Sorry, just a quick follow-up. Do you think you need to increase the amount of the total compensation linked to the share price, or are you... Sorry, Johan, in your mind, are you happy with the current structure?
Answer is no. I think the LTI is a very strong program. Then, of course, on a private basis, it's open to anyone who wants, and if Björn wants, he can also invest into the company, and as I have done myself.
Thank you.
Okay, we take some questions here from the audience in Stockholm.
Yeah, just a question about Faxander leaving Sandvik. How much is linked to-
Could you speak up? It's difficult to hear.
Yeah. How much, yeah, of Faxander leaving Sandvik, Sandvik is linked to what has happened in the civil sector and how much is linked to Sandvik specifics?
I saw it was very popular that that was the case. But I would say that Faxander has worked for Sandvik, and it's related to Sandvik and what has happened here. We have looked at, me as chairman, but also the whole board, we have looked to the situation, and our assessment, as I mentioned then, was it's very difficult to reignite for another round of four or five years forward. So we felt it was a good timing then to look for a new CEO.
Okay, thank you. Next question here from the audience in Stockholm.
Two questions, if I may, to Björn. Firstly, what are the key lessons learned at Wärtsilä that you think that you will put into practice at Sandvik? And secondly, what are you leaving, unfinished at Wärtsilä?
Well, the first question is, I think there are three words that I think is very important. So that is, transparency and accountability and speed. These are three very important things for the development of, I think, any company, but it was related to the Wärtsilä part. I think Wärtsilä is in a good shape. It is, of course, a challenging market at the moment. I think the structure changes that we have done are good. I think the strategy in place will continue, and I think that's also one of the reason why we choose Princess coming from Wärtsilä inside and not taking anyone else, so moving the company in the right... Probably one of the most important changes I've done in Wärtsilä is related to the aftermarket.
I think the performance of the aftermarket in Wärtsilä has had a tremendous development during the last four years. And I think one of the main reasons today why we stand more stable than we did before in a very unstable market, yeah. And then, of course, then we know the gas, which I'm very excited about, that industry has made a lot for to Wärtsilä, and that, of course, cannot be related to me, but to the innovative guys who have innovated, you know, using gas as a fuel. So these are the main reasons, I think.
Okay, we go over to questions from the operator again.
Okay, and, our next question on the line is coming in from Mr. James Moore from Redburn. Please go ahead.
Good morning, everyone, Johan, Björn, Mats. I have a couple of questions as well. Johan, can I ask what you feel were the skills missing and needed changing in this appointment, and what skills you feel Björn brings to the group? And secondly, on the new strategy, Johan, you mentioned it's not been enough so far. So I guess an important part of the strategy will include more headcount, efficiency, growth, and faster. And, and we know a lot of that from ASSA, which we've seen in the past. But on the portfolio side of the strategy, do you think the five divisions are the right group of assets to go forward in the group, or should we think of the potential for disposals?
As I mentioned, I have not been so long in Sandvik as chairman, so, and I did not specially study Sandvik before becoming the chairman. So that means that I don't have a very firm idea about these things. I have, of course, basic assumptions. And what skill and changes there are, I think it's much, very much up to Björn now to define what should be done, in fact, for the company. Of course, the strategy will be set together with Björn from the board, but I look very much forward that Björn really makes a big, deep assessment, rather than that we decide before he starts what should be happening.
On the portfolio side, I feel, after having looked at the different parts of Sandvik, that most, if not all of them, have a very good value for the future. Then there's a question, is that the right within Sandvik or not? I know there has been a lot of discussion on that. I have no firm opinion. I think each business has a lot of reason to be there. And then I think it's up to the board and the new CEO to sort of sort out what part might then not be part of Sandvik in the future.
But right now, everything is part of Sandvik, and I think, as I mentioned, if you read the book about Sandvik's history, it's impressive how it has been developed as a company and how much asset there is in the company. It's incredible. I feel for the future, I feel that Sandvik has a great future, and it's just a matter of really getting these things in motion. Since Björn is talking about speed, we look very much forward to that.
Excellent. Thank you very much. Just on the skills, the skill sets that you felt were perhaps missing and needed changing, and, and what you feel Björn specifically brings to, to change that?
I think it's difficult to find someone with the skill of Björn. He has 30 years of industrial experience. So when I saw that Björn was one of the candidates for this job, I felt that this is a very strong candidate for obvious reasons. But also that we, if you look to Björn's track record, he has been... I happened to have the opportunity to work as a colleague to Björn in Atlas Copco, and Björn did a very good job there, and he has done a very good job at Wärtsilä. So I feel very confident that he can do it once again, and he's very, very sort of excited to do that. At least he has assured me that he's very excited, and I think he really is. Therefore, I think, I look really forward to our time together.
Thank you very much.
It will be an exciting trip.
Thanks.
Thank you. Next question from the operator.
We have our next question on the line coming in from Mr. Colin Gibson from HSBC. Please go ahead.
Thanks very much. Morning, everybody. Most of my questions have been asked, but I had one left, and that was, obviously, Björn, you mentioned something like six months or so after you take over, we should perhaps expect some sort of comments on strategy going forward that would put that announcement sometime in the second quarter of next year. It in between now and then, that's quite a long way away, and in between now and then, we have a set of group financial targets, which clearly are a long way from being met. The 8% growth target, I think, was only 2% last year. The 25% return on capital employed target was only about half of that last year. How should we feel about those group financial targets in the interim period?
Of course, those, the targets are there, and these are the targets for the group. Before we make any kind of changes, these are valid. That's pretty clear. I think for me, it's premature to be able to comment any of them yet. So I think we need to do our homework before we can. We'll come back, and I think those targets are, of course, an important part of the strategy that we will be presenting. And you want to have given me 100 days, so I will try to do it within that time to learn more about the group. So but, we'll come back somewhere in the second quarter with some ideas how we want to take this forward.
Thank you.
Have a good time with the rest of the management team, so I'm looking forward to that.
Thanks.
I think we have a few more questions from the telephone line, so let's take another question from the operator.
Okay, the next question line is coming in from Mr. Anders Roslund. Please go ahead.
Yes, Anders Roslund, Swedbank. Good morning. I have a question regarding the short-term outlook here. You mentioned a challenging demand situation and maybe some adjustments short term. Is it primarily machining solutions, and materials technology you are thinking about when you talk about short-term adjustments?
I mean, we're not changing the message from what we communicated when we closed the second quarter. So it's basically the same message. And if you're looking on the organic growth numbers for the second quarter, I mean, we had issues both within machining solutions and within materials technology, so it's a fair assumption, yes.
Okay, thank you.
Thank you. Next question from the operator, telephone line.
Okay, and the next question line is coming in from Mr. Lars Brorson from Barclays. Please go ahead.
Thanks. Good morning, gentlemen, Johan, Björn, Mats. A couple of questions from my side. Johan, first on the portfolio, it's an obvious focus now for value creation. Why do you think Faxander was unable to execute on a more convincing portfolio strategy? And I guess to that, why should we expect Björn to be able to execute? And, and maybe to be a little more specific here, beyond the CEO change, does this really need further changes, including perhaps on the board, in order for you to unlock value that may be embedded within the value creation around portfolio strategy?
So looking to the portfolio, what was it difficult to execute? It's very hard for me to answer. I wasn't there during that period of time, but I do believe there were a number of things initiated and a number of things carried out, but perhaps not to your expectation. But I can really not answer why it was difficult to really do execute, as I mentioned, to some extent, it happened. When it comes to the board, I have met the board. We had quite intensive time here during the summer, better thing if we're on the beach, but unfortunately, we've been on the phone talking to each other quite a bit.
I feel that they are very committed in the board, the people that are there, and I feel also that they have relevant competencies, so there is no immediate changes as far as I can see.
And secondly, maybe just to that process around your intense time during the summer, can you tell us when this search was initiated? Was it a unanimous board decision, and what was the universe of candidates that you considered?
I can tell you, I always go into a job with open mind, so it was not initiated before I joined the board as chairman. I traveled around with Olof. I saw a number of good things. As I mentioned earlier, I saw also a number of things that could definitely be better. My conclusion was to take that to the next level, which I think is required, and I heard your questions as well. I felt that we better then take someone that can restart, and that was the conclusion. So, a few, I would say six weeks into my mission, I concluded, I think we probably are better off, or we are better off, if we change at the helm of the company.
Thanks.
Thank you. So we have two more questions on the telephone line, but before that, are there any more questions here from the audience in Stockholm? No. So let's take the next question from the operator.
Okay, and the next question is coming in from Mr. Andreas Koski from Deutsche Bank. Please go ahead.
Yes, good morning. It's Andreas Koski from Deutsche Bank. I have two questions. Firstly, for Björn, I understand you won't share any future plans, for what you're going to do with, with Sandvik, but if you review your time at Wärtsilä, you said that you are proud of what you have achieved in the aftermarket business for Wärtsilä. Can you please elaborate a bit more what you actually changed in the aftermarket offering within Wärtsilä?
Yeah. I think when we came in, the first change we did there was we had a deterioration in the profit side for quite some time, and we changed the focus from driving growth to focus on profitability. There have been a lot of activities in that, and one is our diversified the strategy that we categorized our different customers in different parts, where we focus on the customers which have the biggest potentials. We worked a lot with pricing.
We introduced what we call value-based pricing, which is extremely important in the business. We concentrated on growing the contract business, and this means strengthening the relation between our customers and our business. And I think that is probably the biggest success, and we were not successful before in the marine part. Now, during the last three years, this business is almost as big as the power plant business on the contractor side, and that has driven both the profitability but also have generated a lot of growth during the last year.
Of course, a lot of focus on pricing, which is very essential for any aftermarket business. The latest thing that one who has followed us is that the digitalization is a very strong focus at the moment in that, meaning that we use what we call remote monitoring. We can follow any engine around the world, where we can give advice to our customers when it's time for maintenance or how to tune the equipment to have better fuel performance and so on. So strong connection between our equipment and our aftermarket, of course, gives confidence in our customers also to invest in new products in the future. So I'm really looking forward to work together with, you know, our people and our organization here to see that we can get a good drive in the aftermarket also in-
We just-
I'm sure they're doing a good job today. I'm not so much into the details, but I think, yeah, that's an important part of the business.
Yeah, because, and would you, would you say that this is how you used to work within Atlas Copco Mining and Construction Technique as well?
Or Construction and Mining Technique, yeah.
Atlas has been a good school for me. I learned a lot during these 13 years. I think it's a good company, a good culture, and a good value base to work from, and I've learned that. And one of the good reason here, and also why I'm standing here today also, is that I think you and I have a very common value base. I think, yeah, for being a chairman and CEO, you have to be able to work and have the same viewpoint, you know, how things should be running, and I think that's extremely important moving forward.
So I think it's a good part, but every company is different. So, I mean, I have to tell you, Sandvik is not Atlas Copco. That's pretty clear. There are some parts of Sandvik which is equivalent with the mining and construction part there, but the rest of Sandvik is a totally different company than Atlas Copco, and you should not expect that these two are similar.
Of course not.
Even though I say that, Sandvik has, from what I've seen and what I've, looked into, is that it's a, it's a very exciting company with great businesses. And for, for me, I think it's, it's very much down to the products that you have in any company. You know, you can, you can have a lot of organizational and, and good things, but if the, the, the products are not the best in the market, it's very difficult to be very successful. And I think, Sandvik have, probably the best products in each of the fields that they are operating, which I think is, very, very important as a start when doing change.
Better than Atlas Copco?
I was just kidding. I was just kidding.
After Björn's treatment, I'm sure. But I, I'd like to say one thing also. I have been around quite a bit within Sandvik, and I can also add to what Björn said, there are a lot of competent people around as well. So I think the building blocks are there.
Yeah. My second question, because you started the call by saying that it's business as usual for Mats in the interim period here. You are running a supply chain optimization program. You're also running some restructuring programs around the administration financing part. Would you say that belongs to the business as usual part, or do you suspend the supply chain optimization as of today or until Björn comes in?
No, I mean, it's definitely business as usual, because, I mean, the ongoing, already communicating program, that continues. So, short term, we will focus on customers, we will focus on the cash flow, and we'll definitely focus on the cost savings and restructuring that is ongoing, so no changes to that.
Okay, perfect. Thank you very much.
Thank you. And the final question, then, from the telephone.
Okay, and the final question on the phone is coming in from Mr. Andre Kukhnin from Credit Suisse. Please go ahead.
Yes, good morning. Can you hear me?
Yes.
Yes.
Great. Thank you.
Go ahead.
Yeah, thank you for taking my question, and sorry about the glitch earlier. Johan, I know you've not been at Sandvik for a very long time, but just from the time you have spent there and traveling around, more broadly, where do you see the company in terms of the balance of where it needs to be streamlined versus what actually needs to be invested in for growth? And how do you see that evolving, maybe with a bit more color across the divisions? Clearly, there was quite a path that you followed at ASSA ABLOY, where there was a lot of cutting first and then really an acceleration of growth focus. So using that analogy, maybe if you could comment about Sandvik.
Well, first, I've seen an organization that have met a lot of hardship from the marketplace, and there has been mining and construction. I think we all know what has happened to that segment. We have seen SMT, at least in the first half of this year, the more difficult situation. Oil and gas, which is an important customer segment among others, for Sandvik, has also difficult times. So I have seen, people that then are working very seriously than to do short-term business as usual, meaning that we have to adjust to those, challenges that we face short-term. But I've also seen a lot of good innovation. I must say, I'm impressed what the work that has been carried through and what is carried through, both in history, but also what is in, in the pipeline.
I also see a lot of focus on in the marketplace, trying then to develop the aftermarket, where I think then Björn can bring also some good input and good strong ideas about how we can bring it even further. And I see also when it comes to cost reductions on a from a basic point of view, there are many factories, and they were perhaps a little bit slow to start to consolidate and find synergies. But that work is initiated by Olof, and that will be carried through and carry on.
And I'm sure that Björn will continue that work as well, because like any organization, it's not static. It's changing all the time. But it's my feeling is very positive, and it's a very good company, and especially the people are very good. Amazingly competent people around in the organization, that it's really both interesting to listen to, but also they are full of good ideas. And I think it's a matter now to make sure that we release those and get things done.
Thank you. Just to follow up, at ASSA ABLOY, you used the last downturn to actually implement a lot of the change. The downturns that Sandvik has been living through, do you think this is not too late? Do you think these are not sort of missed because we're kind of, well, many years through it now?
In my opinion, it's never too late. I think there is, there's a lot of potential. We need to unleash it and get it done. And I think also the understanding among the people in Sandvik is strong in that direction. They see it themselves, so it's more a matter of finding a good balance, how to do this. At the same time, as we don't lose focus on the business, it's very, very important that the customer is still center in this kind of change. So it's a sort of delicate balance, and those of you that know me from ASSA ABLOY knows that I've always said, a factory you don't close overnight. It's something that has to take time, and it has to be balanced, because otherwise, you derail your sales.
And then that is something that you develop over decades, and you should really make sure that you maintain that part. That's the real asset. That the cost is high on a temporary basis, you can live with. You cannot live without the customer, so it's very important that we stay focused on the customer as well. And innovation, as Björn mentioned, the products are extremely important in that, and I think innovation culture in Sandvik is very strong. And that is a very positive asset that we will continue to develop.
Got it. Thanks very much for the color. Björn, just a quick follow-up from me, too. Many questions, and thank you for sharing your thoughts on the key skills and particularly on the transparency, accountability, and speed. But as I feel, I understand that you came through with quite quickly also stepping on the investment sort of pedal there with quite a transformational deal. How do you see that at Sandvik? Do you think that process of kind of resetting the companies that would be required is a little longer, or do you think you can be quite quick on actually adding interesting businesses to it as well?
You know, first, I think it's very early for me to answer so. But I think as the basis, I think, you know, when we're talking about merger and acquisition, I think it should come from the operations. You know, if there is a need for certain areas where you have to strengthen your portfolio to be, you know, number one or number two in the market, or if you need to strengthen your market share. But I have a very strong belief that it has to come from the operation, and it has to be a core part of your strategy to achieve your goals.
Got it. Thank you very much for your time.
Thank you, and I think with that, we have no further questions from the audience here or the telephone line. So with that, we close the press conference. But for all of you media representatives, there will be a chance to have one-on-one interviews with Björn and Johan Molin. So line up close to Per, who's responsible for external communication, and we will help you through that. Thank you all.