All right. Welcome to our year end report. This is Torunghinandan, and I have with me a Mats Hartzellian, and we will go through the report. I will say next slide, we won't change slides. We go for the 2nd slide now, the value we create for customers.
Jaguar is doing business in imaging, I think, where we do large installation, large IT systems installation taking care of the images of hospitals and healthcare providers. And to some extent also veterinarian clinics, but that is a small part of the business. But mainly it's the human medical care and we take care of the images in the hospitals. We started with radiology or increasingly do other images as well, creating a sense an image repository in management systems for hospitals. And then we have business innovation, which is small spin offs of the medical side right now.
1 is special software for planning and follow-up of PDOC procedures, not the least follow-up, which is very important. And we also do an area of medical education, which had had a boost as many medical students have not been allowed to go into the self serving. They've been educated from home and we create value and we provide a means for them to be taught at home from the universities despite being locked in. And then we have secure communications where we actually provide security for society, both for communications means, but also for critical infrastructure, etcetera, which is an increasingly large problem in modern societies. And next slide, we'll go through the Q4 highlights.
Next slide. We increased our profitability and We had a record breaking order bookings for the full year. The order bookings for the full year is up 46% to SEK 2,600,000,000 and we have not been at that level ever before. We increased our profit by share by 16% SEK 7.15 per share. And we also have a nice cash flow per share, which is up 26% to SEK 9.66 per share.
Next slide. Our financial targets from left to right are in priority equity to assets ratio. Our customers are very dependent on our systems. We have a no fail option. If they fail our customers' businesses, We have a severe blow.
And therefore, we cannot be risky in any way we need to provide trust. That also goes to financial trust. So we have a target to be above 30% in equity assets ratio. We are currently at 54.2%, so well above the target in that aspect. The 2nd highest priority is profitability, operating margin.
But note these are high gene measures. The first two target for hygiene measures, which should be about 15% as the hygiene of healthy business. We don't need to be at the current 21.4%, which mainly came around because we have been very careful with cost due to the pandemic and so we have increased our profits margin, though we have not grown so much on top line. And the 3rd, which is our main target when the 2 first are fulfilled and that is unlimited upwards, That is growth of profit per share over a 5 year period and that should be above 50%, which is the equivalent of 8% to 9% per ounce per year. We are currently well above double that at EUR 115.7 billion.
Next slide. We've had seasonal effects. We've also seen the pandemic, which has, of course, affected us as everyone else. We have large variation during quarters where we already had. They continue to be large, but over time, we gradually decrease, not the least because we are in the uncertain position to selling software as a service instead of software as a license.
That it is quite a large change that we lived through over several years. But it's a change that most of the software industry is doing and so are we. It will strain our cash flow a little bit over some years, but it will be very good long term. But it will also decrease the variation between quarters as people will use for pay for usage instead of when they buy licenses. We also see from the pandemic a traveler marketing cost increase post pandemic, but we don't think we will go back to historic levels.
There will be somewhere in between where we have been now and where we used to be, not the least because we have learned and customers have learned that you can do a lot of things remote that we always before travel for. Next slide. Q4 highlights in secure communications. We have established a cooperation with the Swiss firm, Wire, to have a user interface for sincere communications where we can provide a very safe underpinning to it and platform for that communication. That means we by cooperation reached much more functional than we could have possibly done ourselves.
We also have an extended contact with Dutch ministries for secure communication as a service. We are increasingly selling also our communication products as a service, as a subscription. You pay per month and you get a phone that is encrypted more or less. We do not think we have adequate margins yet, But that has been because we've been doing some growth initiatives that need for some investments. And we have had growth and we have had also increases in margin over the last year, even though the are not on levels we want them to be yet.
Next slide. As a Chief Financial Communications Financial Performance, we had a turnover EUR 207,000,000 million, which is up from SEK 189,000,000 last year. We had an operating profit of SEK 9,500,000, up from 2.9% last year. And our operating margin is 4.6%, which is above 1.5%, but quite a lot below where we need to get the communications to be long term. Next slide.
Our growth initiatives and secure communications is to use a trend we've seen in the pandemic. People have been working at home, Also people who work with very sensitive tasks and sensitive business. They need to sit at home with a mobile secure workplace. They need to sit as if they were on the office. This has opened quite a large market for very secure remote workplaces, mobile secure workplaces.
And we see a large trend there that would drive the market. We do see critical infrastructure. We provide a SOC, Sweden yet, but we're increasing steel a little bit since coming from neighboring countries as well. This is costly when you begin doing it Profitability is low, but when you increase volumes, it will increase. However, the pandemic has really slowed down this area.
This is an area we cannot go without meetings, fiscal meetings and that has been slowed down. We also do the highest possible security level secure voice communications mainly in EU and Sweden in Netherlands. And that is secure voice on the secret level. And we do high speed network encryption units on the secret and top secret level. Next slide.
Then we have Q4 highlights in business innovation, which is our Orthopaedics And our education business, these have now also been put into their own legal entities to clean up fee in the accounting structure a little bit in the company, but they are still accounted for the Business Innovation segment as they are much smaller than the other areas. Sad sea. This area has had a very strong negative impact from COVID-nineteen. The number of elective procedures, for instance, in orthopedics has gone down by 80%. And of course, that is our main target for the orthopedics business.
And that means the customers have no money for the time being and they then cannot invest. Next slide. So you see our revenue in this area has gone down to 50 5,800,000 from SEK 78.1 billion. We barely made profits, SEK 800,000 from SEK 12,900,000 and the operating margin is not large, 1.4%. However, we think this will recoup.
The people who need a new prosthesis in new hip has not gone away. And there is a large mountain of need built up and that needs be taken care of in the next few years. Next slide. The World Initiatives and Business Innovation, It's medical education transitions. We have had some very spectacular orders and interest from large universities, not the least in Southern Europe and South America and Far East, where students have been at home and they want to be taught from remote.
Before, we mainly did teaching in class with a large table that we did anatomical teaching on. But now we also provide the same software, same support, but sitting remote on a PC or a tablet remote. That means lower payment, of course, per seat. This cannot pay the price for a table. But very often, this also is going over to a subscription demand.
So each student pays for a subscription of their software. We see an interesting growth in that area where people want to continue to be taught to remote. We also have new areas in orthopedics, mainly in implant movement analysis,
sad feeling.
This post operation, when you have a prosthesis and it begins to hurt, the orthopedic surgeon has 2 choices, either to treat this with medicine, if it's an extraction around the implant or actually do revision, that is to put in another implant. Revisions are very, very expensive, very, very risky and you want to avoid them. And we have a new tool in our EMA implant motion moment analysis that can be used to determine who needs to be re operated to who do not. That is a very interesting area as the revisions are so expensive and dangerous. We also do the more or less the same technology for something we call computed tomography, micro motion analysis.
It's basically the same thing, but this is sort of research clinical evidence building on new prosthesis when we have large prosthesis companies as customers. Take order a study from us and we can analyze it. The prosthesis is stuck over time, for instance, between months if it moves in the body. And then we have a research area mainly focused on AI to medical applications and future applications at the time being. Next slide.
Then we have our main area, ImageNet Solutions. The Q4 highlights, We have several orders in Sweden for cloud services. Almost everything we sell in Sweden now I would say literally everything we sell here in Sweden now is cloud based solutions, where we provide from a private cloud, not the public cloud, but from private cloud hosted by ourselves, software for the hostels, so they don't need to have all the servers on prem in the hostel itself. We also see an increasing interest to sector 1, which is Our sales software as a service model, which means that we sell for use we get paid for usage and sell for the license prop. We introduced that 1 year ago and we see now 3 new U.
S. Coal prices during Q4 and a large interest in this area, not the least because hostels have a problem with liquidity right now and they still need to buy things. And then they often prefer to pay for usage. We have several new clinics and networks that has chosen the Tekra Digital Pathology solution. We have orders for also new which in that area we are big in Israel, for instance, we are big in Korea or big in France, areas where we have not been a large player before.
Next slide. The financial performance of Imaging IT is that we actually shrunk a little bit in our account of INSEUS to SEK 1,397,000,000 turnover, down from EUR 1,400,000,000 to EUR 8,000,000 or EUR 1,000,000,000 last year. And we have an operating profit that has gone up. So our margins have increased substantially. This is not the least because of less travel and less marketing activities, much less exhibitions, etcetera.
Next slide. Growth initiatives in Imaging IT Solutions, we are selling into some new markets, for instance, some markets in the Far East, both direct and indirect. We do enterprise imaging, including digital pathology, integrate diagnostics and cardiology. We are the only vendor to our knowledge yet, but there are more coming in that have all medical imaging in one single system, which means a large saving for the hospitals. They don't have invested much if they can use the same system for pathology, radiology, cardiology, thermology or other actually large image users in hospitals.
We are focusing on the U. S, the world's largest market. We have the highest customer satisfaction ranking there. And we have a small but growing market share in the U. S, which is also seen as you will see later where U.
S. Is now our largest market. Next slide. And I will leave the word to Mats van Szeen who will tell you about the financial development.
Thank you, Torbjorn, and good morning, everyone. Next slide, please. When we look at the major numbers that we see that the order bookings for the full year had a quite a good trajectory. Now we usually say and we and keep saying, I think, with a good reason that order intake is fairly volatile. Now we can see that as for this financial year, we actually have had good traction for all 4 quarters actually.
So there hasn't been that much of a swing in order intake. I wouldn't go so far as to call that a trend shift really. It's By the 4th, I think it's something that also can happen obviously that you have a stable period as well without the overall trend being materially different. We didn't really meet last year's Q4 in terms of order intake, although it was substantially above sales. And just for currency, we saw a slight traction upwards in terms of sales, which is a good thing considering the times we're living in.
And the order the book to bill or the order bookings ratio is now at 1.6 It was just short of 1.10 last year. And as you all know, we have had quite a lot of headwind in terms currency over the last year, especially in the later part of the financial year, but we have been able to accommodate that I think. Next slide please. So the major currency fluctuations and we have had some limited possibilities, partly in terms deployment. However, recurring revenue has kept up strongly.
We don't report that separately, but that has been a good buffer for us here. And as most of you know, I guess, 20% about, I would say, foreign currencies, mainly European euro, £0.30 in the U. S. Dollar. And following on up on that, the markets where we have a high share of new sales have been adversely affected the most, whereas the markets where we rely more heavily on an installed base of Customers and recurring revenue has been more resilient to impact from the pandemic.
And service sales in the UK has been I think has increased, but also in terms of hardware has been declining, which also and interesting in terms of analyzing the gross profits for those who do that. Next slide please. So obviously, by the sheer number and the sheer size, Imaging IT is most adversely affected in terms of currency. And what is a good thing for us here is that secure communication actually Continue to report sales growth, whereas as we have been touching on previously, the business innovation has been struggling more in terms of elective related business like the orthopedic side. Next slide please.
So
earnings wise, we had a good earnings development throughout the year and not least in the last quarter. And as Torben previously mentioned, the margin this response to, I would say, a bit pumped up by the fact that we do not have an as is basis in terms of operating costs. And we do not see that this last year is something that's a steady state going forward. Hopefully, we can see a business going back to it. But it's not post COVID, but at least normalizing to the extent that we can visit customers and do what we do more in direct of a lot during this year in terms of doing business remotely obviously.
Higher gross margins, we said, normally 4th quarter is a strong, not only in earnings, but also in gross margin wise, since it's a higher share of license software revenue, which has a higher margin. If you compare the 4th quarter's growth is really gross margin for the full year. Also, we managed to actually beat last year's Q4 somewhat as we had more hardware in the Q4 last year in the U. K. Especially, which is a small amount that now is more heavy on the service side where we had better margins.
The software portion between the 4th quarters are fairly the same, about 32%. We don't go into details on the margins, but that gives you sort of a pointer on what happens on the aggregated level. Next slide, please. As for cash flow, it was a strong year. For us, we focused on this, but also obviously we have had some help in terms of business shrinking somewhat on top line more than we thought and we managed to get a better profit than last year obviously and that doesn't carry as much capital tied up in working capital as than we would otherwise have seen.
And in all fairness, we also have had some a bit lower investment levels. So all in all, that has contributed to a really strong Q4 in terms of cash flow. But As you can see from the graph here, the in between quarters are very volatile in how cash flow develops. And that was it for me.
All right. And then to Alexander, that is me, come back. Next slide, sectors way forward. And then we'll take next slide again. Our focus forward is continuing to strive for high customer satisfaction.
All business is set around that. And also in the pandemic, A lot of our customers provide very critical functions for society to function. It's our job to keep them able to do that in a very efficient way. And then they need to be happy. They cannot be stressed because the IT system, etcetera, doesn't work.
It's attraction with unhappy employees. It simply doesn't work. And so we strive a lot of having good, smart employees who know what they need to know by culture. And we are that company culture is very important. That has been a little difficult during the pandemic.
We cannot call people together for training, etcetera. You cannot travel. So that's something we have to increase spending on in the fall here to kind of get all the new people we have on board to get to this kind of culture, etcetera, etcetera. And that we normally do here in Sweden. Not a tremendous cost, but very important to self-service motivated so they can provide customers with good service and products.
And then of course, we need to have profitable growth. We will not hesitate on that one. And then the 4th one that we strive for is sad sea and skate where the puck is going to be. It's very important for us, etcetera, to develop things for the world as the world will look a few years out from now. If you always develop things to where we are, that would be a problem.
I'll come back to that in a few slides. Next slide. This year has been great. As we informed about last report, we won 5 best in class awards in PACT and digital pathology. We were best in class for large U.
S. Hospitals, which is our prime area of interest, which means we have happy customers with quite a large margin to the second one in the U. S, large hospitals. And of course, we can never compete with real big companies in marketing campaigns. And marketing, we need to have the customers who tell each other that they're happy.
And we see that in increasing demand in the U. S. Coming up as we so we won it all over. We also won small hospitals in the U. S.
That is not our prime segment, But we want that because we have the correct culture to take care of everyone who trusts us as a customer. We want Paxo Europe that we were second in last year. So that's an improvement and we're very happy for that. And then there was a new category, digital pathology, which is But in the world outside of the U. S, we want that also happy to discuss in digital portfolio, which is a new area, which is very important for us.
Next slide. We like quotes, etcetera. This is a quote for Edwards Deming, a person that was consulted in the Japanese government after the war when the Japanese changed from junk industry to a very high quality industry. And we like that quote and we have it in memory all the time. Procter business comes from repeat customers, customers that boast about your product and service and that brings friends with them.
And that's kind of how we motivate our high customer satisfaction ranking and how it actually works. Sometimes people forget that in the new Internet area, but it is as true as ever and will forever B isn't in our view. Next slide. Skate, where the fuck is going to be? It's rumored that Wayne Gretzky was the best hockey player in 8 years in a row.
He was not particularly good in anything on the field. But when they asked him, why are you so good? You're not good at anything. You're not good at skating. You're not particularly good at shooting.
Well, good. And he said, I don't skate to where the puck is. I skate to where the puck is going to be. That is you can read the play. That is very important for us.
If we start developing products today, they will be ready 2, 3, 4 years out from now. And if we only develop for the needs of today, we will be wrong when that time comes. And we've been very successful back in digital pathology. We started where we saw this opening up as opportunity, possibility. We're still unique even though more companies are coming in now, in that we were there when the market came.
We have been doing this over and over again. Sometimes we have trained, but most often we've been good at it. Frontier Healthcare is at core of society's needs. That will be there now. It's also there 4 or 5 years ago away.
Medical community needs consolidated IT systems, we can do all imaging in one system. They need to improve workflows and integration. The level of burnout in U. S. Radiologists is scaringly high.
And more than 50% of U. S. Regulators say that they are under risk of being burned out. And our job is to help them out and make them more effective so they can come home to the family at a normal time despite the increasing workflows. And we also use AI to gain efficiencies.
AI will not replace doctors and medical regoliths for a long time to come, perhaps not ever, but it can help them out in becoming more effective. And that's our job to help them out with that. Secure mobile workplaces, you don't have to go to the office to do your work also in sensitive environments. Secure communications channels, you can communicate or say you can do a Teams meeting over a secured channel instead of being forced to do it in unsecured channels. And complete some completely new areas, is implant movement analysis allowing orthopedic perhaps to do 4 new implants instead of one revision that was done unnecessarily, also risking the fixed lives.
And digitized pathology imaging, which is only in its very infancy right now, a very early phase in the market where the whole world will, of course, go digital also pathology after while that market matures. Next slide. We are increasing recurring revenue. The intent is to become a software as a service company. Paper usage improves value for both customers and vendors.
Most of us pay now, for instance, Microsoft licenses. $53,000,000 $65,000,000 We pay per month. We pay probably more over 10 years for that than we would have done otherwise, but we're happy with it. We get upgrades. Microsoft makes more money.
We as customers are more happy in the other model and we are moving there also in our products, especially in Michelin IT, but also in the other areas. We have a new business model, Sekro 1, introduced in May last year. And that will play a very important role in Sekro's future. You pay a combined payment. You get everything we have in imaging and you pay after while you use the different parts.
The transition will be over several years, but it has been accelerated by COVID-nineteen. Next slide. This is something we repeat internally all over and over again. It's quite easy to create happy customers. Just live and act the only rule that you have in all religions that we have encountered.
All belief systems, all religions one common rule, which a little variation of the same, but it's due to others as you want them to do to you or in a negated form or do not do to others what you do not want them to do to you. That is a cultural thing we try to enforce or motivate all over the company and it's working quite well. It's quite easy. Just don't remember it. Just don't forget it.
Next slide. Our philosophy regarding shareholders is that if you have happy customers, you have happy employees that can provide sad fan, support the customers to make them happy. You have a good long term strategy in growing market. It's much easier to grow in a growth market market that is stable. And both cybersecurity and health care is growing by external forces.
And if you have reasonable cost control, then shareholders will be happy. But it comes in that order. And I think we've shown over the last year that it has worked. Next slide. The proposals to the annual meeting, which will be in September in Linzhou or actually it will be virtual this year.
We have a split 5 to 1, and we have a share redemption program of SEK 4.50 per share. Or if we do the split before that split, it will be SEK 90 or it is SEK 0.9 per share after split. Upcoming financial reports and the AGM, we have a 3 month interim report coming up September 3 and the Annual General Meeting, September 14 this year. I remind you that Your feedback is very important for you. Please go to the www.sector.com shy Syrian IR survey and fill in your feedback on these presentations.
We'll try to modify them and improve them after feedback we get from you or send an email to info at investorsecra.com to tell us what you want us to do different in the general presentation. Next slide. And then we have the time for questions. If you follow online, please use the e mail button or send question to info. Investorsector.com and we'll try to reply to them after And our first question comes from Christopher Levi from Carnegie.
Please go ahead. Your line is now open.
Yes, thank you. I'll start with 3 questions and then I'll get back to the queue. First one, I wonder about this difference in reported sales fan. So reported is 3%. FX adjusted is 23% in the quarter, while at the same time you made your currencies down for 5% to 9% worse year over year.
And also if you look at the FX effect you have reported for individual quarters doesn't appear to or they appear to be larger than the full year figure. That if you could explain this, it would be very helpful. And I wonder about large shaders in rest of the world in Q4. I think it's by far the largest quarter ever for that region. Is this digital pathology?
You mentioned that, but is it something else? And then I also wonder if you could discuss a little bit about the operating leverage in the large service segment. I think that was the only segment that was up in reported currency in Q4. And at the same time, you have this, I think, gross margin second highest level ever or something? Thank you.
All right. I will leave the first to Matt Francine.
Yes. Morning, Christoper. Yes, you're right. The way we calculate this is on accumulated values less previous accumulated periods. And in times with large currency sort of fluctuation, that might skew the quarterly numbers in a way that might be bigger than they should be if the quarter was calculated in isolation.
Now we will revisit this and do the quarterly wise numbers and see to what size effect that might have and then we will be able to get back to you.
So we thank you for that observation as that leads us to an improvement opportunity that we appreciate. You're good at finding small things or important things in our accounting, Christophe. Thank you very much.
So but the reason it's becoming so big, that's because of the large currency movements this year. Yes. And normal year, you wouldn't see that, right?
Right, right. So we haven't seen it at all in the last 2 years in any quarter, 1st
2 quarters.
So that's a bit unfortunate this quarter.
And the second question are large rest of world products and what they are including the rest of the world is actually a mix of pathology that has been in several markets, but also in radiology where we have some business some difference. We also have an impact from New South Wales, which is now becoming operational and thus paying off money to us in New South Wales in Australia was an order we took more than a year ago, but they are now coming online and they are contributing on a recurring revenue basis. Your third question, can you please repeat 3rd question, Christophe?
Yes. I'm just trying to understand what type of operating leverage you have in the large service segments. And I understand there's a lot of different type of product sales you have in there. Uncertain. And the reason I'm asking is that, I think, at least at a reported basis, that was the only segment that were up fair year over year.
And at the same time, you have this but historically strong loss margin. So if there's a correlation between these 2?
I wouldn't say that there is a clear pattern to that. I mean, you're correct in that with this year, I think we're about 62% of total revenues. It's in the service side, whereas it was 57% or something like that last year. And we have seen a strong traction also in Q4 now at some just short of 55%. And last year, it was €51,000,000 So the trend is clearly upwards.
But I will be able to answer more detail on share, how that really plays out in different projects or markets for now. But the observation is true and it carries some above average support in terms of the contribution compared with the hardware side, but not as good as the software on the other side. So in between, but it's helpful.
In the service, is it correct to assume that there's a lot of man hours here, so that Operating leverage is less than for the software?
Yes, it's 9 hours is a significant contributor in that part of the revenue stream, yes.
Okay. Thank you. I'll get back to the queue.
Thank you. Our next question comes from Paul Moreen from Danske Bank. Please go ahead. Your line
is now open. Yes, good morning. So I have a couple of questions. If we start with your access to hospitals now in the later part of the quarter and also maybe in May, what That's the first one. And then I have a question regarding that transaction, which was announced yesterday.
I think you saw it where Compu Group Medical acquired Resus Health in IT, which I think was best in class in Europe last year, if I'm not wrong. I just have a question. Mean, how do you believe this has changed the market environment in Europe for you? And also, what's your thoughts on combining this EMR provider, so to say, with the PACS provider. Do we have any successful companies doing both as of today?
If you Could you just remind me on that one? Thank you.
All right. As for access to hospitals, I can make Quite good. There is some easier ways now in the U. S. It's lighting up a little bit in the U.
S, but for the rest of the world, it's no change. Europe is still in lockdown, especially for hospitals, very, very difficult to cross borders. And there is no substantial change now as compared to what it has been over the last 12 months. It will probably lighten up or ease up in the fall of this year, but we don't see it yet. And for Q1 this year, there will be no substantial change.
As for the transaction with Kompa Group acquired visas, that's interesting. Kompa Group has acquired quite a lot of companies. They are a house who kind of pick up medical companies all over the among others. They own the EMR of Stockholm and Sweden. And they have acquired a very significant part of other EMR business.
And in general, they have picked up companies who have been mature. We don't know what the impact will be. Buses has been a good company, though we have mainly seen them in the DACH region, Germany speaking regions. We have not met them very often head to head outside of Germany. They have a very significant market share in Germany, though, especially for mammography.
And we don't see that this will really change the picture. So to try to lock customers into EMRs by adding images to EMRs has been tried. Uncertain. Agfa acquired several eMARS. About 10 years ago, it didn't go very well.
Customers do not like being forced to buy products. They want to buy free choice. And also other companies like CERN have been trying to do PACS over many years, but they have also not been very successful. It's quite different to manage images and manage small transactions of textual character. Of course, the reply is we don't know what the impact will be, but it's not something that will keep us awake at night over the next half year.
Okay. Thank you. Very interesting. And can you also last question on Can you say anything about how the sales within digital pathology has been developing during the year? And what sales do you have in this segment as of now.
We have chosen not to publish the share we have in digital pathology. But as you can see from our stream of press releases, it's definitely rapidly increasing. We are very well positioned. We are number 1 in class worldwide. We opened up new markets with it.
In radiology, the markets are quite saturated. No, very, very few at least hospitals use film anymore. Everyone is digital. So to grow in digital regioli into a new country, you have to replace an incumbent. That is difficult if people are happy or okay with incumbent.
Digital Catoli opens a spearhead to go into new markets and then we can come in with gradually after. So we're using it, opening up new markets. We've seen it in France, where we have some very prominent cancer institutes going our way. We see it in Israel. We see it in Korea.
We in the U. S. And not the least, we see it in Sweden. Sweden is today still by far the world's leader in digital quality or we have an absolute dominant market share in Sweden. So it's a growing area, but we don't publish how large it is compared to the rest of the business.
Okay. Thank you. And just a question from us. On the other operations, you had a negative EUR 26,000,000 on the EBIT book. Is this related to financing or interest movements?
Or could you elaborate a bit on that, please?
Sorry, could you repeat the for this year?
Yes. For the Q4, I think you had a negative €26,000,000 Yes.
It's part of the costs that we do not push forward to the same extent as we have to the other segments. And one of those is profit sharing for employees that we take as a central cost and that is a significant part of that difference.
Okay. So this will continue going forward or
If we are well, let's see what the future holds in terms of employee remuneration. But this is the explanation for this year at least.
Okay. Thank you. That's all for me.
And we have a follow-up question from Christopher Lederweig from Carnegie. Please go ahead. Your line is now open.
Thank you. One more from me. When it comes to the margin target, I understand, of course, costs uncertain. So temporarily over here, but I think you also said that some traveling costs, etcetera, will not come back. Still you're keeping the margin target unchanged.
So what's the reason for that?
The reason we see huge opportunities in growth. We have 15% because we need to have a healthy business. We should not go below that. But if we get money above that, we should invest it in future growth of sales. We have digital pathology.
We are world unique. We're world unique in what we do in orthopedics. We're world unique in many things we do and we should fair. For the benefit of shareholders long term, we should invest in that growth instead of taking out too much margin right now. And there We took the number 15% many years ago to provide a healthy margin, but whatever comes above that should long term be invested in future growth.
But since it's a target of being above 15%, I think previously I said that you should be pretty close to that, do you see an opportunity that you could maybe be a little bit higher or a little bit more about 15% than what you thought a year ago maybe?
Uncertain. The target is still 15%. Right now, we also see a big transition into software as a service. When that is fully implemented, we don't know what the future will bring. That will not be a bad situation where everything is software as a service based, especially after the initial period of 4 to 5 years amortization for the customers.
But that is a few years out. And right now, we'll need money for that transition because we'll be strain on both profitability and especially cash flow. We also see that we don't know what's going to happen post COVID. So we've been a little bit careful. We like to be careful when we don't know what's coming, etcetera.
So we have increased we've been a little bit more careful with investment than normal. And it's been almost impossible to open up new countries when we can travel. Okay. And then we'll see, do we have anything coming in on over email?
No, we have no email questions today.
All right. So we have no further questions. Then I thank you very much for your attendance. And I do hope that we next year can do this live as we normally do in really light as the youngsters say, but this time we had to do digital also this one. And the normal quarterly report will continue to be done over Internet as now, but the 1 per year we'd like to do in real life.
But I thank you for this and most welcome to join us for more questions over e mail and so on if you want to do that further on. Thank you. Goodbye.