Ladies and gentlemen, welcome to the Publication Full Year 2020 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast.
At this time, it's my pleasure to hand over to Edith van de Gees, Investor Relations. Please go ahead, sir.
Yes. Thank you very much, operator. Yes, hello, everybody. I welcome you to our full year earnings call. Nice afternoon to the people here in Europe and a warm welcome to the people from the West Coast, who had an early start this morning to join us.
I hope you all found our press release, presentation and the annual report on the website. Maybe for some of you it was Not so easy since the web is new. You have to find your navigation to the place. You have to look at another place as you We're used to do that, but I hope you're all fine now. Before we start the presentation, we first go through the figures by our And then go through the business and the outlook by Jens.
Then I would like to remember that after the Presentation, the Q and A session, the questions can only be put by telephone. We don't have a chat function in the webcast. So please During the conference call whenever you would like to put questions to Hans, Thomas. Thank you very much. I would now like to hand over to Thomas to start the presentation.
Thank you, Edwin. Also from my side, a warm welcome to this conference call, I start with highlights and the key achievements 2020. Similar to many other companies also, Cardex was hit by the COVID-nineteen crisis And this led to prices in the P and L throughout every level. The good thing of this story is that the relative profitability One is that the Alsiers business had the stabilizing element or proved stabilizing element in the business model of Cortex. Also, Alsace business was affected by the COVID-nineteen And the media, especially in springtime, but in the second half, they catch up partially.
The second element is that we have a high Organizational flexibility. This means that, for instance, in the supply chain, supply chain was able to cope with the pandemic and implemented the protective measures immediately when the pandemic started. They did recover also with reduced capacity levels, meaning that they implemented The 3rd element was the stringent cost management. We achieved to reduce the cost levels because when Panini started, we announced the hiring freeze. We reduced the amount of temporary workers, but on this level, we also had windfall effects, meaning that travel costs were reduced, Nevertheless, we believe in growth In Europe, we continue to invest in the technology.
So we Put a substantial amount of money into our R and D activities. And we also invest into the digitalization, meaning mainly our SAP project at Cardiac Labs. Besides the prices, The equity, the balance sheet and also the cash situation remains very strong. Let's look together on the key figures of the past 5 years. Here we see that Ongoing growth path is interrupted based on the COVID-nineteen crisis.
If you look at the net revenues, the CAGR of this year, 8.7% is reduced to 3.6%. And the net revenues range between the level of the year 2017 2018. The operating results of the EBIT also there, the CAGR was almost cut in half. Last year, it was 14.4 percent, now 7.7 percent. EBIT ranges between the years 2018 2019, So only 1 year back.
The net cash flow from operating activities, there we can report almost EUR 50,000,000 of net cash flow, and this is the highest level since 2007. Net profit, EUR 40,700,000 In 2020, this ranges between also between 2018 and 2019. And there, The proposed dividend of CHF4 per share amounts to roughly 70% of the result of the period. Let's go to the financials. So the details, the income statement.
The FFO bookings were down by 8% compared to 2019, a bit different from the 2 divisions. So, Carls have low profited a bit. They could report high bookings, but this was overcompensated by the strong net at Carlsdale. The order backlog is slightly up by $2,400,000 or 1.1%. Net revenues there, we need to report Reduced levels of 12%, there both divisions suffered.
Good thing, the gross profit margin went up by 70 basis points. So last year, we grew up 36.4 percent and now 37.1 percent. Mainly reason for this upswing is that The share of LGS business has went up. Last year, the share of LGS business was 32%, And now it is 36%. This is the main contributor to the increased profitability.
OpEx levels went down by €10,000,000 or almost 10%. There Mainly the elements travel expenses, but also marketing expenses and variable salaries were cut EBITDA margin and also EBIT margin are more or less on the full year's level. EBIT demand decreased by And with this $1,900,000 we are Or less on a normalized level. There last year with the 3,300,000, we had a special effect with the accrued interest expenses. The tax rate went down.
Then we can report the tax rate of 94.1%. This has been all our guidance. This is mainly due to two reasons. One is that we were able to use tax losses by goods And the other effect is that we have adjusted tax rates at the whole company. The The effect of this lowered tax rate is that the result for the period of the net profit margin went up by 14 basis points to 9.9%.
So result for the period is EUR 40,700,000. Having a look at the balance sheet, we see that there are also quite a lot of influencers Based on the COVID-nineteen funding, debt reduced business volume also led traces. Good thing is that the net working capital levels was reduced more or less in line with the business reduction or business level reduction. If you look into the details, the noncurrent assets went up by almost €13,000,000 This is due to the investment activities we had. I will explain more in cash flow statements and there we also reduced the inventories of the net working capital.
The current assets went down €25,000,000 There are 2 main elements are impacting this, the current assets. This is the Nevertheless, cash level with EUR 122,000,000 is quite stable and as a result. If you look at the equity ratio, there we have almost 63%. This is the highest Equity ratio we could report in the past years. And I'm not getting tired highlights that on our balance Looking at the cash flow statements, we see that net cash flow from operating activities amounts to €49,000,000 Almost €50,000,000 This is €5,000,000 above last year's level or 11%.
The reduced net working capital overcompensated the lower result of the period. Cash flow from investing activities, there you see that we invested more than EUR 10,000,000 more than last year. It's mainly due to the supply chain. So we purchased machines and we So bought the building for the U. S.
Factory last year, then we also invested in the ERP landscape of card remstar, And we also acquired stakes in the 2 smaller companies, Robomotive and Rocket Solutions. The amount of free cash flow is €25,200,000 and around 6 €1,000,000 or 18 percent below the estimated level. Net cash flow from the investing activities, there we see mainly the dividend payments of €32,000,000 We distributed early 2020, and we also bought some treasure ships. Thank you for your interest. I would like to hand over to Vincent Cano now.
Good afternoon, everybody. 1 year has passed very quickly, and we are sitting here again with The annual report, I will highlight a few things about the divisions, as usual, And then go into a short outlook, cautious outlook as always for the group looking forward. So if we go to the next page, we start with the TransStar division. Tom has already mentioned some of these things that we've experienced. Yes.
There is a big hit in our bookings in our first half year for cardiac Renstar, As we already mentioned in our half year reporting, on the positive side, we saw some recovery with bookings On a global scale, for 1 star and especially in 1Q for onwards, which also continues into the early parts of 2021.
As Dan
had mentioned, life cycle We are very happy with the development there. It had the expected stabilizing effect, and We've been able to record things close to 2019 levels, which given the situation out in the field, It's quite an achievement of our teams in the world. Net revenues for capex, while it's Slightly less affected in the first half year due to the then strong start in backlog. However, based on the bookings, the weak bookings in the half one, we then saw We've used net revenues in the second half year, which was quite the consequence of the bookings as mentioned. What happened in the 1st months of this pandemic was that we relatively quickly We implemented contingency measures, very stringent cost management, which help us countered the effect, the negative effects of lack of net sales and helped us also to protect The relative profitability levels in Renstar, as you can see, this gross profits on one hand, but mostly with EBIT of 16.5%, slightly above the upper level of the target ranges communicated with 16.5% Close to the upper range of 60% and the royalty very healthy of 41%.
And the development in CardXRams are spread around the world. North America held fairly stable for most of the year. We saw some recovery signs in Asia Pacific. And in Europe, it was pretty heterogeneous Across these countries from relatively solid in the northern part to fairly weak in the southern part of Europe, and We may come back to this a little later in the Q and A. Next page, please.
This is the summary of the developments. CAGR unfortunately dropped a bit with net revenues 13% below 2019 numbers. So that had an impact on the CAGR of now 4.6%. The operating results, Fortunately, only dropped by 8% to €56,000,000 or 16.5 Percent on EBIT margin. And then if you look at the revenues mix, you can see that LifeCycle Services took a better Share of the business was 32%.
So it was less affected and obviously also contributed to better And expected margins, margin levels. The geographical split, there's no mistake, it's the same numbers As in 2019, it looks very strange. We had the same feeling when we looked at it first, but it is really The situation, we had different developments, some FX impact, which then effectively led to the same split as we had In 2019, still the majority being Europe, 68%, 23% in Americas and the rest This is included between APAC and Greece and Africa. Tonet, next page please. Enlog, I think it's fair to say that Enlog had a mixed year in 2020.
On one hand, there was a good recovery in bookings, new business bookings after a fairly weak 2019. We have explained this already with the full year closing in 2019 and also with the half year closing. So A fairly strong booking trend continued with €90,000,000 overall. Yes, €90,000,000 overall. And We also saw a very healthy increase in life cycle services bookings for Cardexamlog, which I believe it's a natural effect also of the threat the asset trends with our customers Maybe stopped in some places to invest into new installations, but then invested more money into actually safeguarding their previous investments via Extended Life Cycle Services.
Net revenues, not as good. We had a drop of 7%, Mainly due to the low starting order backlog in new business going into 2020 and also Relative to the lead times of these projects for Cardexamlog, so that was a knock on effect Coming into the year with this order backlog. The other element that we are not so happy with is what we already reported at The half year closing is this valuation adjustment with the negative impact on especially EBIT, EBITDA and ROCE in the first half year. On the positive side, however, analog was able to recover and also return So profitability levels that we have seen the years before in the second half of the year. So overall, We had to report an EBIT margin of 3.8 percent, whereas this was 6.8% in the second half of the year.
And then ROGI of 17.9%. Next page, please. Net revenue development already mentioned, which now leads over the last 5 years to a Slightly minus CAGR, not too impressive. Operating results, Also the drop, just explained it, from €5,600,000 to €2,800,000 Revenues mix, We see a slight shift towards new business from sorry, it's life cycle service and not a slight, major shift. Life cycle service from 49% to 54%.
And geographically speaking, we still That's the major business in Germany and only a minor part of the business is 20% in the rest of Europe. Thomas, would you please go to the next page? We inserted a page that It's relatively new, which is new initiatives on group level. Next page, please. We would like To share with you our new initiatives that you already mentioned and some information to the market, but It's maybe worth mentioning here as well.
On the technology side, we managed to Acquire stakes in 2 interesting technology companies, one being Automotive And the second being ORCAD Solution. On the right hand side, you see an example of Automotive Installation, so pick and place, robots technology that helps excel in Item picking, single item picking, but also in case picking activities. Rocket, we don't have a picture here, is the latest addition So our technology, which is ready for market launch next week on March 9, There will be a market launch and then we will be able to tell the market more about the technology itself. Both of them are targeted to actually complement our portfolio and enter into the more item and case related technology from where we are today. Both companies are run independently, to primarily managed market organizations and we use an incubator concept for the development of This innovative technology platform, so we give them shield, we give them the security of CARB X and on the other hand, let them do their job without Imposing too much bureaucracy on these 2 youngish companies.
Very lately, we also announced that we have entered into a global partnership with Autostore. We signed the agreement February 2021, so strictly speaking, this does not belong to the reporting year 2020. However, All of the preparation for this partnership, all the partnership talking, the strategic outline Within Cardex has been dealt with in 2020. So the formal signing after the approval of our Board of Directors to invest Into the buildup of this business in Cardex, formally happened in the 1st part of this year, and therefore, we thought it might be Worth mentioning here as well. And the major aim is quite obviously to extend CardX's portfolio technology wise With an established technology that is in the market for quite a few years, it's complementary to what Caordex is doing typically, and therefore, we believe that it will be a great addition to our portfolio, and we can actually offered to outsource our global network and our global customer base.
So I think it could be a very interesting combination of 2 companies focusing on high quality technology, reliable technology and actually help our customers Manage their logistics in a better way. Next page please, Tom. We've We kept investing into other things as well. One of these we wanted to highlight is digital marketing. Our digitalization continues and elements of it you can see if you Look at our new website, extract of the website on the right hand side, I would say a fairly modern presence now, presentation of caudex, Which means modern standards, but that was not the main target.
The main target was to actually have a website that helps our customers interact in an easier way with CardX and therefore also hopefully increase Customer loyalty with CardX. Make information easier to find, structure our knowledge, Structure our presentation to the market. So this was the main reasons to introduce it, and we went live early February 2021 as well. We have also invested into digital marketing quite a lot in terms of demand Creation of our customers with very sophisticated marketing campaigns, social media usage For covering all these needs of our customers. And last but not least, partly driven by the cancellation of Physical sales last year, but also partly because we had it on our strategic agenda anyway, We went to a now hybrid concept for fares, where we will in the future show up on fares In a combination of physical and virtual.
And this by doing so, we can also then make content That normally can only be seen on one fair and then people are unlucky if they hadn't visited us on the fair, They can then also see it on the website or in a virtual platform, which I believe We'll make information provision and information gathering even better than before. Last not least, we also communicated for the first time what we are doing in terms of sustainability and ESG. You can find the extract of it on our website and we have also included it into the annual report. So that I believe gives a very good and comprehensive overview of what Cardex has done for many years already And it's also committing to in terms of sustainability and ESG. So you are more than welcome to also have a look there And inform yourself and then I suppose bring it up in our next investor and analyst meetings as we go.
Last page, please. An outlook, typical what you expect, Not many indications, this all exception. You will see it in a minute. I think what we really believe in is a strong recovery of our top line, Always, of course, under the assumption that COVID will hopefully soon stop to impact the business as much. I don't think it will cease I think it will accompany us for the years to come.
But I think the impact on the economy, the impact on our daily life should hopefully go down and then we should go back to normal business operation and normal customer interaction Very soon, I hope. So we expect continued recovery in terms of booking and also then resulting in better net sales then compare then in 2019. Cardiff MLOG. I mentioned the Slow or the weak starting backlog for 2020. It's the opposite going into 2021.
So we believe that Cardex Mlog, together with continued good booking levels, should see a fairly increased net Should be able to demonstrate and deliver profitability levels in the mid to upper range of our communicated target levels. You know those rents are 8% to 16% and AMLOG 4% to 8%. So We are positively cautiously positive about this expectation to be delivered. In line with our midterm belief in the market Intralogistics to come out to the crisis faster than other industries, We continue our investments in supply chain, technology and digitalization to position ourselves For the expected upturn for the market and perhaps Cardex as a whole for the future For the next steps and the next levels that we want to reach with Cardex. Market conditions still affected.
I think you're hearing this disclaimer In quite many of these calls, so I wouldn't elaborate too much on it. Very clear that this could impact the short outlook, but mid to long term, we strongly believe in the industry. We strongly believe in Within the industry and therefore our mid- to long term financial targets remain unchanged. And with that, I would like to thank you for now and would like to hand back to Edwin. Thank you very much.
Yes. Thank you very much, Jens and Thomas, for We would like to start the Q and A session. Now, moderator, can I please hand over to you
The first question comes from Joerg Rane from AWP? Please go ahead, sir.
Yes. Hello. This is Joerg Rane. Could you tell me a little bit more about your clients? Where do they Invest is indeed can we see a regional focus Where companies are willing to invest in your technology and where you still see,
Hello?
Yes.
Okay. I tried to answer your question. If I understood you correctly, you asked geographically whether we see a change in
Yes. If you look at the orders, where do you see a pickup? Is it more is it Strong in Asia or in Europe, Germany?
No. I mean, you saw the it's a different answer. So for 2020, I think I mentioned that the regional distribution is the same as in 2019.
Yes.
So that has not changed in terms of dynamics.
Okay.
And for now, let's say, the first part of this year, it's early to say, it's only 2 months That has passed. We see a fairly good development in the U. S. For now, which We expected there was some delays in orders by the end of the year, I think partly linked to the elections And the typical, I would say, typical delay in decision making in the U. S, this is not uncommon.
If you look 4 years back, It was the same. And there we now see a bit of a relief on orders in terms of decisions being taken. So we saw 2, I would say, happy months in the U. S. In the very first two months of this year.
Europe is a little heterogeneous. We see a fair, How should I say, reluctant not, but hesitant to invest in Germany. We see other countries coming out faster and stronger. And in Asia, it's the same, I would say. We had okay months in the 1st 2 months, but it's not like It's superior uplift.
So really, I currently would put positive focus on SCS.
Yes, go ahead.
With the firms and partnerships you bought or went into in the last year. When do you see a A sizable effect of these engagements? When do you expect that there's new products coming on the market It can be combined with your offer and form.
Okay. So, this is me again. Different answers. If I start with WAPO Motors, technology is ready to be used. And now it's about finding and we have a 2 fold go to market strategy for the automotive company.
1 is Serving the market as an independent market organization. So they do not just offer their technology to CARTX. Their prime target is to offer it to the independent market and therefore prove The technology in terms of competitiveness, innovation and so on and so forth. So find partners to integrate their technology in their solution. The second line is Within capex, what I call cross divisional selling and implementation, and they are we are in the process of establishing Standalone subsystem concept, where we use automotive technology together with an REMSAR technology or even with an analog technology.
And this is in the process of being A design, B then also campaigns in the organization. First of all, it starts with the internal marketing and then it's Going out to the market to the Cardex customer base. So in essence, if you ask me when do I expect An impact on that, I would say we should see the first relative The impact in 2022. Pocket solution, this is a new technology And therefore, this is really early stages. I talked about the planned market launch In terms of sales launch next week, we in parallel already market to the market to interested parties.
And also here, we have a 2 fold go to market concept, which is, Again, independent to partners, independent of caudex, I mean, and second, within caudex. And this is also in the preparation. In terms of size of the numbers, here we are a little more careful. And the reason is This is new technology for us and for the young company as well. So we want to be a little cautious in terms of how many Parallel installations, we want to print to the market.
We want it to be okay. We want it to be mature before we go on a wider range to the market. And last not least, the buildup of the outdoor store business, I think 2021 and part of 2022 are mostly business development and building up the business organization wise And everything. So also here, I would say that we see the first two impacts in 2021 Leading into 2023.
Okay.
Does this answer your question? Yes. Okay. Edwin, back to you.
Yes. Moderator, I'm asking you for the next question, please.
The next question comes from Sebastian Vogel from UBS. Please go ahead.
Hello. Can you hear me?
Yes, we hear you, Sebastian.
Perfect. Got a couple of questions. I would ask them 1 by 1. The first question is, if I look at the order intake at mLog in the second half, the growth was really good, as you said in the presentation, year over year. The year over year number with Ramster was not that great, actually it was negative.
I was guessing normally that the sort of trends that are favoring M Locker are eventually also sort of the same trends that are serving Rambstar. I was wondering where this mismatch was coming from.
Sorry. Can you repeat it again, please?
Yes. Essentially, Ramstar orders went down by 4%, but analog orders went up by 30%. Why was Randstad still so much down? Also, yes, both are warehouse automation active and therefore should also benefit from similar trends?
Yes and no is the answer. Two effects, I would say. Remstar still Let's say, mLog is in the warehouse distribution market. And they also saw Quite an interesting incline in 3PL, in the 3PL segment, the 3rd party logistics providers. And this was a very interesting trend where these 4 third party logistics providers did not invest Into automation or not much, they started due to also the impact of COVID and the lack of people To operate their facility, they started to take much more interest in the automation part of things.
And That is where Amlok benefited from. But don't forget, Amlok had a very poor 2019. We should never forget that. So it's not really Like we had a normalized thing. And what we typically look at is a 2 year window for mLog, because we quite often see That these projects in the sales phase has a pretty long lead time before they really materialize.
And second, these projects have a very long Lead time in realization. So normally, it's better to look on 2 year averages than just on a year by year. Things could shift By the end of the year into the New Year and all of the sudden you have a €10,000,000 or €20,000,000 project in the next year, Which pretty much skews the averages. That's one element of the explanation. 2nd, Remstar, Even though we've been okay with the U.
S. Development, it was below last year Sorry, below 2019, I'm careful what Jan referring to, below 2019. And second, we had a negative Perfect, perfect, also in the U. S. So that had a double dip in terms of impact.
And MLOG, I said, is mainly dealing within the distribution of the housing industry, whereas Remstar has not managed to move towards This segment, enough. So Randstad is really not yet benefiting enough from Trends in e commerce trends in the housing distribution markets and therefore is still too dependent on I would say, traditional industry segments they're dealing in like the machinery, electronics And we all know that this industry segment these industry segments have been more impacted than the warehousing, distribution and e commerce.
Understood. And the second question deals with organic growth numbers. I was wondering, therefore, your acquisitions Into Kodak Italy and Automotive, they did
not add any revenue so far, right? Only Okay.
Because and with regards
to the other part of organic
growth, so FX impact on Randstad, can you quantify that?
Yes.
Yes, I can take this up. The FX effect on top line for net revenues is around 4,000,000 Negative effect. On Remstar. On Remstar and Coop, yes.
Yes, makes sense. One last question from my side. Raw material prices are increasing, steel prices are increasing. I was wondering how well you see yourself prepared to pass that on or how much you
Different answer again. Some of it we can hand over or pass on to customers. And this is mostly for the mLog business. When we're talking racking solutions, racking purchases for us, it's very interesting. That's an interesting market where These price increases can be passed on.
For Randstar, it's a little different. We We have challenges, and this is more on the competitors' behavior than on us. We did try to Part on sales, but this is a very challenging market when it comes to simply saying we have higher costs. So the increase healthy increase on prices to the market. So we have to find means to actually compensate So the increases to some extent with productivity gains, but somehow also with added value selling Where we get out of the pure price wars for Randstad.
And that's a challenge in itself going forward.
Understood. Many thanks.
The next question comes from Erwin Lutz from Kempen. Please go ahead.
Yes, can you hear me?
Yes, Boro, you're in.
Excellent. Hi. So I'm not sure whether this is difficult to answer, but Do you think Remstar has gained or lost market share last year versus competition in the niches that it operates in?
I wish I could answer that. We don't know yet. And the only because they don't disclose numbers, like the direct competitors, modular, Hemo And some locals, they do not communicate their numbers, so openly like we have to do. The only Area where we normally see relatively reliable numbers is the U. S, That the community report, the competition report into 1 report, but that is due to come out in April, May only.
So we will know by then. We believe that we do not did not lose market share in the U. S, Rather the opposite. In Europe, it's different by country. I believe modular, the 50% of their business Must have been very hard.
It's very hard in Italy. We all know the situation in Italy. So we believe that they are they must have lost quite a bit and informal lines and I cannot quote those, but informal lines in the modular Tell me that they also suffered by about 10% or a little more in terms of top line, but this is informal line into them and I cannot confirm straight away that this is true. We see them. We do have pretty comprehensive loss reports when we lose against Pay and Or Modular.
So this is relatively comparable to previous year statistics. It's not that we all of a sudden lose more against any of the incumbents, but does it mean we see all of the projects? And do they win projects without us knowing? That could be the case, and that's the challenging part to help us. Okay.
Did I manage to answer some of your questions?
Yes. That is helpful. Yes. And I have a second question. So if I look at gross margin in the RevPAR, it went from, I think, 38.1% In the first half to 43.6% in the second half, which is actually I think could actually be an all time high, the gross margin for Remstar in the second half 43.6.
Is that purely the mix effect of the services business being relatively high? Or is there something else behind That's very high gross margin for Remstar in the second half. And also, can you talk a little bit about whether that is sustainable into 2021 then?
It's a mix, one you guessed already, which is LCS, But the other bonus also gains in the factories. 1st half, I think pandemic And the impact hit us more than in the second half. And second, we also benefited from subsidies from the German government for Volkswagen Group. And that helped, I would say, Compensate some of the losses from the top line in the factory. And I guess you can Formulate to answer yourself to your questions, not all of it can be expected to be carried forward into 2021.
The expectation is a little unclear. So far, the German government has extended the subsidies, I believe, until the end of the year. Not sure whether this is fully extended like they did in 2020. And we need to watch it And then see how much we can compensate and how much will be a drop in this gross margin business.
I hear something. Maybe, Erwin, may I add something from our former discussions? You remember that also 2019 was still negatively affected because we had this huge capacity utilization With 3 shifts, etcetera, and extra cost that was that had a negative impact on the gross margin at that time as well. So this also fell to win. Okay.
And then maybe lastly,
Could you talk a little bit about what the U. S. Factory will do from a financial perspective with the business? I mean, how much Maybe cost benefit should come from that factory and maybe In terms of
revenue uplift
that you expect, can you give a little bit of Financial color around if and when the U. S. Factory starts up after summer. Well, I'm trying to understand to what extent is the U. S.
Factory is going to really change The profitability structure of the business?
The U. S. Factory, we had to postpone due to the COVID situation. We're expecting it in the later part of Q2 sorry, half second half year, not Q2, of the second half year, So rather towards the end of the year. So for 2021, we don't expect much impact either top line or bottom line.
And then you will have a ramp up period for the factory. It will only produce 10 of machines in the beginning. So actually ramped up in a moderate and well managed way. And That will mean that we in 2022, we'll probably see A potential negative impact on profitability in terms of overall supply chain because we have an added capacity, which is Fully leveraged by then and utilize on it. And I see 2022 as a ramp up year But it's not just for efficiency and productivity sorry, for efficiency and profitability.
It I believe it is also I know that's why we did it. It's also to protect our market position in the U. S. With the ongoing political debate in the U. S, manufactured in the U.
S, we need to have local production Close to the customers and also be able to demonstrate to the market that we have a local manufacturing. So it's Actually, twofold strategy. It's aiming at satisfying this need for us as a company. And second, in the longer term, then obviously also increased profitability. But the main part is really defense Okay.
Operator, are there more questions to come? Or are we at the end of the
Now gentlemen, so far there are no more questions from the phone.
Okay. Well then, I would like to thank you all to those who have joined us. You know we are happy to answer any further questions whenever you have gone through the whole annual report and figures. So I would like to thank you very much. Thank you, Jens and Thomas, and we'll hear you as soon as possible.
Thank you, and
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