Earnings Call: Q3 2020

Nov 5, 2020

Ladies and gentlemen, thank you for standing by. I'm Haley, your Chorus Call operator. Welcome, and thank you for joining the Vina burger conference call on the results on the third quarter of 2020. Throughout these recorded presentation, all participants will be in a listen only mode. Presentation will be followed by a question and answer session. If you would like to ask a question, star key followed by 0 on your telephone for operator assistance. And I would now like to turn the conference over to Mr. Daniel Merle, Investor Relations Manager. Please go ahead. Ladies and gentlemen, a warm welcome to the Winnebago earnings call on the 1st 3 quarters of 2020 and our Q3 twenty twenty results. Our board representative today is our CEO, Haimo Choi. He will lead you through the presentation today discussing our results in the COVID environment also giving an outlook for further growth opportunities for Vina Vega in the future. After the presentation, as usual, we are ready to take your questions. I will now hand over to Henrik for the presentation. Thank you, Daniel, and good afternoon from Vienna from my side as well. Thanks for being on the call and, would like to sort of briefly go with you through the three results, give you an update on the situation in our markets, and then also a short update on our strategy. Ladies and gentlemen, as you have received the presentation, I would sort of kindly refer to some pages that you can flip through with me. And when we look at page 3, you see obviously Q3 has been a very good quarter, obviously, determined by strong operational performance in all of our units. We had a post lockdown demand that improved through the summer months, the catch up effect due to the lockdowns in this quarter. 2 have materialized. You remember that we discussed those at, half year results and, I've seen them coming through in all of our units. And above all, I think, the self help efforts that our group, puts in place with respect to performance enhancement measures the improved product mix and obviously also the strong focus on innovation is paying off where you see that we even in this sometimes very challenging market environment can grow the business and the specialty profitability. Draw your attention that obviously on a group perspective, the turnover has been down in the quarter 3 about 2% and EBITDA compared to the record level of last year, up with 2%. So it shows clearly that we're on a good path, for, the further development of addressing some of your potential questions already. Pricing has been very stable. So we have been able to hold the prices as the levels that we, have attained, at the beginning of the year and throughout the whole COVID crisis. So pricing is stable. We had on the front of efforts, in the different units, obviously, a good performance on the farm forward projects. And as I've, all of the said couple of times, we have implemented our measures. Very rapidly and quickly. So we have delivered so far 24,000,000 out of this project in during the 1st 9 months of this year. I'm very confident that the 6,000,000 remaining we will achieve also year. So we'll come to a 30,000,000 EBITDA improvement from our fast forward program. The rest that we will to deliver in the years to come and especially in 'twenty one will be then, part of our overall measure. I will talk in a minute about So this is the the general sort of statement. If I can guide you to slide 5 of my presentation, here I give you an overview of the markets. A little bit more in detail, taking on your suggestions that I had during a couple of calls with you that you want to see a map again a little bit. So a little bit of background to the market, new business renovation. When we look at Western Europe, BN markets in the 1st 9 months of this year. They have been from an overall perspective slightly down compared to last year. That is to do with the lockdowns. And obviously also the problem that administrations are not full time working, and we have some delays with issuing billing permits. This is the general sort of, status when it comes to new build. Renovation is being up, helpful for our roofing business especially in the strong Western European markets like the Benelux. We've seen very good performance also in the Plaving segment in Belgium, Netherlands. Very good demand levels coming in in these segments. Central Europe, again, when you look at Austria and Germany, especially We have been a sort of flattish market environment when it comes to newbuild in our core segment for 1 and 2 family houses. And also in the renovation field, more sort of a flattish environment in these two markets. Then Eastern Europe mix picture, ladies and gentlemen, we have seen obviously that the Eastern European markets have been sort of throughout the COVID and the lockdowns operating. From very differently approach, they have taken to the Western European economies. However, we have seen some markets, over the summer also weakening these especially true for Poland and, Hungary. This has not to do exactly with the COVID situation, but both countries especially the Hungarian 1 have taken tax measures before the COVID crisis, bringing VIP substantially up from billing materials and services and construction. So they obviously were suffering from quite a severe downturn in the market. So we had to digest this also in these economies. So as I said, Poland and Hungary weaker compared to last year in the new build segment. The other markets like the Czech Republic and Romania taking only the 2 big ones have been more or less flattish compared to last year. In the, again, in the renovation segment, we find a very stable sort of environment throughout the whole area, with good volumes and stable volumes compared to last year on the roofing segment. Downs, especially, obviously, when you talk about the more important markets for us like the Netherlands and, and France. And to some extent those of Belgium. At the Nordics, these are the markets like Norway, Sweden, Finland, the politics relatively flat. Development to last year. So on a good level flattish and Eastern Europe in, especially the one, the markets that are heavily influenced by the creation fund and by public funding from the EU, doing well. So we had infrastructure projects Again, in the summer, it's a little bit the same scenario than in the new build segment in Poland and Hungary showing a slight decline in these markets. So this is the, overview on the markets. You will see the more or less the same development for the rest of the year will come to this in a minute in some areas, probably a little bit more declining because obviously, the catch up effects are now over and we have worked up, worked up the the volumes basically that were pre COVID issuing off permits. Let's have a quick look to the US and Canada. We've seen, in the 1st 9 months and especially after the sort of COVID, major COVID crisis in quarter 2, a strong demand level in newbuild in the U. S. So good levels. And in certain areas, even above last year. And you've seen also that our profitability in the segment has increased very, satisfactory. And also in the renovation front, good demand level. Infrastructure due to bad weather, obviously a little bit below last year. Canada was severely affected by a very long lock lockdown, and obviously after that it came back nicely. But as I said, it took a while to start of the business in Canada. So all in all, I think that's the overall, perspective on the market development on our end markets. So when we look at, page 7 of the presentation, 4% turnover, down compared to record last year, on an overall perspective. I think in this business environment, a very good performance, and it shows also that from a cost perspective, we have costs under control EBITDA is only down by 7%. We had to digest, recall major lockdowns in in nature of our markets and digest all of is sort of cost. And I think we've done well in order to manage it. On page 8, 910, you have an overview of our business units. I think the numbers explained themselves. And that's given you an overview. If you have any questions afterwards, we can go into the detail, but generally speaking, I think considering the markets, and the development and overall very good performance. Do you want to draw your attention to Slide 12 of our presentation? Here again, the overview on the financials, you see that obviously from a EBITDA margin like for like, we have, well digested this, sort of, events this year. In our end markets, I just want to draw your attention that obviously being a previous business model today is much more resilient than in the past. And Therefore, we can sort of digest those events, rather sort of in a more appropriate way than in the past. On page 13, two things that I would like to mention. First of all, you see that, on a working capital perspective, we have been able to reduce our working capital in this market environment shows how tight we manage, our working capital and our, structure, when it comes to net debt, you see that compared to last year, we are down by 22%. So below 700,000,000 on net debt. It gives us a ratio of 1.2 times net debt to EBITDA. So a very satisfactory level, and I think It shows, as I said, at the beginning of this year, you'll recall, cash preservation and very strong balance sheet management for the remainder. Free cash flow also on a very satisfactory level. So I think, yeah, these are essentially parts of the, the issues when it comes to cash management, balance sheet, etcetera and working capital. Let's move very quickly to page 20, where I give you an outlook, over the whole year. I keep, saying this over the year, and now you've seen the consistency in my words during this COVID crisis that the markets will be down by roughly 10 percent. I think when we look in certain markets over the year, we'll see this. You will see it at the end of the year, obviously, quarter 4 is still before us. So I think here you will see, a certain decline compared to record levels of last year. We will spend this year roughly about 120 of maintenance CapEx. Now the question that you will ask in the in the discussion anyways about quarter 4. So let me give you here in my personal field. We've done very well in quarter, in quarter 3. We've actually performed exceeding very satisfactory in quarter 4, I think we have a lot of issues in front of us. Currently, the visibility is very low. There's a lot of political issues coming to the high infection rates that we face, especially in Europe. And countries are moving very fast in imposing all sorts of partial lockdowns or certain lockdowns. Will they affect us? I don't know yet. I don't have sort of the visibility yet because it's moving very quickly. Can only tell you that the high rates of infections, I'm in a certain way affecting all of us because people kind of come to work from a production perspective, from a service perspective, from also a construction perspective out on the sites. There's a lot of things that, are coming our way. I'm not, pessimistic at all so that I say this loud and clear, I'm not pessimistic. I'm trying to be realistic and we face a lot of challenges in the next couple of weeks or months as you wish. This, COVID 19 won't go away so quickly. So we have to deal with it. Is the current guidance that we have out there with a like for like EBITDA with the higher range of 500. Is it too pessimistic? It is a gentleman. The only thing that I can tell you from today's perspective independently of lockdowns and whatever comes our way. I'm sure, and I'm pretty confident that we will reach this 500. So I think here you have, I think, a very strong message from us that even in these difficult times, we're more or less certain to reach this 500,000,000. So a a strong statement from my side independently, obviously, of the market developments that are already the general political and other developments that we might see in the next weeks. So I think, what I'm trying to say was this, if it's going better, if we have a mild winter, if the weather conditions are such that we can work through, right, through, to Christmas. And, and, if also from a perspective of COVID-nineteen, we have a favorable one. Yes. The answer is yes. We will be doing better. But let us sort of see this during the next couple of weeks, I will be updating you as I did in the past on COVID. But from today's perspective, the visibility is low and it is, would be obviously not the right way to now rush ahead and do some sort of in scenarios, again, because we will see, as I said, we will work on the working capital. We will work on our cost structure And as we did in the 1st 9 months, bring in the best performance that we can get. So I think this addresses the whole issue of guidance. And for those who want to take quarter 4 of last year, meaning 2019, as an example, please don't do that. It was a very different quarter for a couple of reasons. I only give you 2. First of all, we did some price increases last fall. So they, were fully effective in quarter 4, and we didn't do this this year because it was not the right moment to do so. First issue, second issue. It was a very, very mild winter, and we were able, we were able to work through right to Christmas And there was a lot of deliveries also in December, so a strong month. And I'm not saying it's not going to be the same, but that's not, I would say only one word. Don't take this as an example. Okay. So this is, I think, my message as far as the guidance is concerned. Let's move a little bit towards the future to address also our strategy We've clearly laid out, during our Capital Markets Day at Wienaburger independently, independently of the markets that we will find in 'twenty one, 'twenty two, 'twenty three wants to grow. And we will again focus on our business, on our product, on our route to markets, on, sort of our overall, business approach with services and with solutions. To grow the business. To simplify, you'll find on Page 23 of the presentation that we want to grow in these 3 years by 135,000,000 of euros EBITDA in these 2, 3, investing in the business, obviously, but with a clear payback. We do this on a very structured basis in improving our technologies, improving our processes, improving our overall performance, and adding therefore 135 minutes. If I sort of multiply this with our current multiplier on the stock exchange, we'll create more than a 1,000,000,000 sort of value for the company. So an impressive, again, at, goal and strategy forward independently of markets independently of M And A. Ladies and gentlemen, I think when you look at our targets on the ESG front, you see again a very clear commitment of VINA Burger to reduce energy consumption to reduce, obviously, our mission of CO2 by 15% in the next 3 years. Again, a very impressive way forward. And it's not only enough to talk about CO2 emissions. We are talking about biodiversity. We are talking about our portfolio is saying it's a 100% recyclable or reusable, the new products that we design and put in the market. So as strong commitment of Inaburger to a very modern, a very forward looking ESG, management. Last but not least, let me just say one thing. We don't shy away of, looking at our portfolio. Also, divesting certain assets. If we don't see that there's enough growth. If we don't see that there's enough opportunity for further improvement, you've seen that we have, successfully divested our suites business for a higher multiple actually that we are currently traded on stock exchange. So it's, again, a very could move forward on the liquidity side and on the strategy side, we can invest this money in businesses that grow faster. And again, We promised to divest $550,000,000 of value we did so and are successfully, obviously, ticking this box again. On an M and A front, we obviously, we have created a lot of liquidity. So that's certainly the case. We have created a room for further growth. Will wisely use it in the upcoming months and, upcoming year. You've seen a small acquisition coming through and I've described it on page 25 of my presentation. It's again, there you can see that we are improving our range of products and solutions for our clients. We have here added a software company that basically, offers smart infrastructure solutions to monitor predict and control data when it comes to sewage water. And again, here, we think we can alter new additional features and, value to our clients. I think summarizing all of that, I think from our perspective, we will move forward on our innovation the strategy and clearly do it by M And A and also internally. We have ambitious targets for fast forward enhancement project. With all the, performance enhancement that I've, sort of given you an overview very briefly. ESG and Sustainability are top priorities. We clear targets that we can track, that we can communicate it, and that you actually can, sort of check on us. And we will use the strong cash generation for further growth. Again, anticipating some of your questions, yes, we have a very good and interesting pipeline of projects they will come through. It takes their time and, obviously, we're not rushing into something. We don't feel ourselves under pressure. Think the next month will show that when we do a move, it's the right one for the right price and creates value for all of our shareholders. So thank you very much for your attention. And I'm obviously delighted and ready to take all of your questions. Ladies and gentlemen, And the first question comes from the line of Keith Form ahead of Exane BNP Paribas. Please go ahead. Afternoon, everyone. I hope you're well. I'll have three questions. My first one is, well, I guess you've already answered anyway the Q4 and the full year 2020 guidance. So I'm not going to ask you something about that. But, when we look at the kind of stock level of brick, inventories in UK announced where it seems that the market is getting quite tight, especially post the catch up effect. So I guess two sided. One is, can you keep level of free cash flow? Or are you going to have to increase working capital in Q4? And secondly, is that preparing you very well for the price increase season as we get towards January 2021. My second question is, I want to know if you could comment on the impact of recent consolidation in the U. S, through one of your competitor. And in Europe, recently, there has been an announcement on the trial market. Just wanted to get a feel as to how consolidated the market is today versus maybe pre crisis. And last but not least, I appreciate you've been very vocal around the niche piping solutions where you're increasing your weight there. Are you also interested in maybe some new verticals like the HVAC industry? And could there be some overlap there? Thank you, Yi, for your questions. I think the first one on the inventory level, I think from our perspective, we are in a situation in being a driver where we can easily sort of deal with, with any changes in the industry. We are clearly monitoring our root markets. I think we have this, that company that works the closest with our end consumers and end users, even in the UK, on the contrary to our main competitors there that are working more or less in the, in, I would call it in the commodity and the big, sort of scale and volume business. We are working with a lot of smaller clients and here we have a good visibility. We have stock levels on acceptable levels, I think, not not lower or not, in any means, for me in a critical situation for the the demand level that could pick up eventually or also as you are referring price increases coming our way. And don't under estimate our capacity to move, production from, UK to mainland Europe or actually also support UK production with our capacity on Mainland, New York. So here, I feel that we have, all the flexibility we require and also in the tile segment because you referred to it also in a later question, but also in the tile segment, I see ourselves well positioned because I see renovation picking up. And here, obviously, we are monitoring this also very well to have, the, the, I mean, the, the stock level on the right situation. Working capital is not only linked obviously to inventory, as you correctly pointed out, but for me, it's also, I think that a benefit perspective, we're on the right way and we don't need additional sort of inflow of cash to finance with additional working capital. So I think we are year final for the rest of the year as well. Consolidation effects, your second question is, obviously, moving along. And you had obviously a, M and A activity, ethics selling its business and create on roofing cars in Europe. And they sold it to the French competitor of Asterial group, owned by private equity. They have bought it for quite a high price. I would say at this point when you look at the performance of the business. So I'm not unhappy that consolidation is taking place. And as you see, we are not only thinking of consolidating out the industry and think it's helpful that others do it also because we are moving ahead already in the sense of integration of different businesses and offering more of than one solution. It's not only about capacity, it's about the whole solution. So when you talk about the roof or competence, is not only in roof tiles, but in non, non ceramic accessories, in insulation and other material that is linked to the roof. So this is going to be Venus as past forward. But again, if there are consolidation possibilities, you refer to the U. S, but I refer also to smaller ones in Europe, Vena better will be ready and do it for the right price because obviously we are not doing it just for the need of consolidation, but it might make a lot of signs. So yes, we are certainly a consolidator also in the future and do it for the, for the right, parameters that required that we require to create, value for all of our stakeholders. On the niche, typing solution part, Again, yes, we are driving our change process in the piping segment very thoroughly with with a lot of energy from the management side. And as you've seen, the strong numbers coming in from this segment, and we will do so over the next years. It's a process. I always said it's not something that will be in a couple of months achieved. So this is will certainly be part of our of our strategy forward for the next years. You will see us, 1st of all, investing in the business. Yeah. We create capacity. We create technology for additional products, accessories that we can sell with our typing business, you've seen us doing as little M and As left and right, and we'll continue to do so. And so the answer to your question is, yes, we think that we can sort of grow the in house segment, which we call it the electrical 1 and the water 1 of the business. And also on the infrastructure side, create here. So, product range that is not only consisting of packs, but, as I said, on the on the M and A front with the Dutch acquisition and more comprehensive and more, value creating product range that we put in place over the next years. The next question is from Shing Tong of Onfield Investment Research. Please go ahead. Thank you very much for taking my questions. So I have 2 if I may. The first one is actually on the Q4 outlook or even routing to 2021, because if I look at look at the EBITDA guidance, which means that the Q4 EBITDA like for like will be even lower than 20 2019 or 2018 level, not just 2019. So I'm just wondering, in that sense, can you please help me understand a little bit in Q4 in which market that you see a significant slowdown in enrolling to 2021. And also, what are your rationale high, the 500,000,000 guidance is I'm just trying to understand the gap here. The difference versus the previous years And my second question would be actually on your digital tool because, you've mentioned that during, say, Q3 or even the first 9 months. Your digital solutions actually helped a lot, for example, the Unbuilding Solutions business. So I'm just wondering, is it possible to quantify the impact in any sense For example, how many more users you've got, and also, like, how do you see it improve their productivity And also, what kind, what is the opposite scenario, for example, the slowdown in construction activities or businesses Please both tools more in actual in place in the 1st 9 months. I'm just trying to understand the impact of all the digital tools here. Thank you very much. If I may take your second question first, and thank you for this one. Obviously, we track it very very detailed in a very detailed way this this approach. And, please, if I may remain a little sort of a helicopter level and not go through in all of the details. But if we introduce a web shop for plumbers in Austria, for example, which we did last year and this year was fully effective. We see here double or even triple digit growth in this web shop. What does it do? It actually offers the plumbers to order directly from us directly, and we deliver between 12:4:24 hours on the construction side. So this is the coach we necessarily take. We have put this in place. And as I said, we have here double or triple digit growth this year. So Yes, it adds to our business. Yes, it creates it. It's difficult to measure on a group level because we have so many things in place. And actually, I tell you if we hadn't, this sort of things in place, we probably wouldn't, create the business that we have done in the past. From a, sort of users that come to our websites that, order from us directly or that I in contact with in order to create leads for project sales, for example, all in all, we have, again, very impressive growth rate I mean, when I look at Belgium, one of our major markets in Western Europe, we have a traffic here of, more than a million people at on our sites and work with us. So it's quite impressive. And I think we are surprised ourselves how strongly people are using and interacting with us in the digital field. And you will see more and more features from us to, satisfy the demand level and satisfy basically our clients. 1, as a matter of fact, one of our subject is also we have more and more access or hits to our installation videos, yeah, how people install our products. And so it's very helpful for them to see it, to get instructions directly from us. We used these learning tools more and more especially in the COVID times. So these are things where we we are dramatically changing our efforts and where have human efforts and also financial going. From a financial perspective, these investments are not huge for us. We are not talking about, 10 or 20000000 of euros here. Smaller amounts that we exactly use for those businesses and bring to the marketplace. I think I hope I addressed it, but obviously, I will think and take your question for the future to give a sort of a couple of KPIs that we can track them in the future so you have a better idea. But I hope I addressed it in a way that you can get a better feel. The digital is for us a major tool when we talk about customer relationship and interaction with our customers. Your first question was relating to the quarter for, and the guidance. Let me just give you as I tried in my presentation first, to give you the following, sort of perspective. We were one of the first companies in the sector to give guidance this year. And we did, and we upgraded the guidance in the sense that we said very early in the year. 500,000,000 is the upper range. Basically, that we are think we are able to achieve. So yes, we are working forward. And as I said, please don't take always the comparison to last year because was very different with the price increases with high volumes in, in quarter 4. So it's a very exceptional one. You're right to go back to to 'eighteen and 'seventeen looks there as well. It's fine. It's good. I said, with the current situation, and please understand my my position here It is very difficult to update a guidance in October when you have not a lot of visibility for the rest of the year. And I can guarantee you as of today that we will reach the 500,000,000 in any event with all the closures and all the lockdowns that potentially, and I say, potentially come our way. We don't know yet, but I'm just saying, I think Unamerican goes through by not, affecting our current performance, and we can sort of say give you the insurance that we will make 500,000,000 this year. That means on the contrary, if nothing happens and if everything goes well, if we have a mild winter, yes, we will do better than this. At absolutely, and you are right to look at the historical numbers, and we will do better. And, that's, I think, I can update you probably in, in a 3 or 4 week time when we have a better visibility. But from today's perspective, I rather would stick to what we have that give you this information. And this is the best I can do at this point of time. The next question is from Amy Gala of Citi. Please go ahead. Hi. Just a couple of questions from me and I'm sorry for asking, a bit more on the Q4 again, but would it be possible for you to give us some color on how the October trading span through your markets? And secondly, is it based on the sort of lockdown information that we have as we stand today? Would it be fair to assume that actually most, countries are still quite positive in terms of the construction sector and there aren't as many restrictions in place versus when we compare to the first lockdown. I think related to that, I would I mean, it would be also helpful to to understand how the renovation sector as you see it would would probably operate in the current, lockdown scenario. My sec my second question really is on the international piping business. I mean, if you could give us some color on how how the backlog stands in that business, that would be quite helpful. And the other really connected question is really on the margin performance in piping has been quite good in the past 2 quarters. Obviously, there has been some self help measures as well as product mix benefits. If you could give us some color as to What is the normalized margin that we should expect your piping business to have on the back of the optimization measures that you have taken so far? Thank you. Right. Let's start with the piping business because otherwise we always talk about Winneberg in general and I very appreciative that you talk about the pipes. Because I'm very proud what our colleagues are doing there. And, from a perspective of margin, I think they've done a great job in improving it. I would say from our target perspective, it's about 12% that we target there on an ABDA front. We are moving in the right with the current portfolio. Obviously, if we acquire and invest strong in the business to upgrade the portfolio, this sort of margin will trade upwards. But for the moment, with the current portfolio, with the current industrial structure, the 12 is a is a goal that we want to achieve. And I think we are in good shape to achieving it. When you look at the the current performance in the 9 1st months of this year, we have made good inroads when it comes to the fast forward and fast forward means performance enhancement that goes for all divisions I've given you the the the indication of 24,000,000 this year and the whole up until the end of September 24 and for the whole year, 30,000,000. So again, also the the part that is, that you can distinguish by turnover or whatever goes into that piping division as a contribution there on performance enhancement. So that's one part of your question. The second one is obviously on this up trading, as you said, here again, as I said, slightly improving, the, the, the sales and, the interaction with the market was with higher, value added products. We continue this path and we will do so. So again, here, good movement in this direction. So all in all, from a piping perspective, we are on a on a good, way forward in order to achieve our targeted 12%. From a backlog perspective, from the international typing business, what you are referring to is the big dimension types or the the solar force business, So again, here, yes, orders are on our way. We have delivered just a very big project to Bangladesh, and we are delivering some other project internationally. So the order book is quite satisfactory at this stage. When we look at the construction market and you are trying to get had a sense of, quarter 4. Yes, I think we need to understand the following that not all market are doing that well. As I said in my introduction statement about different markets in residential and renovation and also in infrastructure. With a very different set of markets in Europe. Some of them are down more than 10% by the way. And that's why I'm saying for Vina Perger's perspective, a 10% minus from our end markets is the fair assumption to take for this year. And, that means that, obviously, construction markets in Europe doing differently. And, Hungary is down more, for example, compared to last year 10%. Also in Poland, we see a decline that is more important than the 10%. Other markets are more flattish, as I said, about German and Austria. So again, here, you have a very mixed picture. Is the market changing dramatically in the in the last couple of weeks this year? Listen, the difference is is the following. And it's not, that I'm trying to be evasive, but you need to understand the rationale of people and psychological We, at the end of the year, winter comes, that people are sort of not working through in all the countries. So psychologically speaking, they are not in this, in this situation as in March April, where they are just waiting that it starts. And then when it starts to go off and do it, and in certain countries, yes, you were right to work through it. So obviously, we are in a in a phase where people are thinking twice to start a project right now. And that's why I'm saying I'm not so sure that we have this sustained development, through, quarter 4. I'm not pessimistic about any market. I'm just saying we need to keep an eye on the situation. It is a difficult one for all of us because COVID creates issues also for our installers, also for the work on the construction side. It's not that easy that they handle it. And that's why I'm saying we should be a little bit more cautious and not over optimistic. Yes, you are right. Renovation is doing well in certain areas of Europe, not in all, again, certain areas, and it will certainly improve over, the next 6 months or so. But again, take into consideration that the winter months that are starting in November for me and going through to February, March, and certain areas in Europe will be this sort of month where we will deal with COVID, yeah? There will be a sort of, impact on construction industry as such. In some areas, more than in others, it's about labor availability of labor. About, I say, the infection rates and all of those sort of things that will affect us. So again, please get me right. I'm not being negative about anything about structure of markets about the demand levels. But I'm just saying this is an is an issue that we will face over the next weeks and the, and, and month. It's different to the lockdown because the lockdown was a one time effect. And this was clearly in certain countries, yes, it was 100%. This time, it's not but it's it's a sort of thing that we will drag on for a little while. And, this is my, hopefully, my answer to your rather complex question, if I may say, because the visibility we don't have, and please understand also my position. I've never been in such a situation with all these sort of things that come our way. And we will see, as I said, I'm also cautious because we need to digest this. Yes, that's it. That's very helpful. Thank you. Thank you. The next question is from Nishu Heiber of MainFirst. Please go ahead. Great. Congratulations on the great results and thanks for taking my questions. I'll just ask two questions if I may. If I can just start on your outlook for pricing, just given the volume declines, I mean, I know you mentioned on a number of occasions end markets declining on average by roughly 10%. Looking forward to next year, do you anticipate any competitive pricing pressures coming into your key markets? And just a second question, just following up from a previous question, the self help measures that Vina Burger have put into place have been very successful in driving margin expansion. And it does seem that across the 3 key divisions, you are close to your midterm targets. So do you anticipate revising, or can you provide any updates in regards to the midterm targets for each of the operating segments? Thank you. Thank you. I think from a pricing perspective, you are absolutely right. We, I think we achieved factory levels this year. Again, I think we promised that we will offset all inflationary cost increases 5 price increases. I think we were successful in this. We're obviously upgrading our portfolio as such to get better margins. And this is, the tendency forward. And, from a competitive pricing environment, listen, we live this year in competitive pricing environments. Be perfectly honest because our smaller competitors are fighting for volumes and they're fighting for markets. And this is, again, I think the strengths of Vina burger that we don't go into this area of price wars or price sort of declines, we really try to prove our services and improve our products to decline to our customers and therefore keep the prices as the wallet at this level. And this is key for us that this sort of, in performance enhancement measures has helped us in order to keep it at the level. And obviously, on the other side, we are trying to improve margins and also now addressing your question in the forward looking by health sales measures. So cost technology and and the input, costs will be managed in a way to improve, here, the portfolio. Are we able to give you here enough? I mean, from my side, the the the group as such when I gave you gave you the indication that we want to have growth in EBITDA was 135,000,000. I think it's a strong statement when we say we keep here the 2020 level far as sales is concerned and prices is concerned, and we say we can actually improve our performance by 135,000,000 due to self help measures. And I think this gives you also an indication that we want to perform better in the future and get obviously step by step the margins up in our different product segments by self. Obviously, if we can do it, then additionally through better markets and better acceptances and price increases, then we will be on top of it. But I hope I gave a sort of a first indication to your question forward looking. Yes, that's great. Thanks a lot. And the next question is from the line of Pamela of Morgan Stanley. Please go ahead. Hi, thank you. I have two questions. Number 1 is related to margin and the fast forward program. It looks like the margin gain mostly comes from North America, not really from Building Solutions. And in fact, in the 1st 9 months, in Beauty Solutions margin has contracted. Could you please comment on that and provide a bit more color on the fast forward program? Thank you. And then the second question is, really related to acquisition M and A. 1st of all, how big is it intact software business that you have recently acquired? And secondly, if we think about your capital allocation strategy, and specifically Pipe versus North America, what's your topic and why? Thank you. I will take if you have made your second questions first. I mean, an M and A perspective, impact is a very small acquisition. It's a single digit amount in millions of euros, so it's not that significant for the overall picture. But as I said, it's very important for the future development of our typing operations. So something like this, we can digest very easily. It's on top of it. It's more a human business in the sense of know how and and and IT solution and cloud driven sort of solutions here and not an industrial footprint with with machinery and building and construct and then production sites. So Yes, this, sort of M and A will continue. Top picks, you know, for me, a top pick is, where do we create the most sort of value on synergy side, on on on also on the customer side, and and on on the performance side. So we have numerous projects in our pipeline right now that we are currently working on. And, they will emerge in the, I would say, in the next couple of months. So I'm very confident that we can add to the current portfolio of Vina Burger, certain assets that will bring a lot to our operations in North America and in Europe. So here, again, confident on this track record, and you've seen it in the past. I think we've been very disciplined in allocating financial resources to, to, M and A with the payback on average above about five times. So I think here again, we are very confident to get a couple of those deals in pretty quickly. On the margin and the fast forward, yes, you are right. Obviously, the American business has improved and has, improved in margin and in performance. The contraction when you talk about the Veena Better Billing Solutions is only logical. You have to, you see, this has been key business that has been mostly affected by our lockdowns in quoted, 2, they had obviously to digest all the shutdowns, so that the costs of this, the idle capacity, the cost of being down for, in some cases, 8 weeks. So this, this business has suffered the most and had to digest it. But if you look at the performance as such, and I think it goes without saying a contraction that is slightly from, from 21% to 20%. 1% is not in such a critical and extraordinary circumstances. I think it's, it's acceptable. I think they have done a great job on the pricing front, great job on the front of, cost management, but, I'm not so worried about this sort of margin contract contraction in this case of the COVID situation. Okay, thank you. And if I may just go back to the M and A comment, if I can be very bold and just say them and then North America why, it looks like a fragmented market with lower margin. Why wouldn't you put more money here to grow over here. But why do, why to grow in North America? First of all, the North American market is not fragmented. I think if you look at it the 4 big players who have more than 60% market share of the market. So if we were to make a major consolidation move in North America, we would further, concentrate and therefore structure the industry. I just take as an example, the UK and how the UK is today compared to what it was 10 years ago. And I think our industry always is important that it has a certain concentration. So a small number of big players that actually drive the market in the sense of innovation, new products, and also from route to market. And therefore, obviously, to improve margins in North America and drive this upwards is a key element to such an acquisition. And there are no more questions at the time. I hand back Mr. Daniel Wells for closing comments. Thank you, operator. Ladies and gentlemen, thank you very much for dialing in today. The next conference call will be on 24 February for the full year results. Thank you once again for your questions today. I wish you a pleasant afternoon. Stay safe and goodbye. Ladies and gentlemen, this concludes the Vina Valley Conference Call. Thank you for joining and have a pleasant day. Goodbye.