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Good day, and thank you for standing by. Welcome to the NKT Q2 Report 2021. [Operator Instructions] I must advise you that this conference is being recorded today, Tuesday, the 17th of August 2021.And now without any further delay, I'd like to hand the conference over to your speaker today, Mr. Alexander Kara. Please go ahead.
Thank you. Yes. Good morning, everybody. Thank you that you take the time to listen to our Q2 results of NKT and NKT Photonics. I have here in the room with me Line Fandrup, my CFO; and Basil Garabet, the President and CEO of NKT Photonics, which you'll hear later.If we come to the Q2 numbers, and we have preannounced Q2 results on 16th of July. So you will not hear too many surprises. So we have disclosed already EBITDA revenue for NKT and Photonics, and we have updated our guidance as such and no surprises to expect in this call.So overall, a key message for Q2 is we had a good organic growth, satisfactory quarter overall for both NKT and NKT Photonics. 20% organic growth in Cables, and all the 3 business lines contributed to the revenue growth and also to the earnings, and this is the highest EBITDA result since 2017.Further, we have some order wins, Troll West in AC cable with Equinor and SSE customer and Dogger Bank C, DC offshore wind farm in U.K., which completes then the Dogger Bank cable order where we had already received Dogger Bank A and B. So in Photonics, we had the highest ever Q2 revenues of 28% organic growth, which was mainly driven by the Industrial segment, which is also great. Further, the Board of Directors decided to resume the strategic review of NKT Photonics.If you look at now the performance. As I said, a satisfactory quarter, the best since 2017, 21% growth. And you can see that here also on the chart. And in Solutions, we had a good utilization in the factory with different kind of orders, which we produce different cable types and then 2 awards, as I mentioned already, which bring us back to a record high order backlog of EUR 3.16 billion in market price, which is, of course, great, as it increased our visibility and planning capabilities for the way forward.Also in Applications, we continued to improve on the performance -- financial performance. We have increased revenues and also the earnings efficiency, and I'll come a little bit later back.Service & Accessories achieved the highest ever quarter. We had an exceptional good quarter, in particular in Service with repairs. And this, of course, contributed strongly to the results of Q2.If we go then to Solutions. Here, as I said already, we had different type of cables produced in Karlskrona and Cologne, DC, like Dogger Bank A, AC offshore like Ostwind, Troll with -- for oil and gas with Equinor and Viking MI cable. So a good mix of cable production in Solutions and, as such, a good utilization in the factories.Then wherein what is also highlight the completion of the NordLink interconnector from Norway to Germany. This is also personally for me a great achievement. As I have in 2014 personally involved in this tender under ABB. And finally, this project is now in Service. So 2,450 megawatt, quite a long time, which it takes actually to install such a large order, but the great achievement and good to see that.So the NKT Victoria was busy in Q2 with several installation. Also first half was a good utilization. And what we are looking now in, what we have started already in application and accessories, looking on structure optimization of the business, we have initiated the process for solution, how to optimize the Solutions business from the cost structure, the portfolio. And this we have also preannounced with the EUR 40 million -- up to EUR 40 million cost, which is a mixture of CapEx and other costs.Looking at the high-voltage market overall. I think what is good, there is around EUR 2 billion, which have been awarded in the first half, which is good for the industry and which helps industry to increase the utilization, which is great for all. And as I said, we have been successful with Troll West in Norway, AC offshore, cable with dynamic sections and the Dogger Bank C, which completes the total Dogger Bank order.And we are busy with -- continue with tenders in a different market segment. The majority of the orders, which have been awarded in the first half have been DC and some AC. And you see on the right side, Dogger Bank C and Troll, which have been added to our backlog.Going to -- now to the backlog with these 2 orders. We returned back to a record high backlog of EUR 3.16 billion in market price, which gives us good visibility and planning capabilities for the future. So we are now back on this high account level with Dogger Bank C and Troll West.Looking at Applications. Applications, we have increased revenues to EUR 124 million, up 6%, and also the earnings have improved to EUR 7.6 million. So we see the results of our actions -- improvement actions what we have taken, and we expect that this trend continues. We are also progressing on the moving -- building wires from Asnaes in Denmark to Poland to have a focused factory concept. So this relocation is ongoing, and -- but it will take some time, obviously. And also on the medium-voltage side, we had some good momentum in the market in the Nordics, whereas other markets were a little bit weaker. So good traction in Applications and more to come in the coming quarters.Service & Accessories, a really good quarter, I would say, with EUR 65 million of revenues compared to EUR 36 million the same quarter last year, 90% growth, mainly driven from the Service with several repairs, offshore repairs, but also good traction on Accessories with medium-voltage accessories from Nordenham in Germany. Also, we have worked on optimization on the business. And as we have announced earlier, we concentrate the high-voltage accessories business in Alingsås in Sweden and moved those production capacity concentrated in Alingsås and moved it from Cologne to Alingsås.EUR 14.5 million EBITDA, quite nice achievement for 1 quarter. Unfortunately, this is not to be expected to continue as it was also driven by repair orders.So with this, I think you have the highlights of the Cables business. And I would now hand over to Basil, who will give you more details on Photonics.
Good morning. Thank you, Alex, and what a great quarter for Cables. It's getting harder and harder to catch up. So let's start with Photonics.We had a great quarter. It's a great satisfactory quarter. We had the highest revenue for Q2 in Photonics. And the revenue improved as well as EBITDA, and it's compared to last year, which was obviously impacted by the COVID-19 pandemic. Our organic growth was 28%, which was driven by a very good growth in Industrial.Medical & Life Sciences had a modest growth and Aerospace & Defense had a modest growth year-to-date, but the actual quarter was up 30%. So we're seeing some fluctuation in organic growth in the defense side, but it's -- if you take it over a year, it's relatively steady, and we're very pleased with the way it's performing.And obviously, due to the higher revenue, our EBITDA increased earnings, including redundancy costs were at 0 EBITDA because we had something like EUR 0.4 million of redundancy costs.The other good thing that is happening in the quarter, which is very pleasing to us, is that our order intake was also at a record high. It's at 41%, which is an all-time high for Q2. Again, very pleased. We've been working very hard with our customer and our customer base to improve the business going forward, and it's good to see it come home.And finally, in July, July 16 to be exact, the Board of Directors decided to resume the review of strategic alternatives for NKT Photonics.We'll go to the next page. In the business development, the Medical & Life Sciences, which is driven mainly by our microscopy and our ophthalmology business, is doing well. We're getting more traction in the ophthalmology field, and we expect actually that to grow and is one of the focus areas for the company. We have new products that fit in there. We're also benefiting from a release of a number of different products that we did last year.In the Industrial segment, which is our biggest segment and also is the fastest growing this year, the main contributors were the semiconductor industry. We supply a number of lasers that go into major tools in the manufacturing area semiconductor. That's doing relatively well. But it's also -- the other area that's doing very well in our Industrial area is the quantum, anything from quantum research to quantum computing, et cetera, that is a big, big pull from our customers in there.In power cable monitoring and distributed acoustic sensing is also doing well, and we are in sort of a record high order intake in that side.And finally, in Aerospace & Defense, this is the smallest activity we have, but growing. The project level activity is very high. Again, something that is nice to see, and we see that's growing also in the U.S. going forward.And with that, I will hand it over to Line. Thank you.
Thank you very much, Basil. So after the go-through of the business, we go through of the financials. And if we just have a look here at the income statement highlights, I think dwelling on the organic growth and the change this quarter for both companies, NKT Cables is coming out of a solid growth even in 2020 and now further to that 21 percentage growth on the Q2. So there's a lot of things underneath is going on, as Alex also alluded to.And then for Photonics on the growth also to see that the 2020 path has changed. And now we're looking into a very, very solid growth. So overall, we are satisfactory for the company as a whole.And this also boils into some earnings that are strong in the quarter. EUR 42 million on the total for the company on operational EBITDA, and this constitute of the Cables part with the EUR 42 million, which is a EUR 26 million increase compared to last year in the same quarter, but also Photonics coming into a breakeven.If you just read a little bit about, let's say, the seasonal pattern of Photonics, we now have ahead of us a second half, which is usually the high end of the Photonics as well.So on the margin level, this, of course, also pans out into good results. So this is really great to see. The net result for the company is positive. And comparing to last year at the same time, we are up by [indiscernible].If you just have a look on the FTE side also, you see here that the corridors expansions in the Solutions part is adding some to the growth in NKT Cables and NKT, but also the underlying changes in the factory footprints in Applications and in Accessories is also impacting here where you see a change for the coming periods also.And in Photonics, you see the opposite of the -- you see the restructuring that Basil alluded to, taking the 3 numbers down a little bit. We had no one-off items in Q2. In Q1, we had [ Stenlille, ] but that's also, of course, a part of the group earnings level of the Q2 that we didn't have anyone else.If we go into the balance sheet highlights, here, you know that the working capital changed significantly from the first quarter of 2021. I'll now come back to that. I can say here that it's primarily coming from the Solutions and Applications business. In Photonics, on the working capital, that's actually an improvement due to a more effective collection of trade receivables.Going down to the ROCE, you see the company, as a whole, turning into positive. This is, of course, very much impacted by the improved profitability in the Cables division. And you see the net interest-bearing debt impacted, of course, by the working capital changes for the quarter, but coming significantly down compared to last year at the same time, of course, due to the capital raise in 2020.Our leverage level NIBD to operating EBITDA is at 1.7x EBITDA for the quarter with an expectations that with the -- what we will see in the working capital, expected improvements that will come down again.If we go to the next slide on the working capital. So from the Q1 of minus EUR 65 million to Q2 of EUR 113 million, this is due primarily to Solutions and Applications here. As you know, and we talked about earlier, the Solutions business is very much prepayments and milestones in general. And it is so that this quarter, we actually have a phasing of the milestones that impacts us unfavorable on the Solutions business. This, combined with the hedging instruments that we run as a business here, drove up the working capital quite significantly. Overall, the commodity prices is, of course, also impacting NKT, and you can see, when the metal prices go up, our receivables increase corresponding more or less and the payables also decreased, more or less have a neutral effect against that. And then you see, of course, also inventories, raw materials, anything we have a stock also taking some of that mix of pricing.But important to say here also that we are working on, let's say, the internal elements of the inventories and accounts receivable, [indiscernible] and the milestone payments and where some of these effects are more or less also related to the seasonality of the summer buildup on inventories and the hedges. So this will be coming down in the quarters to come.And then having a look at the cash flow statement and the free cash flow for the period. Working capital, the change here, of course, not favorably impacting the free cash flow, but more to say that the EBITDA, of course, positively contributing to the level, whereas our continuous investment in the expansions in Cologne and Karlskrona is also taking down our free cash flow. We are on good track on the expansion program. And you will see over the second half also that the investment level continues to be impacted by these investments.Coming to the next slide on the outlook for the year. As we came out on 16th of July, with a specification to the guidance, there's no change to this now. We expect the NKT Cables coming out in the upper end of our revenue guidance of EUR 1.1 billion to EUR 1.2 billion. And similar in the operational EBITDA between EUR 80 million to EUR 110 million, where we'll be in the upper end.NKT Photonics changed the outlook for the year on 16th of July based on the good performance seen. So now we are looking into an 8% to 15% organic growth on the revenue and an EBITDA margin of 6% to 8%.So just to recap the key messages of Q2 here. A strong organic growth in NKT Cables across all business lines contributing positively and getting the operational EBITDA to the highest level since 2017. Our backlog returned to a record level of EUR 3.16 billion in market prices based on also the awards from Troll and Dogger Bank. And Photonics having the highest ever Q2 revenue with 28% organic growth compared to last year. And finally, that we have decided -- the Board of Directors have decided to resume the strategic review of NKT Photonics for the time ahead.With that, I'll pass over to the questions session.
[Operator Instructions] Your first question today comes from the line of Kristian Johansen of Danske Bank.
I've got 3 questions. So the first one goes to the mix in Solutions. So as your guidance implies a lower earnings and then you have talked to this worsening of mix going into the second half, I understand you sort of expected sequentially to worse in Q3 and worse further in Q4. So firstly, whether that is correctly understood? And secondly, when do you expect this mix to improve again?
Yes. Okay. So Kristian, as I said, we had in Q2 a good mix on different cable types. And this has changed a little bit in the second half, a little bit unfavorable. And so we just won the Troll West as an AC order. So ideally, we want to have an optimum mix in the factory, which would ensure a maximum -- best -- or, let's call it, best utilization of the Solutions factory. So it depends very much on the order wins. And then, of course, also the second half is somewhat weaker because we have a record high Q2 in the Service & Accessories business as you wrote also this morning in your report. So this will somewhat weaken the second half of the year.
I understand. If we look at just Solutions, though, I mean, I guess that there's probably a limited amount of orders, which can really change the second half given the amount of months left. But then looking into the beginning of next year, you still see opportunities to optimize that mix for sort of first half 2022?
Yes, absolutely. I mean, I want you also to mention, we have won sometime back a major part of the German corridor projects, which we expect also to start production next year. And this, of course, will also contribute, if you want to say, not really a new segment, but quite massive amount of cable, and that will help. So -- but we are not yet there. We have not come out for guidance for next year. So there's still going to be time to do so. And then Troll West AC order helps, yes.
Understood. Then my second question, this investment into the Solutions business where you expect to spend EUR 40 million. I understand you're reviewing this, so that the exact actions are probably not in place for you to share right now. But can you maybe then elaborate a bit on the motivation? I mean why have you felt the need to make these changes?
No, for me, it is very simple. I mean, I started the job in NKT to improve the result of NKT. And we have done good progress in the last 2 years, also have initiated a lot of actions in Applications business, where we see some -- the results, and this we expect to continue. We see -- we have taken actions on footprint. If you take -- if you look at 1 kV movement, the building wire movement, Accessories high-voltage concentration hauling source, then optimization in factories and different actions. And we have also started on the Solutions side to look on improvements. And now we're looking to further improvements, also look at the cost structure and what can we do to improve the business to increase our competitiveness, particularly in the lower profitability segment to get a broader part of the market with our market share. So this is just a continuation of what has been started already in other business lines, and this we will continue until we are on the level where we say we are satisfied, which will most probably never happen.
Fair enough. When do you expect to have the plan ready to share with us in terms of exact timing and potential, I mean, earnings upside to these investments?
I mean, we -- I think we will during the second half come out with some more detail.
Understood. Then my last question is just on these repair jobs. Obviously, it's fairly evident that they were quite profitable for you in the same quarter. Can you just comment on what amount of repair works you have been doing here in Q3 so far?
No, we did -- we had several repairs, for example, the treatment, repair, which is on the MI Cable, which is a quite complex project, what we call a contract project is from U.K. to The Netherlands. And then we have the Baltic one, which is an offshore wind farm from 50 hertz. So there were several but just by accident concentrated and we had another repair, not the full repair offshore with TenneT. And this contributed to this result. But again, as also Europe, a new article, this is not the plannable in the [ offshore ]. We cannot assume that we will have in the second half of this year the same pattern. So -- but of course, we work with service agreements, with customers, and with those customers where we have service agreement, if it happens, then -- which we will repair, will award it to NKT. So -- but okay, if there will be a repair from external factors, we are not plannable one, so.
I guess my question was more on whether you have initiated any larger repair works in the third quarter?
Sorry, sorry, I don't misunderstood. No, no, no. There's no other large initiated, not that we are aware of any external cable, which has broken.
Your next question today comes from the line of Max Yates of Credit Suisse.
Just my first question is on the Solutions margin. So you did 14.1% in Q2. It sounds like the factories were well utilized. It was a good mix of projects. I'm just trying to understand, as we look out into 2022 and 2023, is there room to improve margins from this 14% level? Or is this an example of when everything goes right, you have good mix, this is the kind of level the business should be achieving? I'm just trying to understand kind of if you look at this quarter as an example, what additional levers there are that you can pull to move margins higher from that 14% level? Or is that a fair reflection?
Yes. I mean, in general, to improve further margin, which can happen if we have increased the utilization and have a good mix. And then as we just announced also, we look at the structure of the cost base of the Solutions business. And this should also lead to an improvement of the earnings. This is why we have initiated this process. Then we also expect that the German corridor will start production next year. So -- but we are not yet here on the guidance discussion for '22 or '23. So we work on it obvious to improve further. That's the plan.
Okay. That's fantastic. And just my second question would just be thinking about your -- the balance of your backlog when we look across sort of years in 2022 and 2023 and also the types of cables in your backlog, both AC and DC. And I just wanted to understand, do you view your backlog is relatively balanced when you look at kind of when you will be -- or when your factories will be utilized in 2022 and 2023? Or are there sort of certain technologies which we should be looking out for where you really need to win some orders to make sure that your utilization is relatively balanced across 2022 and 2023? So just to understand the different technologies and phasing that is balanced.
Sure. Sure. So I mean, we were quite successful overall in the past quarters on order wins on the DC technology, but also on AC at this quarter, we just announced Troll West AC [indiscernible] cable. So -- but we have more capacity on the AC side and also on the MI side. So for MI, there is no project get awarded and that will be difficult for 2022 as it takes also some signs. So what we have capacity to take some more orders and also, in particular, on AC and MI in the, let's say, which impact AC '22, MI '23 rather than '22. So still more possibility to further optimize the factories if awards are there and if we are successful, a lot of ifs. But of course, we have also other areas where we're looking on improving the business.
Okay. I mean, do you not -- do you see that as an issue when you look at the MI project pipeline? Because my understanding is that your margins in Solutions in Q4 weakening because you're finishing the production of Viking Link. So just to understand, as we go into 2022, do you see projects out there in MI that can fill this capacity?
No, there is projects, which are out, but there is always a delay from award until you start production. I don't say it is an issue. I just say with additional AC and MI, we could further optimize it. On the other side, we have also the German corridor projects, the DC, then Cable, which we will start next year, so that also contributes to the loading and the mix of the factory.
Okay. And just finally on the Photonics process. And I mean, I realized you've only just restarted the process, but assuming that you are able to dispose off this, could you maybe talk a little bit about your capital allocation priorities balanced across paying down sort of debt and hybrid bonds, thinking about additional shareholder returns? How you see those for the group?
On Photonics, just to answer your question, no decision is made yet on disposal of anything. It's a strategic review, and we have not concluded on that review. We've just started it, as you mentioned, [ NOT ] will take however long it takes to conclude, and then we'll announce what the conclusion is and what the results will be.
And just to build on Basil's comment in terms of proceeds and your question there you're right, of course, multiple options, as you also mentioned and [ we didn't decide it ] as of yet. So now we'll do the review and conclude that on then, of course, begin to how to use possible proceeds.
Your next question today comes from the line of Akash Gupta of JPMorgan.
My first question is again on the guidance. I think, I mean, you had very strong performance in first half. I guess that -- part of that is driven by these one-offs in Service, which may come, may not come in the second half, but still at EUR 110 million, it's EUR 37 million implied for the second half against EUR 73 million in first half. So I wanted to understand how much of this is driven by you being conservative because of the previous disappointments that you are not raising the top end of the guidance range now? Or to what extent it's driven by the mix in the projects, which may not be fully captured in consensus estimates?
Akash, this is Line. So I think fair to say, as we repeat that the utilization of the factories is the number one in terms of the Cable business execution and good margins to bring up earnings, right? And what we are looking now with the visibility we have, we see that we will come out at a different level. And certainly also that the services is not to be predicted which kind of repair jobs we have. And then maybe also the note that the business is a project business and, as you know, also from the history and our competitors that can be rather large swings, which will always make us at least considerate about any unexpected events that could come. But not to say that this is the main part of it, but that will always allow us, make us, be consider it when we do any kind of adjustments to our guidance, what would the revenue.
And my next one is on Solutions full year revenues. So you reported EUR 323 million for the first half, and you are indicating around 10% backlog to be converted into sales in the second half and 10% of EUR 2.66 billion will give me around EUR 590 million or slightly below EUR 600 million revenues for Solutions. Is that the right math? Or are these numbers are rounded, which may indicate that you may have higher revenue potential in Solutions for the year?
I mean, 10% is a rough number. And we set them, Akash, that we expect somewhat weaker second half. And so we will see, and we'll work on it, and there could be also some in and out orders, which helps to improve the numbers we have always in the Cable business and the large projects, variation orders, which could improve the revenues, particularly the short-term revenues improvements on variation orders. This needs to be seen. So for the time being, we will not -- it's unlikely, let's say like this, that Service will have the same strong second half than the first half. I would not call the Service one-off -- if you want to call one-off, it comes also not -- you need to do something to get these orders. It is not just to have a write-off of some numbers because of -- so we work on it. And of course, we do everything to improve. For the time being, what we see is somewhat weaker.
And then my final one is on market share in both Solutions and repair. So in Solutions, I -- on my back of envelope calculation, you had roughly 20% market share in first half order rewards. And when we look at the second half orders and as we hear from some of your competitors in terms of complexity of the projects like Eurasia and others, can you say if 20% would be a fair assumption for second half orders? And then coming back on market share in repairs, I mean I think your performance kind of stood out against competition where basically, we haven't seen that strong repair performance in the first half. So I wanted to ask, is there anything that you have changed in the organization, which is why you are gaining market share here? And these things, should we expect to continue in the foreseeable future?
Yes. I mean, the market share is obvious. It can vary quarter or even within a half year quite substantial depending on how your success rate is on the orders and how is the size of the orders award. Last year, we had a very high order intake, which increased our market share beyond the 20%. And of course, we are now with EUR 3.16 billion market share backlog at a very high level. And Akash, of course, our investment is aligned that we cover backlog and the future order intake. So we need to see how that matches our capacity. So we need to see also how much can we take in and as we need to also deliver. So about the market share in the second half, this is very much dependent on the order win that comes and that can also vary quite a lot. Will be a large interconnectors be awarded to whom, small will be awarded. So in average, of course, we plan to keep, over the period, our market share, [ LTM spoken ].And the repair, we have not done specific actions on the organization. So we focus on ready preparedness orders to get more in, which increases the likelihood of getting repairs if it happens with those customers and the specific projects. What I have, of course, done already early when I joined NKT is, I splitted intentionally the business line in more focused business line Service separately, Accessories separately, Applications and so on in order to have a clear focus here and to get also certain areas from the past and also to prepare for the future. So that wasn't -- I have intentionally increased the span of control in the organization, and that is may be the combination of certain actions we see some results. But definitely, the repair is also somewhat just statistically more predictable and to a certain extent, it just happened in Q2.
[Operator Instructions] Your next question today comes from the line of Claus Almer of Nordea.
I have also a few questions. The first question goes to the pipeline. Alex, I think you gave some comments about awards. So when do you expect the next larger project awards coming to the market? That would be the first one.
I mean, that is difficult to answer. We see here potentially some delays in the CfD in U.K., which might slip into what we expected originally end of this year and then beginning of next year, it could even move further out. So these large projects and their awards, they have their own dynamic, which is actually not in our control. It really depends on the customer and even on the authorities and permits and financing a new name -- several aspects of the super large interconnectors, in particular. So I cannot tell you the -- when an oil connect or for example others will be awarded. That would be a pure speculation. So we need to see. As you know, on some projects, you work for potentially years, someone takes and split out and move on. And then this is a little bit the nature of these large infrastructure projects.
Sure. I know we have learned the hard way in the past that projects are very difficult to predict the exact timing of. But do you expect more projects to be awarded this year?
Yes.
Okay. Good. Yes. Okay. Good. Then the second question goes to the guidance. I guess, at least that the Service division has exceeded your own expectations. Is that a fair assumption?
Exceeded own expectation, my team needs to do a lot to exceed my expectation. But let's say, they definitely have an outstanding quarter absolutely and also performed well on executing these repair jobs. Yes, I would say...
It was more like compared to the guidance when you started the year and what you included for the Service division. I would assume at least that the Service division has done better.
Yes. Yes. Yes. You're right.
And then this was maybe a slightly nasty question because then if something goes better and you are reiterating the guidance for the Cable division, then something else must has underperformed to maintain your guidance. Is that the way we should look at it? Or is it like, Line said, let's see this project business and there might always be some swings in the performance?
No. I mean, it's not that the other business has less performed. I would not call it like this. We have now just also specified the guidance to the upper end. So before we said EUR 80 million to EUR 110 million, now we say upper end, which means closer to the EUR 110 million. And I think consensus is that EUR 110 million. So this is where we are. So we have changed -- specified the guidance. So I would not say that other business is performing less. So let's see, and we work on the second half and work on -- hopefully, that we can present good results.
We hope so. And then just on my final question, which goes to Basil. In the report, it was mentioned these possible component shortage and you're doing something to mitigate a possible situation. So what are you actually doing? And what's the risk for component shortage in the second half of this year?
Claus, yes, I mean, obviously, there is a risk, and we are mitigating on several fronts. We are buying ahead of time on -- a number of components are very specific in our production, very specific in the possibilities of shortages. In general, we see most of our suppliers having delays. The delays are not in months, they're more in weeks. So we are mitigating against that as well. It's hard to see because it's a dynamic situation at the moment. And we are also qualifying other suppliers to the strategic components that we might have shortages on. So far, the delays have only, like I said, been in a number of weeks rather than months or quarters.
Okay. That's good to hear. And then I'm a little bit unsure about this strategic review timing. Did you say anything about when could we hope or expect even an outcome of your work?
Well, Claus, it just started. So we announced it on the 16th, which was a month ago and through the holidays. So the process is just starting, and we'll announce it in due time.
So no guidance whether this will be this year or next year?
But that's all part of the review is to see -- look at the options and what we're going to do with the assets.
It appears there are no further questions at this time. Please continue.
Okay. Then I think we -- if there are no further questions, thank you for your good question and that you took the time to listen to Q2 results. And I hope you have a good day and hope that we talk again when we have the Q3 numbers ready. Of course, hopefully, with good numbers. Thank you very much. Have a good day. Bye-bye.
That does conclude our conference for today. Thank you all for participating. You may now disconnect.