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Good morning. And welcome to Nilfisk's earnings conference call for Q3 2020. My name is Jens Bak-Holder, and I'm Head of Investor Relations at Nilfisk. Turning to Slide 2, to present Nilfisk results for the third quarter of 2020. We have CEO, Hans Henrik Lund; and CFO, Prisca Havranek. Now if you turn to Slide 3. Before we begin, I want to remind you that this presentation, including remarks from management, may contain forward-looking statements. For a number of reasons, this should not be relied upon as predictions of actual results. And therefore, I encourage you to read the content of this slide in connection with the presentation. Now on Slide 4, we have the agenda of today's presentation. Hans Henrik will start by going through the key takeaways of the quarter as well as an update on the business in general. This will be followed by Prisca going through the financial performance of Nilfisk and a brief status on our outlook for the financial year 2020. As always, you are invited to ask questions during the Q&A session at the end of the presentation. And Henrik, please go ahead.
Thank you, Jens. Good morning, everyone, and thank you for taking part of our call this morning. I hope you're well and safe during these extraordinary times where the pandemic continues, of course, to impact people and societies all over the globe. Let's go to Slide 5 for the key takeaways for Nilfisk in Q3. Overall, we are pleased to see an increase in the market activity and a pick up in demand after the heavy impact we saw in second quarter of the pandemic. Across most markets, we saw continued positive development in demand month-over-month through the quarter. And despite continued high volatility between markets, we saw many markets return to positive growth rates in September. The positive development was most profound in EMEA, where we also experienced some of the heaviest drops in demand during Q2, but also U.S. improved during Q3. The general pickup, of course, had a positive impact on the organic growth for the branded professional business. And all together, with the continued solid performance in our consumer business, we came to an organic growth for the total business of minus 7.3% for the third quarter. Obviously, we are not back to normal in terms of market activity, despite the solid pickup in demand. But we consider this a decent performance in light of the conditions given in the market. The second takeaway for me from the third quarter is the cost performance, which I'm happy with. The execution of our restructuring that we announced in May has been executed according to plan. And in combination with continued tight cost management day to day, we managed to reduce overhead cost by more than EUR 15 million compared to Q3 last year. In nominal terms, the lower revenue in Q3 compared to last year, obviously, resulted in a lower gross profit. However, with the significant reduction of overhead cost, we did manage to improve EBITDA before special items, both in nominal terms and in relative terms. We're pleased with having improved our earnings on a lower revenue base, delivering a 12.6% EBITDA before special items compared to 9.8% in Q3 last year. Finally, we are maintaining our financial guidance for the year, but now expect a full year result in the top of the range. And Prisca will get back to this before we go into Q&A. With these highlights, let's move on to the business updates on Slide 6 for a little more details from the quarter. Needless to say, we continue to focus on the safety of our employees, customers and partners, and we're pleased to see that we've been fully able to serve customers throughout the quarter despite the impact from the pandemic. And it does make me proud to see this effort from the Nilfisk workforce. How we've been able to adapt to the changed circumstances, finding new ways of interacting both internally and with customers externally. Now looking at the market, as I mentioned, we've seen recovery across customer segments compared to Q2. Some segments are still heavily impacted. You can imagine like hospitality segments, hotels, restaurants, and of course, also airports, whereas retail, food, pharma and the health care sector are less impacted, if at all. Whereas lockdown restrictions posed a big challenge in Q2, we're now to a higher degree, seeing the macroeconomical repercussions of the pandemic starting to impact demand, in particular, in the industrial segment. Just as we are cautious on our spending and looking at how the future might evolve, so are, of course, our customers. And we are seeing the decision-making process taking more time than normally, especially within the industrial segment. Despite these observations, we did see a solid pickup in the key markets. And well, let me just highlight a few, I mentioned the come back in Europe, and I actually think France is a great example. France was extremely hard hit by COVID restrictions in the spring, impacting demand quite dramatically. This impacted sales also in the beginning of Q3 with negative growth rates in July, bouncing significantly back in August and September where we achieved double-digit organic growth. Looking at the U.S., performance continued to improve month by month during Q3, showing a clear recovery pattern in terms of demand, but also credit to the performance of our U.S. team who continued improving their execution of the commercial strategy. Looking at the Americas coming in at minus 8.2% organic growth and with Canada and Latin America impacted more by COVID, it leaves me quite content with our U.S. performance in the quarter. Prisca will share, as always, a little more detail on the regional development later in the presentation. However, I do want to mention APAC here as well. The hospitality sector here continued to be deeply impacted by the pandemic, affecting our traditional strongholds like Thailand and Malaysia. And in China, performance was not good in Q3, as we experienced lower demand with some of our channel partners. During Q3, we went live with our new distribution center in Ghent in Belgium, and I'm happy to report that we're now in full operation at this new DC. The Ghent facility is a cornerstone in our updated distribution footprint in Europe, leading to faster and more efficient deliveries to our customers. We have moved this main distribution hub from our in-house facility in Denmark to a new and better location in Europe, operated by our supply chain partner, Casa Martà who has been our supply chain partners for many years. The move and the start of this new facility was quite a big logistics exercise. And we did experience some starting trouble causing temporary delays to our customers. But as said, we are now in full operation. Q3 has been yet an exciting quarter with regards to our autonomous solutions. At a virtual launch event in September, we announced the launch of the new Liberty SC60, a high-performing addition to our autonomous portfolio. It is the first autonomous solution for us built on software developed by our technology partner, Brain Corp, and it complements the abilities of our other autonomous floor scrubber, the Liberty SC50. SC60 is the largest autonomous ride on scrubber in the industry and also the largest so far on the Brain Corp platform. And it is ideal for hypermarkets and warehouses. And to this end, the launch of the SC60 marked a significant step-up towards our ambition of building a full portfolio of autonomous cleaning solutions. At the same time, we launched a UV light solution to be applied to the Liberty SC50. This so-called UV-C light has been on the front line in the fight against viruses and bacteria. And we wanted to offer our customers these opportunities as well. The UV solution was developed in our partnership with Carnegie Robotics, and it's actually a very good example of how working with multiple partners makes Nilfisk able to bring innovation to customers fast. It's evident to us that over the course of 2020 cleaning has become even more essential for businesses and institutions. They face new cleaning demands and requirements brought on by the pandemic, and many of them have turned to autonomy to meet these new demands, such as combining autonomous Floorcare with the proven UV disinfection. So to sum it all up, we're pleased with the progress we've made during Q3, not only in terms of, of course, the continued progress with autonomous. But especially also pointing to a steady peak of demand. And despite the lower revenue, our solid improvement of earnings. With that, I would like to hand over to you Prisca, who will walk you through the performance and the financials of Q3.
Thank you, Hans Henrik. Let me start off with the profit and loss statement on Slide 8. As Hans Henrik just mentioned, we saw a continued improvement month by month in many markets. We are not back to normal though as the pandemic continued to have a negative impact on demand and in turn our revenue. However, despite the lower revenue, we are reporting solid improvement of earnings with a strong EBITDA margin before special items. As you know, Nilfisk issued preliminary results for Q3 on October 5, following the reinstatement of our full year outlook. After final closing of the books, both organic growth and our EBITDA margin came in better than the preliminary numbers. For Q3, we report organic growth of minus 7.3%. This was driven by further recovery in EMEA and the U.S. as well as continued strong performance in our consumer business. Total reported revenue in Q3 was EUR 202.5 million, corresponding to a drop of EUR 25 million. Roughly EUR 2 million of this or 0.8% comes from the exit of the consumer business in the Pacific region last year and almost EUR 7 million or 2.8% comes from FX effects, of which the drop of the U.S. dollar accounts for half. As a result, the reported growth in Q3 was minus 11%. The drop in revenue impacted our gross profit, which was down by EUR 10.8 million, but our gross margin was roughly in line with last year at 41.1%. Compared to Q2, however, we are pleased to see that the gross margin is coming back and improving by 120 basis points, which is largely a result of better capacity utilization. But our gross margin is still negatively impacted by our underutilization of our production capacity compared to last year and also by higher logistic costs as a result of higher freight rates. On the positive side compared to last year, the negative impact of tariffs was smaller. And in Q3 last year, the margin was negatively impacted by sales at low margins in our consumer business in connection with the exit of the Pacific region. Now looking at overhead costs. We are pleased to see the results of our continued cost management focus. And in addition to this, the effect of our execution of the restructuring, as Hans Henrik has mentioned already. By the end of Q3, we have almost concluded the restructuring except for minor selected countries, and we will see full effect of the savings in Q4. For Q3, however, we realized approximately 2/3 of the full run rate savings potential. Compared to Q3 last year, we reduced overhead cost by EUR 15 million. Roughly half of this reduction is coming from lower personnel expenses. And the other half is a result of continued cost control, minimizing all necessary spending, such as travel, marketing, use of consultants, of course, balancing this with the gradual increase in activity, which we've seen during the quarter, and we will continue to see in Q4. Our efforts on cost management led to an improvement in the cost ratio of 260 basis points compared to Q3 last year. In nominal terms, the cost reduction more than offset the negative impact on the gross profit from the drop in revenue and resulted in an improved EBITDA before special items. Consequently, we are pleased to report an EBITDA margin before special items of 12.6%, which corresponds to an improvement of 280 basis points. Special items amounted to EUR 0.7 million, of which half comes from the finalization of the restructuring that I just mentioned, and the other half relates to projects such as the consolidation of our European distribution center in Ghent. I'd like to comment a bit more on the special items here. We ended the year with a list of ongoing projects and initiatives that would lead to special items. When we suddenly had to deal with the worldwide pandemic, more items were added to the list. However, as the year progressed, we've continuously scrutinized the list of projects to keep our special items low as well as costs in general, obviously. As we have gained more clarity on the impact from the restructuring and other projects on the list, we have found more efficient solutions, and we have incurred lower special items costs than initially expected. So to summarize, as a result of lower overhead costs and special items, our reported EBIT came to EUR 9.1 million compared to a loss of EUR 0.2 million last year, and the EBIT margin improved from 0 to 4.5%. Let's turn to Slide 9 for a review of the reporting segments, starting with EMEA. Here, we continue to see a pickup in demand during Q3. The pickup was seen across the entire EMEA region, with the steepest recovery in the South region, where both France and Italy have recovered well and reported positive growth in September. We saw the same pattern across many other markets in EMEA. Germany, as an example, our largest market in the region showed good recovery. But the large industrial sector is still negatively impacted. All in all, our revenue in EMEA came to EUR 96 million, and organic growth was minus 4.9%, which is a significant improvement compared to the minus 29% we reported in Q2. It should be noted though that Q3 last year was not a very strong quarter for EMEA. So comps are relatively easily. Nonetheless, we're pleased to see a strong recovery trend in EMEA. Our gross margin came to 45.2%, down by 60 basis points, largely due to lower capacity utilization. On the cost side, we see the results of our tight cost management and also the restructuring carried out which more than offset the gross margin drop and resulted in our improved EBITDA margin before special items coming in at 25.4%. Moving on to Americas on Slide 10. Hans Henrik mentioned already the recovery and the good performance we saw in the U.S., which was a significant positive contributor to the Americas region as a whole. In Canada, on the other hand, the demand trend was almost flat in the quarter and is only slowly recovering. And in Latin America, the picture is mixed. All in all, our revenue for Americas was EUR 64 million in Q3, and organic growth was minus 8.2%. Despite lower capacity utilization, we increased our gross margin slightly to 40.6% through disciplined pricing, mainly in the U.S. Our cost management efforts also had a positive impact on earnings in the Americas and in combination with lower personnel costs, it led to a reduction that more than offset the drop in revenue compared to last year. In turn, this led to an increase in our EBITDA margin before special items of 4.2 percentage points to 21.4%. Turning to Slide 11, where we have the numbers for APAC. Our performance in APAC was a bit of a mixed picture, as already Hans Henrik has mentioned. We were hard-hit in the hospitality segment and also contract cleaners and its institutions were still impacted. And while we are not entirely satisfied with our performance in China in Q3, we are pleased to see that the Pacific region is performing well. We've been struggling with this market for some quarters now. So it's good to see positive indications from the region. Total revenue for APAC amounted to EUR 15.8 million, corresponding to organic growth of 29.6%. We saw a drop of 1.8 percentage points in our gross margin, partly due to revaluations of inventories. And partly due to lower utilization of production capacity. Our operating expenses were reduced slightly as a consequence of lower activity, but in relative terms, the revenue drop obviously impacted our margin negatively also in Q3. Now for consumer and private label business on Slide 12. Starting with consumer. We're happy to report another strong quarter for the business and the continuation of what we saw in Q2. Our revenue was EUR 17 million, and we delivered an organic growth of 32.6%. We are very pleased to see this performance in Q3, as it's not only the result of a solid demand, but indeed also a strong effort from our consumer team, picking up on opportunities in the market, not just with existing customers, but also adding new customer wins during both Q2 and Q3. Our gross margin in the consumer business was negatively impacted by higher freight cost, and the margin was down 1.4 percentage points compared to last year. For the private label business, total revenue was EUR 9.7 million, and our organic growth was minus 22%. This is in line with our expectations and largely a result of one of our customers slowly phasing out. Our gross margin was in line with last year at 22.7%. Now turning on to the balance sheet and cash flow on Slide 13. Through Q3, we have continued our focus on working capital management. We have worked actively to manage our inventory levels to match the expected demand, and we have emphasized our focus on credit collection. Inventory levels are down EUR 35 million compared to last year and EUR 5.6 million compared to Q2. Some of the reduction is driven by FX, but we are pleased we've been able to maintain flat inventories in the quarter where activity picked up and also a quarter where we went live with our new central distribution center in Ghent. Our receivables we have kept our focus here, and we've seen good collection efforts. Trade receivables were almost EUR 30 million lower than in Q3 last year and are flat compared to Q2. However, we saw a drop in the level of overdues and also in the days outstanding as a result of our continuous focus on collection of cash. Trade payables were reduced by EUR 28 million compared to last year but were up by EUR 5 million compared to Q2. All in all, we reduced working capital by EUR 32 million compared to last year. If we compare to Q2, net working capital was flat. But the working capital ratio was reduced by a percentage point to 20%. Our efforts to conserve cash, obviously stretched beyond working capital, and we have prioritized CapEx tightly also in Q3. Compared to last year, CapEx was almost EUR 8 million lower as a result of lower IT investments and lower R&D activity and to some degree, also lower investments in tangible assets, such as tools and equipment. Free cash flow for Q3 amounted to EUR 5.6 million, driven by operating profit, low special items, as I mentioned earlier, and CapEx. However, the cash flow is EUR 20 million lower than in Q3 last year due to a significant reduction in tied up cash and working capital in Q3 last year. The release last year was EUR 28 million, which was mainly driven by a reduction of trade receivables in combination with an elevated level of payables. We reduced our net interest-bearing debt further in Q3 compared to Q2. And we remain highly focused on managing the debt level also going forward. Compared to Q3 last year, net interest-bearing debt was reduced by EUR 29 million and came to EUR 402.3 million at the end of the third quarter. This corresponds to a financial gearing of 4 -- 4.2x compared to year-end '19 at 3.5x. If you adjust and reported net interest-bearing debt by EUR 60 million of right-of-use liabilities in our balance sheet, the net debt was EUR 342 million, which leaves EUR 208 million in headroom to our total committed facilities of EUR 550 million. So all in all, we delivered a solid financial performance in Q3. Before we continue to the Q&A session, let's turn to please -- to Page 15 for an update on the outlook. During the first part of Q4, across all key markets, we've seen a continuation of the positive recovery that we've experienced in Q3. As a result, we have seen a continued positive development in our gross margin due to improved utilization of capacity. In addition, our continued efforts to tightly manage costs, combined with a lower structural cost base have impacted positively our operating leverage, which in turn has a positive impact on our earnings. However, we've also noted an escalation in the pandemic with renewed lockdown restrictions being introduced in many markets. While we have so far not experienced a material negative impact from this development, uncertainty remains at a higher level than usual. Based on this, we, therefore, maintain our current financial guidance, but expect our full year results for 2020 to materialize towards the top end of the range, which is an organic growth of minus 12% to minus 14%, and an EBITDA margin before special items of 10.5% to 11.5%. This concludes our presentation, and we are now ready to take your questions. Operator, please go ahead.
[Operator Instructions] Our first question comes from the line of Casper Blom from ABG.
And first of all, great to see these cost improvements in such difficult times. I have a few questions here. First, regarding APAC, I understand that you're being affected by a slowdown in the hospitality segment. But does this mean that you basically just have to wait until we get a vaccine and people not traveling to Asia again? And maybe also on APAC, if you could give an update on the Australian market, which I believe has given some problems previously? That's my first question. I'll take them one by one.
Casper, if I started at the latter part, we have gotten the channel picture in Australia and New Zealand, better under control. So as Prisca mentioned under the regional go through, those are not our main concerns at the moment. So it's a good channel work by the local team. However, of course, we're not happy with an APAC, minus 29% for Q3. And if I give you 2 of the main reasons: one, we are structurally set up in APAC, where quite a portion of our revenue comes out of Malaysia, Thailand and a bit in Vietnam. And these 3 countries are very dependent upon the hospitality sector. So to your question, how much can we actually do short-term in those countries? We can -- we are, of course, moving our focus towards other segments, as you would expect, but it will still be difficult given the hospitality sector down there, no doubt about it. So that's the one. The other one is China, where through the quarter, we had a number of channel partners who had an inventory position and didn't sell-out the way they had expected. And then of course, we have our focus on that saying, okay, how can we improve that in China moving forward? So we have 2 focuses. How do we redeploy resources in Thailand and Malaysia mainly? And how do we perform better in China? Those are the 2, Casper.
Okay. Then moving on to CapEx. Now you're guiding for a CapEx ratio of 3% of revenue this year. Does that mean that you are sort of sweating assets a bit more, and we should expect a little bit of a pickup in the CapEx ratio in '21, '22?
I'll take that question. Yes, thank you for your question. Obviously, we are not at a position right now where we can share much about next year. But what I can tell you is the low CapEx level that you're seeing year-to-date and also in the quarter, are mainly a result of lower capitalized software, so IT developments, which historically have been quite high in the last 2 years, and then also lower project activity in R&D, which leads basically to lower capitalized hours in R&D projects. And I think what you have to keep in mind, I can't guide you for next year. But of course, activity will pick up, particularly in R&D, I don't expect software to pick up a lot. But of course, we -- as you know, we have paused strategic projects during Q2. Some of which we have picked up during Q3, and we continue to invest in them, and we'll continue to invest in them also in the following quarters of next year. I hope that helps a little bit.
Yes, it does. But -- and actually sort of a follow-up on costs. Now you mentioned the R&D spending. Sales and distribution down quite a lot here in the quarter. Admin also down year-on-year. Your guidance sort of implies that this cannot last forever. But what is sort of a -- one are sustainable levels on the other side of the pandemic? I would hope that you can hang on to some of those cost savings we've seen now.
Yes. Let me try to answer the question in a way by looking at what we've seen this year. So obviously, we came into the year with EUR 85 million, EUR 86 million of overhead cost per quarter. Then you saw Q2, which, of course, is a mix of government support we saw and the basically stand still of activities and cost management that we've seen. Now what you see in Q3 is, of course, a mix of activity picking up, some support still from government programs and 2/3 roughly of the structural cost restructuring that we've done beginning of the quarter. So I expect the impact of the structural cost reduction program to continue in Q4, we'll see the full impact. I anticipate around EUR 7 million of financial impact for the second half of the year of the restructuring. So from that, you'll see a full year impact, of course, also going forward, which we haven't fully capitalized in this year. But then on the other hand, you will see activity going up, and that can be travel, depending a little bit, obviously, on the situation we are going into. And then also activities like marketing or increased R&D projects. So we will see some of that going up. But then, of course, we have the impact of the structural cost improvement program.
Okay. If one was to sort of take some ballpark numbers, then on an annual level, you had total cost of EUR 350 million in '19, probably coming down to like EUR 310 million or so in 2020. Is it -- I suppose it's then somewhere in the middle that one would have to speculate about '21?
We are obviously not done with '21 at this point, but I think your logic is quite sound from the impact that you're mentioning.
Okay. And then just finally, a suggestion now when restating Q3 '19 numbers, it would be really great to also get restated full year 2019 numbers, just a suggestion from my side.
And the next question comes from the line of Mikael Petersen from SEB.
First, I wanted to ask you about Americas, talking about like disciplined pricing. Can you quantify that in any way?
I can't give you a specific answer, obviously, also in the light of competition, but we have already focused and said that it's in the U.S. and there are certain parts, particularly of our parts pricing that we have actually taken a look into, and that is the driver of this.
Okay. And then my second question is regarding the gross margin in Q3 in EMEA. It's down year-over-year despite less organic decline. You mentioned that the capacity utilization is the main driver for this. But just have a hard time figuring out how that is possible comparing to 2019, Q3?
Yes. And I wouldn't read too much into the decline. I mean its 0.6%, so that's not a very material number. I think you have to keep in mind that EMEA is, of course, the bulk of our revenue and therefore, also gross profit. So from an impact point of view, the largest impact is driven by EMEA. There's no special impacts that factor into that other than that.
We've seen any sort of pricing moves from competition that we have responded to. So it is the capital utilization.
And the next question comes from the line of Claus Almer from Nordea.
Yes. Also a few questions from my side. The first is about your full year guidance. If I calculate or if I try at least to calculate your implicit Q4 organic revenue growth guidance, I believe that is around minus 4%, which is probably around the level you left Q3, that's at least my thoughts. You have seen an improvement during Q3 when it comes to revenue growth. Why don't you expect that to continue during Q4? That would be the first question.
Claus, I think your logic is sound as always. As we communicate, we have seen an improvement in October. We know the first couple of weeks of November. So we have some solid indication in your direction. However, we are also cautious because we don't know what December will look like given the pandemic situation and so on and so forth. So that's the balance you should see.
So should I expect or understand your reply that October and start of November is in this level of minus 4% organic is that what you said?
No, I'm not commenting on it. I'm commenting on your logic, and I'm repeating that we're pleased with what we've seen in October and the first couple of weeks of November.
Right. Okay. Then coming back to Casper's question regarding R&D spend. So it's down by 40% in 9 months, and I fully understand you have put a few projects on the pause. And you also mentioned that the activity level will go up again next year. But what have you actually done this year, excluding a few projects on a pause? And also you consolidate some of these R&D centers. Should we fear that the number of introductions of new products in next year will be delayed? So there will not be so many new products to brag about when you're calling dealers.
I don't fear it, Claus, and it's not the case. We have a solid road map for '21 for '22. I think I would ask you to think about the previous years, the level of investment we did because we were at 4.2% of revenue, which is a very high number for this industry. And as we've talked about earlier, this was driven by us wanting to have a solid autonomous platform as one major driver, and we've always known that, that level would not continue. So look at it that way and be calm about product introductions. We know what's coming, and we're confident with it.
But this 3%, 4% of revenue, I guess, that's more or less the same level as tenants. So it's not like you're overly -- overspending or investing in new products, I guess.
No. But that caters to your other point, Claus, we are becoming more effective than we used to be, mostly because we've consolidated sites. Mostly because we have a very strong presence in China. And our Chinese site can develop products at a lower price than we have normally seen in both Denmark and U.S.
And what will the most likely level be going forward? Is that 3% of revenue? Or what's your...
I think the 3% Claus is probably a good pointer.
And the next question comes from the line of Kristian Johansen from Danske Bank.
Yes. Hello, can you hear me?
Yes.
All right. Great. Just a follow-up on the R&D. So to what extent is the decline in R&D spend impacted by the move of the cooperation with Carnegie Robotics through a JV and the collaboration with Brain Corp, where I assume that the Brain is probably doing a larger portion of the R&D as well.
That is one factor question. I think the bigger factor for me is how much we have invested in the past and getting our platforms in place. And that's now come to a more stable level. So that's the bigger part. The third part is the restructuring we did in terms of saying, "Hey, we can actually get more done in China." That would be the third element I would look at.
Okay. That's fairly clear. Then on gross margin, can you talk a bit about the cost inflation you have seen? I assume that the inflation you've seen this year is probably lower than what you anticipated in the beginning of the year, i.e. there say, you can say, from your earnings perspective, the positive COVID-19 impact on raw material costs. And how should we think about that going forward? Would it be fair to assume that normalized? Do you expect it to pick up what was lost this year? And then how can you balance that through your price?
So as you said, it's -- I said it's early days for '21. What -- but you're right, if you look at our initial expectations, before the pandemic versus what we see now, in raw material prices, we have seen less of an increase. Obviously, we've also seen less of tariffs materializing than I think we anticipated. So that's a benefit. Going forward, we do not -- I would expect raw material price increases to still materialize in our gross margin. So I don't think those will go away in the near to mid-future. But we will continue, as always, to, of course, look into purchasing savings and to the largest extent we can try to compensate.
Maybe one thing to add, Prisca, on the freight part. This year, we've seen the freight rates go up, which was kind of not that expected. So that's a counter.
Yes. And obviously, but we have not docked in on next year. There's also Brexit, which, of course, is also something that we will prepare for, but then we also have to see how it plays out.
Sure. Understood. And then my last question on the U.S. Once, I remember in the past, your conservation says that the U.S. is not fixed yet. We are now seeing you report an organic growth in line with tenants, where are we now? Is the U.S. fixed? Or is there still more work to be done?
I'll repeat my statement. U.S. is not fixed. I can, with some pride, conclude that Q2, Q3, we've been on par and in Q3, slightly better than competition, which is good to see after a long period of the opposite. Nobody in the U.S. organization is talking about U.S. being fixed. Everybody is talking about the next day, how we do need to improve. And we will, for the next year, at a bare minimum, talk about it like that question.
So obviously, that was my follow-up here. So when do you expect U.S. to fix, that would be sort of 2022 then?
Well, I don't think this is a binary game, right? This is what do you see day for day, week for week, month to month, quarter-over-quarter. And what I do see now is better than what I saw last quarter, and I'm happy with that. And I assume that will continue.
[Operator Instructions] We have another question from the line of Mikael Petersen from SEB.
This is a little bit related to what Kristian was asking about. The strategy that you implemented in the U.S., have you changed that over time? Or is it still the same as initially?
Completely as it was initially, Mikael. And by the way, I firmly believe that's why we start seeing impact. So we are extremely patient with that strategy because we know it's right. The fundamental of doing more end user focus, working well with our dealers, servicing them better. That is the right strategy in the indirect. And then we are doing a better job in strategic accounts as well. So those are the 2 main drivers. And we will continue on the strategy as exactly we pointed that out and then started it.
Okay. And then another follow-up. Regarding the sales performance in consumer, you said that you had like new customer wins, what is driven by that? Are your sales representative doing something different? Or why are we seeing this pattern now?
There are a number of factors, Mikael, because, first of all, one, remember that last year, for the entire industry in consumer was bad. It was -- the whole high-pressure washer market was really down last year. To take it in that context. So that's the external part. And we've seen across the markets this year, I guess, partly influenced by COVID and the lockdowns that people spend more time on decorating and repairing their assets at home, than they do traveling, obviously. So there's a special condition this year on that front as well. However, having said all of that, I give a lot of credit to the internal team with Pierre heading it that came in a year ago or so, and has focused on our sales efforts across some key markets. And some key customers, and that's where we start seeing the wins come in on the account side, which is, of course, very positive.
And we have one more question from the line of Claus Almer from Nordea.
Just a follow-up for me, too. What are the key focus points of management and not just you sitting in headquarter, but also out in the local markets. Are you still in a more defensive mode? Or are you actually now starting to look at growth opportunities once things are stabilizing or even improving?
We look at growth opportunities every single day Claus. That's a given. And I think what -- if I should give you one word, then it's execution because we put in the strategy 2, 3 years ago, and it's about execution. And it's about improving day by day, just like I explained in the U.S. So the management focus is very much on the execution. It's very much on how do we serve customers better. And then how do we do it with a less spend? That's basically what we have in focus.
So you would say your focus is still, like we have seen for the last couple of quarters, you are not yet in a position where you can start to ease on the internal improvement or maybe not internal improvement, but a very strict cost focus, you're starting to open up for marketing budgets and so on.
We obviously, Prisca said it, of course, the activity level across different things that's increasing as a normal thing after a complete lockdown in Q2. However, it is down to the execution on a daily basis. Because we know this business, what happens with it when you generate growth. So Steen and the team are obviously fighting every single day in all countries to generate growth.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Well, we don't have any further remarks from our side. I'd just like to thank you all for participating and hope to hear from you again. Thank you. Have a nice day.
Thank you very much.