Cavotec SA

STO:CCC

Earnings Call Transcript

[Operator]

Welcome to the Cavotec Q1 report for 2021 and update on strategy. [Operator Instructions] Today, I'm pleased to present the CEO, Mikael Norin; and the CFO, Glenn Withers. Please go ahead with your meeting.

[Mikael Norin, Group Chief Executive Officer]

Good morning, everyone. Great to have you with us today, and welcome to this call. My name is Mikael Norin. I'm the CEO of Cavotec. And as you heard, I have our CFO, Glenn Withers, here with me today. We have 2 topics that we like to cover in this call. One is about the announcement of our accelerated focus on cleantech to really leverage on the growing markets that we see for electrification of ports and industrial applications around the world. And the other is, of course, our Q1 report for 2021. But I'm going to start by elaborating on our decision to invest in growing what we call New Cavotec, which is our business excluding airports. In March, if you recollect, we announced that we will divest the Airport's business, and now we are taking the next steps on our strategy. The background is that we are at an inflection point where our core markets are really undergoing a significant change. What has, in many ways, the niche markets for cleantech are becoming mass markets. And this development is driven by the fact that communities and consumers cannot and will not accept today's unsustainable transportation systems. And this is a trend that has really accelerated as a result of the pandemic, and I'm sure that you have seen that in other areas as well, this focus on sustainability. There was a political initiatives that point in this direction. Let me give a couple of examples that I think are important. The first is that there is a European Union directive that encourages ports to adopt shore-to-ship electrification systems. That's what we call Shore Power to reduce emissions from vessels when they are import. So by 2025, this recommendation will become binding for all European ports. And the consequence of that is that in Europe and more than 2,500 ports will have to drastically reduce emissions by offering Shore Power to visiting ships in the next 5 to 10 years. We've also seen very interesting development on the other side of the Atlantic. And I'm sure you've heard of the American Jobs Act, that big initiative by President Biden. And he's planning to spend $17 billion on the U.S. shipping infrastructure. And there is a special mention of the need to mitigate the impact of pollution from ports. Turning then to another strong area for us, and that's automated mooring technology and that has also an untapped potential, and we see around 4,700 port burs at least that are suitable for automation to increase efficiency and reduce pollution. And we are a market leader in what I said before, what are -- today are niche markets for cleantech for ports and industrial application. But we have a long tradition to start from. And we've already equipped some 600 world's container ships as well as hundreds of ports around the world with our Shore Power systems. So we are established in this market. And we're also really pushing the envelope when it comes to these markets and trying to be at the forefront of the development. And one example is that we've recently developed an automated e-charging and mooring system for what will be the world's first zero-emission autonomous battery-powered fleet that's going to go into operation in Norway. So we believe we're extremely well positioned to leverage on this expected market development. And that is really the background to today's announcement that we will invest at least EUR 20 million over the next 5 years in sales, in marketing, in engineering and technology. And the concrete result of that is that the global Cavotec team will grow by an estimated 320 people, and that's an increase of about 60%, with more than 2/3 are going to be engineers. So we are really excited about the opportunities we see going forward. Obviously, we will be opening up for questions on this topic after the presentation. But let me now turn to our Q1 report for a few minutes, first. I'm going to cover the status of New Cavotec, which is, again, it's our core business, excluding airports, which is up for divestment. In New Cavotec, we grew the order backlog by close to 13% compared to the previous quarter. Our revenues increased 7.5% versus the same period last year. And our EBIT in New Cavotec grew by 60% approximately to EUR 2.4 million, and that's a margin of 8.2%. And that was on the back of several important orders. One of them is for the first MoorMaster system in Asia, that is for a system in Japan. And I don't think we can say enough about the importance of this project because this is the order in what is, as most of you probably know, a very quality conscious and hard-to-enter market in Japan. And it not only opens up the domestic market there, they have more than 120 larger ports but it is also a stamp of approval for the wider Asian markets that often look to Japan when it comes to new technology. It's a very important order for us. Closer to home, in Europe, we were awarded the contract to provide Shore Power to 5 cruise shippers at the Malta's Valletta Grand Harbour. And the project is part of a major EU funded initiative to electrify the entire harbour and reduce portside ship emissions by 90%, it's estimated. And this is an example of many such projects that are being developed around the world right now. I'm also happy to say that in the quarter, we continued to secure multiple long-term service agreements, driven by new contracts for MoorMaster and for Automated Shore Power. And the services revenue in the quarter represented 21% of our total revenue for New Cavotec. So in summary, we're off to a good start to the year for New Cavotec, and it's really encouraging that the interest in the market reinforces our view about the future potential. But I'm going to pause there and hand over to Glenn to talk more about the first quarter sort of in total, Glenn, please.

[Glenn Withers, Group Senior VP & CFO]

Thank you, Mikael, and good morning, everyone. I will start by addressing the way that we will approach our reporting in response to the announced strategy. As you already heard, we've talked about our intention to focus on our Ports & Maritime and Industry markets and consequently, to divest of our Airports business. Firstly, to update you on the divestment of Airports. We appointed Rothschild as a lead advisor this quarter, and we have now also commenced the preparatory work on the carve-out of the Airports business and the Airports Services business now. During 2021, we will report in 2 parts. New Cavotec and the Airports. New Cavotec is defined as the group without Airports and without Airport's services. Splitting our results this way will help you see the contribution from the continuing business on the one hand and the business that we intend to divest on the other. For now, the split is simplified as we have not yet completed the detailed carve out analysis and later on in 2021, as we progress the divestment, we will address the future reporting segments for New Cavotec. With all that said, I will now summarize our performance in the first quarter in terms of New Cavotec, Airports and then the total group in that order. Mikael already provided you the headlines about New Cavotec. To recap that, our backlog grew during the quarter and our revenue and profits grew year-on-year. We're happy with the development of New Cavotec during the first quarter. Turning to Airports. Our order backlog grew 3% compared to the end of 2020 to EUR 28 million. We won 2 large Airports orders in Asia and in the Middle East for turnkey deliveries of complete in-ground GSE systems. Revenues, however, decreased 23.5% to EUR 8.7 million, and EBIT in the quarter decreased to a loss of $1.6 million from a small profit in the same period last year. The negative performance, especially on the revenue side, as explained mainly by the timing of major deliveries related to what we see as continued COVID-19 uncertainty in the aviation market. I would add, though, that although there was a loss in the first quarter, the result is not indicative of our expectations for the rest of 2021. Finally, turning to group level. Our order backlog increased 9.5% overall when compared to the previous quarter to EUR 93.1 million. Total group revenue decreased 1.6% to EUR 38 million, and that revenue decline is explained by the lower revenue and Airports that I just talked about. This wasn't fully compensated by the stronger revenue performance inside New Cavotec. Total group EBIT decreased to a loss of minus EUR 0.2 million. And that's -- that corresponds to a margin of less than 1% negative. Again, the negative EBIT in the quarter is mostly explained by the lower revenues inside airports for the quarter. Operating cash flow was negative $5.5 million during the quarter, but that decrease is mainly due to the timing of receipts on several major contracts, resulting in an increase in the receivables side of our balance sheet. and we also settled a long-standing project dispute in the Airports' division for EUR 900,000. And that had no impact on the profitability during the quarter because it was fully provided for in prior periods. So just a cash impact inside the quarter. Investing activities amounted to EUR 600,000, mainly related to Research & Development investments in New Cavotec products, especially in the continued development of our new MoorMaster and NXG products. And with that, Mikael, I'd like to hand back to you.

[Mikael Norin, Group Chief Executive Officer]

Thanks a lot, Glenn. With today's announcement, we are really doubling down on our efforts to transform the markets that we operate in. And the mission that we've -- that we believe in very much, which is to make the world cleaner, safer and more efficient. We're going to accelerate our focus on developing attractive connection and electrification solutions to decarbonize ports and industrial applications. Obviously, the return will not come overnight, but if we look at the market potential going forward, it's really very, very attractive. If you believe that a picture says more than a thousand words, then I really encourage you to look at the short video that we have made to summarize our strategy and to explain our strategy going forward. You can find it at cavotec.com under the Investors section or YouTube or other channels as well. And with that, I'd like to thank you for your attention. It is the end of our prepared statements, and we're ready for any questions you may have.

[Operator]

[Operator Instructions] We have a question from the line of Karl Bokvist of ABG Sundal Collier.

[Karl Bokvist, Analyst]

So to start off with a bit more about near term development. It's interesting to see the comment you made about any -- growing backlog. Just to understand this, given that you highlighted a few selected orders, too. Is this -- do you think it's mainly because of this kind of larger orders? Or have you seen any form of an improving underlying market activity as well, and I think primarily within the port side?

[Mikael Norin, Group Chief Executive Officer]

Thank you, Karl, and good morning. It is across the board. We see good activity also in our -- we shouldn't forget about our industry business also where there is the same additional focus on electrification. So some of our traditional customers are clearly ramping up, but we see also with the effort that we spent last year, in particular, to broaden our customer base with an industry are paying off. We also see the flow business in general, industry and services also performing quite well. So we're -- I have to say we're quite happy with how the quarter has started for New Cavotec.

[Karl Bokvist, Analyst]

Understood. And then a bit of a technical question, I just wanted to understand a comment made by you Glenn, when it comes to the reporting structure going forward because when you say New Cavotec, we used to have Ports & Maritime and Airports & Industry. Do you think that's a few quarters from now that we could have this kind of more granular split back again when we can see Ports & Maritime on its own and the industry on its own?

[Glenn Withers, Group Senior VP & CFO]

Karl, the first point would be, like I said -- in what I said earlier, the caveat of Airports is work-in-progress. So what we've prepared for 2021 so far as an interim structure of New Cavotec in Airports, and that's the reason why. So as we go through 2021, we'll update on the process of the divestment of airports. And then we will start to talk about what the future's segment structure of New Cavotec will be going forward. But I don't want to be drawn into exactly what that new segmental structure looks like right now. We're going to develop the business in the markets during the year as we divest Airports and more to come on that, Karl.

[Mikael Norin, Group Chief Executive Officer]

Like I said, commitment from us is there will be segmental reporting in New Cavotec.

[Karl Bokvist, Analyst]

Just a follow-up on this, if we -- based on the available data you do give on these 2 isolated quarters. Of course, 1 quarter might not make a trend, but it's -- you can derive that, for example, the industry business seems to be performing very, very well, both in terms of revenue growth, but strong double-digit margins, whereas the kind of P&M business is more on the mid-single digits and was low single digits this quarter. So do you think that well, first of all, are there any particular product areas driving profitability in industry? And the second one would be, is it mainly about volumes for Ports & Maritime before we could see a kind of a resurgence in margins in that business?

[Mikael Norin, Group Chief Executive Officer]

Before handing over to Glenn to talk about it more -- in more sort of detail. One thing to point, Karl, when you make that kind of comparison is the continued investments in the business that we have been making. And we talked about that. I think it was Q3 or Q2 last year that we were going to do that. And if you've been following us in the market in terms of aggressively rolling out new products and so on, it's part of us now gearing up for what we see as an expanded market. So I would be a little bit careful with making those comparison and draw those conclusions right now, Karl, from 1 quarter. But Glenn, I don't know if there's anything you want to add.

[Glenn Withers, Group Senior VP & CFO]

All I would add there is Mikael mentioned that we're really happy with the flow business that happened inside Q1. That flow business is both in terms of services. Attached predominantly to the Ports & Maritime business and then also the industry flow business, which is predominantly a flow business. So that's the main underlying message. Then about the profitability. It's also -- and to reiterate what Mikael said, we've made underlying investments in our products in Ports & Maritime. There was a peak of those inside the Q4 report where we mentioned direct spend there. But it continues, and it will continue, as we've announced today, especially during 2021.

[Karl Bokvist, Analyst]

Understood. So just to hold on, on, let's call it, before we focus on the longer-term investments, the kind of potential margin recovery for the full year, provided that the pandemic situation continues to ease. Do you think that it will mainly be the Industry business supporting recovering margins given that Ports & Maritime will improve, hopefully. But that you will invest in on -- over the P&L, just thinking about profitability there.

[Glenn Withers, Group Senior VP & CFO]

Yes. I would say guidance about profitability, I understand the math that you're talking about, Karl, but industry is a flow business that provides, what I call, stable profitability. That's why we talk about it as a flow business. With Ports & Maritime, as we grow this business and the way we've described in our strategy, and this includes during 2021, we will -- the underlying profitability of that business is good. And yes, volume will contribute to that. But at the same time, we'll be making investments in the products to secure the market opportunities we see in the long-term here. So it's going to be a combination of those 2 things I think inside Ports and Maritime.

[Karl Bokvist, Analyst]

All right. And then just 2 questions before I get back in the queue. The final one related to more near-term aspects of the thing you mentioned with a working capital buildup and timing of receivables. Is it -- do you think you're thinking about this in 2 parts? Will some of these receipts be realized already next quarter. And then just thinking about seasonality of cash flow for the full year, do you think that we could see again another year where you will have a release compensating for the buildup during the first half happening in the second half?

[Glenn Withers, Group Senior VP & CFO]

In relation to the cash flow during the quarter, it's not representative of what I expect to happen in future quarters. I'd say that as a first statement. And already in Q2, it's not the same results as we've seen inside Q1. We showed last year, 4 consecutive quarters of consistent cash flow generation. And in the current quarter, we -- there's a couple of projects that have really changed the look of the result in terms of cash performance. But overall cash conversion, I expect to be the same, again, with the exception of the same -- or similar to prior year, but with the exception of 2 things: first, underlying investments in Ports & Maritime. And second, the revenue line is growing. There will be some natural growth of the -- of working capital requirement. But the same disciplines that we've talked about not so much towards the end of last year, but during the previous discussions about the way we're changing this business, the focus on how we write our business commercially so that it is structured in the right way, still the same focus. That hasn't changed.

[Karl Bokvist, Analyst]

Okay. And my final 1 before going into the queue is about the EUR 20 million investment. Very interesting to hear about it and let you quantify it. So you mentioned the kind of expected personnel expansion here. I think you said 2/3 into engineering. What are your thoughts about sales capacity. We've talked about this a few quarters before, but do you think that you -- your existing sales force, what will have to be done there and the kind of new potential sales personnel that you hire? Why -- what they need to be focused on and so forth?

[Mikael Norin, Group Chief Executive Officer]

Well, what we're seeing is that when we talk about those 2/3 engineers, but it's really difficult to pinpoint with because salespeople are often engineers as well. But in general, Karl, we do see a need to expand our sales force, and that is part of this investment that we're going to do in capabilities. And the reason for that is really to be able to keep up with the interest in the market. And we're seeing that. And let me just take one example for you to try to concretize this a little bit. I had a conversation with cargo port on the U.S. East Coast before the pandemic, the fall of 2019, and we talked about sustainability. And their reaction then was, well, that whole area of sustainability. We leave that to our colleagues in California to care about. Okay? Now the attitude has completely changed. And we are having conversations with everything from cargo port on -- in the northeast of the U.S. down to Cruise terminals in Miami and Fort Lauderdale. So we need to expand our sales force. We also need to expand our outreach efforts in terms of marketing and so on to keep up with that interest. And that is part of it -- part of the investment because, as you know, you don't hire salesperson overnight. And when you have hired them, it takes time before they are completely up and running. So it is a future forward-looking investment that we're going to do in sales globally.

[Karl Bokvist, Analyst]

Understood. A follow-up on that one, would just be when we talk about this hiring of new personnel, it sounds like a high degree of this will be investments taken over the P&L. So that would be the first one. But then how do you think we should look at this EUR 20 million investment in relation to your near-term margin target of 10% and your more longer-term target of 12%?

[Glenn Withers, Group Senior VP & CFO]

In relation to the timing question, Karl, the guidance I would give is, of that EUR 20 million, I expect approximately 1/4 of that during 2021. I think that gives you the ability to look at the impact over the P&L in relation to our currently announced targets.

[Mikael Norin, Group Chief Executive Officer]

Let me just add on the targets that you mentioned as well is that as we go through now the implementation of our new strategy and the investment of building up and really seeing how the market evolves, I think we will be looking at those targets also. We're planning on an investor information meeting here in the fall. And to see. I mean, long term, I think those are reasonable targets. The question is how the market will develop short term.

[Operator]

[Operator Instructions] And there are no further questions at this time. Please go ahead, speakers. I stand corrected. We do have another question from Karl Bokvist.

[Karl Bokvist, Analyst]

So just let's -- if we stay on the topic of ports, just interesting to hear. Now we talk a lot about organic growth ambitions. What are your thoughts about your current capacity and scale in the market in case you feel that you might need to add something inorganically? Hello?

[Mikael Norin, Group Chief Executive Officer]

I'm sorry, Karl. I was on mute there. So a technical issue on our side. Apologies. I was talking away to myself here. I was saying, Karl, that after the turnaround and which I think we demonstrated in 2019, the results of that, we have really opened up for M&A to look at that in a structured way. Where we are now with the announcement that we have made is really two avenues that we are looking at. The first one is in terms of some of these capabilities that we're looking at, in technology, in the turnkey abilities, deliveries and so on, is to possibly acquire those capabilities just because it would be faster to get them than -- rather than to build them up organically. Secondly, it is also about looking at geographically and looking at also different technical market niches where we feel that we could get faster access to those markets by doing an acquisition. So it is part of the work that we're doing.

[Karl Bokvist, Analyst]

Understood. And then if we think about the industry business, excluding Airports, do you -- what do you think are kind of the main growth drivers for this business in the medium-to-long term.

[Mikael Norin, Group Chief Executive Officer]

I think there's the same growth drivers that we see for Ports & Maritime, and that is really sustainability, it's electrification, it's automation, it's efficiency. So we don't speak as much about the industry often because of the project business that we have in Ports & Maritime. But I really like to emphasize how attractive, we think that the industry business is going forward, the market, the niche markets where we're playing regarding electrification. And also the synergies that we have between our Ports & Maritime business and our industry business. And both from a technology point of view, as both of them have really the core in where the company started with the cable reels business. But also both of them, then, as I said, capitalizing on this growing demand for what we call profitable sustainability solutions. There are also other technology overlaps. If you think about the automated charging technology that we have developed, we are applying that now. There's 3 different areas. We are applying that for e-ferries, which is a growing market in large parts of the world, we are applying it for electrifying trucks or port trucks, and we are also driving the development in industry collaboration called [ Sharin ], where we are leading the effort around automated charging of large commercial vehicles. So this is not the cars that you and I drive that may be electric. This is a large vehicle such as big garbage trucks or other commercial vehicles. And it is about high-speed and high-power charging of those. And that's really our sweet spot. So it's a very interesting area for us. We see a lot of synergies, a lot of overlap. We see -- we have an established position in the same way that we've in Port & Maritime, and we want to build on that.

[Karl Bokvist, Analyst]

Understood. And we -- Glenn, you highlighted the kind of flow business and the stable profitability in the industry before. But to think about it going forward, what kind of additional levers are there for continued margin expansion within the industry business.

[Glenn Withers, Group Senior VP & CFO]

Yes. Karl, do you have a particular context to that question?

[Karl Bokvist, Analyst]

Well, I think just over -- what we've been focusing a bit about from the historical Cavotec and that those transformation efforts in order to improve profitability. You have mentioned cash flow resiliency and conversion. But I think what we talked about before was that the industry already had a stable double-digit margin? And just out of interest, are there any efforts undertaking within industry that could drive those margins even higher?

[Glenn Withers, Group Senior VP & CFO]

I guess I think 2 ways that could happen, Karl. First is a pure volume. And then the second is -- so I think there's more to get from the volume side, especially as we come out of the pandemic and flow business reestablishes back to pre-pandemic levels in those sectors. But also, what Mikael referred to, the technology part of this, which is that we can leverage the investments inside our Ports & Maritime applications in industry and the combination of both delevering both -- on both applications, both the Ports & Maritime side and the Industry side, I see a benefit there from that inherent sharing of technology. Those 2 pieces. One maybe a short-term impact and the other is a longer-term impact. But those are the 2 key ones that I see.

[Karl Bokvist, Analyst]

Yes. Understood. And then if I may switch to Ports & Maritime, you highlighted this one tenders or one orders in both MoorMaster and Shore Power. Just to understand the kind of structure of the projects that you bid for now, how would you assess the kind of total size of the projects that you strategically pursue now compared to a few years ago, if we total scope for you also in relation to the perceived risk, of course? But mainly, if we think about more large greenfield orders, how those are coming back potentially to the market and mainly -- and it mainly one bur for one ferry at the time orders?

[Mikael Norin, Group Chief Executive Officer]

Yes. No, I understand the question. Let me start with going back to some of the work we did during the turnaround, and that was really looking at exactly those questions, which projects do we quote and how do we quote them? Or what are the type of risk that we are willing to accept? And we are not deviating from that. We are using that same structured approach. I guess what the evolution has been is if we take MoorMaster, there's more about a general larger interest in the market. So that then opens up discussions around frame agreements, the larger projects and so on rather than just one isolated order, and that's quite encouraging. What is more evident is in the Ports & Maritime market is on the Shore Power side as we see now that market developing. It has to do with the fact that Shore Power for most courts is not part of their core activities. And it is something where they look for a total solution provider. And we have, in the past, often work through integrators, often local integrators who have done that work. We are now stepping up and saying that we are prepared to take on a larger scope in the same structured and careful way, but we are -- already have the position in the market to have those conversations with ports. And I still want to emphasize that we look at each project individual and say, well, this is the scope that we feel comfortable taking on and where the risk is reasonable versus the reward that we can get for that. But we are stepping up. We are saying that we're going to be a total solution provider in Shore Power.

[Karl Bokvist, Analyst]

Because then my follow-up is just we -- you talked about the broader improvement in the market. But in many other industries, we hear a bit about -- talks about how expansion and brownfield investment and some products are one's really driving growth at the moment, whereas Nordic greenfield ones are still a bit hesitant. So what are your thoughts on this within the Ports business as you see it?

[Mikael Norin, Group Chief Executive Officer]

So I think it's mainly brownfield, mainly. There are very few new ports opening up around the world of being built, most of them are expansions. Most of the projects that we are in conversation about -- are about increasing the efficiency. Number one, that's what drives the investment decision. And when we talk about -- you've heard me talk about profitable sustainability. What that means is that we can talk to the port operator and say, our equipment will increase your efficiency. You will become more competitive, because port is a competitive business like any other business. You will become more competitive, but you will also improve your environmental footprint. So it's really a win-win. So that's where it starts, and that's where the conversation starts. And for that reason, it is most -- and just out of the industry works mostly existing ports that we're discussing with.

[Karl Bokvist, Analyst]

Understood. My final question now is on just seasonality. You mentioned that the industry is more of a stable flow business, and we are in a -- in the middle of the year, there is still -- plagued by the pandemic, of course. But what are your thoughts on the seasonality for the year for the ports business provided that demand continues to improve. I think historically, it's been quite tilted towards the end of the year, both in terms of revenues and cash flow and earnings.

[Mikael Norin, Group Chief Executive Officer]

Well, I think one -- what is at the top of my mind right now, I guess, like for many business leaders, is that we really want to get out there now. We -- there is -- it comes a point when Zoom meetings and video meetings and so on are just not enough, you need to be out there. So I think we are all just very eager to get out there and meet customers and also meet our own people. So I think that we will have a positive trend during the year just because of that.

[Operator]

Our next question comes from the line of Graham Dowle of LPA Group.

[Graham Dowle]

You mentioned at the beginning of the call that there's -- where you recognize the trend against unsustainable transport systems. And if I can just focus on your plans to divest the Airports segment of your business. I guess this is as much an environmental decision as it is an economic one. I just wondered whether you had any detail in terms of your expectation on the time scales for that divestment? And second to that, whether you see any negative impact to your current headcount to expand on that? Are there industry-specific personnel that would potentially be lost from the business due to this transition? And do you see the transitions happening within this fiscal year? Or what is your expectation to diverge that segment of the business?

[Mikael Norin, Group Chief Executive Officer]

Thanks a lot, Graham. Before I get into your questions, I'm actually going to disagree with the first statement you made about the rationale for the divestments. It got nothing to do with the sort of environmental footprint or anything like that. We have built our Airports business on the same premise that we will offer solutions to increase efficiency and improve sustainability. If you look at our in-ground solutions, for example, and so on. So the divestment was purely made from a realization that in that business, we did not have the market position that we have important maritime. We came in too late because of that in the conversations with the end customers, we were too far down the sort of the value chain, even though our solutions were very much appreciated when talking to the -- and just how the business works. And that's why we said it's better for that business to develop. If we can belong to a company, a group that has a larger sort of a larger presence in that aviation industry. Sorry for that introduction, Graham, but I just wanted to comment on that. Then in terms of the timescale. So well, as you heard, we have appointed Rothschild, we have appointed other advisers as well. The work is ongoing. We fully expect to complete this by the end of the year. And then in terms of people, which I think is a good question. Fortunately for us, 2 things. First of all, the Airports business has always been a rather stand-alone business within Cavotec, with fairly few overlaps, both in terms of technologies, but also in terms of other groups on our staff in terms of salespeople and so on. And I'm very happy to say that the work that has continued to do by the leadership of the Airports business, we have seen no people leaving the business, we have seen no, sort of, drama in the organization as a result of that. So the people in the Airports business are very much committed to that business. They very much believe in the future of that business. So that's been very positive, actually.

[Graham Dowle]

Okay. So there is some technology overlap across markets from -- within your existing portfolio is what you're saying and the expertise is -- the commonality is transferable in effect?

[Mikael Norin, Group Chief Executive Officer]

Well, there's not a lot of technology overlaps between Airports and what we now call New Cavotec. It's fairly stand-alone in terms of all the technology and in those markets. So very, very manageable.

[Operator]

And we have no further questions at this time. Please go ahead, speakers.

[Mikael Norin, Group Chief Executive Officer]

Well, if there are no further questions, then really, it's for us to say thank you very much for your attention. Tomorrow is holiday in large parts of Europe. So for those of you who are having a long weekend, please enjoy it. And we look forward to talking to you again in the future. Thank you very much.

[Operator]

This now concludes our call. Thank you all for attending. Participants, you may disconnect.