© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, welcome to the Nederman Holding Q4 Report 2018. Today, I'm pleased to present CEO, Sven Kristensson; and CFO, Matthew Cusick. [Operator Instructions] I will now hand over to Sven Kristensson. Please begin your meeting.
Thank you very much, and good morning to whoever is listening, yes. Quarter 4 was a significantly stronger than the quarter before. It was actually quite a good quarter with earnings per share increasing with 22% plus, which we are pleased to announce this time. If we go to the different areas, Americas had incoming orders of just about the SEK 300 million, and that's currency-neutral 4% up. The adjusted result was around SEK 40 million on operating margin of close to 12%.EMEA, we had organic growth combined with very positive contribution from acquired companies like NEO Monitor and a little bit Luwa, but it was a short period. The orders were SEK 469 million and currency neutral, that was a growth of 11%; and sales was SEK 524 million, and that is currency-neutral growth of roughly 20%. And we also had an adjusted operating result of SEK 94 million with an operating margin of close to 18%. Core business with sales of products, smaller systems and also the aftermarket developed very well in the quarter. In APAC, we had a positive growth by contribution from the APAC part of Luwa. Luwa has, which you will hear a little bit more later, a very strong position especially in India and China, but also in other places in Asia. The order intake was SEK 172 million and currency neutral, that's a growth of 49% and the sales totaled SEK 206 million with currency neutral 61%. Operating results for the quarter was SEK 16.5 million, that is an adjusted operating margin of about 8%.
Okay. If I move on to the detailed financials for the quarter for the consolidated group as a whole, orders were SEK 968 million, which is currency-adjusted increase of 13.4% compared with Q4 last year -- Q4 2017, I should say. Net sales for Q4 2018 was SEK 1.069 billion. Currency adjusted increased 19.4% compared with Q4 2017. Adjusted operating profit SEK 126.7 million, and that gives us a margin of 11.9%. Net profit, SEK 89.7 million, up from SEK 73.2 million in 2017. And earnings per share were up to SEK 2.56 versus SEK 2.09. This is, of course, newly stated figures compared to last year when we -- due to the split that was carried out during May of 2018, 1 for 3 on the shares.
So the comparison was flat [ 50 93 ] compared to [ 17 39 ] in the old way of...
Exactly for the whole year. Financials for the full year, SEK 3.479 billion in orders, currency-adjusted increase of 7.4%. Sales roughly even more, 10.1% to SEK 3.554 billion. Adjusted operating profit, SEK 308.1 million for the full year versus SEK 285.8 million last year. I give the margin of 8.7% versus 9.1% last year. Net profit full year SEK 203.2 million versus SEK 186.3 million, giving earnings per share SEK 5.79 versus SEK 5.31 in 2017. The dividend proposed by the board is for SEK 2.3 per share, that's up from SEK 2 per share in 2017.
Going more into Americas for the last quarter, talking about the general market situation. It's so that you have a strong economy in U.S., but what we see that there are a lot of uncertainties still. The trade to flow continues, and there are discussions of new and old and new again trade barriers, which has had an impact. We had also some uncertainty regarding health and environmental policy and so on. This has an impact on the U.S. economy, but it also has an impact, especially on when and how decisions are taken for investments in the U.S. We see that we have a very healthy pipeline in the region, and we are cautiously optimistic that we will see that materialize. But again, the uncertainty will make it difficult to say exactly when. The NAFTA agreement has now or since sometime been with the, I try to remember, U.S., Mexico, Canada agreement. It means that the uncertainty probably gradually will decrease in the trade between these countries. But as you've seen, the trade war going on between China and now threatening also EU gives some uncertainties. But the long-term economic development expected to be very good in some countries. We see that Brazil and some of the South American, including Mexico, are doing quite well. They have very stringent environmental and workers' health legislation, and this is positive with a growing economy again or an economy coming back to growth scenario. It will be possible for us in that region. So if we say development per country, the U.S. market had a stable development during the time of quarter of the year. It was good growth in order intake and sale. Brazil also had a positive end to the year with an order intake and sales growth of 9% and 33%, respectively. Canada was a bit mixed. It had periods earlier in the year when there were positive signs, and I think still that there are possibilities in Canada. They are, however, quite dependent on the first-tier suppliers of -- to the automotive industry and the lining industry. And again, Mexico, strong end to the year with good sales growth.
Move on to the financials for Americas. You've heard some of the numbers already and hopefully seen them, too. Incoming orders, SEK 327 million in Quarter 4 and SEK 1.26 billion for the full year. This is an increase of 4.2% compared with Q4 2017. That's largely structural growth. In fact, these are all structural growth. The organic growth is basically flat for the both the quarter and the full year in Americas. Net sales, SEK 339 million for the Quarter 4 and SEK 1.247 billion for the full year. This is an increase of 2.6% currency neutral compared with Q4 and 0.2% for the full year versus 2017. Adjusted operating profit down somewhat for the quarter, SEK 40.3 million in Q4 2018 versus SEK 45.4 million in 2017 and adjusted operating margin at 12% versus 14.7% in 2017. Full year, the adjusted operating profit SEK 121.3 million from SEK 136.9 million in 2017. That's an adjusted margin of 9.7% versus 11.1%, 2017. And now onto EMEA.
In EMEA, the yellow market situation, we've seen stable development. It's still so that investments levels are relatively low in machinery and new technology in Western Europe, but we have seen a stable to moderate growth in the area. We also believe that some of our new initiatives and launched product and solutions will have health and continue to have. Short-term and long-term effect of U.K., the Brexit decision, probably your guess is as good as ours. We have handled the situation whenever it comes up. If we then look at some of the large country. Sales in Germany grew during the quarter, but order intake was a little bit slower. Reasons for that difficult to say, but we have had a very good year in Germany. As a total, the December figures were not so great. Nordic region posted very strong order growth in some countries, coming back in revival of -- Norway especially. U.K., we had good order intake but slightly weaker sales, and the uncertainty still hampers some of the business decisions. Southern Europe was a bit mixed. We were not doing extremely well in France, but in Spain and Portugal, we had a very good sales. Poland, very strong quarter, and we also there landed a large order to installation to a foundry. And what we could see here, it's also so -- it's a true-fledged solution with Nederman Insight where we will add some more sensors and also the control systems that will give them much more insight in their own processes. Turkey, strong order intake distributed into the market, strong development both in order intake and sales in the quarter.
Moving on to Slide 8 and the figures for EMEA for Q4. Incoming orders for the fourth quarter, SEK 469 million and SEK 1.732 billion for the full year. Currency-adjusted, an increase of 10.5% compared with Q4 2017 and 9.2% for the full year 2017. Sales during Q4, they were SEK 524 million and SEK 1.768 million -- SEK 1.768 billion, excuse me, for the full year. Currency adjusted, we've got an increase there of 19.8% in Quarter 4 and 12.7% for the full year. Adjusted operating profit in Q4 is quite a significant increase there, SEK 93.7 million from SEK 68 million in 2017. That's a margin of 17.9% in the quarter versus 15.9% last year. Adjusted operating profit full year 2018, that's up to SEK 259 million from SEK 206 million in 2017 and adjusted operating margin for the full year there of 14.7% versus 13.6% 2017. And now into APAC.
Yes. APAC, there are, as we say, still good opportunities with APAC region as a whole. There is a significant need to deal with pollution and workers' health issues. We see this is as an important region going forward, but it's also a volatile and difficult region there. We are then, therefore, very pleased to now have a bigger footprint in the region with the acquisition of Luwa, and we will use that for further expansion here. China, as we've said, they have strong legislation and they have initiatives for a greater focus on environmental issues, pollutant, industries at risk of dust explosion, workers' health is still a little bit down on the scale, but it's coming. What is limiting the situation in China is very much the lack of financing or financing opportunities for new investments, including investments in the special investments for clean air. India, we have seen a fairly weak 2018. There has been a lot of initiatives on buy India and import duties. So we are now adapting to the new situation, and we believe that there will be uptick 2019 and especially to '20 with the new initiatives we have here. Yes, as we said, Luwa had a positive impact during the final quarter. They have, as we said, large business in China, India and also a representation office in Singapore for the southern parts of the region. We had a positive movement within China in the last quarter. We increased sales by 44%, and we received 14% more orders there. We had also, for India, a new development mainly due to the Luwa acquisition. We increased with 43% and just over 26% in order intake. Yes. Australia, smaller business, but it had a sort of more mixed situation.
Financials for the APAC region. Incoming orders for Quarter 4, SEK 172 million compared -- in Q4 and SEK 488 million for the full year. Currency adjusted, this is an increase of 48.7% compared with Q4 last year and 11.1% for the full year. Adjusted operating profit in -- excuse me, sales, SEK 206 million for Q4 in 2018 in APAC and SEK 539 million for the full year. Currency adjusted, that's an increase of 61.1% for the quarter and 30.3% for the full year. Adjusted operating profit in Quarter 4, that was up SEK 16.5 million from SEK 11.6 million in 2017, given a margin of 8% versus 9.5% last year. For the full year, adjusted operating profit, SEK 16.3 million and up from SEK 9.3 million in 2017, and that's a margin of 3% versus 2.3% last year. Onto Slide 11 of the presentation, which is the new organization that we have reported that this should happen during last year and is fully implemented as of 1st of January. We have 4 divisions as of now. We will -- and they are grouped through how they have their business logic and base technology and also the customers that they're working with. This will give us more possibilities with better expertise to handle impact on a global basis. It will also strengthen Nederman's work with the group key customers and expand their aftermarket business that have significant opportunities for the future. For the regions, we still have a coordination of HR, shared service, statutory accounting, et cetera, et cetera, which is lended -- better lended itself to be handled in regional base because that's how we do. But the operational focus and the business will be handled in the 4 divisions. Next slide. The 4 divisions will be or is Nederman Extraction & Filtration Technology, main brand name is Nederman. It's a traditional extraction and filtration for businesses like welding, metal fab and fabrication. We also say, and here, we have to realize the fiber and so on, because when we talk in this division, fiber-based technologies mainly, glass fiber, composites, wood applications that are big in this area, it is the largest division and it had a turnover of close to or roughly 8 point -- SEK 1.8 billion in last year. The second largest is Process Technology. Here, we work with the brand names like Pneumafil, Mikropul, Luwa, LCI, et cetera. And here, we have technology that are included in the process. The filtration is a part of the process. It is mainly larger projects. And we have different pleading for heavy process industries, and they have or had a turnover of roughly SEK 1.1 billion last year. The -- with Luwa, this will be higher for 2019. Then we go to the small brothers, Nederman Duct & Filter Technology. Nederman Duct & Filter Technology works with different types of piping system, valves, filter element to ensure good air quality in a number of industry. Their operating segment operates Nederman Filter Competence Centre that also supports development of Nederman's other divisions when it comes to filter media, filter technology and so on. Their turnover was SEK 0.5 billion last year and 2 main brands are -- went solo. Outside the group is Luwa and [indiscernible]. Then we have Nederman Monitoring & Control Technology where we have developed the Nederman Insight solution, which is sold internally within Nederman Extraction & Filtration Technology and Nederman Process Technology, but also through the brand names NEO Monitor and Auburn FilterSense outside the group to other partners' external third party. In addition to these changes, we have strengthened the organization. As of the 1st of February, we have employed Erik Wahn as Senior Vice President Corporate Strategy and Business Development. He will focus on the new strategy process and M&A activities to continue that work. Kristian Lexander, who has been with us for a year, has been appointed Senior Vice President, Group IT and CIO. So he's now a part of the group management team. The importance of the IT and IT security and so on cannot be overemphasized in our digitalization journey, including our IT Solutions, et cetera, and we are very pleased that we now have found since the impact a very strong addition. We have also added from 1st of February, Jeppe Rasmussen. He has been appointed Senior Vice President and Head of the Duct & Filter Technology division. He has, as of 1st of February, taken over from PO Eriksson, who's been a long-term employee, being very crucial in the development over the last few years. But he has now, at the age of 63, decided that he wants to retire during the spring and will do so.
If we move on to Slide 14, this is some information that you have heard before but is very relevant to Quarter 4, obviously. On the 17th of October last year, we signed and completed the deals to acquire 100% of the shares in Luwa Air Engineering AG, a global manufacturer and supplier of customary engineering, waste handling and heat recovery systems, both fiber applications -- fiber and textile. They're based -- Luwa is based in Switzerland, but have significant operations throughout -- around the world, particularly in APAC, particularly in China and India. It's -- Luwa Group was founded in 1935. It -- the global market theater and textile air engineering, quite simply. That is what we -- fair to say there. The acquisition price -- gross acquisition price, I must point out, to CHF 28.5 million. That was based on a locked box mechanism based on solid exit equity capital as of 31st of December 2017. There are more details on the opening balances and the acquisition in the Q4 report, which I don't think I will go through in much detail to -- with you here. Now the only point I would like to make here is that we see its [ take ] over significant cash balances as well in Luwa, so SEK 28.5 million is a gross purchase price that is important to understand, which is the price was paid -- the CHF 28.5 million is paid in 2 installments. One has been paid on closing, CHF 5.7 million is also due 2 years after the closing date. Luwa has approximately 350 employees, turnover full year 2017 was CHF 66 million. And Luwa fit, as Sven has already said, into the Nederman Process Technology operating segments. The brand is very important, and they will continue to operate as before, and they are adding high-quality solutions to Nederman's Process Technology division. And they are also merging their -- Luwa had a global recognition, Pneumafil, which is a part of our Process Technology division had the number #1 position in the U.S. market. Today, we are the undisputable #1 in textile and fiber applications globally.
If we move on to some key figures relating to cash flow and balance sheet. Cash flow on Slide 16, you can see we had a rather strong Quarter 4 in terms of cash flow from operations, this is somewhat traditional for Nederman for a number of years and is a reflection of the way our business runs, but a pleasing 2018 full year for -- in terms of operational cash flow. Net debt, onto Slide 17, we can see that, that has also decreased throughout -- during Q4. The combination of the -- or largely due to a strong operating working capital development during the quarter that it should also point out that net debt has decreased despite the fact that Luwa group has been acquired.
[ Tax free ]
In the quarter, yes. And in summary, Sven?
Yes, Quarter 4. America, we had a positive end and conclusion of the year in U.S. and Brazil, Mexico, a little bit of a mixed Europe and Canada. EMEA, a very strong end to the year. We have growth, especially also in NEO Monitors have added to our growth, and we have enough digital channels, significant growth as well, which we are pleased with. The acquisition of Luwa is significant to strengthen the presence and earnings and continues opportunities in APAC. We are now doing it roughly 20% of our invoices in -- or will be for the -- on a pro rata here, sort of 20%-plus will be APAC, which is important. But despite what we've said, it's been a bumpy journey. It is an important potential for growth when they take this even more serious when it comes to environment, and as we say, protect people, planet and production. So going forward to the outlook. As you have seen, there are many markets that show continued uncertainty. Risk of trade conflict, financial uncertainty prolongs decisions on large investment, and some large projects have been postponed. Despite these geopolitical challenges, Nederman has a cautiously optimistic basic outlook. Environmental issues will continue to be important for the group customers. And during 2018, Nederman has strengthened its position in many crucial areas where future growth is expected to be.
And on the final slide, you see our financial calendar for 2019. Despite what the heading actually says, the dates are also published in the Q4 quarter. I will not simply repeat what is there. Sven, I think we're ready to open up for questions.
Yes.
[Operator Instructions] And our first question comes from the line from Daniel Lindkvist from Handelsbanken.
So just a few minor questions on each business area. If we start out with the EMEA business, the German order, how much support did you get from that order? Or is the margin this quarter representative when you're selling at these levels? Or are there mix effects basically?
I can maybe answer that. We do, obviously, have production in our own production in Europe, which is already if you get volume, we do cover fixed costs. So there is a margin boost from volume in place, but it is important to differentiate then between the different operating segments. That it is important to understand, but yes, there is some element of fixed cost coverage that is positive when we grow the business in Europe.
Yes, yes, okay. But my question is basically, at these sales levels, there is nothing special with -- the mix is not boosting the margin if you would have sold in different areas. That's basically the question. You would cover the costs anyway then, or is there a high margin order in this quarter, specifically?
No. There's no specific high-margin order in the quarter. That's one without surprises.
Okay, great. And then if we look at the Americas business, then was there something special in Q4 last year? Was there profitable project orders, the supported earnings that time? Because we've been used to these high incremental margins that we've seen before. So will the weak organic growth, is that basically the -- what's the explanation for the somewhat weaker profitability in the quarter basically?
They are lacking in volume. We are geared for and can take significantly more in that, and the Americas has a significantly higher portion of large orders since that is the home base of Pneumafil, Mikropul and also what this now Luwa, since Luwa is taking up over the Pneumafil, which is textile and fiber-based. So I would say that what we really need is we have developed and we have a strong pipeline, and we have developed also healthy mix in that pipeline, not going for, call it, bulk orders with lower profitability. The issue for them and the challenge is to convert this pipeline into orders at a bigger pace. But we're also building out aftermarket position, and we have here successfully added and sold this solid Nederman Insight system. But for Mikropul, we have made a package, which is called Mikropul [ sys ], including also aftermarket services like filter changes, control diagnostics and so on. And we are starting to see that some of that is -- we have seen acceptance in the market for it, that core system sold in the last month when we introduced it in November, which is important to understand that this is the journey. But yes, very long answer. I could be a politician, but the fact is we need more volume in...
Yes, this is basically volume effect simply -- as simple as that.
Yes.
Yes, great. And that's because the incremental margins are still among the highest in that region for your sake. Due to that fact, you will get quite some cost coverage from new sales in Americas.
Yes, yes.
Yes. So great. And then just for the Luwa acquisition, I have to congratulate you to begin with because I expected a higher net debt. So basically you really got that company at a very, very favorable price. But for the seasonal variations, and it's always problematic when a new company enters the business to understand the full effect from it. With the seasonal variations in Q4, is Q4 a very strong quarter for that business and even stronger than for the rest of your business? Or is it normal seasonal variations?
I would say it's rather typical. Luwa is -- have typically delivered more in terms of invoice sales and conclusion of projects towards the end of the year, and that is what we've seen here, too. But I mean, like we keep -- we did point -- we do point out, Luwa's overall operating margins are significantly below those of the rest of the Nederman Group for the moment.
Yes. Plus all of this is higher in Luwa in Q4 than for the rest of the year.
Sorry, can you repeat that one?
Are they significantly higher in the Luwa business than for the rest of the year in Q4?
What they do, they do have some own production, so there is an element of fixed cost that is covered, but it's not that margins -- otherwise, our projects are significantly better during the fourth quarter. It must be remembered that Luwa is a more of a large project-based business. So the order intake, for example, can be rather volatile, and I would say even between quarters, it could be rather volatile, so Luwa group with order sizes and up to...
The biggest last year was CHF 8 million, equivalent of CHF 8 million now, yes, almost.
Almost. So quarter-by-quarter, order intake can fluctuate significantly.
Yes. Great. So and then just a few, and I won't take the whole time here. Just for the R&D, it was higher now in Q4 than we've seen in Q3 and Q2 and so on. Should we expect the R&D to be at these levels? Or was there something special in Q4 to elevate...
I think you should expect that we are -- we have increased and we will continue, as we have had for a long period, the focus of increasing the distance between us and more local regional players. We will continue, and it's also so with we have spent SEK 0.5 billion to spending significant demands in the -- with different technology, i.e., the measure and the control division where we spent R&D money in NEO Monitor, Auburn FilterSense, but also with our own Insight development, which is the IoT platform with the presentation possibilities that are second to none. And what we here now are developing, and we'll launch later in these possibilities within our system to have more advanced services like helping with compliance reporting, energy reporting and so on. So we will continue to have a higher -- we -- it is a decision taken that we will continue to have a higher level of our R&D spending.
Great. So and -- so just to summarize then, the EMEA is stable and you get support from higher volumes, and the Americas should have benefited from higher volumes with scalability basically. So you are in a scalable mood with the full company now that you reached the R&D level that you will be on basically.
Yes, and what -- we need to sell more to be honest. I am not...
Yes. Basically, isn't it so -- and then -- yes.
At the right prices, not being tempted to go in and have a big price fight in the market.
No. So -- and then my last question, with the new organizational structure, we get the few quarters where we get the old structure as well or we would just have to -- should we expect to make a complete cut and enter with the new structure as of Q1?
No. We will supply you with a comparison material. So we will give you a quality of the things in the EMEA, so -- maybe. But the focus will be on the operating business, but we will give you a comparison so you will not compare...
The old comparison as well and then the new one?
You will have the regional comparisons as well.
Yes.
And the next question comes from the line of [ Gustaf ] [indiscernible] from [ Capital ] Fund.
Just 2 questions or rather 3. One on the APAC organic growth down 19, external sales down 20. Are -- I suppose that China -- and my question is, I read here and there the update Chinese government is adding some liquidity to the financial system to get -- to help smaller companies with their finance. Have you seen anything -- any improvement on that the last couple of months?
If you won't have 1 month, January was better than -- for a long period. But as you say, if we go to Swedish, in [ Foreign Language ], we are -- but we can see that there is a push for better and to really follow the legislation, and they are more stringent in imposing these regulations. But on the other hand, what happens is that they are closing down a lot of industries that are old and do not need -- instead of investing in new technology, they just close them to take away overcapacity. But we also see that there's pressure. We are receiving more orders in January and in February, orders that we actually received quite a long time ago, but we haven't booked them because we haven't got the prepayment. We have a fairly cautious methodology. We do not book orders until we get the first prepayment. So we have seen that there has been some releases during this period. But I think that there will be challenges still, and it will depend on if they go down on profitable companies and companies that can afford it, then there will be a better business environment. And long term, no doubt about it, it is actually here where you have a great need, but it's also so, which is outside your question, that U.S. is also lagging significantly behind European companies there, and they are sort of starting to look at [ this segment ] where you are in the value chain.
All right. A follow-up then on the Luwa acquisition, which when you look at acquisition, I guess it looks like another great acquisition on your behalf, I must say. But how -- what is your strategy? Then what are your actions? And what are your expectations from Luwa? I understand you get the better market presence, but when it comes to sort of increase the margins as they are, I mean, quite a bit lower than the one -- the rest of the group.
Yes. But it's -- we will try to redo the same thing as we did when we acquired Dantherm Filtration in 2010 that was actually loss-makers; environmental filtration, autumn 2012 that we're having the record-high margins at that time, 3.4% EBIT, that was working with -- determine what is the profitable business. Sometimes not shy away from the fact that we might need to just abandon some low, low profitability and do the analyzing, which we have been doing in the other areas. We then have to work with the attitude, focus acumen, and what is even more important, increase the aftermarket from currently 8%, 9% to maybe what we're guiding is possible 25%, 30%, but it will not -- 25% in a few years' time, but it will not happen in 2 quarters. So I cannot give you that we will have snapped our fingers and we have fixed it in 2 quarters, but our ambition is then there is no reason why we should not be at significantly higher profitability level. One part of that is that we will introduce -- they have started their project, they called it [ in 7 ], which is -- talk about the ideas of having the same of the Nederman Insight surveillance and -- remote surveillance, remote monitoring, remote services, and we will [ bead ] up that process. Unfortunately, we can start that later, say, May, June, so launching it later in the year. And we will then use the same basis, the same 2% in the tablet. And there is an interest, especially in the textile industry where some of the big factors are in quite remote places, in Guatemala, and so on, and there is an interest. And that is a differentiation that we will try to get paid for. Trying to differentiate, going back to -- we are leaders in -- when it's digitalization, giving more services, but also getting better paid. Was that an enough answer?
It's enough. Last question, you mentioned on a side note there that you only go to Germany, that was a bit weaker. Clearly, weaker in December, and we know that the automotive industry has been in a bit of trouble over there -- down there. Have you seen that easing off, anything coming into new year? Or do you think it has to do with the automation industry?
I think it has to do a little bit about the uncertainty in the automotive industry. It's not doing the investment they have planned -- or postpone in waiting for what the Twitter man will say. He's got 90 days now to decide if he's going to have 25% import duties on cars and car parts. It -- I think it's -- but this is not scientific in any way. It's my guess and your guess is probably as good as mine, but we have seen that they are starting to make investments right now. But if we meet -- we say there are a lot of -- we think we are in a good position. We do what we've -- but again, there are these volatilities in the market due to different macro effect that has an impact on us.
[Operator Instructions] As there are no further questions, I'll hand back to the speakers.
Okay. Thank you for taking your time listening, and we will meet you soon again. If there's no other questions, we thank you for this session.
This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.