Good afternoon, and welcome to Exel Composites Capital Markets Day 2023. I'm Sanna Ahvenniemi, Head of Investor Relations at Exel Composites and the moderator today. Before we are going to the agenda, I will give you some practical information. First of all, safety. We have 2 exit doors here, 1 in front of the room and the other one on the back. In emergency case, please follow the instructions given by our guide. This event will be also webcasted. A couple of words about the Q&As. We will have Q&A session after each presenter, and our CEO is also available after all presentations and before closing remarks for additional questions. I would like to remind people in this room that before presenting your question, please wait for to get the microphone. For the webcast participants, you have a text box on your screen where you can type your questions anytime during the presentations. This event will be recorded, and the recording and the presentations will be available at Exel's website after the event. Please note that the presentations will contain forward-looking statements. I will now hand over to our President and CEO, Paul Sohlberg. Before he starts, let's watch a short video on customer testimonials. Exel understands the demands and needs of our customers and is always ready to respond. Exel has an extensive knowledge of fiberglass as a material. This helps Sorec in the solution development of new products. The use of composite materials provides exceptionally high thermal insulation, resulting in condensation-free surfaces. With the fiberglass products, like working with Exel and with Sorec, we can reach very good U-values and thermal values, even when you're going with very, very slim frames. So it's basically the one product that does frameless windows without any compromises. Frameless windows have existed for a long time, and in frameless windows, you're going for the slimmest profile possible with huge panes of glass. And the problem about frameless windows is that when we're working with aluminum, you're going to have thermal problems, which means condensations and houses that don't work that well. Peter, when working with Exel, what's really important for us? In fact, the first reason why we started using composites was because of the flexibility and its ability to give the structure time to withstand, like, wind loads, because that's the biggest challenge for our umbrellas. And there, the composites really help to give the frame the time to withstand the wind force. Stiffness of the composites and of the ribs of our umbrellas is also important thing, isn't it? Yes, it's very important. On the one hand, it needs to be flexible, but on the other hand, it also needs to have a certain stiffness because it holds our canopy open. Our composites and what we use is like the perfect balance between the stiffness we need and the flexibility we need. Yeah, we are working together since more than 27 years with Exel, and very often we choose for the pultruded profiles from Exel. But why, Jan? Mm-hmm. The benefits of those profiles, especially for the train business, they are very customized, can have complex geometry shapes. They are thin-walled, so which means less weight. They have very good mechanical properties and also an excellent fire retardance behavior, yeah? For all our key suppliers, it's very important for us, so we can keep an eye on all the different components. But for the specific component or material, it's important we can rely on the technical expertise of our suppliers, and that's also where Exel comes in when it comes to composites. We really need their technical experience, and we expect also that they give us advice on how to better use their material and products. Everybody, my name is Paul Sohlberg. I am your CEO. Warmly welcome to Exel Composites Capital Markets Day. Today, we have an exciting lineup of speakers and a full agenda, where we'll be discussing how to unlock the full potential of Exel. I'm very happy to see so many in the room and online. Thank you for joining. During the presentation, I would like to pay full respect to you and stand up for the whole duration of the show, but something happened. You know, I wasn't planning on breaking a leg when actually preparing for this show. So three weeks ago or so, I was raking some leaves in my backyard. I slipped, and I tore out my quadriceps tendon. So doctor's orders are that maybe I will need to use the chair, but if I do it, I do it with the greatest respect for, for my audience. So heading into the presentation, I like to start with people, and it's always a privilege to work with great people. So let's take a moment to review the Exel leadership team and today's speakers. So after my session, Olli Tevä will be discussing our tailored business. Shortly after that, Kari Loukola will be discussing our volume business with a special focus on wind. ... Kim Sjödahl, our SVP of R&D and Technology, he will be discussing and giving us a glimpse into the future of the composites. And towards the end, our CFO, Mikko Rummukainen, will be kind of summarizing our journey of transformation in numbers, discussing our financial situation, and also presenting the new group targets for Exel Composites. So with that, let's head into the presentation and see how we unlock that potential. And I start with the context and the global megatrends, and we all know them. I mean, we discuss them almost on a daily basis. So they are climate change, the mitigation of its effects, sustainability, the energy transition, urbanization, the need for more energy-efficient buildings and transportation. We all believe that these provide for opportunities for composites. In particular, what we believe that the demand for the material properties offered by composites, these are lightweight, strength, thermal and electrical insulation, weather and corrosion resistance, and longer lifetimes. They'll all increase in response to these megatrends. Rightly so, the market, the global composites market, is growing. sWe tend to say that composites is a fairly young material compared to many of the incumbents, you know, iron, steel, stone, concrete. It's been around for 50, 60 years, so it's still young in that, but it's been coming through infancy and maybe into the teenage, and we can see the growth spurt that's happening. Last year, depending on the research house, they estimate that the global composites market is between EUR 85 billion and EUR 95 billion annual globally. Exel, we operate in a subsegment of this market, particularly in pultrusion. And pultrusion, the good news there is that it is one of the very few continuous manufacturing methods available in composites. And it's commonly in the industry said that once the volumes start growing, this is the manufacturing method that will respond best to growth since it's a mass manufacturing method. Now, then let's look at the addressable market a little bit. And by the addressable market, I mean both the customer opportunity market and also the competitive landscape. From the customer opportunity market, it's common for pultruders in this, let's say, EUR 4 billion pultrusion space, to have to look for their opportunities in different sectors and in different segments. There's opportunity in most of the industries for the composites. It's just thing of finding them there. Now, if we look at the competitive landscape, what is typical to this EUR 4 billion pultrusion market is that it's full of small pultrusion players. They are usually quite small, they're local. They may be operating in a particular part of the market or serving just one or a few of the sectors. What sets Exel apart is that, first of all, we are large, we are able to serve many of the sectors, we have a global network, and we are significantly stronger in R&D. I mean, these small players here, they are often not mom-and-pop shops, they are bigger than that, but they are local, privately owned, smaller vendors. In the market, you know, the way we've split it up here is what we call the traditional outsourced, where you have different companies competing against each other, and then the insourced market. And what's going on here is that there are a couple of larger customers of ours as well, and raw material vendors who have decided that, "Hey, let's go ahead and insource some pultrusion lines, as it's an important supporting element in our own value creation," either by way of finding a vehicle to field their raw materials into the market, or then, for example, you know, to insource what they feel is an important step in creating their own product. Now, obviously, this is a competitive threat for us, but it's also a great opportunity. We are currently in discussions with some of these players to outsource back the insourced pultrusion. And we see some opportunity there as well because, as I will explain in a couple of slides, doing pultrusion is not very easy. So it's usually something where we feel we have a good opportunity there as well. Staying still with the industry and the customer pain points and the industry pain points. So as I mentioned, composites, they are a fairly young space in materials. They're usually there wasn't a lot in the engineering high schools in terms of how to work with composites. It's changing now, but the general picture is still that there is a lacking awareness of the benefits of composites and particularly how to design with them. And Exel can help solve this and many of the other ones. What we have been doing for decades already is that we have been active in the industry organization, in standard setting bodies, in creating this awareness and creating these design codes. So, for example, the Eurocode that's coming out soon, which is a design code for the building and infrastructure sector in the European Union, we have been a contributing important member to that, and that's just one example. We do this, and we have been doing this for long. The same then kind of carries over to the application and product development. As I mentioned, for these same reasons, there isn't a lot of, you know, ready-made productization or application development available in this market. So if you are a big OEM in any particular industry, and you feel you need a composite subassembly for your own part, you actually had to go ahead and kind of figure that out by yourself and then maybe get the pultruder to pultrude it. What Exel will be doing, given this strong R&D capability, is that we will be leaning more in the design process of larger customers to help them choose composites. We'll also be adding more post-processing services that are needed to provide the final subassembly. And we believe that, you know, by holding the customer's hand and helping them actually design the subassembly they need and helping them see the path to the post-processing, they, by holding their hand, they will choose to walk this path with us, and that will help them also to choose composites. A further industry challenge is, of course, cost, and cost reduction is needed in composites parts. The good news is that many of the large raw material vendors, they are also working hard on this, and raw material costs are coming down. For example, in carbon fiber space, which has traditionally been a costly raw material, there are now more offerings coming out that has more of a mass market appeal with a, let's say, a better cost point. Of course, what Exel is doing, we are catching this opportunity, and we are also driving efficiencies in our system by increasing volumes and then getting economies of scale for the unitary cost of the items. Finally, a large opportunity, I want to call it, is, of course, the sustainability drive. The industry, for sure, will need to go green, go sustainable, figure out the circularity, the recycling routes. Good news here again, Exel is a forerunner in this. We have been working on this for quite a long time already. Our landfill numbers are low. We are actively working with industry bodies and others to create these recycling paths. I'll give you as an example. For example, the Kimura recycling project in Finland, where Kimura shared all together with colleagues from the industry, they developed the first commercially operational recycling path for glass fiber. It's fully operational, commercially operational today, so that's taking care of our waste, for example. And what is interesting is that they have successfully managed to recycle a windmill blade, and this is not commonly known. So I think that's a good testament also to the things that are happening in the industry, whereby Exel is a participant in solving these, these challenges. So let's look then at why customers choose Exel and stay with us. I mean, we heard in the video, the gentleman was talking about having stayed with us for 27 years, and it's typical. We have very long customer relationships. We have high customer NPS. I want to say that with humility. I mean, we need to keep working hard on maintaining and improving that, but it is a testament to that some of the things we are doing, they for sure get stickiness. So first one is the Exel brand, which is very well known in pultrusion. Like I said, we have been around for a good amount of time. People know us. They, they know us for our significant technology and R&D capabilities to solve challenges. We're known for our high-performance products. Also, as a large corporation, we have the quality, reliability, and surety of delivery that all of our customers expect, and in particularly larger customers, they, they have very stringent requirements on, on this. And then finally, the global reach in sales, sourcing, and manufacturing network, which is also something we can leverage to the benefit of our customers. Mind you, that few of these are held by any of our competitors. So, so this is clearly an area that sets us apart, all these four, four items here. So I'm going to head over to talk about the new strategy we launched at the beginning of, of October. So we announced a transformative strategy that will make Exel more integrated and see us move towards being a designer and manufacturer of pultruded composite solutions for both tailored and volume applications. We also said that we will reorganize Exel's operation to improve performance and support the growth. We can see here the four main pillars of that, of that strategy. So starting with growth, this new strategy is first and foremost based on driving organic growth from the fast and large, growing applications driven by decarbonization and sustainability. We're seeing strong demand for products needed for electrification, the mitigation of climate change, as well as energy efficiency in buildings and transportation. The next pillar is about driving customer value from everything we do, and this goes back to those pain points I discussed in the industry. So our strengths are in know-how, agility, independence, and having been exposed to a wide range of all of these applications. So we will ensure that we make this knowledge available to our customers earlier in their design phase. We will lean in in that design process. We will offer that post-processing, as I mentioned, and we will be supporting them in choosing composites and kind of lessening the hurdle of going with composites. It's interesting to note that when we look at our won and lost cases, we usually tend to win the cases that go forward, but the items that are on the lost list are not we lost them to a competitor. It's rather that the customer chose not to go forward with the composite solution, so they found another solution, or they, let's say they didn't see the end result. So we'll be working on increasing this. The third pillar then is obviously profitability. So in terms of lasting profitability, we will take swift and determined step to transform the company. We announced that we're planning to go into a new operating model, which will organize this into two distinct business units. We'll go towards larger factory units with dedicated roles and then drive efficiency improvements through the whole system. I'll talk about this in a minute more. We also announced that three existing sites will be placed under strategic review, and a few weeks after the announcement of the strategy, we had already completed the first one, which was concerning the U.S. operation and refocusing that. And then the fourth pillar is high ambition and rigorous execution. So we want to make sure that we have a very clear plan, and we are executing the actions. I'll talk about that in a minute as well. Executing the actions in a good way, and during the strategy period that we develop the skills and capabilities that enable us to make more than EUR 200 million in annual revenue with good profitability within the five next years. So let's look then into the economic neighborhoods from where we will drive this growth. And as mentioned, so we see favorable growth opportunities driven by sustainability. So it's common basically to most of the applications we do, that sustainability is there as a strong driver. I mean, obviously, we have first the wind power. The wind power, we have been doing that already for many years. In fact, the spar cap, that's a very important reinforcement part of the blade, was originally developed by Exel Composites back in the day. So we're already in that space, both with glass fiber and with carbon fiber products. Obviously, we know the drivers, the growth drivers there. So first of all, longer blades, and in general, the increasing installation of the wind turbines. Then, on the building and infrastructure side, you know, we see sustainability as a major driver here as well, and particularly in the brownfield space. So we all know that the globe is just getting hotter or colder, wetter, wherever you are, and we need to insulate the buildings. So we need to either, you know, keep heat out or keep heat in. So we see that there's gonna be a huge demand of composites or parts that will help in this insulation. I mean, just look at how it's been in Europe this last summer. It's been pretty hot there, for example. So there, we're talking about different types of windows and doors, facades, roofs, and other insulating parts for buildings. Also, of course, the drive for electrification in transportation is a major driver. We're speaking particularly about public transport here. So we are already in China working with the world's largest bus manufacturers to really increase our wallet share there, and for example, help them with this design process. And I wanna remind everybody that in transportation, it's not only about moving the vehicle and the electrification of the drivetrain, it's also the same thing. The climate control consumes a big part of the energy that the bus or the tram uses. So insulation is, again, an area where composites can play a part. And then we have our traditional stronghold, which is certain, often carbon fiber and glass fiber tube-based products, which is really, really the sweet spot of Exel. And we see there the same situation, that many of them are driven by sustainability, and we will, of course, keep driving profitable growth out of this as well. Now, then, in the coming slides, I'll switch over a little bit and talk to you about the equity story portion of the strategy. So what's gonna be the value capture model to drive those premium margins that we all want? So the good news here is that we are already specialized in in challenging and high-margin pultruded composite solutions. Like I mentioned, we'll be expanding the value add through earlier designing and product post-processing. We already have some examples in the company of successful customer projects, where we can see that we are generating more value for the customer and also, consequently, for us. On our end, we need to increase the repeatability by driving standardization in our own offering. So I'll speak in a minute to showing you that, yes, there's a lot of uniqueness and tailoring in our business, but from our point of view, we have ability to standardize and productize our offering, and we will be doing that. On that, on the back of that, we also expect to be able to harmonize our operating procedures, the procurement, and the supply base, as we then standardize the offering. And as a new element, now that we're going towards a business unit with volume focus as well, we'll have the ability to transfer the tailored applications to the volume production side once they start go volume and before the price erodes. And this has been an area where Exel hasn't been very good. We've been very good in pulling in and kind of capitalizing on those tailored applications, but once they start to go volume, then we have kind of struggled in our current factory network to do well with them. So this is gonna be a new area where we can kind of stick to the application for longer and kind of extract more of the value to Exel. Okay, and then we come over to asset intensity, and I'm big about asset intensity, and I'm gonna show you in an example in a minute. But how are we gonna sweat the assets better? And I think we have a lot of potential here. So first of all, we'll have a compressed global production network with clear factory roles to achieve economies of scale. The factories will be dedicated with standard operating procedure for the type of business they are doing, whether it's volume or tailored, and this will then also enable us to put in place a cost structure and a production philosophy that's aligned with the type of business they are pursuing. We have a significant R&D team. This will be deployed into the sales and customer application engineering to help them with that solution design. And we also have a, as opposed to our competition, a large and capable sales organization, and we will refocus the sales operating model to focus on speed, responsiveness, and then creating those solutions for customers. And now we come to something that really gets me excited. So this is an imaginary example of a global diversified pultruder. So let's look at the first, or we have a couple of different options here. Let's look at the first one. So we have a pultruder who has 120 pultrusion lines give or take. If they manage to run that capacity at 45% out of 24/5, so basically, they are running it five days a week, 24/7, but not the weekends. It means that their revenue, depending on their mix, is gonna be EUR 100 million, and the dynamics of the value creation is such that they're gonna be loss-making, and it's gonna be single EUR 1 million loss-making. We can debate how many, how many it is, but the point is just that it's gonna be loss-making. Okay. Let's take another identical diversified global pultruder, who also has, you know, the same type of mix, but they happen to have only 90 lines. But they're able to sweat those assets better, so they can run them because they have only 90 of them at 60%. Well, what happens is that they swing into profitability. That's good, but not yet exciting. But then we take the third one, that still has 90 lines. They are able to actually run the capacity utilization at 85% of 24/5, and 85 is a good number in our industry, or 60% of 24/7. And you can see it's double-digit with the same asset base, the profit. And where it gets really excited is, that when you really sweat the assets, and you have the orders coming in, and you can run 85% of 24/7, then it gets really exciting. And I think this makes me very happy about the potential we have in the company. Then let's just discuss quickly, you know, the value chain lock-in and the levers we have for strategic control. So how do we reduce that beta, that volatility in the cash flows? So first of all, we have decades of cumulative knowledge of how to apply those pultruded composites. Now, we'll mention that, running a pultruded composite, you can get it fairly easily right for one particular profile or in a specific sector, but it's not easy to get it right for a wide range of applications. And the reason is that on the pultrusion line, in the beginning, you have a wet end, and that is complete chemistry. So that is how your fibers, your mats, they go into the resin and the chemistry recipe. You know, you run it through your curing process. That is chemical. That's chemistry. And then you have kind of the mechanical end of the line, which is mass manufacturing, so the line keeps running. So it's easy to get it right for a particular type of applications. It is not easy to get it right for many different applications. Since it's continuous manufacturing, you have to be able to apply that skill and that tacit knowledge that you have to that line constantly. I mean, if you have... You know, you might have a challenge on the quality on the incoming raw material. So how do you manage that, such that you can keep the line running and don't start making scrap? So that's a strength we have. The other point of view, if you look at the infeed and the tooling there, so from a customer's point of view, every design is unique. So customers feel that, okay, they have a unique recipe, and like the gentleman said, I mean, if we're doing a good job, there isn't a big drive to switch, but it's also a big hurdle to switch. Because Exel owns and protects the IP around the infeeds, the tooling, the chemical recipe, and all of these, and that's our IP. And that kind of helps keeping the customers. We do not leverage that in front of the customers. We try to keep them happy, so we don't even end up in this conversation, but it's good to know that we have this strength. Going forward, we will standardize that chemistry. We can do it, actually. We don't need to kind of come up with a recipe, with a unique recipe every time. So we will standardize that chemistry, and we will kind of productize our offering so that we reduce the customer's visibility into the cost drivers, and of course, then enable the scale advantages for us. Then looking about future, okay, so what do we wanna drive in the future to keep this lock-in? Well, we feel that sustainability and being on the forefront of that is very important, and also then the production methods research. So we will be focusing our R&D efforts and spend on activities that kind of create this, this strategic control element. Coming then to our internal organizational system, I won't discuss much of it, but I'll just show you an example how we have potential to, let's say, unlock benefits in the system. So up until now, we have been organized, the factories have been organized around seven in the fairly independent BUs, which have had fairly few shared operating procedures and a little bit of a fragmented P&L. So going forward, what we'll do, we'll organize into very clear two BU structure. We'll put in the factories with the—you know—role clarity and the production philosophy around what they're supposed to be doing. We believe that this simplification will drive tremendous speed and efficiency in, in the whole system. And, of course, you know, resource clarity and, and, and mandates and all of these will be, will be clear, we believe. Moving over then to sustainability. I mentioned that sustainability is, will be, and is one of the big things in, in this industry, and a big opportunity. So what we will be doing there is, today we are setting firm commitments for the people and the environment. While Exel has been working well on many of these areas before, we didn't have these as clear targets and something that we follow and communicate constantly. So there are three new targets we want to introduce, and the first and the foremost one is zero harm. So the most important thing we do is to make sure that everybody goes home healthy and safe. So while we have been, of course, measuring LTIs and having activities, we are now raising this to a group-level target to make sure it's, like, you know, first on mind on everybody, whether you are working in an office or in a factory or wherever. The next part is then the environmental responsibility and making a firm commitment in that. So the targets we will be measuring there is, we'll be going zero landfill by 2028. Like I mentioned, 100% of our R&D spend will go towards activities we believe also have a positive sustainability impact. We will be reducing our greenhouse gases in line with the established UN targets. We're currently in the process of calculating and rebasing them, and we will be sharing them then when they are ready and giving you kind of annual GHG targets. And then finally, I believe very strongly that a healthy and thriving workforce is a very, very strong contributor to, you know, welfare, and to profit, and to all the good things we expect. While we have been doing this, I think this is already good. We are introducing employee eNPS surveys for the whole organization, and we will be kind of working hard then on ensuring, you know, that everybody has a good environment and can thrive in that, and do their best every day. So the target there will be to improve it annually from the 2024 baseline as we go forward. We'll also give a firm target on that once the baseline is known. Good. I'm gonna start summing up now in a couple of quick slides here. So first of all, it's just a summary of kind of the phases we have in the strategy. Now, I will say that, you know, we welcome profitable growth as early as possible, but what I want to do, in my mind, is to have a, you know, quite a clear distinction that in the first phase, we need to stabilize and make sure that we are profitable. So once the growth comes, we grow in a good way, we grow profitably. We've outlined certain high-level headlines here for activities that we will be, we will be doing to get us to our targets we announced today. In terms of concrete actions, we have concrete actions that are ongoing. The first one was the U.K. downsizing, which is completed already. We have taken the decision to build a new manufacturing facility in India for wind power. It's progressing well, according to plan. We have completed the first of the three strategic reviews. We will endeavor to complete the two other strategic reviews as fast as we can, subject to legal and other requirements in these processes. Then, of course, in the next year, we expect the new manufacturing facility in India to go into mass production. As we move forward, we have completed these actions. We will supplement with other actions from our long-range planning and the strategy work. But this is just to give you a flavor of, okay, where are we now, and what we will be doing in the near future. So to round up, coming back to the headline of my presentation: so how do we unlock the potential? Well, we have an attractive growth path identified. We have potential to significantly increase intensity in operational and sales assets. The transformation is ongoing, and we have concrete actions well underway, and we welcome the growth and profit that will follow. So with that, I'd like to thank you very much for staying with me, and it's time now for questions and answer session, and I think, Sanna, so that we'll take the first question from the online while we get organized in the room. But in the room, please raise your hands and you will get the microphone in a, in a second. Sanna, go ahead, please. Yes. So in five years' time, what is going to be the sales in volume and tailored business? What is the split? Yes, so, my vision is that we wanna grow both of these businesses, you know, in a good way. But in five years' time, I would like to see a healthy and balanced mix, which, let's say, 40% volume and 60% tailored business, to ensure that we have a good, good balance in the, in the businesses. This, of course, requires us to profitably grow both of these, these legs. Okay, and then questions from the audience. Do we have... Yeah. Yes. Thank you. Thank you. My question, Markku Kumoinen from Nordea. Well, first of all, regarding the first bullet point of your new strategy, capturing organic, profitable growth, you mentioned that your target to capture this growth, for example, from the electrification and building and construction and wind power. But if we look at your current customer mix, how much that will change, or are you just, like, refocusing among existing customers or trying to acquire new customers? Okay, very good. Yes, the answer is yes on both accounts. It is important that we do attract new customers. We've said previously that without at all, you know, forgetting the small customers, it is important for us, for the reasons I explained, to get also larger customers, larger organizations, to drive those volumes. Yes, that's for sure, a thing we need to do. With that said, we also do have good existing customers in these sectors or in these areas already, so we will focus on them as well. We have quite a large amount of customers we serve annually, and we want to, of course, find ways to serve them all well. But it is true that we will focus more on, let's say, those that have a repeating business or those that can offer us, you know, larger volumes or more repeatability in the business. Okay. Then, next question, still on those four strategic points. If we combine this to your financial target of this 10% or double-digit EBIT margin, how much do you think that each of those different bullet points or strategic initiatives will drive you towards that goal? Well, starting. You know, looking at the example from the diversified pultruders, the most important thing now is in pultrusion, generally, the profit lever is having, you know, pounds or kilograms going through the machine every hour while applying the skill to it. So it is going to be very important to have a right-sized capacity available to meet the maximum demand we can serve in, or the maximum order intake or demand we can serve from the market. So the two big drivers of, you know, or the two bigger levers of that success is coming from capturing those orders from the organic growth, and then ensuring that we are kind of right-sized and sweating those assets well. I'm not prepared today to discuss how much from each of them, but we have a good plan for that. Okay, thank you. And then my final question regarding the U.S. factory review that you already completed. You stated on the announcement that you will refocus the U.S. production into tubes and profiles, but how much do you think that this will change your competitive landscape in the U.S. market? And have you already established new customers, and how long do you think that the ramp up with the new customer focus will take? Yes, it will take some time. The good news is that we have been working on this already in the background for some while, and just as we speak, we have, let's say, new or the new type of customers coming in and putting in their, their early orders for that. So the sales team, of course, has been working on this for a good amount of time. It is good to know, though, that the sales process is quite long in pultruded composites. So the time from first initial contact to actually mass production, you know, it can be a year, it can be even longer, and it doesn't only depend on us, it depends on the customer. So it is good to keep that in mind as well. But we have been working on it for a good amount of time. Thank you. That's all from me. Anyone else? Yes, Henri Parkkinen, OP Markets. Can we go back a couple of slides to this picture where you illustrate those different kind of utilization rates and lines for the... Yes, this one! If we assume, let's say, the average market situation, which is more apt currently at this time because of different kind of economic situation and so on, where would Exel land in this picture at this moment? And if we go, let's say, forward something like three to five years, how much about this targeted earnings improvement should we count on better utilization rates and how much to better economic situation? That's my third question. Yeah, okay, so, you know, I can't give you any other detail about the current situation as well as we have been given in the quarterly report, so I think you can maybe make some deductions there. And these are, of course, now, simplified examples, so there are a lot of conditions to it as well. But I think the important point is that a good company that can attract orders from the market, they also have this step-inbuilt step in and step down factor in the manufacturing process. So there is a cha... There is a possibility to do, you know, do well irrespective of where the market is, if you fulfill this condition that, you know, you have enough volume going through the machines every hour in line with the customer demand in the market at the time. So I'm not sure if that's a good answer, but that's kind of, you know, as best as I, as good as I can give you now without revealing more than I should. Okay, the second question is about your action plan. You have an action plan that three factory reviews and so on, and you announced that this US review and the action you take there should lead to something like EUR 3 million annual cost savings. How about the total? When you go through all these actions, where we are then? Okay, yeah, I like the question. So, we did, we did announce already the savings for the U.S., and of course, we are sad to say, I mean, we had to reduce our capacity and our staffing there, so a lot of that work has been done for the U.S. portion already. For these, we actually haven't done because of legal reasons. As you know, in many countries, you have to do a proper planning process and invite, you know, employee representatives and others. So once we get there, we'll announce then immediately, once that planning process has proceeded, and we decide what is the outcome. I mean, the strategic review, there's a wide range of options, alternatives that we can choose to do with these sites. I'm not gonna jump ahead of that process and say anything here yet, but we'll announce as soon as we know. Okay, thank you very much. Thank you. Thanks. Any further questions from the audience? Yes, please. Joona Silvén from Evli. You mentioned earlier today that you would need 20-25 million EUR in required financing for transformation business growth and working capital during the next 5 years. But when I look at your slide number 15, this capacity utilization rate slide, it seems that you really don't need any more pultrusion lines. You would only need to, like, step up your production from 24/5 to 24/7 or so. So can you maybe, sort of try to tie that example to this, this 20-25 million, figure? What kind of... Where do those costs stem from then, if you don't really need new lines? Mikko will speak to this in some more detail in his own presentation. But you know, this is of course a simplified example. So you know, you might need to have different types of lines, and you need to do, of course, transformation in that factory network as well. But where we need those funds is, of course, for financing the growth. So there are investments in new capabilities, capacities which may not necessarily be production lines. There's working capital needs, obviously. There are some balance sheet and financial situation considerations and other things as well. So you know, we shouldn't get too stuck on that because there are needs to do the transformation. We have to remember, we have a positive, quite significant transformation of the company ongoing. So it's easy to think, okay, it's line investments, but there's much more to it. Okay. If I take a couple of questions from the online audience, when would you expect the reorganization of the production footprint to be over? Okay. Yeah, and this has a lot to do with the strategic reviews and the schedule that we just addressed. So if we were to make a reorganization in the lines and the factory network, that would happen in line with those plans. As I said, I cannot, unfortunately, jump ahead of time, but we will do it as fast as we can. Okay, so we have time for one more question. Do we have any questions in the audience here, or do I take one from online? I will take one from online at this point. Are you trying to reduce the cyclicality of Exel's business with this new strategy? If yes, how can you achieve this? Yeah, obviously, that's an important planning parameter in this strategy. And, you know, we have looked at different options of how we can do that. One of the biggest drivers there are to ensure that we continue to be diversified across industries. We are looking at, okay, which of the industries could be countercyclical to each other? But then another element is to be a preferred vendor with larger corporations. So yes, there will be some variation in their volumes as well, but it may not be as tremendous as it is with smaller companies, or a big mix of smaller companies. The other important thing is to be really a preferred vendor. So in this business, it's often a lot about wallet share, and the ones who are the number ones or the number twos, so they take a smaller hit usually when the total demand goes down. Okay. Thank you, Paul. Olli Tevä to talk about the tailored business. Hello, good afternoon. My name is Olli Tevä. I'm heading the sales and marketing in Exel, since about five years now. And I'll be talking a little bit more about this, tailored business that Paul mentioned, and how we plan to grow the profits and increase the share of wallet with the customers in that business. Maybe first to start with the market information. In practice, the market is quite big. Last year, estimated to be EUR 3 billion, and this is now the pultrusion addressable market without wind, since wind will be more focused by the high-volume unit. So the market is big enough, if you compare it to our size, plenty of room to grow there, and the market itself has a healthy growth. What it means in practice to us is that we don't need to desperately go after every opportunity in the market. I'm not saying that we've done that before, but I think we can be even more selective than we've been in the past. We've been long in the business, and we have a wide range of applications, and we know where we have competitive edge, and we know which ones are profitable for us. So we can pick and choose the ones that we feel that are right for us, and that has a good impact on the profitability in the future. Then I'm now jumping and diving into one specific, particular part of our business, just to maybe show how versatile the applications are that we can do with a limited product range. This slide is about thin-walled carbon fiber tubes. So it's a round shape made of carbon fiber and resin. So it seems like a very narrow range of products, and it is, in our full range of products, only one small category. But looking at the pictures where this technology or product can be used, it actually opens a lot of different business opportunities for us. And having in mind that in carbon fiber tubes, we are the best in the world. So what's common with these applications? Well, first of all, they are all using carbon fiber tubes. They all need light weight, and they need stiffness, but then there are some other elements that are required by the applications. Like with the tripods, this is a very high-end tripod product that we can make the telescopic poles for. So the end users expect to get premium class for the money that they pay for. So on top of the lightweight and stiffness, they expect it to look good. So if you go and look at some of these samples, they are being sold in the shops in Finland as well. You can feel and look how good they look. So the visual element is important for that customer. Whereas for the arrow customer, he also requires lightweight and stiffness, but he needs the product to be extremely straight. You could say straight as an arrow. And we have the technology for that. And then the two ones in the middle, the drones and the airships, those are about transportation. I would say that those are elements of the future of transportation.... We can read news articles about drones as well as airships that they will be used for, let's say, the drones, for the last mile delivery in the cities. So the lighter and the stiffer we can make those tubes for those products, the more they can carry load that is actually paid by the end customer. Special requirements for those applications is they are aviation products, so there's very strict requirements for quality assurance in those industries. And smaller local players just they just don't have the credibility to customers in that area, that they can cover that quality assurance as we can. So we have an advantage there against the small players, small local players. Then, application engineering was mentioned earlier. Composites, it is a new material, even though it's 50, 60 years old. But compared to concrete, steel, aluminum, wood, it is still fairly unknown material for the application engineers. So it's kind of the scary unknown, you could say, for the application engineers, and it often creates a hurdle of applying these composites. The metal engineer thinks metal, so when he is planning a profile for composites, we often get a request for quotation for a profile where you can clearly see that this person who designed the profile is actually engineering, typically, aluminum. So you can see the shapes and sizes that are matching the requirements from aluminum. So what we want to do, if you look at the bottom part of the graph or the picture, the conventional way. Typically, how the product engineering is done by our typical customers or the customers in the industry, starting from the innovation phase, all the way until you more or less have a picture and specification for the profile, the customer is doing it by themselves. And having in mind that these customers are familiar with aluminum, and then they make the product design to the extent that they make it to the phase where they actually have tied the hands of the design engineer of a composite supplier. So this composite supplier, whatever knowledge he has, he doesn't anymore have the freedom to take the best benefits out of the composites. And also, probably the composite profile is not as cost-effective to manufacture as it could be, if he had the knowledge that these guys have. So what we want to do is, that we want to take couple of steps closer to the customer and help them take the full benefit of composites. So when they are designing their products, already in the early phase, when you can still change things, we can help them consider what is needed to consider when we go to this phase of the process. Maybe just a quick example, what it could mean in practice. Like, we make profiles for bus manufacturers, the side panels in the outside of the bus. And we are often against aluminum profiles, extruded aluminum profiles. But there's a limitation of width for aluminum extrusion. Commercial technical limitations, which we don't have in a similar way in composites, or the limitations are less. So instead of having narrow profiles in the side of the bus, we can make wider ones, and then makes their product design more simple. They can have less components attached to the end product. But if they don't know that, they end up with a design where you have smaller profiles designed in, and even if we do it with composites, it's too late to change. So we want to be there in an early phase to help them take the full benefit of composites. Another challenge is then the post-processing. Again, the same companies are typically very accustomed to post-process metals or wood, and they have the necessary equipment for that as well. So they have all the necessary CNC machines, drills, saws, surface treatment equipment, to work on the traditional materials. But they are quite unfamiliar with how to post-process composite materials. And even if they had the knowledge, they don't have the equipment, or most of them don't have. So what we want to do is, that instead of the conventional way, where we are the pultruder who only makes the profile and then leave the customer with all the post-processing to handle, either for them to do themselves or to outsource it from multiple different suppliers. We want to simplify their value stream, and this way, save cost and take some of the hurdle away from the customers. In practice, it means that we will take care of that. We typically have the knowledge. We also have the equipment to do that, or if needed, we can have good partners to help us to do that with. So this simplifies the sourcing process for our customers and also reduces a lot of packing, transporting, unpacking, packing, transporting, unpacking from one supplier to another. So there's a cost-saving element there. And also, quite often, this part is of almost equal size as this part, as a business opportunity. So it creates a volume of business for us as well, not just the profitability and easy to do business with.... I'm using KONE UltraRope as a case example to illustrate actually those, both of those elements, the engineering as well as the post-processing. Quite a few years ago, KONE engineer, a very innovative guy, came to us, and he got this idea that how about we they replace the steel rope in elevator with a carbon fiber rope? Because it's lighter weight, and it's stiffer. Because majority of the masses, the mass of elevator system is actually the rope, which is no workload for it. So in sauna, in his own sauna, he developed the first version of the UltraRope, the carbon fiber rope. And what he did was that he looked at the steel rope and made same-looking rope from carbon fiber, same round, spiral-like construction, and came to an Exel engineer and said, "Can you industrialize this? Can you make this in volumes?" I wasn't there, but I think what the Exel guy said was that, "We can industrialize it, but I would modify it a little bit to take the full benefits out of the carbon fiber rope." So what they came up with was this kind of a flat profile, which is surfaced with a softer plastic to create friction between the pulleys and the rope to convey the mechanical energy. So the rope looks quite different from the original idea. The innovation was great, but it needed some composite knowledge to become commercially and technically feasible solution. So that was the kind of innovation part where we helped customer solve a problem in the engineering phase. But then, to be efficient in manufacturing, what we do normally is that we manufacture the... A big spool of carbon fiber rope that is longer than normally needed at the installation site. So then the rope, once KONE knows the exact lengths that are needed per installation site, the big spool has to be cut into delivery lengths. But also they need some accessories like terminal metal terminals and such equipment to accompany the shipment, so that when they get the product on site, they can just take it and install it without having to add items here and there and modify it, and so forth. So what we do is, once we know the lengths, we cut it to the length, put it in a package that is easy to commission at the site, accompany it with the accessories, and ship it to the customer. So again, making the chain of value more simple and more efficient. Then, Paul mentioned about, about us looking at how do we make sure that our factories are running efficiently, and it has a lot to do with the fact that there has to be an adequate workload with the factories. And, so what we need to look at is that we have the right amount of capacity, that we can run it with high enough usage to make it profitable. And once they have enough load, they are profitable. Another thing what we want to do is that we want to have roles for the factories, so that not everybody is doing everything, but they're specialized. If you specialize on something, you become better, and typically, you come out with better solutions, and also you come with better solution faster, so the time to revenue will be faster. As a summary slide, how do we plan to grow the profits by increasing the share of wallets? We want to utilize our strongholds. I was mentioning the carbon fiber tube, where we are the best in the world. We have other elements in our production or in our product portfolio where we know that we are really good at. Let's focus on those, and let's focus on customers that are profitable for us. Maybe leave the other part of the business a little bit aside. There's plenty of market to go after. Engineering, let's go closer to customer, help the customer to come up with the right kinds of solutions. Value-adding services, again, help them to utilize and use composites. It helps them, and it increases our share of the business as well. Faster time to market by specializing the organizations and the factories, and then bigger production units or higher utilization of the existing capacity brings profitability. And I think that pretty much ends my part of the presentation. Thank you, Olli, and let's move on to questions. If I, again, take the first one from online: "You have a good strategic plan, but what are the concrete actions to improve in tailored business? Well, as mentioned earlier, we have a Paul. I don't know if Paul mentioned it particularly, but we have, in my opinion, a good pipeline of opportunities that we are working with. We also have a pipeline of opportunities that we may decide not to work with, and now what we are doing already, since we know that this is the direction we want to go, that we are selective about the customers that we now go after, the new customers, so that we can apply the new model to them. So we are already very—you could say—very selective about the opportunities that we go after, and we go after them offering the full scope. Okay, thank you. Any questions from the audience? Yes. ... Yes, thank you, Markku from Nordea. Regarding, like, this new strategy phase you mentioned in the beginning of the slides, how do you feel or what kind of experience do you have that how the customers respond to the fact that you are now trying to enter into their table in the designing or engineering phase? What kind of feedback are you getting? Well, something that makes it easier than I have a history in manufacturing industry and serving multiple segments of OEMs and system integrators. And if you look at our portfolio of customers that we have, lucky for this particular strategy is that we haven't been particularly hunting or looking for opportunities to serve those value-adding service providers. So we are not cannibalizing, or we are not competing against our customers, but rather we are offering to our customers something that they have in-sourced that they could potentially outsource to us. And in my experience, during the last five and so many years with Exel, this is a challenge for our customers. They are... Even the customers that we've been serving for years and years, they come often to us to say that, "If only we could get rid of this, this, this, glass fiber dust that the, our employees are complaining about, and if our CNC machines are have a short lifetime because, we had to use it also for the composites." So it is a part that, as said, we know very well how to do it. We have the right kind of equipment, and it seems to be a problem for the customer. So I, I'm expecting it to be a hurdle that we can remove, rather than them seeing it as a threat, of us entering to their zone, at least in my experience. Any additional questions? Yeah. Yes, please. Yes, Henri Parkkinen, OP Markets. Regarding your company-level profitability target, 10%, operating profit margin, can you split it between, let's say, volume products and tailored products? I assume that in tailored products, you are at least internally targeting higher markets. But, just to get the idea that if the share of tailored products is some 60% of your sales in 2027, so what kind of impact that could lead to what comes to profitability? Yeah, we have a common profitability target for the whole group, and we haven't really done the math of how those different organizations would look like. But we do have parts of our tailored, current tailored business that has really good profitability. And then we have some parts which don't have such a great profitability, so selecting the right ones will help us. So is great profitability, over 10% or- Yeah. I was instructed not to talk too much about the numbers. Okay. Okay, I understood. Yeah, thank you. Yes, let's get back to those with Mikko's presentations. Any further questions, or do I take the final question from here on the- Yeah ... online audience? Which of your current customer segments belong to tailored business? I would say that wind is more or less the only one currently that we've considered that it should be served mostly by the volume, and then the rest of the segments, that's the area where we want to select the right ones from. Yes. Thank you, Olli. Thank you. Now it's time to move on, and Kari Loukola will tell us about the volume business. Please, go ahead. Good afternoon also on my behalf. My name is Kari Loukola. I'm heading the Wind program in Exel. I will tell you about that, what is this volume business and what we're going to do and how we go forward with that to achieve that 40% level. But in the beginning, I will go that, what is- how we define the volume business, what it is. Volume business, how we define that, is that we do same product on one line, 24/7, 365 days in a year. So continuously, same product again and again, every day. And that is leading us to increasing the efficiency. The efficiency is the game and the key word of all this. Where the efficiency is coming from, it's coming from the things is that we are able to fine-tune the last bits of the process. There are less startups, less stops, all that, which is causing quite a lot of raw material waste. And in practice, what it means is that the philosophy of doing the products is different compared to tailored products, is that they're normally very well-defined with our customers. So it's more like the R&D partnership rather than we are the experts. Then second thing, what is also very much we could say in the volume business, is handling the raw materials. What we do in that, how we buy, what price, what is availability, and especially, what are the financial terms, the payment terms? So how much that is impacting to the working capital. And that is also directly linked with our contracts with our customers. When doing all this, we have frame agreements with the customers, which are over the years, mainly over the years, not only over the year. So it's a longer term relationship. And then we have the forecasting system, how we stabilize the production so that the volumes are stable. There are two examples on the slide. So the spar caps for the wind, and then another could be the conductor core in for the cables, power cables. We have been talking that, okay, what are the places, what are the segments we could select? There are actually multiple in Exel that what we could start with. But we are starting with wind, and there's a clear reason why we do that. The investments to the power plants and how to supply the increased demand of electricity is going to be com- it's coming from the clean energy, from sustainable energy. And if you look at the graph on the left-hand side, we see that, okay, there are also some increase on the fossil fuel side, and that gets a lot of, we could say, headlines in the press and all that, but the major thing is coming from the green energy. And that green energy is about half and half for wind and solar. There has been also talking about that, how that the wind itself is developing, and as we see the graph on the right-hand side, the orders are going up all the time. And this is... And one is to pay attention to that, it's a gigawatts. So how much power these turbines are able to produce. So that is coming from two different sources. So it's coming from the number of the turbines, but also the size of the turbines. So the size of the turbines are getting bigger and bigger. They already. The nominal, the so-called standard length of a blade is about 70, 80 meters. That's, and they're going, and now the longest ones are already more than 120 meters. So if you think about the size, Helsinki Stadium tower is 72 meters, London Eye, the diameter is 120 meters, so we talk about really massive constructions. And why this? It's a direct impact that what is the size of the sweep area of the wind turbine, there's a direct connection to the power it's able to generate. And at the same time, when the blade is getting 10% longer, then the wind turbine, in theory, is able to produce more than 20% more energy. And that is exactly where we're coming to. So we have about 12 products in our portfolio together, but in this wind business, we are really focusing on these products, which are helping to make the blades longer. The one thing what is getting a lot of attention, and also today, is the spar caps. They are the carbon laminate, which is on the side of a blade, which is holding that it's not bending. When there's stormy weather, it's not the blades hitting the tower. The second thing what we do is that the so-called shear web profiles, it's a hollow profile, so the wings, the blades, they are hollow, and there's a wall called web inside the products to that web. And then the third area is the root joints. So root joints are down here, which are connecting the bolts to the blade. And you can think of it if there's a 80-meter blade, and how much there's a force there to those bolts, and the bolts should stay together with the blade. So we are doing the shear webs, we do those in China, and that's that stays there, and that is going to be our focus area for glass products. Now we are paying more attention to the spar caps. The spar caps, they are the ones which we are going to produce in India. Why India? India is about 11% of the global blade market or the production capacity of producing blades. India is one of the main exporter of blades, and they are exporting more and more. One reason that they are able to do that with very cost-efficient way, because it requires a lot of manual labor. Okay, the India market itself is also growing, but then another driver at the moment also in India is that they are looking for more domestic suppliers. Currently, they are relying on a lot of supplies from China and a little bit from other places, too. But they really are all the players, not only the local ones, but also the international ones, they're looking the opportunities to buy them locally. Okay, we have seen many things why that is happening, but that's, of course, good to us, and now there are not so much capacity in India. And that is the reason why we are building the new factory together with our joint partner in India. How we're doing in India? We're doing quite well. We are proceeding as planned. We have two LOIs already signed. We are doing multiple product carbon fiber testing and in general, the product testing in India. And that is actually a very, very key thing here, is that one of the learnings from the past and what we have done, that we have to have our choices of the raw materials suppliers. We need that for the thing is that it's not only the technical thing, but and the quality, but it's also price, availability, and then also that what kind of, we could say, financial terms, like the payment terms, we are going to have them. So that is ongoing. Then we have already, we could say, agreed with the one customer that we will do a so-called PPAP test. It's time to the Q1 2024. And what is the PPAP test? Production Part Approval Process. So how this goes to get to the volume deliveries is that the first we are doing the product or the samples, as called coupons. They will go to the labs of our customers, and they are seeing that are they good? Are they... What, what is this and that, and all that? And when they are approved, then we come-- they come to us at, "Okay, it's approved, and we will do the PPAP testing." And PPAP testing is doing- it's not only testing the product, it's actually more testing about the, the process, our quality system, our staffing. Are we able to produce that 24/7, all year long? So it, it's that... And, and special attention there is that what is going to happen if the something goes wrong? How are we going to react? What are the things? What are our standard operation procedures, working instructions, especially when things are not going right? When we get that approval after that, so basically what we do, we produce material, which is going to be used in their own production, and when they do a little bit more test, and when that we pass that, then we are allowed to start the volume deliveries. So as you see, it's a fairly lengthy, lengthy process of doing all that. We have the testing ongoing on the existing site, and we are about to ready to start the volume deliveries after, and we are ready when we get the PPAP approval, and then the new factory is ready for volume deliveries next year. As the summary of the volume business is that, yes, the volume business is for growth, and it's very much, we could say, the volume, it's bringing the profit. Wind is the first segment what we have selected to be in the volume business, and then, of course, what is important and what I'm looking very closely is that the India project is proceeding very well. Thank you, Kari. And now to the questions. If I start here from the online question: "How big share of wind blade can be Exel's products? So it's in the blade, if you take the whole blade, it's about 50/50 material and others, and in the out of the materials, the spar cap the carbon is quite expensive, so it's about 25% of the material. And then if you take the whole blade, it's about 10, and then we add the other products. So we talk about 10, 10% of the whole blade. So in the whole turbine project, we talk about that's about 1/3 of the price of a turbine, the blade, so about 3%-4% of the total. Okay, thank you. So any questions from the audience? Yeah. Thank you. Markku from Nordea. Earlier, you had a slide showing the market demand development during this year regarding this wind power segment. In your quarterly report, you have mentioned or highlighted that demand, especially in the wind power industry, has been weak during this year. So how should we read this development compared to the slide you have over there. Have you been, like, losing market share or what is the situation? Okay. That is actually... Sorry, I've almost forgot, I forgot to mention that. Yes, you're right. The installations, the number of installations and the gigawatt, the installations have been flattening or a little bit down this year. And that is a little bit, we could say, we have been also looking at what, why it's the thing, because the number of orders and the value of the orders is going up all the time. So it's a little bit, we could say, confusing as such. And the thing is that this... So the investments are going to the clean energy and all that. So yes, this is something. I cannot explain that better today. Okay, thank you. And, can you remind us where you currently have the capacity to produce those wind power parts? Today, we have the main ones we have in China, and now it's the India is becoming. We still have the production capability in U.S., but we are not going to continue. We keep the capacity there, but we are not focusing on doing these spar caps in the U.S. Yes, Henri Parkkinen, OP Markets. One question regarding this high-volume business model and about costs. What kind of contracts you normally do with your raw material suppliers, when taking and, and, is there are there some kind of term contracts, with some kind of checkpoints regularly or, or what kind of contracts? I would say that in such, there is no black magic what we do. But the thing is that the thing is that it has to be, we could say, balanced between this, like I mentioned, the quality, availability, price, and then this financial. And how we link that to our own customer contracts, that is important because we are living between these two boundaries. So that is one of the, we could say, the lessons from the past, is that we have to do the linkage, we could say, tighter between these. So on our customer side and compared to that, what we are paying out. Okay, thank you. Okay, if I take one question from the online audience: Apart from the wind market, which new or existing applications could be part of the volume business in the future? So I mentioned this, that we have these three in our focus at the moment. The next one, yeah, we have. We could also think about existing, what we have in the existing, so helihoist or platforms, cable, ladders. We could also go to the towers. We are doing some parts for the generators. So yeah, there are quite many of those, but like I said, that we want to focus on really those where we can do them with multiple lines, 24/7, 365 days, and those segments are not there yet on that level. Okay, thanks. Any further questions here? Okay, so it seems that no further questions to Kari. So thank you, and now we move on to Kim Sjödahl and R&D. Please go ahead. So hello also from my behalf. I'm Kim Sjödahl. I'm responsible for research, development, and technology within Exel. And I will tell you today a little bit about the future of composites. We are seeing an increased use of composites, which is a rather young material. My colleagues have already mentioned this. We have seen that from the, maybe the sixties, the first boats were starting to emerge on the, on our beaches, and since then, composites have been replacing other materials, where it matters. And quite often, like with Exel, we started in the seventies with ski poles and this kind of applications. Later came also industrial applications, but it was always one application after the other. These applications came, and we implemented them, and it was all good, but there was quite a lot of work needed in order to introduce these new applications. Some of them were easy because of the, the very high advantages or the very, very good advantages from the composite, but some demanded a little bit more work. However, today, we are already seeing that several of these applications are becoming mainstream. We're talking about spar caps that Kari was mentioning, but also electrical insulations are done in large volumes. And of course, electrical insulations was also one of the basis of pultrusion. That is one of the cornerstone of our businesses. But we are also seeing window frames. This has already been accepted, and I actually also put it as a possible breakthrough application, these window frames, because the case is that in many markets, they come in different timings. So basically, window frames have been accepted for quite a long time in the Americas. For the last 10 years, they've been growing quite strongly in Europe, and now we are seeing that the Asian market is also finding this solution to the insulation problem. And of course, the advantage of the composite solution there, as also our customer was telling you, was the possibility to make highly efficient windows, and special tailored, like the frameless windows, which actually has a frame, it's just not visible. You want to maximize the glass. And as we are doing this, we are seeing that more and more of these, our applications are growing, which is great. And we are also seeing more and more engineers being excited about introducing composites into their solutions. Basically, this has been supported by ISO standards, since about 10 years already, and we are now working very hard to finalize the Eurocode, which is the new design standards, and this will then further help us to introduce composites in new applications. It means that our customers, engineers, they can read up on the code, they can apply the design rules, and that way, we don't have to be there holding their hand really all the time and every time, but they can also do some design works themselves. Of course, as Ollie was explaining, we will still be there. We will help them try to introduce things, but we are looking forward to having a little bit easier introduction of composites. Then why do we need R&D? Why don't we just produce a lot of this stuff? Well, every application is a little bit different, and we can see that every solution has a little bit different demands. This is what makes it really interesting for me to work with this, because I get to trial and play and develop different solutions. But of course, it also takes quite a lot of time. That's why we're also trying to focus on certain areas so that we don't do everything. It would be too much if we would be the experts of everything, and that's why we are trying to focus on certain areas. You can imagine that, for example, this, here, when we talk about transportation, we're talking about lightweight, we're talking about ease of application, very important with surface finishes and things like this. And then again, when we talk about windows and doors, that's a cut-through from a window system, then we are talking about insulation properties, ease of machining, and also ease of application. So there is quite a lot of different demands depending on the application. That's also why we optimize the materials quite a lot. There is basically 1,000 ways we can build the composite, but depending on the application, we're trying to make the choices together with the customer so that we can find the best solutions for their needs. So basically, we are developing for multiple different applications all the time, and we are working also in order to ensure that these properties stay. So basically, a lot of the composite applications, composites are never short-lived. Basically, none of the applications we do are what you would call single-use plastics or anything like that. We are always looking at applications where the composite will be there for a long time. And that means also that we, of course, have to test and ensure that it will work for a very long time. That is part of the development we do when we test, for example, UV resistance or long-term corrosion resistance, and this type of properties. These properties come both from the fiber system but also from the resin system, and we are putting especially a lot of effort on the resin systems. The resin systems is also a built-in safety for us because it's really difficult to reverse engineer a resin system. Once you've made a window profile or a bus profile or something like that, you can figure out that it's some kind of plastics, but it's really difficult to figure out the actual... how it has been made, what are the exact constituents, and that is part of the IPR of Exel. So basically, this helps us in the future to keep the competitors out when we are developing these new properties. Typical for this has been, for example, fire properties. In Europe, the fire demands for trains have a few years back changed and introduced new rules which were better for us because they were for the whole of the EU. And then once we have developed the suitable fire retardant additives and done the testing, then this can then be rolled out to many different countries in Europe. So when we talk about the challenges, what makes Exel so unique here? Well, we have been doing this for quite a long time. As mentioned, we started with the ski poles in the '70s, then we did a lot of other things, and we have really, really experience from a lot of different things. We have also experience from many different raw materials, and quite often, if you read the paper about carbon fiber, it just says carbon fiber. For us, it's not carbon fiber. We use actually 10 different types of carbon fiber. So depending on what we are doing, we can either use the, the lowest performance, carbon fiber, or mid-performance, or a very high performance. And this give us also the opportunity to when a customer wants to optimize something, we can, use these different types of fibers, carbon fibers or glass fibers, natural fibers or other fibers, to optimize the properties. Quite often, we even mix different fibers to, to get, the exact properties that we need. So basically, we are tailoring this all the time.... We also have experience from a really, really wide, number of applications. And this of course helps us when we get a new inquiry. Basically, if somebody comes to talk to us about windows and doors, we know quite a lot about windows and doors, but obviously we don't do the design of the windows and doors themselves. The customer have ideas of how to make the doors, and we then help them in order to make this so it fits well with the composite, and they can then benefit from all of these properties that the composite gives. Furthermore, again, as I mentioned earlier, we have that global experience. We have people that have worked with windows and doors in Europe. If we get an inquiry from from China or from an Asian customer, we can help that, and that way, we can utilize the vast experience also in other markets. Further, because we have challenges with fire performance, we have challenges with maybe, food approvals or things like that, as we mitigate those challenges in one area, with certain solutions, technical solutions, we can also look at applying those in other areas. And basically, we have seen recently that some of our telecom solutions for 5G could actually be implemented in transportation to reduce the weight. So we use the same technical solution to bring another advantage to the material. And then rolling out these, as we gain market acceptance, is something that we are doing all the time, and this is something we will continue to do. So basically, we are looking at if we have earlier been producing a lot of transportation profiles in Europe, now the market is switching more to Asia. A lot of electric buses and things like that are produced in Asia, and of course, that is then where we will, or we already have rolled out this, these materials that are suitable for these applications, and that way, gain business there. Next steps, because R&D never stops. At the moment, we're spending about 2.5% of the turnover on R&D, and of course, we will continue to do this. The target here is to all the time find new applications and to solve the challenges with those applications together with our customers. We're gonna do a lot of tailored testing. We're gonna make sure that everything works fine, because after all, we need to make sure that the material fits the needs, and the needs are usually those, you know, the familiar ones, the stiffness, the strength, and so on. But we are also focusing on more on sustainability together with that efficiency and competitive advantage that we need. So basically, if we look at the volume business, it has a lot to do with efficiency, maximizing the performance, doing that last half of a percent of something. And all of this, we are doing still with the continuous production methods that we have chosen, which happen to be pultrusion, pull winding, and continuous lamination. To talk a little bit about sustainability, composites are actually quite sustainable for a start. The carbon footprint is reasonably low. We're talking about 3, 3.5 kilograms per kilogram carbon equivalent, and this is actually quite good compared to many other materials. Furthermore, we have those basic good properties of the composite, the long life, the stiffness, the strength, and so on, also the low weight, and this brings us really good possibilities to build a sustainable product. Adding to that, that the products can be used for quite a long time. So if we look at this circle, the end use is usually quite long. We're talking about in utility poles, a design life of up to 80 years, and most windows and stuff like this, we're talking 25-30 years. Windmills, we're talking 25 years. So the composites, once produced, will be used for quite a long time, and that, of course, is an important part of the sustainability. However, we still want to improve on it, and there are things that we can do to further reduce the footprint, to further improve the possibilities, and give our customers new options to either revamp their existing products or coming in with totally new solutions to them. We're looking at natural fibers, so basically, composite is fibers and resins. We're looking at natural fibers, flax, hemp, wooden fibers, all these different type of fibers. Any fiber that is continuous, basically, we can use in our process. We're also looking at bio-based resin, meaning that instead of using petrochemical resins, resins that are made from oil, we can use resins that maybe are made from pine oil or something like this. Furthermore, thermoplastic materials, which is in opposite to our Thermoset, is something that we've been working on recently, and here we are again looking at the reuse being much easier. After, the end of life of the product, we can just grind it down and make it into a new product much easier if it's a thermoplastic, without, difficult fiber extraction or something like this. And then, of course, recycling, is one of those things that we have been w orking on. Paul was mentioning the Kimura project, which was a, a great success, but we are also looking at other fiber extraction versions and reuse of composites into composite, because that is definitely part of the future we are looking for. So basically, to sum it up, we are, looking at global acceptance of composites, which making it easier for us. Of course, we will get easier to introduce the composites in many areas, hoping to replace what we call traditional materials. We are also all the time fine-tuning our production methods, making them more effective, having bigger throughputs and all the other things, minimizing the waste, and so on. This is important for us to stay competitive. In the end, we also see that by focusing on the sustainability, we can bring a competitive advantage, and we can differentiate the offering from Exel. Thank you. Thank you, Kim. Let's go to the Q&As. First, how does R&D differ in tailored and volume business? Okay. So in tailored business, we are talking about a lot of different applications, and every application is a little bit different, and we try to find harmonized solution, yes, but quite often we are implementing new ideas, testing out new things. So quite a lot of work is on the application side and trying to figure out exactly what the customer needs, because it's only by understanding the customer needs that we can really employ the composite in the best possible way. When we talk about the volume business, it's usually products that's been around for a while. The customer know the composites quite well, and what we are really trying to do is just make a lot of it. That means that we try to be as effective as possible, both in the production output, maximizing the speeds, the yields, and all that kind of stuff, as well as hitting the specifications made by the customer. Okay, thanks. Do we have any questions in the audience? Yes. Yes, thank you. Marco from Nordea. Just one question. You've highlighted many of the positive properties of composites compared to more traditional materials, like steel, steel and aluminum, but are there any disadvantages? Yeah, one of the biggest disadvantages maybe is the fact that composites is not used so widespread. And this means that, when it comes to recycling, for example, in some parts of the world, there is no ready chain for the recycling. So if you go for aluminum, you kind of can find the local recycling place a lot easier than when we talk about composites. And this is also the reason why we have put so much effort on this, in our different geographical areas, so, so that doesn't become a blocking point. Okay, so any other questions here? Joonas Silvén from Evli. Do you see you could use your pultrusion technology for some sort of aviation? I mean, you have mentioned some aviation examples, but, like, if you think about really large volume aviation business, like, you know, Airbus and Boeing jets, stuff like that. Yes, so we are actually already supplying some aerospace customers with profiles. So, yes, it is possible to make airplane parts from pultrusion. And of course, the other applications we mentioned was the both the drones and the airships. And of course, in the form of drones, the regulations are quite different. But there is no technical reason why a pultrusion couldn't be made for any airliner, and it is being made for also airliners. Can you specify which kind of jet parts? Like, are they like indoor cabin panels or like wing parts or? They're structural components that you don't see from the outside. Thanks. Okay, so if I take a question from here: Do you have a role in recycling carbon fiber? Yes, we do, in the way that we are, of course, sending our carbon fiber for recycling. We don't do the actual recycling, but we do recycle the carbon fiber waste from our factories. If we have profile waste or leftover carbon, that goes to recycling. Okay. Yes. Any further questions in the audience? If not, I will take one more from here. Does R&D have a role in customer retention and acquisition? Yes, definitely. As if we look at in customer acquisition, obviously, solving the challenges from the customer, finding those solutions that will fit the customer's problem, or challenges, so that is extremely important. Without R&D, you couldn't maybe really find those solutions. So, so definitely in the acquisitions stage, but also in the retention stage, because we can still develop the profile, we can optimize it, we can optimize it either to be higher performance, we can optimize it to be lower in cost, and other things. So I think, yes, on both accounts. Okay. Thank you, Kim. And now let's move on to financials and CFO, Mikko Rummukainen. So thank you, Kim. Thank you, Sanna. My name is Mikko Rummukainen. I'm CFO of Exel Composites, and I'm happy to be presenting you our long-term business targets and also how we deliver shareholder value through executing our transformative strategy. We have four points I want to highlight for you. Reaching organic growth in a growing market. Then, next one is restoring our profitability and improving it via growth and also efficiency improvement. We will manage our balance sheet and financing so that we enable the strategy implementation. Then fourth exciting area, it's how sustainability brings competitive advantage for us. Let's have a quick look at the history of Exel. Exel has delivered consistently positive operating profit. Actually, the current Exel, the industrial composites, has delivered positive profitability ever since we went public, 25 years. Since 2016, our revenue growth has been 11% per year, and our adjusted operating profit, 6.1%. That is quite nice, stable background to build on. In 2023, we have been affected by a downturn in our market, and that has led to a decrease in our revenue and profitability. What we see going forward, the market fundamentals remain positive, and there's new and growing applications, as we've seen today, both from tailored business and wind business being shown. Paul, our CEO, mentioned Exel has significant unlocked potential so that we can improve in our profitability from business growth, from optimizing footprint, from implementing our new operating model. Coming to our new financial targets, they target growth, profitability, and having balance sheet so the financial position is solid. On the organic growth, we target minimum EUR 200 million annual revenue from our businesses. On profitability, the target is 10% adjusted operating profit. And finally, on the financial position, that we keep our leverage in all cases below three times net debt to EBITDA. And question: Where does the business come from? Where does the new growth come from? In 2023, 2022, we were at EUR 137 million revenue. And this year, with the downturn, the last twelve months' revenue has been slightly over EUR 100 million. What we see going forward from here, it's about growing, especially in the volume business, where the growth can be faster than in the traditional tailored business of Exel. At the same time, the tailored business, we look at how to scale it up, how to improve the growth rate, how to bring more new applications, and especially bigger tailored applications forward. Within the strategy period, the current downturn is going to end as well. We retain some potential that we reach from managing our business portfolio, so that it will improve our EBIT, while there may be a well small reduction in revenue from those actions. Going over to the operating profit target, making at least 10% adjusted operating profit. So one lever earlier discussed today, it's about growth in tailored business, in volume business. We have seen how a pultrusion company and its profitability scales up from achieving optimized capacity utilization, sweating the assets, as Paul said. Another lever in our new strategy, it's about adding more value to customers from engineering. This will help us get the customer, keep the customer, and value usually translates into profitability and margins. Productization, again, enables us to get the customer, deliver them the solution faster. It also enables us to be more efficient in the background, bringing up the profits. We have announced our strategic factory review plan, reviewing three factories. We have done US review. Before this announcement, we already started downsizing of our manufacturing and pultrusion in UK, which has been completed as well. And we aim to review position of two more factories, and we'll announce news as soon as possible. On the growth side, the current downturn, this has significantly affected business volume from our existing customers. We mentioned that a separate point from the first growth part, just to highlight that it's been a volume loss, not a customer loss as such, so it's bound to recover. Finally, on operational efficiency, there we've taken significant action to restructure company, reduce cost where possible, both from personnel, also optimizing other costs. Going forward, we want to keep the company as efficient as possible so that we deliver the optimal results. Financial position. How do we deliver on that EBITDA and improving it? Growth actions, as, as on the previous slide, also from the efficiency and cost side. We continually work on our working capital, streamlining, relieving cash, and then overall optimizing our balance sheet, keeping the right assets and, not having too many. In the recent future, we have actually been in this financial position target. Last year, we reached net debt to adjusted EBITDA of 2.1x. Now, with the downturn, it has gone up to, as you see, 4.8x at the moment. Good news is that we've been able to reduce our net debt 15% so far this year. Just highlighting what we can do on the working capital side, which has enabled us to generate a positive cash flow even in this situation. During Corona, we built inventories, as did our customers. That has led to a clear tie-up of capital into working capital, and we have started quite clear actions so that we drive down the working capital as such, optimizing inventory levels, working with suppliers, and now, improved cooperation inside Exel between our factories. What this leads to is a better position going forward, not just one-off. We have better processes, and we have a better starting point. So when we start addressing the growth part, we will need less working capital going forward relative to the business. We have ongoing actions that are making us a vehicle for growth. In the past, we had a number of M&A actions that helped us to go global, achieve the global footprint. Now, we're turning to making that footprint to work better for us and unlock the full potential. We foresee that there's going to be financing need over the strategy period to execute it, and that is estimated EUR 20-25 million, and that is split into three categories, generally speaking. Business growth will need financing, and especially growing clearly bigger, that will tie up some capital. The factory network review, and then thirdly, investments into flagship sites. Existing sites, and as Paul mentioned, the India site as well. We're working on alternative paths, detailing timing, so that we achieve the strategy and keep the balance sheet in a proper condition. So to wrap up finance part, we will be delivering shareholder value by achieving the group targets: inorganic growth in a growing market. Profitability restored and improved. Managing balance sheet and financing. Getting the benefits of sustainability trends. Thank you, Mikko. Now for the questions. If I start from the online again, "Do you see the double-digit profit margin a realistic target in the next five years? Yes, absolutely. We, we have seen in our business that well-functioning, properly loaded pultrusion business, especially in tailored business, can make more than 10% operating profit. We had earlier today a question about the margin levels achievable in also volume business. It's going to have a different set of economics: lower margins, tighter cost structure. But we have seen benchmarks making 10% EBIT in volume business as well. Okay, thanks. Any questions from the audience? Yes, please. Thank you. Marco from Nordea. Can you give us some kind of a estimate or split between how much of the profitability target should come from the sales growth and how much from these efficiency improvements? We've not split those here in numbers, but as you've seen, a big share. There's a big impact coming from growth, and growth will be a large factor. Another big opportunity, it's about optimizing the network and getting the cost benefits, the efficiency benefits out. And then high value brings the margins, brings the retention, brings stability. Okay, thank you. Then a follow-up on the same slide that you have had there. You have the fixed cost optimization there. Can you give a little bit more color on that? What's included in that one? Okay, personnel cost, first of all, that's been mentioned, permanent restructuring, temporary adjustment to demand. The factory costs are a sizable part of our fixed cost, so those we manage most visibly if it comes about restructuring factories in a public way. We also take a number of actions to keep cost optimized, investments also optimized. Okay, thank you. Then on, still on these different initiatives that you have, have you made some kind of an estimate what will the, like, the one-off cost impact be, when you implement all these measures? First of all, we need therefore to follow the laws that guide our actions. We want to get back to you on those once we start formulating the plans and potentially then negotiating with relevant parties so that we achieve an optimal restructuring, if that happens. Okay. But, you have seen a number of cases executed by us in the past. Okay, thank you. Then final question from my side, regarding perhaps the current market environment where you are at the moment, what kind of visibility do you, do you have on the, on the customer inventory levels? Are they, like, still destocking, and when do you expect that the market will turn and the order intake starts to grow again? ... So far we've given guidance for this year. We aim to give guidance for next year at the next quarter end. But having said that, we do see that we've been able to maintain our customer base fairly intact. So in that sense, once customer business increases, so will Exel's. Henri Parkkinen, OP Markets. Two questions. First of all, the overall market growth. What kind of market growth do you expect for your strategy period? In the earlier presentations, there was 7% market growth expected in many, many applications. There's also a number of can we call them breakthrough applications, where the growth rate can be significantly faster. So there is plenty of potential to grow. Okay. And then second question is about your research and development spend. Last year it was 2.5% of your sales. If we assume that your sales is EUR 200 million on an annual basis, is your research and development spend still 2.5%, or is it higher or lower? That's a good question, looking a few years ahead. So we try to... We've seen a lot of opportunities, both developing what customers need, where the industry goes, sustainability, technical development, and we try to balance it. That there's plenty of stuff to research in our business, but we also need to make sure we make the profit. So yeah, we try to keep the optimal split. Okay, and then the third one: in the past history, what has been the payback, regarding your research and development spend? Do you have some kind of internal target that, if you are spending EUR 1 million, then you should get that back in next four to five years? Or do you have some kind of internal target you can share at this time? We're not been saying about internal targets. What we do is a lot of the research and development we do. It's fairly closely related to customer's businesses that are tangible and, in that sense, relatively short paybacks. Okay. Okay, thank you very much. Thank you. Okay. Oh, okay. Yes, Joona, please. Joona Silvén from Evli. We have seen quite a bit of inflation in the past two years or so. Can you give some kind of estimate how much your average sales prices have increased in the, say, the past two years or so? We've, we've not commented on our pricing as such. What we aim is that, our prices and our value that we deliver customers should stay the same. I can say that there's been also regional differences, but on average, that should be the target, that Exel delivers value, Exel gets paid for value. We have had programs to do value-based pricing so that Exel is keeping a fair share of what we deliver. So sales margins have remained quite stable? Okay, so now I would like to... Okay, there is one more, and then I will invite Paul for the final remarks and additional questions. Aapeli Pursimo from Inderes. One question about the balance sheet and the financing. So you mentioned that the financing needs are EUR 20 million-EUR 25 million during the strategy period, and your current balance sheet situation doesn't give that much headroom to operate. So could you elaborate how urgent is the financing needs from your standpoint? We're really detailing the plan. We hope to get back to that as soon as possible. Also, when we're looking at it over the five years, it's going to be some of it coming up front, some of it coming later. So we'll look into it. Okay. With that, I welcome Paul back to the stage, and if you have still further questions to him, please go ahead. Well, I could oh, yeah, there's one question. Go ahead, Joona. So maybe, could you summarize your geographic strategy? I mean, I guess China will be pretty much like a volume business, mainly like wind and some transportation, and India is also like maybe 100% wind. But, how does it look like for Europe and the US? Are they mainly like in tailor, in the tailored business, or would you- ... Yeah, yeah, one would maybe naturally think that way. And I think that it's reasonable to expect that the volume business will need to reside in the best cost environments. So for example, U.S. then will be a tailored site. And no European plant will be volume or? We will come back to that as we complete the strategic reviews. But, I mean, I think we can all maybe, you know, we can make assumptions around that in terms of what are the cost environments in the different countries we operate in. Okay, thanks. Okay, if not, there's actually another one. There was a question earlier that I might want to address, and I think the question was kind of like: What other opportunities for volume do you see in the volume business except for wind? And I want to just make this point, you know, to us, wind is an important spearhead driver. It's kind of an inspiring positive internal force for us to drive the changes through our network, the ones, the efficiency changes we want to have, but it's by no means a one-hit wonder. So, we're actively looking at what are the other products that will lend themselves well to the efficiencies that you can get out of a volume business. You know, Kari mentioned, for example, the conductor core, which is a new type of overhead power lines, which has a carbon fiber core inside. That's potentially one. The carbon fiber vendors, for example, expect that that's going to be a huge market in the future. There are other applications in the building side, building infrastructure side. And also, please be mindful of the fact that for Exel, volume can already... or the volume benefits can also already realize at fairly small, absolute euro-wise annual volumes. It's not about having massive, massive opportunities out there, and that's the only things we can put in the volume division. No, I mean, for us, volume customers are already those who have, let's say, an annual continuous spend with us for a similar, same product in, you know, EUR 4 million or EUR 5 million. So it's not about those massive opportunities only. So of course, what we will do, we will drive, you know, those products and profiles through the volume business where it makes sense for our customers and for us. Okay, very well. I think this is going to be last call for questions, either in the room or online. Nothing on the online anymore. Okay, very well. Then I'd just like to leave you with this. So I hope we have been able to kind of ignite the ambition and show the ambition we have. We have a very clear strategy and a clear plan ahead of us, how we will deliver organic, positive growth and positive profitability. It's based very much on, you know, providing more value to our customers. They come, they come first, you know, together with our people. They are the ones we take the best care of. We will be focusing on these large and high-growing energy transition, decarbonization applications, not to forget our stronghold in tubes and the specialty tailored applications we are already good at. And then the profitability, it will benefit significantly from the increase in asset intensity. It will also, of course, increase from our value direction in providing more value to customers and, of course, also reorganizing ourselves for profitability. So with that, I'd like to thank you very much for joining here today, both online and in the room. We have coffee and refreshments served. I would like to invite everybody to come over there and spend some time with us, please. In addition to today's speakers, we also have Johanna Tuomisto, part of our leadership team, the Head of People and Culture, as well as Calum Go, our Operations Director. And by coincidence, on a customer trip, we have Kathy Wang, who's our head of the China business. So please join us for another round of refreshments outside the meeting room. With that, thank you very much for joining, and thank you to all the presenters and the organizers today.