Welcome to Incap Q1 Interim Report 2023. I have here today with me President and CEO, Otto Pukk, and the CFO, Antti Pynnönen. Without the further ado, guys, the stage is yours. Thank you very much, Rosa. Thank you all who are listening in and looking in on this webcast for the interest in Incap. We will do the same as normally. We will go through the quarter briefly, and then we'll try to keep as much as possible of the time for Q&A, as I know that that is appreciated. First of all, perhaps looking back at the Q1 and some of the milestones during the quarter that just passed. We had, as you saw in the numbers, still very strong growth in Q1 and this was driven by good demand for our services and of course supported by the investments we have done earlier. Profitability also was on a good level and this very much thanks to the current product mix, of course, but also our operational model that remains very cost-effective. Yeah, another milestone of course, is that we finalized our construction work in our new Indian factory and started slowly to ramp up over that. Of course, we have been investing, as you saw in the report as well in our other factories and we continue that development over time. For us, of course, corporate responsibility has become more and more important, and this is very much driven by our employees and their interest in this. Of course, we have from investor side and from different stakeholders are also a driving factor in this, but we take very much pride of that initiative foremost comes from within Incap. We have continued to work with the developing our reporting. As you saw there also, we released our new report here, and I hope you see the result of that development. We still have a lot to do. I think in generally in the industry there is still lack of standardization when it comes to reporting and here we keep on working with IPC and other industry associations to come up with it. We have done what we have could in this time, and we're focusing very much on currently on CO2 calculations and are preparing for what we expect legislation-wise also will be a new needs for us moving forward in our reporting. This is under development, and then it's very close to the core of Incap and all employees' heart. Talking about employees, I don't think I can emphasize enough how exceptionally good our team is that we have been working very hard achieving those results that we have done also now during Q1 and this is thanks to the commitment of our fantastic people that we have all over the world. A little bit perhaps on the current situation and in April, we informed the market. We went out very early, as soon as we got the information that our biggest customers is reducing their inventory levels or have wished to reduce their inventory levels. As a EMS partner, of course, we are part of the flexibility for our customers. We work very closely with them and we help them to achieve their targets. Now we are working with our customer to achieve the goals that they have when it comes to reducing their inventory. This work is starting of course now in Q1. This went through without it and we expect that now during the second quarter and the third quarter quarter and fourth, there will be more impact of that reduction. That said, this is from our perspective, a temporary thing that and it's not so that we have lost any customer or lost any business. It's just a question of, if you look over a period of time that they have overstocked and we are foreseeing growth also for our biggest customer in the long run, and I think that we'll level up and bounce back here sooner or later in that sense. Still, I think our strategy is valid, and if you look at long-term, our activities, we continue with it as planned when it comes to investing our business and developing our operations and also looking at different M&A activities. Antti, you perhaps want to talk a little bit about the figures. Yes. Thank you very much, Otto. Here is the key numbers from the first quarter, starting from the revenue year-on-year, 36.2% up. Operating profit increased by 67.3%, and in relative to the revenue, it was 15.5%, EUR 11.3 million. Very solid first quarter indeed, and then we added on this slide, we have gathered the quarterly data from 2019 onwards. We illustrate here the path Incap is having here and then obviously you see here the solid growth past years and then also the first quarter here is showing a good development on the numbers. Looking from multiple angles then very, very good performance overall from the. Not only from the biggest unit India being that one, but overall all the European units had also a strong and important contribution for our Q1 performance. Very, very widely, all cylinders were working and then this is the result, 15.5% in our industry can be considered very, very solid. Here we'd included some other key figures. Of course, then important level of inventory described here in the below of the pages is so important for our business and cash flow perspective, and as we commented earlier last year, there has been a lot of challenges in the market, logistical supply chains, missing some components and things like that. Material prices have gone up. That impacted also the inventory levels. We have been working very tightly with all our units, and there's some 10% deduction in inventory levels, and obviously that will boost our cash flow this year. Hopefully the same trend in terms of material availability will continue, and then we can improve our material and inventory turnover and strengthen our cash flow through that. Interest-bearing debt pie chart is described here in the middle. That is very strong at the moment from our perspective. We have EUR 5.2 million is the cash level, and then the debt items are listed there. This allows us to think about some actions in Incap, namely acquisitions, for example. Our leverage is on a healthy level. Number of employees, we have included here the number from 2022, 2,817. As everybody knows, then the Incap India is the foremost the biggest one when it's measured by the headcount, 80.2%. Yeah. Yeah, the outlook in the release remained the same as we did in our profit warning before that we expect the revenue and the EBIT to be lower than in 2022. That said, we are quite confident in our decentralized model and our cost-effective model. We are expecting to keep the profitability at a good level, also in the future here going through this work that we have with our biggest customers with reducing the warehouse. As was seen also in our quarter four reporting, where we opened up the employee statistics a little bit. We are working a lot with contract workers as well and are flexible when it comes to reducing and increasing the capacity need when it comes to manpower without growing on any significant costs for that. Also, as I mentioned before, I think the outlook in long run for EMS business is very positive and we see that we have growth and good traction when it comes to our customers and see growth on many fronts, even if our biggest customer, of course, now temporarily will impact the figures when we're working closely with them and getting their warehouse levels down. Of course, we haven't changed anything, as I mentioned before. Our growth strategy will continue, and we are still looking very much on into different interesting M&A cases. I guess that is it for our short review over Q1, and we are happy to take questions from the audience. Yes. We have plenty of questions. From Gekko Capital, there is a question: Which is the current strategy of Incap to increase the diversification of customers? The risk of customer concentration with 67% of revenues from first customer has come true. Yeah, no, that is correct that this risk has been there and has, yeah, with this latest announcements, of course, realized to some extent. We are working very much with diversifying our customer portfolio when it comes to the overall pictures. But in percentage-wise, of course, with one customer so big, so that is perhaps not noted always. We have had very good growth as we opened up also on the Capital Markets Day on other accounts, and this continues. I think to be able to do a major impact on this concentration, then I think an acquisition is required. That would, how to say, dilute that dependency somewhat and of course, depending on the size of the acquisition. I think that is what we are continuing to do. We are continuing to developing the other accounts, growing them and growing the business, and we are continuing to looking at good M&A possibilities. I think this is something we are very much aware of the customer risk and have been working on and continue to work on now as well. Then Gekko Capital continues, Is there any guidance of reduction of revenues in 2023? From when is it expected to occur, Q2 or Q3? Yeah, no, as I mentioned before that, and then perhaps as noted as well from the all of you guys listening in, that the Q1 numbers were not impacted from the reduction. The ramp down we have started now during Q2. So we are in a phase of ramping down the operations around this customer to a level that will allow us to continue to produce, but also them to be able to reduce their warehouse. I think the full effect, or I would say when we have come down, if we look at now the Q1 as a ramp down phase, then I think we will have reached some level where more stable level during Q3 and Q4. If that answers the question? Okay, we continue. Ben Thackeray is asking, in Q4 2022 presentation, you forecast higher revenue in 2023 than in 2022. In EUR, what is your forecast revenue for 2023 given the postponements announced by your largest customer? If you don't have forecast, what estimated revenue won't you receive from your largest customer in EUR, please? Yeah. We haven't disclosed in EUR any bracket for our growth or our steering and so that we are not normally doing. The steering we have given here during Q4 where we still believe that we would have growth in that sense was that we will be on a higher level than the year before. Now we revise that instead that we will be on a lower level. That follows the same brackets that we have been reporting before. We are reporting on this lower, clearly lower, significant lower or vice versa on for the market. Okay. How will the postponement of orders from your largest customer impact inventory levels? Can you provide an update regarding the inventory levels? What do you expect the impact to be on your debt covenants? I think, short-term of course when we are now ramping down, we expect the inventory level to go up somewhat. Long-term of course we, as we stated also during the last Q4 release, we expect the inventory levels to go down because there's many trends in this. Now when material availability is going down, there is less need to have higher inventory levels. Short-term of course when if we have been driving materials to fulfill orders that we now have been negotiating with our customers to push out, and then of course some of that material will accumulate in our warehouse for a shorter time. That we are working very closely with our customer on how to work that out and so we don't end up with that. As you're also aware of, I have been mentioning before that all our material purchases are order-based and our customers are liable for that material. It's not so that we have a risk in this. This is very much something we are working very close with our customers to deal with so we don't end up with excess inventory. There was a question about the covenant impact, and then of course then if the profitability and mainly EBITDA, which is our key component when calculating IBD, EBITDA covenant for the bank, so that will increase but we have huge amount of buffer to the upper limit, which is 3 x EBITDA, and that will be still very strongly stay under one multiple so there is no whatsoever any problem in that sense. Okay. We have a question from Sam Teman: Are you still expecting growth for your number one customer for 2023? If so, what would be the rough estimate for sales growth? No, I think the... in general, my understanding is that our biggest customer is still growing. Of course with them reducing, having the need to reduce the warehouses, that means for us that we will not have growth over that short, yeah, shorter time period and that will have an impact on 2023 in that sense for us in Incap. Otherwise... our biggest customer is very good, yeah, good company. They have good outlook on their business. They are expecting growth, and, but not as much as they had projected when we were building up the inventories. I think the outlook long run looks very good, and our cooperation as well with them. How long do you estimate this stock balancing for your number one customer will continue? one quarter or whole 2023 or more? Yeah, it's very hard to say. We have said that it would have an impact this year for Incap, but of course it's a little bit of a moving target. It all depends on what is the sales and so from our biggest customer side and how it develops, and so it's hard to predict in that sense. I think you should look at it also a little bit over time that Incap had excellent Q3 and Q4s, but part of this was that we built up this warehouse for our customers. That of course will take some time to get down because it's in our customers' interest and of course ours as well that we don't do this too quickly. We want to maintain production, and we want to maintain capabilities at our factory and competence and so this is very close cooperation that we're having currently and doing this exercise with our customer. Okay. Do you think your largest customer is using more dual sourcing here in 2023 and going forward? No, I don't think so. Our biggest customer have always worked with several EMS partners, us being the biggest, but they have also. I think that this affects many of the other partners as well. I don't see that there's any change in split or change in that we have lost any business or so. It's simply so that they have overestimated their growth and are growing a bit slower and ended up with buffering up too much inventory to carry on. Now we are doing the very much of the service that EMS companies always do, this we also do with other customers. We help them to ramp up and ramp down and we. This is one of the services that we provide and also one of the reasons that many of the OEM companies use EMS partners. We have somebody who can offer the flexibility, and that is what we're doing. This is a big part of our great service offering that we have towards our customers. Okay. We have a question, now that you have free capacity in your facilities, do you think that you can utilize that with new customers and orders? Yeah, of course. Of course, the capacity is capacity and over long run, we can utilize that for many different customers. We don't have, how to say, earmarked or unique capacities that we only use for one customer. That said, of course, this is a big chunk of the business, and even if we see that our other businesses are growing and growing with very good pace, then to replace that over a shorter time period, say, during this year and so in full, that we don't see as realistic. For us, in the long run, this doesn't change our planning in that sense. We still think that we will utilize our Indian factory. Yes, perhaps not as quickly as we originally thought when we were planning this. Those kind of investments that we're have made or take into consideration a longer time span than just some, yeah, six to 12 months or in that kind of timeframe we are talking to now, about now. Okay. How fast can you win new customers to fill up the third factory? Yeah, as I said, it takes time to, if we talk about, this kind of volumes, it takes time. Now, we think that also our biggest customer for them, that this is temporary, that we will work with them to reduce the warehouse levels and then get back to some kind of new normality when it comes to the orders one. That matches, their outlooks and so for their growth, as well. We continue to work with expanding and growing our other accounts. We also have very interesting new accounts that we have won here the past year and so that we are expanding and working on now. But, yeah, it's nothing that will replace immediately the business, but that will contribute to our growth in the future. Okay. Can you give indication on the revenue growth numbers for your largest customer in 2022 and 2023, 2024? I don't think we have separately disclosed that in such details. Antti, do we have some statistics we can share? Well, everybody can check from the annual report then, the biggest customer share, from the total Incap last year, 67%, then Was it 61% year before? That shows the growth over the biggest customer. Then 2023, 2024 is something we don't disclose at the moment. Okay. How will the drop-off in revenue for 2023 affect the different factories? Will the factory in India still open and become operational, and will there be layoffs? Yeah, foremost with our biggest customer, we work in India. There is where we have the impact. We have finalized construction, and we have started with moving into the factory. This is something we will continue with. As I said before, that the factory expansion there is not only tied to one customer and at least a long-term investment for us. We will continue. Yes, the ramp up and then perhaps the full utilization of the factory, that will take somewhat more time than we had expected before. We have been running the business in India with very tight resources when it comes to square meter and so. This investment have been needed over time. In our other factories, we won't have any impact of this. We see growth in all of our European units currently, and we have continued also investments there with expanding some of the floor space in Slovakia, and we have done investments in SMT capabilities in Estonia, and this is something we will continue with. When it comes to layoffs, then as I described before, we work very much with contract workers in our Indian factory and we have a very flexible solution when it comes to the manpower. We will, yes, do some reduction in, of course. in the manpower to match the current demand, but we will be able to do this in a very flexible and cost-efficient way. Okay. How well do you think that you can keep the current comparably high EBIT percent level in latter quarters of 2023 with the changed situation? Yeah, no, as I mentioned, we have a very flexible solution when it comes to the manpower and to match that of the demand. Also when it comes to other operational costs, we are running very lean. I'm and we all are very optimistic that we can maintain a good profitability in the business. We have been able to do, I would say similar revenues with good profitability before and so we expect us to be able to do that as well. When I say that, then to have an understanding for perhaps that our profitability, of course, always is varies a little bit by the product mix and so that we currently have. Of course, that will be the case as well if the volumes are somewhat smaller. We still expect us to be well within this same kind of range between, yeah, 12% and 14% that we have been able to pull off before. Antti, do you have any comments on that? No, it's exactly like you say. There, we focus on, of course, the analyzing the impact and also there's a role together with the biggest customer to discuss and negotiate about the possible cost sharing if we are reducing the resources and so forth. Yeah, we are looking optimistically on the margin of EBIT margin as well. Let's see. What is your firepower for acquisition? I think in that sense, our financials remain strong in that sense. Of course, now when we have somewhat or not growing in that sense, that means as well that our cash flow will improve and that should at least in theory give us better possibility to serve some loans and so as well if we choose to take on those to finance an acquisition. I think we are well set off. Of course, now with the drop in share price, paying with shares perhaps is not a good option currently. Overall, I think we are in still in a very good position to do acquisitions. A question regarding acquisition again. Why do you consider acquisition when your share price is at EUR 10? Why don't you focus fully on acquiring yourself, for example, buying back shares? I think we are still committed to our long-term growth strategy and believe in that. I think that is the key thing. I think an acquisition, a well-placed acquisition is would bring a lot of value and that for the shareholders as well, and that's one of the key criterias. Of course, we are not doing acquisitions just for the sake of doing acquisitions. This should bring value for our shareholders and that also with the low share price. That is key for us, that it's healthy deals that we are looking into. Okay. Do you have any specific projections how much your revenue will drop in 2023 compared to 2022? Will it be more or less than 10%? We have given the guidance that it will be lower. For those that have been following that this guidance that we have been doing before is that lower means 0%-20%, clearly lower, 20%-40%, and significantly would be more than 40%. We have given the guidance that we are in this first bracket that from between 0% and 20% lower in revenue and EBIT. Okay. in the loss of investor confidence warranted as the stock price dropped nearly 50% in a couple of days. Is the loss in investor confidence warranted? Sorry, I didn't catch your question. Is the loss in investor confidence warranted as the stock price dropped, nearly 50% in a couple of days? I have very hard to comment on what individual investors or so thinks and of course. Then also, I've hard to comment the stock price. I guess the market has its view and that is something that of course we can't focus too much on. We are focusing in Incap to continue to build-develop the company and develop our strategy and so on to bring the company forward and I think that is the key. As I said, in the big picture, we see this as something temporary and there is always some volatility in the EMS business. I don't think that this is unique for Incap that we have had a customer having a need to decrease its warehouses for some period of time. This happens all the time. We're working very closely with our customers and so on, always with ramping up and ramping down. Of course, it's unfortunate we have this one customer dependency risk and that is our biggest customer that we are going through this journey with currently. Of course, have an impact in our figures, but we see this temporary and I'm quite sure that we will be able to bounce back from this as well. Okay. What are the prospects for the new Indian factory? With the slowdown, is there possibility that you will have overcapacity for a while? Yeah, for a while, I think for sure. We are always planning with some kind of overcapacity, so we have something to sell. As we see it, yes, we will... Utilization of the Indian new factory will take little more time than we initially projected, but it's a long-term investment and we are still working on filling it up with our biggest customer as well as with new accounts that we have. It has perhaps slowed down the progress a little bit in filling the factory up, but we have taken, starting to take it into use and will continue to do so. Okay. Could you please specify the range that is implied by your guidance of lower sales and EBIT, both 0% to -20%? Yeah. To specify, when we have these brackets that we have, yeah, it goes both way. If it's higher or lower that we have lower means 0%- 20%. If it's would be clearly lower, that's the next bracket is it's, 20%- 40%, and significantly is above 40%, or below in this case. Yeah. ultimate that when the numbers are going upwards, higher is the same 0%-20%, clearly high, 20%-40%, and 40%+ is significantly higher. Same mechanism and logic. Which factory unit is responsible in fulfilling large customer orders? Is it Indian unit? Which unit do you see going into possible reorganization? Yeah. You know, as I mentioned before that it's foremost our Indian unit that we're working with our biggest customer. As I said, we are, uh, there working with the customer and we have made a plan that, uh, which secures us that we can continue the operations and keep capabilities and capacities and so. We're not talking about any now bigger restructuring and so we are of course taking down the manpower with the flexible solutions. We have a contract workers and so, we are matching that to the current demand and so that is the work that is going on currently. Okay. Were you surprised by the big reaction in stock market and the impact magnitude on the share price from your recent press release? As I said, I don't comment on the share price in that sense that, and then don't give any value if that is correct or not. I have a hard to comment on that. Okay. How do you see the current M&A market? Have the valuations come down lately, and do you see the M&A market attractively priced? I think the, how to say, multiples have come down on the M&A market, compared to what we have seen here the past two years. In that sense, I think it's perhaps a better climate to make deals currently than it was some year back. Of course it's still challenging to find good targets that fit all the different criteria that we are balancing in and so on. I'm quite sure that we will find something eventually interesting that we can present to you guys as well. I have a quite long question here regarding your biggest customer. Please provide more color what do you mean by stating larger customer, largest customer who has decided to reduce inventory levels and is therefore postponing some orders from 2023 to 2024. In your previous new release, especially what means postponement? Does that mean the large customer halts any ordering completely or only ceases to make new purchases with new orders, but in meantime, production with older contracts go on? You know, let me put it in very simple terms. We have close relations with our customers and in here during, yeah, just before the release, we had a meeting with them where they said basically that they have overstocked their prognosis or their forecast for their growth is smaller or larger than the actual growth currently is. They have a need to push out orders. We have the orders in that sense, so it's a negotiation on how we're gonna do this. Of course, as a good loyal partner to our customer, we're trying to find a solution where we can help them to reduce their inventory and then come up with a plan together with them on what orders to push out and how to replan the production so that we still keep on manufacturing and keeping the competence so that it's needed for their business in long term, as well as giving them possibility to reduce the capacity. Of course, this cooperation is continuous and we are reviewing this as we speak and continuously because it's a moving target exactly what levels is needed. It's not that simple that they have overstocked on everything, but some product groups more and some less and some not at all. It's a cooperation. I have told before, we are very closely integrated and cooperating with our customers and you can almost see us as part of the same kind of organization or how to say. We share the problems and we share also the ups and we share the downs with our customers. Very simply, we are trying to make this possible for them by helping them to push out some of the orders into 2024 that they had in the original plan for 2023. Okay. Still the interest for the largest customer is rising, so I will still continue asking these questions. Is there any risk of technological rotting of the supplies due to the fact that you might have stocked too much raw materials for the largest customer? The large customer is holding back purchases, but in the meantime, technology cycles move forward, and therefore, stocked materials might not be up to date in the future. Is there any risk of outdating of inventory, and how do you plan to do destock? What will you do with unnecessary stocks? Yeah, no, we don't see any risk in this timeframe that there will be any risk that this inventory goes bad in that sense, technology-wise or otherwise in that sense. I don't think that goes either for our customers', how to say, finished goods inventory. I think that is very much usable as well. It's a question of freeing capital in the warehouses, helping them to reduce their stock levels, and then moving forward on the growth that we see from the customer. I would like to add here that, like we said in Capital Markets Day, all the components and materials we buy based on the customer's firm POs or delivery plans. Basically, customer owns the material, so in this kind of worst-case scenarios, and then our customers are responsible for buying back all the materials. That eliminates quite big time the risk for Incap as an EMS supplier. Yeah, even if theoretically would be some risk then, that is... Yeah ... is also balanced out through that we don't carry liability. Has the business from your biggest customer have better margins? I wouldn't say that our biggest customer business have now some kind of better margins than other business. I think our margins, we have explained many times for you investors as well and for other stakeholders, it's very much due to our organizational model and our lean structure. It's not that we have better margins than other EMS companies. It's that we have lower costs that is as simple as this is. Are the growth of your other customers in line with the expectations from the annual report? If not, have you revised the expectations up or down? If we talk about the other customers, we see very good development currently on the other customer, customers of Incap. We see growth in most cases. Around our other customers, very positive development. Okay. Do you see that negotiation situation of EMS partners has worsened as the supply chain tightness has eased? Have you seen this yet in your business, and do you think that it will have effects on to the business? I don't think it has worsened that what I mentioned before and so is that visibility is coming down a little bit that we have had now extraordinary times where customers have needed to place orders one or even two years in advance. That is not norm in our industry and I have said it many times when I started in the industry, I think, visibility was six months as at best. Now during the problems with the first COVID and then also the component availability then we saw that the industry changed and the customers were forced to give longer forecast and also to purchase much longer in advance. Now when component availability comes down, then of course there's no need because it's also risk if you purchase a lot in advance. We expect that the visibility come down to a more normal level, hopefully not back to the six month where it was once upon a time, but to more normal forecast windows. I wouldn't say that negotiations have gone, been harder or got more difficult now during the past time. In the contrary, that there is a lot of negotiations and a lot of interaction have gone around materials and material availability and that we are seeing now is not gone away fully because there is still problems in some with some components, but it's going down significantly and that helps us and our customers to focus on more productive things. How is the pipeline for new customers looking for you? I think we have a good pipeline, and I think we have had a very good development and as we opened up on the Capital Markets Day and now also in some of our reporting that shows that we are growing the other accounts very nicely. Of course we have one big customer and to balance that out with organically growing other accounts will take a lot of time. I think that for that sake, an acquisition might be a better means for that balancing. That said, yes, now this customer dependency risk in some extent have realized. We still believe very much in our cooperation and in the business of our biggest customer and see this as temporarily and our biggest customer are growing this year, but not as quickly as they expected or. We see the effect of that with this reduction that is needed to be done. This is still a short-term thing that we need to take care of. It's part of our service offering towards our customer to be a flexible partner and help them in these kind of situations and that we intend to do and then we intend to continue as and develop the business together. Okay. Do you think it is possible that the revenue and profit outcome can be much better or worse than current estimate? For example, if things go well, could you even grow profits this year, or worst case you will be unprofitable? That I don't think in the with the knowledge we have today than we have given our steering in that sense. Of course, things can happen in the world, both good and bad, and so, but given the knowledge that we have today, then we will remain in the bracket that we gave and be in this 0% - 20% or in this lower bracket. Of course it's a moving target as I said before, and business can pick up, and there can happen a lot of unforeseeable things like we have seen the past years with pandemics and other things. So it's hard to speculate. With the given knowledge then, I think our steering is correct. With this moving target, it's good to understand that the biggest customer has now like a very high stock levels, and they are forced to internally from their side reduce the stock levels and then of course, the only way is not to order from their EMS suppliers. Their sales has to exceed the supply. That mechanism has to be there. By moving trade out means that, if our customer is able to grow faster, have bigger sales, then of course then from our side we can still keep a like a decent level of output and production towards the customer. The point is that Incap's supplier output has to be lower than what is our customer sales. Our customer sales is they don't have like huge visibility on their business going forward. But they overall they expect also good year for them 2023 and then years to come but we don't have exact like data to show how much it will take. It really depends on the sales development of our customer side. As you consider the decrease in revenues to be a temporary situation in 2023, would it be reasonable to assume that the growth will return to the same levels as the previous five years in the coming years after 2023? Of course, we have been growing. If you look at the previous five year, we have been growing a lot. Within that span, then we would very securely be able to answer that, yes. If you look at I think Q3 and Q4 last year were exceptionally well, but that also contributed to that we built up this inventory. We are talking about something, perhaps in line with, when once it bounces back, so to say in line with previous year or so. As I said, it's very hard to predict. It's a moving target. It can change very quickly and it all depends on, of course, the sales of our biggest customer. For sure we are not expecting this drop to remain for longer, for future in that sense. We see this still temporary and we're taking a hit this year and working together with our customer. Okay. Which key markets the largest customer company see, or you see being in recession, and how long do you see the recession last? Which markets or segments of the businesses you still see going strong? Do you see the recession in some key markets being just a normal and natural cyclical readjustment and transitory in nature or something structural in global economy? What is your opinion how interest rates of key central banks have affected your business now and going forward? Do you see any major slowdown yet in global economy due to interest rate raises? Yeah, I think, of course, it's very complex question with very many questions in it. Yeah, I think we shouldn't overanalyze this too much. We're talking about how we biggest customer is still projecting growth. Even if some markets that are in recession now, the growth is slower than they projected, then overall they are still projecting growth. They have overstocked. They have bought too much inventory here during Q3, Q4 last year and ended up with too much inventory. It's temporary. If you look at our biggest customer, of course, it's hard for me to give proper analysis on their business. It's not my job in that sense completely to understand all the nuances there. They have a very diverse customer portfolio. They are in many different kind of segments when it comes to their products, and many different, there's many different utilization of their technologies. Overall I think it looks very promising and you see growth in, and even if the growth hasn't been as quick as they projected, they still are looking at growth in most of the segments that they are or within. I think we shouldn't overanalyze this too much. It's when you have a business where you sell from the warehouse, you need to do some kind of projections to fill the warehouse to be able to match your sales. If you have done this projection a little bit too optimistic, then you need to reduce the warehouse. I think we should look at it much more simple, simpler than to try to overanalyze this. Okay. Is Germany and the U.S. still the focusing geographies for M&A targets? I think we are of course looking at other markets as well, but I think Germany is biggest EMS market in Europe and of course there's a lot of interesting industry and potential customers in Germany that we already are working with some of them, foremost through our Estonian and Slovakian units. The German market I think is a key market as it's the biggest one in Europe when it comes to EMS business. U.S. is the biggest economy in the world, and I think in that sense there are a lot of potential on the U.S. market as well. Being in North America would give a global reach in that sense, extended global reach for Incap. Already now we have a good part of our business going or our products that we're producing to U.S. and it would give our customers and some of our customers a benefit if we would have something established there. Yes, we are continuing to looking at those key markets but of course we're not ruling out other good opportunities either. Okay. Couple more questions. can you provide some color around the guidance? You talked about high uncertainty after having downgraded the guidance now twice. Can one assume that the latest guidance downgrade is a worst case? Yeah, I think we downgraded it once in that sense from in, yeah, from compared to our Q4, and we downgraded it now once. We are always giving guidance on the best knowledge that we have at hand. As soon as we got aware of this situation, we sought out a profit warning. We try to play with open cards so and take it as it goes in that sense. So it's our best knowledge is that it will remain in this guidance that we have given now and hopefully we won't need to adjust it in any direction in that sense. If, then rather upwards than downwards. Okay, the last question. Can you explain how the expected 2023 operating profit decline will be in the same 0%-20% bracket as the sales chance, given that you have substantial fixed costs? I think, as I said before, that our cost structure is quite flexible, especially when it comes to manpower and we're talking about foremost our Indian operation where we work very much with contract-based labor and always work with flexibility when it comes to yeah, ramping up and ramping down our resources to the demand. So that's the key thing here to see that we have strength in our setup and our flexibility. This is very much our role as an EMS company to be able to take this kind of volatility from our customers, so they don't have to take it. So we are geared up to do that. Okay. Thank you. From my side, no more questions. Back to you guys. Thank you. Yes. Thank you, and thank you everybody for listening in. We will also, if there was any questions left, so we will answer those on Inderes forum as we normally do. Antti, do you want to add something before we wrap this up? Let's see those shareholders that are participating tomorrow to Incap's Annual General Meeting. See you there face to face after a long break with the COVID, having only these Teams AGMs. Those shareholders that are participating tomorrow, see you there. Thanks for everyone else who was on the line here. Good questions. Yes. Thank you very much, guys. Thank you. I think it ended now.