Welcome to the Neles Q1 2021 Interim Report. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question- and- answer session. I'll now hand you over to Rita Uotila, the Head of Investor Relations. Please begin your meeting. Thank you, operator. Good afternoon to all, and welcome to Neles' First Quarter 2021 Results Briefing. We will hear a presentation from CEO, Olli Isotalo, and CFO, Simo Sääskilahti, followed by a Q&A session. This briefing will be also recorded, and the recording will be available on our website later this afternoon. Now, please go on with the presentation, Olli. Thank you, Rita, and welcome everyone online. Our main message or big part of the main message is squeezed in a nutshell in our opening page, the lengthy heading you can see on your screen. Let's go a bit deeper into the topic. As usually, we have three modules in our presentation. First, Q1 highlights and results. I will cover those. Then Simo will go through the financials in detail. Finally, I will end the session by giving you a very brief strategy update and our current focus for the coming year. Starting from the highlights of Q1, well, orders received grew sequentially 15% compared to Q4 of last year. Services and MRO-driven business recovered, especially in services, the orders were already at the good 2019 levels. It's the ones who do not recall 2019 was actually a good year for Neles when it comes to the order intake in general, but also especially in services. The rest of MRO-driven, even though improved clearly, still remained below the pre-COVID levels, but pointing to the right direction. On the project side, on the customer CapEx-driven side, pulp and paper and bioproducts business remained on active levels. The momentum continues, and we are expecting that to continue. At the same time, chemicals and oil and gas project activity turned out to be weak. However, we have an offer backlog, and the project funnel is developing well, so we are expecting the order intake to recover during the second half of this year. Not necessarily yet during the second quarter, but then towards the year-end. On the sales side, we took a bit of hit because of the closure of our supply center in Brazil, where we had some important projects at the delivery phase. As we have said earlier, we will recover that delay during the rest of the year. Sales was also negatively impacted because of the timing of the backlog, generally speaking, and exchange rate fluctuations, especially when we are comparing to the quarter one year ago. Profitability during Q1, despite low-ish sales, was at least internally, we think it was okay-ish. Of course, it's below our long-term target, but on the other hand, the volumes were very low. Because of the good cost management that we still continued last quarter during the Q1, a combination of the delivery mix or very favorable delivery mix, also the product margins were healthy. By delivery mix, I'm referring to the big share of MRO and services versus project business. Cash flow was good. We were turning the profit to cash quite nicely, and good progress in our safety continued. We are competing as in many other areas, but also in this area, we are competing in the Champions League currently. LTIF was 1.1 during the first quarter. If looking a bit deeper into the market, especially we saw the sentiment improvement in North American market, where it started and orders received actually grew by 49% sequentially. Here it's good to note, though, that in North America, there is a bit of a seasonality effect as well, as you can see from the graphs on the right-hand side. Asset services and MRO-driven businesses improved, generally speaking, but especially in EMEA and APAC market areas. Meanwhile, project business was still low in EMEA. APAC was at a solid level, but especially and supported in good development in China. In South America, we had a peak if we are looking at the comparison quarter one year ago. That was a peak quarter like the following one, and obviously, currently, we are below those levels, still on a very solid level, and the overall market activity is solid in South America currently, despite the very bad COVID situation. Looking at the market outlook then, not repeating too much, but pulp and paper bio-products we expect to continue at the current good levels. Market activity in other project businesses, chemical, oil, and gas especially, it turned out to be weak. I think three months ago we said it would be satisfactory. Well, it turned out to be weaker than we thought. Now when looking at the project funnel, we are expecting that to recover and return to satisfactory levels during the second half of 2021. Of course, here I have to make a note that the visibility to exact decision dates in the oil and gas project is still reduced because of the COVID situation in many parts of the world. It's difficult to estimate exactly when the customers are deciding finally, even though the funnel is solid. The other way around in MRO-driven business and services, we were expecting that to be still on peak level during Q1, but it turned out to be satisfactory, and now we are expecting to it further improve towards the year-end, especially speeding up during the second half and towards the year-end. That was my session. Now I hand over to Simo. Thank you, Olli. Let's have a look at the bit of the financial development. First to note is that our orders, as Olli mentioned, developed quite nicely from Q4. Nice growth in Q1. Comparing to a year ago's comparison period, we're obviously behind that, but as was apparent in the previous or in Olli's slide, that was a very strong project quarter. If you're looking at actually what happened in the services and MRO-driven business, we were in the orders ahead of the previous or the year-ago quarter in that sense. That drop is coming from the project side. I should note that, and as Olli said, that the services are on a very nice level comparable to the good times of 2019. MRO, even though it's ahead of last year kind of Q1 2020, it's still a bit behind the levels that we were seeing before we started to go into the COVID situation. Sales, pretty kind of a similar picture. We were EUR 7.7 million behind last year. If you look at actually in comparable currencies, we would've been at the same level or even a touch above. Profitability-wise, when you're looking at our adjusted EBITDA, we are at the same level or even a touch better than a year ago. This year we didn't record any adjustment items. When looking at our operating profit, that was actually an improvement year-on-year. Looking a little bit about the kind of development of the balance sheet. You can see that during the first quarter, it maybe requires a bit of concentration, the chart on the left, comparing the end of 2020 and Q1, the net working capital picture, we can see that we were quite flat. We had had a good positive development during 2020 on the net working capital side. That's what we've been talking about, that we paid attention to managing that in that situation. Now here, we were going a little bit up there, mainly coming from the inventories. Comparing to the situation a year ago, we are in a better shape. Our net working capital is in a better level. Also if you look at the right-hand side of the slide, you can see that the cash flow was quite good, as Olli said, and that our liquid funds were growing in the quarter. Here you can see the laid out the full income statement. One thing to note obviously is that the sales were a bit kind of on a low-ish level, as Olli said. Sales margin's healthy, but the profitability was also achieved by continuing the cost-saving activities that we've been doing now for some time. Those were also, that approach, those activities were in place in the first quarter. Going forward, as we see the activity levels going up, we also anticipate that our costs will increase also partly because we will start implementing our strategy in a bit faster way. Then, I think I already touched the main points about the development in the balance sheet. Balance sheet, I would say that got stronger during the period. In these numbers, though, I would note that the dividend that was decided by the annual general meeting was not paid yet. That will have some impact there. Still, the picture stays that we are, balance sheet-wise, in a very good position. Finally, the cash flow, I said pretty good, especially comparing to the situation a year ago, where a year ago, we had operationally poor development in the net working capital. There were also, to be honest, also some of the items that we were still part of Metso. It may not be fully clean operational development there. This year, the development in net working capital was well under control, and thanks to the profitability and also low CapEx, the cash flow was good. We say that clearly the CapEx is on a lower level, and we also are planning to kind of in the rest of the year, that will be a bit higher on a quarterly basis. That's in a nutshell the highlights from the financial side, so I'm handing back to Olli. Thank you, Simo. We were quite fast, someone might say even aggressive when jumping on the brake pedal one year ago, or a bit more than one year ago, when going to the savings and cash protection mode. We have been continuing cost savings actions until now. We have released some of the initiatives as the situation never got as bad as we thought it could be. We were preparing ourselves to a lot worse scenarios as well. However, there have been quite many things that we have been postponing and putting on the back burner and even put in hold what comes to the growth initiatives and actions. Now the big theme this year, we think, and we believe that it's going to be turning from cost management to accelerating growth. We are not going to do that in an uncontrolled way. That's for sure. At the same time, we are fully aware, and we recognize that the growth will also require some additional spend selectively in the market, but also speeding up the R&D. This year, or last year, we have been able to continue strategic research and development projects, and this year will be, in fact, strong product launch year. We will come out to the market with a couple of important product launches already in the springtime. Those products will enable further diversification to new fluids and industries, but also helping or enabling us to help our customers to reduce their environmental handprint, improving their sustainability, reducing emissions, energy consumption, and improving the safety. One area that we have been communicating the whole year, starting from the CMD one year ago, has been that we still have white spots in the world where our sales coverage is not there. That requires additional resources both on our sales network for all direct sales, which is important in our business on the high-end corner of the technology, but also expansion of our distribution network. That's important when we are addressing new applications and especially new industries that our direct sales channel is not necessarily addressing daily. Digital tools and services, we speed up the development there now, during this year. Especially in services area, we talk about giving the customers tools and visibility to their own installed base to have better inventory management of their valves that they are having installed in their process. That in its turn helps them to plan their shutdowns to have the right valves or right components, right spares for the valves. Finally, improvement in availability and delivery capabilities. We got record high results in our customer engagement survey at the end of last year. We are not perfect. There is still many ways and many areas where we can improve. One of those areas where customers are saying we could improve at least, let's say, to even more differentiate ourselves from the industry standard when it comes to delivery, availability, and especially on-time delivery in very complicated projects where version changes and configuration changes continue to the very end. That requires system-level changes, requiring some investment. That also will require some physical changes in our processes during the manufacturing phase. We are planning both this year. That will enable and improve our delivery capabilities. This may mean selectively, but anyhow, investment to availability in the form of having some critical components in stock or even valves or actuators in stock selectively. Financial targets are the same, and they are unchanged. No change. Balance between growth, ambition, and the profitability target. At the same time, when growing, also taking care of the healthy balance sheet and sharing a fair share with the shareholders as well. Thank you very much. Now I think it's time for Q&A. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. Our first question comes from the line of Magnus Kruber of UBS. Please go ahead. Hi, Olli, Simo, Rita. Magnus here from UBS. A number of questions from me. I was wondering if you first could give us some extra color on how the trading progressed through the quarter and what organic exit rates you saw in March for equipment and MRO respectively? To the extent that you can provide some detail on April, that would be very helpful to see sort of how we are tracking the Q2 versus Q1 if we start there. Well, Simo, do you want to start? We saw the markets improve during the quarter. We were indicating when we were giving a kind of forward information about our results that because of the timing of the backlog, because of the exchange rates, but also because and the Brazil kind of closure, we were saying that our sales would be about around 10 or even more behind. We were doing a bit better than that. One reason is that Brazil supply center, we were able to actually open it faster than thought, and then we were able to get some invoicing, but also I would say that the end of the quarter was very strong in terms of business results and sales. We saw that happening quite well. As you saw, overall the quarter was strong on MRO side, in particular in orders, but we also saw that the sales was developing. Of course, it is still behind last year, but kind of getting there. I think that we can summarize that if earlier we were saying that we would see these developments more during Q2, I think we saw at least some of these things now happening already in the latter part of Q1. We need to also take into account that as Olli mentioned, there are some elements of seasonality in certain markets, but nevertheless, that is our view of the situation. Perfect. That's very clear and very helpful. Maybe on the second one, I've tried to ask this in the past a little bit, if we could get a little bit more detail on how we should see the different sort of components in the EBIT bridge through 2021. Obviously, you could have a reversal of some of the short-term savings you had last year. You would have some extra, more long-term savings coming through this year, as well as a ramp-up of investment. Just maybe if you could talk a little bit about these different components and how they should net out on a year-over-year basis if they're a headwind or a tailwind. Well, indeed, you touched already a couple of important points there. Last year starting from two, we were implementing quite heavy cost-saving activities, including shorter working times and temporary layoffs. We don't have those anymore in place or only in a few places. Still, for example, in Q1, we were running very tight cost control on other spending, travel, but also some development items, et cetera. The plan is that obviously we are seeing that the activity levels as they go up, that will drive up the cost a bit. We will not get the benefit of some of the savings that were implemented in the previous second half, in particular, the short-term savings. Like Olli said, carefully looking at the way that what is the right time to speed up R&D, speed up the channel development. That is our thought, and really the guiding principle is that we are committed to following the financial targets, and that's the kind of equation that we have in mind when steering the company. Okay. You're not willing to give us any sort of flavor on at least what kind of headwinds we should face from the temporary savings reversal in the quarter? I mean, that's very important for us when we try to build out our estimates for the second quarter, obviously. Well, I'm not sure. I think I understand your question, but it's really so that what Simo said here is that the Q1 cost levels, they are not yet sustainable bearing in mind the growth targets and the growth ambitions that we are having. We are aiming to increase the cost levels towards the year. Also having that, of course, tightly controlled the increase. There are some items that will come partly back. Not only these temporary saving actions, but like traveling. It's a good example that we are expecting that if not normalized, that we do not believe to, but at least increase clearly during the second half. That's our expectation at the moment. I would only add, maybe at the risk of that this may be even more confusing, we did also do, and have been doing constantly structural changes and cost savings with the idea that we save costs on permanent basis so that we can invest them. We did those last year. We had lay off people. We are constantly developing our operations also and our footprint with that in mind. Even though being able to kind of plan or planning to invest, still there is this balancing item. As said, the cost levels will go up from the Q1 levels going forward. I think the best thing is that we keep an eye on the profitability and the growth and try to steer the ship with our strategic targets in mind. Got it. Thank you so much. I'll get back in line. Thank you. Our next question comes from the line of Antti Kansanen of SEB. Please go ahead. Hi, it's Antti from SEB. A few questions from my side, if I may. I'll take them one at a time. First, a general question on the oil and gas and chemical side, where you're kind of seeing the weakest project activity today, but some improvements back end of the year. Where do you see the investment coming from? Are you already seeing CapEx pulling back that was postponed last year, and it's kind of timing of your deliveries that would be on the back end of this year? Or is this more like early signals, quoting activities, planning? Could you open that up a little bit? Well, I think probably there is a big both. It's really so that the project funnel here in between, it was weaker. It has been strengthening. I guess if you look at an oil and especially oil and gas side, and we look at what the industry analysts are saying, how they believe there is a CapEx growth, of course, expected this year and next year. From very low levels though, but anyway, there is a growth expectation. I think our view or our own internal view is also reflecting, or maybe that is then reflected in the customer activity, and that's what we see from our own focus funnel. Okay. That's clear. Then secondly, on the projects, I mean, activity in oil refining, especially in North America. I mean, a lot of the U.S.-based oil majors have sizable projects in renewable capacity, which is both greenfield and conversion. How does those conversions opportunity play out for you in terms of getting into the customer, taking market share, or what types of alterations are the refiners making when they are shifting from fossil-based to renewable? Could you talk about that a little bit? Well, Simo may complement what I'm saying. I think our starting point in that is not bad. We know the customers, we have the customer contacts, we are calling the customers daily by our sales network. We have the products that are required. From that perspective, I don't think that makes a big difference. If there is a CapEx for a customer investment, it's always an opportunity to us. For sure, from the MRO, let's say the replacement market day to day, as we call it internally, it is. The smaller the project, it's always an opportunity, of course, to replace competitors' valves. That was a good summary. I would say that when talking about the processes, change is good for us. You change the process you develop, you change the areas where you need to touch the process, you need to touch the valves. As always said, we have strong technologies. We are very close to working with customers and then, of course, following the trends and developing our offering all the time. Change is good. Okay, thanks. Maybe lastly reflecting the strategic outlook and you have the 5% organic growth ambition. Has really anything changed in your view during COVID regarding the structural growth opportunities in the marketplace or your M&A ambitions? Is there more M&A opportunities or maybe slightly weaker organic, or is it still the same industry outlook in your view? Well, in the big picture, it is the same. Of course, you mentioned the bioenergy. I would mention another example. We are very closely looking at, and actually we are active in some projects or a couple of projects already on the green hydrogen, things like that. Meanwhile, maybe at least some industrialists are expecting over the long term, during this strategy period, still oil and gas, even though maybe now a bit recovering, but still remaining on a quite low level over longer period. There are these new opportunities coming up. Not forgetting, of course, the bio-based materials. In our case, quite a lot means then bulk or wood-based materials. All these opportunities are there and not getting less, but I would say the opposite. Okay, thanks. Maybe I'll squeeze one more in reflecting to what Magnus was asking before regarding the cost. These kind of growth investments that you were reflecting, should we think that these are mostly OpEx items or CapEx or increasing net working capital? Can you open up that once more? Thanks. Elements of both. There will be OpEx type of additions, sales channel, for example, some initiatives, other initiatives, also on CapEx wise, we were guiding the beginning of the after Q4 that this year CapEx levels should be comparable to last year, and obviously Q1 was quite low. There are some ideas, some opportunities that we are looking at kind of developing that will require some CapEx, also R&D. The net working capital side that's something that we will continue our efforts to kind of optimize that. We achieved good results already last year in getting the terms in a better shape. We will work on that, of course, keeping in mind then the requirements for the availability and whatever the logistics situation is kind of developing. That we keep in mind, but I would say that in net working capital terms wise, we still want to kind of get better and we'll be working on that. I'm not saying that there will be a huge jumps there but continuous improvement. Okay. Do you think it's possible to run the business with above 15% EBITA where the demand is currently and with sufficient growth investments? Last from me. Yes. We think so that it is actually balanced. This is frequently asked question and actually quite often been asked that why such a low ambition level on the EBIT. It's really balanced with the growth initiatives. There is room to play between these ones. When the volumes are, let's say back to the normal, that is possible. All right. Thank you very much. Our next question comes from the line of Antti Suttelin of Danske Bank. Please go ahead. Thank you. Hi, this is Antti. Just one question. It's on oil and gas. I was just wondering how you see the situation now, because last year we spoke about in this conference calls a lot about the structural headwinds against all fossil fuels and their refining activities. Now we can see that fossil prices have increased. Maybe that's a positive. The question is, are these structural headwinds now all of a sudden over and your clients are investing again like before or how do you see on that? Well, I think if you talk about the long-term view, I think the headwind is still there. I don't think the big picture has changed in that regard. When I was referring to recovery, it's good to note though that the current levels are pretty low. There is a natural pressure to make when they are upgrading their, for example, fossil fuel. I mean, because of the environmental reasons our customers need to upgrade their processes to produce better fuels. Upgrade the fuel quality, or they are making other improvements, or safety investments, or reducing their emissions. Emissions are coming from an oil refinery is emitting. They need to reduce their own emissions as well. It's not only their product that they are doing. There is a lot of investment drivers still for a long, long time, even without huge, let's say, green field commodity fuel refining. As long as the processes are running, you are upgrading them, maintaining them, and improving the quality and the safety and, of course, the sustainability. That's giving some kind of an investment level on the CapEx side as well. Yes. I know this is far out, but would you expect oil and gas project orders to come, let's say, back to the 2019 levels by 2024, for example? Will they be lower even then? Well, I wish I knew. If you look at what the industry analysts are saying, it's unlikely, I would say. Yeah. Just make a note that obviously we are not authorized to maybe comment on this, like Olli said, but our strategy talks about diversification. That's an important part of that. That while this is an important industry and we are seeing long-term opportunities there, it's also that we've been consciously working that we have an offering and we, like Olli said, we are constantly developing it and releasing new versions, new products that help us create other opportunities or other industries that may have different growth expectations. I just want to make that note that we shouldn't be too hung up on just this question. Of course, it's an important one. The other side is that we are already a pretty nice portfolio. We have the pulp and paper, we have the industrial gases. In the other sector, we have things like renewable energy and metals and mining and some things we can also develop. Yes. Okay. That helps. Thank you so much. Our next question comes from the line of Tomi Railo of DNB. Please go ahead. Yes. Hi, it's Tomi from DNB. A question on the service orders growing in the first quarter. Would you say that the order levels are approaching or even exceeding for the full year levels what we saw last year? It's, of course, early to say, and we are not giving guidance, and especially on the kind of services guidance separately. The good development that we see there, it's a combination of the demand, the market support, but also our own efforts that we have been doing by focusing very much in proactive selling to shutdowns, approaching customers, having shutdown coming at a very early stage. A classical project says you have to be there early enough to help the customer to create the value, and it's a combination of these things. We believe on continuous growth on our services. I don't think we saw any kind of a peak or a maximum in 2019. It was a peak at the time, but there is a lot of opportunities to grow services further, and that's our aim. Thank you. If you could remind us about the MRO business level in 2019. How much was that in terms of orders in 2019, and how far are we from those levels then? You take the MRO and services together, during the Q1 we are back on those levels where we were in 2019. There are, of course, two components. The good development in MRO business and services together combined with the low project order intake. When we are talking about percentages, of course, it's an equation. During Q1, we were back on those percentages when we have been here in between, when we took the hit, especially early last year and still during last year, we took a lot of hit in MRO side and in services because we did not have the full access to customer sites and because of the travel restrictions. That was on, let's say, compared to earlier crises, oil drop in 2015, oil crisis in 2015 or even financial crisis. Still, it was more the hit taken on the CapEx side and later, meanwhile, here we took an immediate hit right away in the MRO side last year, and that dropped the share to 60% levels. On the other hand, when coming to the crisis last spring or winter, our order backlog and associated order backlog was very strong at the time. Okay. Thank you. Our next question comes from the line of Tom Skogman of Carnegie. Please go ahead. Yes, good afternoon. This is Tom Skogman from Carnegie. I'd like to start off by discussing the gross margin. I just noticed now that also on the sales level, business is tilting much more to service, for instance, than one year ago. The gross margin is down to 31.4 from 35.0%. I just wonder, is there some bookkeeping changes compared to Metso times or was basically this high margin a consequence of good demand in oil-related business? The main reason is that there's lower volumes are impacting and diluting the cost of gross profit. It's not only on the fixed cost absorption in SG&A costs that you see the margin hit, you also see it clearly on the gross profit side? The gross profit, yes. There's also an element of basically our operations fixed cost that we got to cover. There's also logistics costs that, of course, were a bit higher, et cetera. From that point of view, there's a volume element also included in the gross profit. All right. I wonder about when oil refineries strive to replace gray hydrogen with green hydrogen, we start to see some of these projects. How big is the business scope for you in these kind of changes? A refinery is a very complex factory. It's very hard to understand from the outside how big this change would be in a refinery. This is still an early stage that this is happening, but we believe, and as following people who research this as their job, that this is a phenomenon that will be happening. We see that, like we said, all the changes that you need to do there, you've got to touch also the processes, you've got to touch the valves. It is an opportunity for us. How quickly it will take off and turn is another matter, but there's a lot of belief that this is starting to happen and accelerating. We see that it's still a bit of an early stage, but we are closely following and working on those areas. All right, you said in your presentation that you will launch a lot of new products that will enable further diversification into new end markets. What industries are you targeting now? Of course, we already, during this call, we have mentioned that mining and metals is an example, especially the metals processing. It's a good example. In fact, the product launches that are in the pipeline, they are designed in such a way that they are with, let's say, reasonable modifications, easy to do. They are modular so that you can actually tailor them to quite many fluids and to respond to many customer requirements in many various chemicals. Well, industrial gases were mentioned. We are not covering all of them. LNG, it's a good example of possible areas where we can still grow. LNG, you said? Yeah, okay. I wonder finally about your acquisition plans, and this target to reach EUR 1 billion of sales. It looks like you're missing some EUR 200 million, and even the high valuation levels on valves companies, it's clear that an acquisition of a company with EUR 200 million of sales would be quite pricey. Can you give some comments on your acquisition funnel? What is your view? Sorry, we lost you, and I didn't hear the whole question. If I answer to the first part of the question first, and then you can repeat the second part of the question. The answer to your first question is that we have been actively working by screening the market. We have active work ongoing. It's not, as some of you may know, it's not difficult to make a long list in this industry when there is 1,000 companies in the space. Shortening the list, and finally, if the target is available, and because we are not interested about turnaround cases, that's again limiting, of course, the number of potential targets. I can restate what we have said along the year and starting to capital market day that reach EUR 1 billion level measured in order intake in a reasonable timeframe. As you rightly pointed out, it's not possible without success in acquisition front. Can I just get an understanding of what is your new board thinking about this? Is there any kind of changes given that Valmet has a bigger influence on the board than they used to? Our strategy is still very valid and it has not changed. Do they have any kind of wishes to what direction you would try to get growth now when they are in the board, for instance? I mean, are they happy that you search growth in the oil industry, as an example? We are not specifically targeting oil industry, but we are diversifying ourselves to other industries. We are already, if you are referring pulp and paper, which is of course very important industry to us and Valmet, by the way, very important customer to us. We are very strong in pulp and paper. We are the market leader. It's not easy to grow there. When growing the company, you need to address other industries. I have not heard any owners, neither Valmet or any other, to be opposing that direction. Have Andritz or Voith reacted negatively some way in doing business with you after Valmet got involved? No. We have not seen such reaction. Okay. I would even go beyond that. I had been surprised of negative impact because in this industry, it's quite common that the companies are, in some projects cooperating, in some projects competing with each others and forming different kind of combinations with automation suppliers, on the other hand, equipment suppliers. Okay, we'll now go to our next question from the line of Magnus Kruber of UBS. Please go ahead. Hi. Thanks a lot for taking my further questions. Could you tell us a bit about how your supply chain is working at the moment, and if you see any potential issues on any product lines or components going through Q2? I think we have seen, of course, temporary issues here and there. We maybe were referring already to the Brazilian situation currently. You all know, in India, where we have two factories, we have some issues there. Indian volumes in a global scale and from the corporate point of view, they are not huge so we are not overly concerned regarding the financial impact. We have some suppliers in India as well, so we have to be and follow very cautiously. The other issue that we have seen is the lack of, or the imbalance in the containers, empty containers which are piling or have been queuing to the ports in the U.S. West Coast, and not returning to Asia as fast as industries would hope. That has caused some issues. Trains have been fully booked. I mean, this new train connection, this has been some challenges to get slots there. We have managed well. We have global operations. We are able to balance between the suppliers. We have alternative suppliers to many critical ones. We have actually actively also, even though it wasn't so visible in our working capital, but we have also been actively increasing the safety buffers from the critical suppliers. We are coping with the issues, but there are issues. Perfect. That's very clear. Secondly, of course, logistics costs are very high at the moment, then you have raw material inflation coming through. How do you see net pricing this year? Is there any lag between your price hikes and when you see cost inflation coming through, I guess, more materially, I think particularly on the component and raw material side, I guess the logistic cost we've had for a while now? We have recognized the cost pressures that is coming from the raw material prices and because of the logistics. Of course now we come to a very sensitive area, and we are not definitely commenting our pricing strategies going forward. On general level, I can state, as it has been discussed before, that on the CapEx project side, of course, when the funnel in other areas except pulp and paper, it's relatively weak or has been weak. Of course, the price competition is normally tougher in such a situation, which we have felt. On the other hand, in this industry, generally speaking, it's quite common to transfer the cost pressures to the customer, meaning price increases. Of course, it now remains to be seen then how different companies are reacting to the cost pressures. Traditionally, it has been recurring price increases. That's very good. I just wanted to verify that you've already seen this raw material inflation in Q1 that's already in the books as we speak. I'm not sure how much it's in the books, but of course, we are following the indicators, and we know that it's coming through, that it's a delay. Okay, got it. Thank you. Just one final one. I know it's difficult to comment on, but is there anything more you can share with us with respect to the situation with Valmet? Any talks between the parties at this stage that you could expand on in any way? That's the other area that we are not commenting. Of course, as a public company, if there were something to be published, it would be published. Absolutely. Thank you so much. Thank you. Our next question comes from the line of Manu Rimpelä of Nordea. Please go ahead. Good afternoon. Most of the questions have been answered. I just have one left. Could you talk about these new products, and you mentioned this modular ability of them. Could that be something that you could expand over to the whole product portfolio? Is it potentially a meaningful cost saving or a competitive advantage if you look at other products out in the market? Just to help us better understand what kind of implications it could have beyond addressing new markets. Well, again, it's information that we will keep to ourselves. Generally speaking, of course, I can comment that whenever we are developing new products or launching new products, we are taking into account the market price levels from the very beginning so that when we are launching new products, we aim them to be competitive. Generally speaking, whenever it's possible, it's normally from the operations and manufacturing point of view makes also life easier from that perspective. Okay, thank you. Maybe one more. On this M&A topic we discussed already, could you just talk about how do you see the discussions having evolved with the potential prospects over the last, say, 12 to 18 months in terms of, I guess especially the valuation angle, which also used to be a problem for the combination of Metso Neles back in the days that it was hard to make M&A because of the rich valuation. Do you see that that is still the main hurdle for making M&A, or is there something else which is kind of hindering you beyond obviously the COVID situation you have now? The COVID is always there, but I think that the strategy is quite clear and the growth ambition, the drive for diversification, drive for developing certain product areas and markets. The work is ongoing there, and I guess kind of quoting a bit of Olli, but if there were something to inform, it would have been informed. No, I don't see that there's anything that's holding us back from execution. Obviously, we are working on it. Okay, thank you. No further questions from me. There are no further questions at this time. Please go ahead, speakers. Thank you very much, Olli and Simo for the presentations and all the participants for great questions. This concludes the briefing for the Q1 results. Half year review will be published on July 23rd. Thank you. Thank you. Bye-bye.