hello and welcome to the Hexagon Q4 Report 2023. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a telephone question, please press star one one on your keypad to join the queue. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand over to President and CEO Paolo Guglielmini. Please go ahead. Thank you very much for joining this, Q4 2023 and full year report. Welcome. We're pleased to report another good growth quarter. The carries us throughout the last couple of years is continuing is driven by the efforts that we're making in innovation. Automation, sensor fusion, cloud technologies are carrying growth throughout most of our divisions and that's also coming with margin expansion, which underlines good execution, good discipline and strength of the business model. In Q4, we were pleased to report also strong cash conversion and overall for the full year 2023 results came on track with our 2026 objectives, which we're going to review in a second. As a result, the board proposes an increased dividend of EUR 0.13 per share. In detail, Q4 represented the growth of 5 percentage points on an organic basis, with adjusted gross margin up to 67%, which is a very important metric for us, driven by improvements not only in volume also in mix and a growing prevalence of our software-centric solutions. Operating margin came in at 31% in the quarter, with cash conversion of 103 percentage points. For the full year 2023, growth on an organic basis was up 7%, with an adjusted gross margin of 66%, operating margin of 29 percentage points and cash conversion within the guidance range. If we move on to slide 5, Q4 was the opportunity to meet a lot of you also face-to-face at Capital Markets Day back in December in London. We've discussed a series of things during that day. We restate the confidence in the targets, in the midterm targets for 2026. We plan to keep on growing the business on an organic basis between 5 and 7 percentage points. Growth from structure is planned to come in around the 3-5 percentage mark. Operating margin will need to keep on ticking up and we plan for that to land above 30%, inclusive of PPA amortization by 2026. We've also laid out plans by areas and by division in terms of how innovation, commercial execution, operational discipline will need to help us to leverage the strong value proposition that we are sitting on. Q4 has been a reconfirmation of the fact that the macro trends that we help our customers with in terms of quality of the output, in terms of financial viability, productivity of their operations, in terms of safety and security of their operations, but also decarbonization, has really underlined that we are at the right spot in the market. We are gearing up the portfolio to capture those opportunities and we wanna have the discipline to build the strongest possible financial profile for the group as a result of that. But in London, we've also discussed broader commitments, starting with cash conversion that has been formalized in terms of the guidance between 80% and 90%. We've talked about ESG and targeting 95% reduction in Scope 1 and 2 emissions by 2030 as net zero alignment by 2050. We've talked about financial disclosures and making a few changes to give you the best possible visibility within the business as our initiatives to connect and align as much as possible management incentives to the financial profile that we're trying to build for the group. The good performance in terms of margin in Q4 was also supported by the rationalization program that we have launched as of the end of Q2. As a reminder, in slide six, we're working on four fundamental pillars in terms of building more operational efficiency within the group. We're working on synergies and lowering and optimizing the cost of serving the business across divisions. We are tackling small areas of underperformance or trying to align our operations as much as possible to the financial profile that we're trying to build for the future. We're optimizing our physical footprint and we're working on investments in automation, physical and digital automation, to make our operations as efficient as possible. Because of the synergies between the divisions, we are working on a simplification of the organization. We have had a relatively strong Q3 and Q4 approach to these things and we are gonna be rolling out within 2024 shared services, operations and centers between at least our two major divisions, GEO and MI and we're well on track with that. In terms of performance, we start to see some of the benefits of these initiatives already in Q4 and we have announced a couple of weeks back, a second divestment. Within the MI division, we've sold the hand tool business worth roughly EUR 50 million in sales on a 2022. phases and we plan to close that transaction within a couple of weeks. In terms of the physical footprint of the group, 50 facilities have been closed in 2023. There's a lot of focus on this topic and we plan for another 60+ facilities to be targeted and closed down in 2024 for an overall reduction of the physical footprint of about 25% from the beginning of 2023. We also keep on working with, our leadership team in terms of rationalizing further the manufacturing footprint of the group and optimize it in terms of our geographical, presence. Last but not least, in terms of automation, we have made investments in physical automation to improve throughput and cost footprint in terms of assembly operations, calibrations, but we also roll out digital tools to really step up productivity in terms of services, in terms of technical support teams. Overall, we've talked about taking a one-off charge within Q3 in terms of P&L investments worth EUR 198 million. In terms of cash out related to the program, EUR 32 million has been spent in Q4 and 48 million to date. We have benefited of EUR 20 million in savings within Q4 and we have triggered a current run rate of EUR 95 million in terms of annualized savings. Now, Ben Maslen, Our Chief Strategy Officer is gonna take you through updates in terms of reporting segments and industries. Thank you, Paolo and good morning. F irst, the organic growth overview for Q4. If we take it regionally first, we continue to see good growth in Asia, Middle East and Africa. South America declined on a tough mining comparative, but is growing excluding that and China continued to grow in the quarter, despite a slower overall economic backdrop. North America delivered solid growth overall, despite us exiting some lower margin defense contracts. Western Europe remains the weakest region, especially Germany, the Nordics and the UK with the region registering only slight growth overall. By segment, discrete manufacturing shows a good momentum still, with the exception of automotive, where we have seen some slowdown over the last six months, largely reflecting tougher comparatives. T his is being offset by good growth in general manufacturing in electronics and aerospace markets. Power, energy and mining had a good quarter and those segments, we think, have good momentum going into 2024. We continue to see a weaker construction and surveying demand particularly in developed markets and especially in Western Europe, although this is overall being mitigated by good growth in reality capture. Construction markets outside of Europe continued to grow during the quarter. If we move to Geosystems Enterprise Solutions, we saw revenues of EUR 675.5 million in the quarter and that represented organic growth of 2%. EBIT margin of 30.9% was slightly down on last year, driven by currency translation and transaction effects. By subdivision, Geosystems saw 3% organic growth. This was driven by good growth in mining, reality capture, geospatial content sales and our software platform. Together, they represent around 45% of our divisional revenues and the positive development here offset the weaker development we saw in our surveying and construction products during the quarter. The Safety, Infrastructure & Geospatial, we saw a continued decline during the quarter, with good momentum in public safety, offset by our decision to exit some low-margin service contracts that we took in the Q1 of last year. This drag is expected to be less significant in Q1 2024 and after that we will start lapping easier comparatives would expect to get back to growth. For Autonomy and positioning. We continue to see very good momentum, especially in precision agriculture and the marine segments and we expect that to continue going into this year. On to Industrial Enterprise Solutions. IES delivered revenues of EUR 759.8 million in Q4 and that represented organic growth of 7%. The EBIT margin of 31.2%, that increased significantly compared to last year. That reflects good product mix, operational leverage and as Paolo said, the payback on our savings. Manufacturing Intelligence achieved 7% organic growth in the quarter and as I said, they had good growth across most segments and geographies, including China. Orders also grew in the quarter, at a similar rate to revenues, o ur backlog is relatively unchanged coming into 2024. For the ALI division, we saw good growth right across the product suite and especially for design and engineering software, cybersecurity software and SDx Asset Lifecycle Information Management platform. On to the next slide, new divisional structure. As Paolo mentioned, we're gonna move to a new divisional reporting structure from the next set of quarterly results. Here we show the five divisions and the key end markets that they serve. The only change to the previous divisional breakdown under which we reported organic growth is that we've moved the Hexagon Mining business from Geosystems to Autonomous Solutions. It was previously called A&P and this is better to capture synergies across our positioning on autonomy technologies, as Maria described in more detail at the Capital Markets Day. Next slide shows historical performance by quarter for the new divisions. We broke out full year 2022 at the Capital Markets Day. H ere we add the progress that we had by quarter through 2023. Organic growth by division is as we previously reported, with the exception of Geosystems and Autonomous Solutions, which has been restated due to the transfer of Hexagon Mining. The restated quarters also allow you to see the seasonality across the year in the different divisions, with the Q1 normally being the weakest from a margin perspective due to lower volumes and Q4 the strongest. Two exceptions to the normal pattern that I would flag from last year. Firstly, in ALI, they had a stronger than normal quarter of perpetual license wins in Q1 2023, which helped the margin somewhat and secondly, Geosystems, which, as you can see, has seen some margin compression, by quarter as we went through 2023, as volume growth slowed and because it has a more significant drag on currency than the other divisions. W e hope that helps with the modeling. The IR team are available to help with any additional questions you have on the restatements and with that it's over to David. Thanks, ben and in the financial review, I would like to take you through some more detail of the strong performance for Q4 and full year and that we've already alluded to, touching on the areas of importance we discussed at the CMD for delivery of our long-term financial targets, in particular, in terms of EBIT margin progression and cash conversion. Starting with the Q4 income statement. Stepping through the sales bridge, sales of EUR 1,435 million gave a reported growth of 2%, negatively impacted by FX of -4% and with structure of 1%, giving an organic growth of 5%. Gross margin improvements delivered a positive uptick of 30 basis points. Adjusted operated earnings grew in line with organic growth by 5%, which resulted in a 70 basis points improvement in the adjusted operating margin percentage to 30.5%. In the earnings before taxes, excluding adjustment line, interest expense of EUR 49 million versus the prior year of EUR 18 million, resulted from increased interest rates driving the dilution. The adjustment line includes an equivalent EUR 29 million for PPA amortization and LTIP costs are running at EUR 18 million versus 13 in the prior year. Taxes being 18% in line with prior year, bring us down to an EPS of EUR 0.118. Moving on to the Q4 profitability bridge. Unlike the prior two quarters, FX doesn't give a dilution on overall EBIT percentage delivery in the quarter, it's a minor accretion. This is despite a currency translation of EUR 55 million on sales, with a corresponding EUR 24 million EBIT impact at roughly 45%. This is because of the net transaction, which was a positive, with a current year loss of EUR 10.5 million versus a prior year loss of EUR 20.5 million. Translation movements are driven from currency devaluations to the euro of the CNY by 7%, the US dollar of 5%, where we have sales exceeding costs and appreciation of the Swiss franc by 3%, which is the reverse. The structural element being predominantly the acquisition of Qognify, Hard-Line and Project mates, net of the disposal in the SIG division, delivered an accretive 41% margin. Similarly, the organic element, which includes the portion of the savings from the rationalization program for business and growth, delivered 40% margin. That bridges the 70 basis points improvement to 30.5. Moving on to the full year income statement. Sales were EUR 5.44 billion, representing a reported growth of 5%, again, negatively impacted by a 4% FX and structure two, giving organic of 7% for the full year. On the full year, we delivered a solid gross margin percentage improvement of 70 basis points to 66.1. Adjusted operated earning growth of 5%, with a full year adjusted operating margin of 29.4% versus 29.3 prior year and in the following slide, I will show the FX impact in this comparison. As we have seen each quarter, interest expenses are drag versus the prior year and on a full year basis, this was EUR 155 million versus EUR 39 million, impacting the earnings before taxes of excluding adjustments. Within the adjustments, the main difference year over year, being the Q3 rationalization program of EUR 198.7 million. Taxes were at 17.8% versus the prior year of 18.3%. This brings us to an adjusted EPS of EUR 0.43, 2% below the prior year. Moving on to the full year profitability bridge, the magnitude of the dilution of the negative currency development is clear. Currency translation impact of EUR 180 million on sales had an EUR 81 million effect to EBIT, which again, is 45% and the net transaction was a further negative EUR 20 million, with a current year loss of 24, minus a prior year loss of 4. Translation movements are driven by the same currencies I mentioned in Q4. Structure from the acquired business in the first year of consolidation delivered above group margin of 33%, with the balance of the organic growth at an accreted 42%. The important conclusion being that the dilution from currency is offsetting the impact from the organic leverage. T he reported operating margin only increases by 10 basis points, whereas the neutralized for currency impacts, it would have increased by 100 basis points. Moving on to the gross margin. We discussed the importance of the long-term positive gross margin percentage development for the group during the CMD presentation at some length as it correlates strongly with the EBIT margin improvement. The Q4 at 65.5% versus 66.2%, was a continuation of this theme and cemented a strong annual improvement, reaching 66.1% versus the prior year of 65.4%. The drivers of this being the software mix, innovation-led developments and increased operational leverage. In the next slide, we go to cash flow, which shows a broad and material improvement, with a stronger operational cash leverage at 8% than the EBIT at 5%, due to the increased add back from depreciation and amortization. In conjunction with a marginally reduced net investment level, cash generation post-investment improved by 15%. The cyclical improvement in working capital gave a release of EUR 69 million versus the prior year build of EUR 76 million, which resulted in a cash conversion for the quarter of 103% versus a prior year of 61%. The impact of the strong Q4 being a full year cash conversion of 80% versus the prior year of 72%. Including cash, taxes and interest payments, operating cash flow before non-recurring items was 105% above the prior year. Moving on to the next slide, working capital. In Q3, we discussed the cyclical nature of working capital and in particular, the ratio to sales, the intention to remain below the 10% level. We saw in Q4 with the positive impact of the release of EUR 69 million, the ratio dropped to 7.9, down from 9.5 for the prior quarter. Looking at the constituent elements, receivables and prepaid, though an increase is a positive contributor, as despite the strong invoicing in the Q4 through very good collections, we only increased by EUR 33 million, with DSO dropping a couple of days between Q3 and Q4. With the strong shipments, we saw a reduction in inventory as expected and DII is now a similar level to the prior year. Coupled with the usual Q4 increase in deferred revenue and accrued expenses, it was a positive impact on the cash in the quarter, contributing to the strong cash conversion. My final slide is highlighting our progression to date on the planned disclosure change we've discussed and Ben has already taken us through the new segment information that is new in the quarter. I would like to close my section by reiterating the Q4 was a strong performance from both an EBIT and a cash perspective and cemented a strong 2023 for the group as a whole. Thank you, David. As we have seen, we're having good growth momentum led by innovation and all the efforts that we've been putting through the last years into building a portfolio that is as future-ready as possible. I want to now discuss with you a couple of examples, not only of innovation, but also of how commercially we combine these solutions to go and gain ground and deliver return on investment for our customers across divisions. Starting with slide 22 and 23, where we see examples of our incremental investments in terms of having a cloud-first, cloud-ready portfolio. In slide 22, for the construction market, where we go and develop new applications on our digital reality platform, HxDR. This is where big data coming from our sensors and third-party sensors get integrated that users can share data and go and make the very best planning and design decisions for their own customers. In slide 23, an example of how we are expanding our offering with Nexus. Nexus is our cloud platform for the manufacturing market that has been launched a couple of quarters ago, with good adoption in terms of number of users, new applications that have been deployed onto the platform, including Nexus Compute, that has just hit the market. Nexus Compute allows designers and analysts to deploy simulation tools for finite element analysis and go and compute on the cloud, accessing on-demand HPC access, having enabled consumption-based licensing for more flexibility, more scalability and ease of use. Talking about commercial successes, in slide 24, an example that comes from our collaboration with Yanmar. Yanmar is a manufacturer of equipment for precision agriculture, with global operations, extremely keen on innovation, extremely keen on safety and sustainability of its operations. Yanmar has selected Hexagon as their lead partner when it comes to accurate GPS antenna receivers, but also correction services and that enables to bring a next-level productivity into their operations. We've talked about the growth of our autonomous solutions divisions. Agriculture has been a big part of that growth into Q4 and the full year 2023. Moving on slide 25. Ma'aden is one of the fastest-growing mining operations in the world, is a pioneer in Middle East and again, very committed to technology, to innovation, setting standards and driving safety and sustainability of its operations. This is another example of how we approach the market with a vast portfolio of solutions that are software-led. From blast movement, to simulation, to monitoring, to fleet management, machine guidance and operator alert system technologies, we blend sensors with software and analytics, to take to the next level our customers in terms of safety, predictability and productivity of their operations. In slide 26, an example that comes from the world of construction. PERI is a global leader, more than 9,000 employees in 70 countries. They're extremely good. They're market leading when it comes to formwork technologies, scaffolding technologies, 3D construction printing. They're very much committed to an open BIM approach that they can go and combine these digital technologies, share data across applications and with their stakeholders. In here, using our BricsCAD technology, we have displaced an incumbent and PERI utilizes our kernels and technologies to develop proprietary applications using our CAD technology. An example of more progress when it comes to our cloud deployment comes from the world of SIG and public safety in particular. This is a market that has had relatively slow levels of adoption for cloud technologies in the past, but that is clearly accelerating. When you think, for instance, of this example coming from Massachusetts in the U.S., you have in the state multiple regional emergency communication centers with their own databases and their own priority. The moment they decide to rip and replace their current system to deploy a cutting-edge, SaaS-first technology like the one that Hexagon has developed over the years, OnCall Dispatch, then they start to see the opportunity for more productivity, data fluidity across these centers and leveraging their support infrastructure. We've talked about automation earlier. In slide 28, an example of commercial success coming from KLM. T he Dutch national airline with diverse fleet and tough challenges when it comes to minimizing downtime preserving very high quality standards. KLM works with Hexagon to improve gas turbine inspections. This is where we use robotic technologies and cutting-edge inspection techniques, combined with our software for the analysis of the data and that technology allows them to dramatically reduce the 4-week downtime that has financially vast consequences on them. W e are deploying with KLM our technology called Presto, which is a series of modular automated inspection cells, way more productive than conventional techniques. Last but not least, we've talked about the good growth of the asset lifecycle intelligence divisions, not only in Q4, but for the entirety of the year. We have seen in previous quarter a couple of examples of diversification of our offering in the context of medical, in the context of semiconductors and other industries. This is an example coming from Legoland in Korea. This is a theme park and actually, this resort is the largest Legoland theme park in Asia. T hink about not only the complexity in terms of the number of assets, not only the complexity in terms of the amount of visitors that Legoland Korea needs to manage, whose flows need to be optimized, but also think about the complexity of maintenance routines in a context that needs the highest quality requirements. Legoland Korea has standardized on our enterprise asset management technology, again, to increase the levels of availability and reliability for rides and facility and at the same time, keep on reducing the cost footprint when it comes to maintenance budget, when it comes to service costs. In conclusion, moving on to slide 31. We're very pleased with the growth momentum that we see in the group, that in Q4 was apparent not only from a shipment perspective, but also from an order intake perspective, pretty much along the same lines. We're pleased to having delivered financial year 2023 with an organic growth performance that is at the top end of the 2026 financial plan. That growth has come with good leverage. Despite the headwinds, we've seen a continued gross margin expansion and a continued EBIT margin progression. Cash conversion for the full year came in within the 80%-90% guidance that we also commit to for the financial year 2024. All in all, we are excited about 2024. We come from a couple of years of accelerated investment in automation and cloud technology. From an R&D perspective, we're excited about the development roadmaps that will see new technologies hit the market within the next 12 months. From a governance perspective, we have announced exciting news at Capital Markets day and the board has approved a proposal for a dividend of EUR 0.13 per share to the AGM that allows the group to still have headroom when it comes to investments going forward. I'll leave you with a couple of reference dates in terms of IR and opportunities to learn more about our divisions in slide 32 and thank you very much for your attention. Operator, can we now go to Q&A, please. Thank you. As a reminder, if you wish to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, press star one, one again. Please stand by while we prepare the first question. Your first question comes from Joachim Gunell at DNB Markets. Your line is open. Please go ahead. Thank you very much and good morning. I n Q3, you were very helpful with Q4 commentary. C an you just help us here with what you can say about how Q1 has started across the segments and the organic growth trajectory in relation to the 5% we saw today. Hi, Joachim. Good morning. Look, we come from a good momentum into Q4. I don't see substantial changes into Q1. When it comes to 2024 overall, we stand behind the guidance of 5-7 percentage points of organic growth. What we do see is that also the areas and the markets that are having more muted demand are well offset by innovation that is coming to support our operations in those areas and are offset by good growth when it comes to the mining market, the agriculture market, the design portfolio that we have in ALI and overall manufacturing. understood and on the cash flow, side obviously step, a clear step up here today. Directionally, how can we think about the cash conversion 2024 versus 2023. You said the ambition was to be in the interval but will this be. How should this progress across the year and what are the delivery mechanisms here. A s Paolo said, W e do expect to stay in the 80%-90% range, we do have obviously some phasing in the cash flow and Q1 tends to be a weaker cash conversion because of the reversal of accruals that we're used to seeing. B roadly speaking, we intend to stay within that 80%-90% range. Clear. Final one. You've said before that we're coming out of this peak investment cycle with a lot of new technology to be introduced here in 2024. Would you say or anticipate that new product launches will be a, call it, meaningful growth driver already this year. And can you say anything about what you are the most excited about. Look, w e have a good balance in between, life cycle management and technologies that come in to re-stimulate, CapEx that offer substantial value to customers and to, to try and stimulate a reshuffle of the portfolio that existing customers have new applications, new incremental value drivers. W e are excited because we see that in the space of a couple of years, we're gonna be able to, substantially reshuffle our offering and and try and grow, not only within the share of wallet of the existing customers but also open up new fronts. Thank you very much. Thank you. Please stand by for your next question. Your next question comes from Sven Merkt at Barclays. Your line is open. Please go ahead. Great. Good morning. I have a couple of financial questions. First, I was wondering if you can give us an indication on how capitalization of R&D should develop in 2024 and what increase in related amortization we should expect and then, secondly, it would be great if you could comment what is behind the impairment in Q4 and then finally on the cost savings, you're already at a very high run rate of EUR 95 million more than half what you're targeting. From here, how should we expect this to continue to progress towards the target. Will it be gradual. Will it be front-loaded, back-end loaded. Any comment would be helpful. Thank you. Sure. J ust I'll start with your capitalization rate. W e talked about at the Capital Markets Day, that we currently stand at a high level of capitalization because of the new innovation projects and platforms that we're currently working on. We certainly don't expect any increase on that capitalization rate. We expect it to stay at that level or tick down slightly. In terms of the impairments, we had a fair value adjustment and earn out release and the impairments relate to us reviewing the various assets, be it PPA assets or capitalized R&D related to those acquisitions and that was a value of around EUR 37 million, offsetting any gain that we saw on the earn out releases. The third question related to the run rate for the restructuring. As you say, we moved very quickly and we have come up to a run rate of EUR 95 million, with EUR 20 million in the quarter. We would expect the incremental rate to slow down. Obviously, we said that we wouldn't deliver the full savings until the end of 2024, beginning of 2025 more like EUR 4-5 million incremental quarterly increase would be at the expected level on those. P erfect. That's clear. Maybe just one follow-up on the impairment. You said that splits between PPA impairment and also capitalized R&D. Can you give us the breakdown between the two, roughly. I don't have that to hand now, to be honest. N o problem. Thank you. Please stand by for your next question. Your next question comes from Daniel Djurberg at Handelsbanken. Your line is open. Please go ahead. Thank you, operator and good morning, Paolo, david and ben and congrats to strong growth on cash conversion. I was wondering first, if you look at the geosystems and if you can comment anything on the book-to-bill and on the organic growth trajectory when we enter 2024. Should we expect it to stabilize around it was 1% in the quarter organically or—but, or, or will you have this innovation and new product that will be supportive. Any comments on Geosystems would be great. Thanks. Hi, Daniel. I t's probably the most difficult one to predict because you don't have as big a backlog in Geosystems as you do for, say, MI. It'll take Geosystems probably until the second half of the year before they start hitting easier comparatives on surveying tools and construction products and this is what we've seen far this year, our best estimate is that we see a similar trend that we've seen in the last six months continued weakness in surveying construction we aim to offset that with growth in geospatial content, in reality capture sensors and then the software businesses we have like Bricsys and forth. Perfect. Thank you and if I may, can comment a little bit on the outlook on China. It was, still a solid organic growth quarter. It was around 5%-7%, something. If you can say anything about China per segment, entering 2024. T he Chinese team has had a great performance again into 2023. We're all very proud of what they have achieved. They've grown from a very strong base, our manufacturing intelligence portfolio by roughly 10 percentage points, which is impressive. We see a continuation of growth within manufacturing. We have more than enough reasons for that to happen. Keep in mind that our end markets in China have evolved over the years. We have more of a softer presence also in manufacturing. We have a deeper presence in electronics, we also have more variety in terms of the end market to go and capitalize on and still we see good growth and adoption when it comes to e-vehicles, both on the battery inspection and on the chassis inspection. W e look forward to welcoming as many of you as possible, in Shanghai, in Qingdao and in Shenzhen, visiting BYD, for you to really experience firsthand how our technologies are utilized. What we do expect to see and we're working towards, is an acceleration of adoption when it comes to the ALI portfolio and the Geosystems portfolio within 2024. We have slightly easier comparatives. We think that the commercialization of EAM, that now is commercially active in China, is gonna be a net positive to open up new industries and in Geosystems, we have done a lot of work, from the middle of last year, to go and reshuffle our go-to market in terms of distribution, in terms of direct channels, in terms of localization of products. W e look forward to that paying off. Thank you. I'll go back to the queue. See you in China. Thanks. Thank you. Please stand by for your next question. The next question comes from Hemal Bhundia at UBS. Your line is open. Please go ahead. Morning, Paolo, david and Ben. Hemal Bundia from UBS. Thank you for taking my questions. Just, just a quick follow-up before I ask my second question. But on China growth in the quarter, was this predominantly driven by software or product growth. And I'll follow up with my second question after. Thank you. The growth was across the spectrum and we've had a very good simulation year in China within the manufacturing portfolio. The portfolio that we have with DNE and our CAE tools is a very good fit for the depth of automotive relationships that they have. S oftware has done well, services are growing and there's good demand in commercial aerospace. W e expect that to continue into 2024. Thank you and I just wanted to break down the IAS margin performance in a bit more detail. Was it fully driven by demand from enterprise quality management software, or was the rationalization program the key driver there. Thank you. C an you repeat the question. O n the IES margin performance, was this poorly driven by the rationalization program savings, or was it the, enterprise quality management software transition. T here were several factors. We've had a good quarter in terms of perpetual licenses. We've worked with the teams on the restructuring plan. A multiplicity of factors, but to me, the most important element there is that we see sustained rates of adoption for not only EAM, which is important for us. EAM has grown close to 10% throughout the year, with a SaaS bookings growth that probably doubles that within 2023. T here's good adoption and we have internationalized EAM and their sales operations with success, we hope to see an acceleration there. But I also think that in terms of the cybersecurity portfolio, in terms of SDx and the cloudification of the design tools, the teams have done very well and we see an increased adoption. We see growing shares of wallet in existing customers. Thank you. Operator, next question, please. Yes, your next question comes from Nay Soe Naing at Berenberg. Please go ahead. Hi, good morning, everyone. Thank you for the questions. Mine is on the more, the EBIT margin target that you've set and reiterated back in December as well and if we go with the definition of the targets set on the, if my calculation is correct, you ended the year 2023 at about 27.2% EBIT margin and to hit the target of over 30%, you've got about 2.8 percentage points to go. It'll be really helpful if you could help me understand where that 2.8% of margin expansion to hit the targets will come from. Thank you. Y our calculation is pretty good. PPA is about 2.1, It's reason it's 2.1-2.2, it's around that number. I understand where your calculation came from it's exactly as I alluded to at the CMD, really. The business model that I see it is that we will continue with the growth levels that we've forecasted at to have a margin expansion. That growth margin expansion with a controlled level of selling expense, maybe a slight tick up on the net R&D related to the increase in amortization. Good implementation of control on the administrative costs through restructuring will bring us that incremental improvement. It's in run rate with what we've historically achieved. J ust to confirm, did you say it's gonna, it will come from both growth margin expansion as well as the operational efficiency improvements from the rationalization program, for example, you've announced in 2023. Yes. All right, thank you. Would you be able to share the split that you're expecting from between growth margins and OpEx. No. All right, thank you. I'll get back in the queue. Please stand by for your next question. Your next question comes from Olaf Cederholm at ABG Sundal Collier. Please go ahead. Yes. Hi, everyone. It's Olf from ABG. A couple of questions from my side, maybe looking at R&D investments. Overall, if we look at Q4, the growth in R&D expenses and investments in tangible assets slow down a bit and should we expect the growth rate of both of these items to slow when we go into 2024 and maybe even grow below the sales growth. What's your thinking there. W e think that when you look at it by division, we have done the lion's share of the step up in investments for both organic and recently acquired software, portfolios. W e're happy with where the R&D spend level is at and yes as David said before, we're gonna try and take down the, amount of R&D that we spend as a percentage of sales and we enter I said before a year that is gonna be very important for us in terms of, releases. W e have to do all of the right things, not only in terms of development, but also commercialization and engaging with customers and sales enablement and digital sales tools. W e really look forward to seeing good adoption on those technologies. Excellent, thanks and just to follow up on the organic growth discussions that we've had already and mix. In Q4, it looks like you're now we have divisional data, thank you very much for that. That ALI and Autonomous Solutions with the higher margins are actually are also growing the fastest within the group. Is that development expected to continue when you look into the next couple of quarters. Do you think these divisions will continue to be the fastest growers. It's a safe assumption particularly in the first half of the year. ALI is a highly recurrent, business model, T here's a lot of focus on growing, consumption, usage and users within existing accounts and there's a lot of focus on growing new bookings, especially when it comes to saas and I really think that we have, we can go and produce an acceleration in growth when it comes to asset management, because it can be a foundational technology that we go and sell across many different industries, right. And when it comes to autonomous solutions we're excited to see not only autonomous transportation also agriculture pure automotive, contributing to that growth. I t's a double-digit growth that comes as a result of all of those efforts and then, as you've seen from our slide 11, mining is part of autonomous solutions. We see good opportunities in terms of technology synergies between the teams and mining has seen sustained double-digit growth rates for the last couple of years and we think that that's a safe assumption in terms of continuation into 2024. Very good. Thank you very much. Thank you, Ola. Please stand by for your next question. Your next question comes from Victor, sorry, Viktor Trollsten at Danske Bank. Please go ahead. Thank you, operator and good morning, everyone. Just to follow up on Geosystems, in Q3, you said that the BLK new generation series added around 3% growth to that division. Could you help us with that number for Q4 also, please. Hi, Viktor. the overall Reality Capture portfolio had good growth in the quarter. It was double-digit. W e don't classify it as new products now because it's lapped itself. T here's not a percentage we can call out for new products. The new BLK has lapped itself and the BLK Pulse hasn't really started ramping up yet. I wouldn't say new products added much to the quarter, but overall Reality Capture grew at double-digit rates. T hat's clear. But just thinking around the call, It underlying yield systems which are breakout without mining. I'm just underlying organic growth was negative in Q4. Is that correct assumption or- Yes W ithout this new. A s I tried to say in the comments, you've got around. If you look at it on the new disclosure basis, so ex mining, you've probably got a third of Geosystems in the quarter that grew very nicely, right. Reality Capture, software businesses that we have, the geospatial content business, they have very good momentum, as they did in the prior quarters and they are offsetting the weakness that we see on surveying tools and construction products. That's been running for over six months now and that will be our expectation. That will continue for the next couple of quarters before we start hitting easier comparatives on surveying tools and construction products in the second half of 2024. No, exactly. No, that's, that's super clear. Thank you so much. Thanks, Viktor. Thank you. Please stand by for your next question. Your next question comes from Daria -loana Sipos at JP Morgan. Your line is open. Please go ahead. Hi. Thank you for taking my question. Just thinking about the sequential development in organic growth by regions that you saw in Q4 versus Q3, while Asia accelerated, both India and America has decelerated about five percentage points. Can you please comment on what the drivers there are. You mentioned some weak infrastructure and construction markets in Western Europe specifically and there's the exit of defense contracts in the Americas. But just, trying to understand a bit more about the dynamics and what you expect into 2024 by region, please. W hat we've seen, as you say, is in developed economies, a gradual slowdown in growth throughout 2023 and there are puts and takes on the different segments, but that is the overall macro trend and we'll have to see how that develops as we go through 2024. Western Europe is the weakest region at the moment, particularly countries like Germany, the UK and the Nordics. North America looks better. W e'll have to see how the pending election impacts things we do see better momentum in, on the construction side, in segments like infrastructure. Still a good development on discrete manufacturing. T he drag from the exit of those defense contracts will disappear as we go through 2024 and then as Paolo said we feel confident in the outlook in China, rest of Asia and then emerging Europe, Middle East and Africa, based on what we see at the moment as we go into 2024. Great. Thank you. Please stand by for your next question. Your next question comes from Mikael Laséen at Carnegie Investment Bank. Your line is open. Please go ahead. Yes, Good Morning. A couple of questions. I was wondering if you can say something about the sales trend for Geosystems, hardware or sensors, compared to the services and software side. S ure, Michael. The software business within Geosystems is not as large as the other divisions. It's products like Bricsys, Agtek, Project Mates that we bought earlier in the year, which isn't organic yet, that's in there as well. Collectively, they're probably growing high teens to 20% by the individual product. W e have very good momentum and then, obviously, the hardware side is if the overall business is growing at 1%, the hardware side is in aggregate less than that. F air enough and then another one on the margin for the SIG segment. When I look at the quarterly track record in 2023, the margin for the segment is relatively low, 18%-19%, much stronger in Q4. W hy was the margin so low in the first half of 2023. And when you also discontinued less profitable contracts and how should we think about the trajectory going into 2024, also considering the strong backlog you have for OnCall contracts. T hat division, that was the point of my comment. This breakout gives you the seasonality in these divisions and SIG is one of those divisions that has a weaker margin at the start of the year and then it builds through the year as revenues increase on the same cost base. It can fluctuate a little bit because sometimes they'll finish projects or meet milestones that will drive release of profits, but generally, it will have that same seasonal profile. The exit of the low margin contracts has been a constant theme throughout the year, I t doesn't really affect one quarter relative to the others. They are low-margin contracts, they would have helped the margin, but obviously, we've had less volume going through the overall business. I t's probably not had a huge impact and then, as we get to Q4, SIG is one of the divisions where we've done it probably benefited more from the, the restructuring actions that we've taken. That definitely boosted the Q4 margin and that will carry over into next year. Thank you. Thank you. We have one final question and that comes from Balaji Tirupati at Citibank. Please go ahead. Balaji, can you hear me. Please go ahead. Your line is open. Apologies, he doesn't seem to be able to hear us. Let me bring on the next questioner. The next question, or the final question, apologies, comes from Magnus Kruber at Nordea. Please go ahead. Hi, Magnus here from Nordea. Thanks for taking my question. Could you potentially help us add a little bit of color, how you expect the cost savings to come through as a proportion across the different business areas in 2024. W here do we see more or less of the savings coming through. That would be very helpful. Magnus, hi, good morning. We have done the lion's share of the restructuring efforts, as Ben was saying, within the SIG division, within Geo Systems and within MI. We have done most of the work on addressing underperformance areas and simplifying those organizations and now we're gonna move into more structural type of activities to go and build shared services, particularly within MI and Geo Systems. The reason why we have worked particularly on those divisions is the nature of how those operations have grown over time. As David was saying, we have a good run rate in terms of the savings that we've realized in Q4. We're gonna probably slow the or reduce the incremental amount of savings coming into the P&L from this moment onwards, but we have a lot more to work on throughout 2024. I t's gonna be relatively gradual, but we have change management pretty much in all of the divisions. Brilliant. Thank you so much for the detail. Thank you. Thank you. There are no further questions, over to you for closing remarks. T hank you for all of you for listening in. Again, very pleased to have closed out the year well and looking forward to 2024 and seeing as many of you in the near future. Thank you.