Ladies and gentlemen, welcome to the NIBE year-end report. Today, I'm pleased to present Eric Lindquist, CEO, and Hans Backman, CFO. You can ask any questions at any time in the Q&A box that you can find on the bottom left-hand side or press zero one on your telephone keypad. Mr. Lindquist and Mr. Backman, please begin. Good morning. Thank you very much. Good morning. We're going to have the usual split between myself and Hans. I start, Hans dig into the financial numbers more precisely. I hope you have a nice winter day out there, wherever you're sitting. We have a snowstorm in Markaryd. We've gotten 25 cm or 30 cm snow between 12:00 A.M. last night and 9:00 A.M. this morning. It's still snowing, it's been minus for three consecutive weeks here in Markaryd, which we think is pretty great for business on top of everything. Starting with our business environment for the full year. We all know that it's been a very, very different year, we are quite pleased to announce that it's been a strong full year for us despite the COVID-19 that everyone is talking about. I guess we're all exhausted about hearing that COVID-19. We rather call it the situation just to avoid that name. Nevertheless, of course, we've been affected to some point with the large variations in demand from quarter to quarter. In the end, it seems like we have landed fairly successfully. One driving force behind that is, of course, that sustainability has remained relatively strong even during this pandemic. What has also hit us during the latter part of the year was, of course, the Swedish crown being stronger. We had some headwinds during the four or five last months, hindering, of course, the pure organic growth a little bit as we present it typically to you. When we look at the growth and results and so forth, we have continued to grow 7%, predominantly and actually driven by acquisitions. Our result has also improved both the operating one and the margin. One thing that we like to describe precisely now, Hans going to come back to that, is of course, the SEK 353 million that's disturbing everything. All the figures that we're going to present from now onwards, except one slide, they do not include those SEK 353 million, that's more of a bookkeeping or auditing phenomena. When we acquire companies, as we typically do, we run amount initially and then an earn out amount. The result assumptions in the future, we, of course, base the theoretical purchase amount on, that is being evaluated every year. Now during 2020, we have come to observe that there are some companies that has taken a hit, that's why the considerations that we had planned on going to be a little bit less. Funny enough, that means that the same amount is going to be a plus effect in the profit and loss statement. That's, of course, not a true operational phenomenon. That's why we've taken that apart in the slides that we have ahead of us here now. Acquisitions, you've seen that the first six months we had a number of acquisitions, and later on it's been a little bit slower. That doesn't mean that we don't have prospects. Of course, it is a hindrance that we can't see people or can't travel as we've done in the past. It's important also to note that it's not come to a standstill at all, but it's a little bit more difficult, we can say, to approach new companies particularly. We once again like to, should I say, appreciate our own management model. That might sound like we pat ourselves on the shoulder, the decentralized model has proven once again to be very, very valuable and hard to beat. It would be impossible for Hans and myself, and a few others here in Markaryd to stand and scream to all the 120 companies, and you better be cautious. It's impossible. That we have instilled during the years that everyone is running on their autonomous way, that has proven to be so valuable once again. We are very appreciative to our managements out there, and naturally also the employees. The slide here, that is just showing the fourth quarter and the full year with those SEK 353 million included. We just skip that. That is just what you see in the report. The true numbers, of course, operationally, that they are on the next slide, where we came out with a decent fourth quarter on SEK 7.7 billion versus SEK 7.1 billion the prior quarter 2019. The year, of course, ended almost SEK 2 billion ahead of last year. A healthy growth, mainly acquired, but nevertheless, the organic growth was still there, but of course hindered again a little bit by, or quite a bit by the headwind currency-wise. The gross margin is also on the right side compared to last year, both in the quarter and in the full year. Of course, very pleasing to see that we were able to come in on operating margin well ahead of last year, both in the fourth quarter and in the full year. I can't see that we have been at 13% ever before in our history. We've been between 13% or 12% and 12.9%, but I think 13% is record, if we are to say that. We are quite pleased with the results. Of course, we would have loved more organic growth. Then we were sitting here in March, April, May, I guess we all had that experience. We were pretty pale, and where is this going to end? Now we see that the second part of the year, after all, was pretty decent. We just look at the bar chart that we typically look at. You see the same seasonal phenomena that we have had for so many years, that every quarter beats the previous one. We see here the second quarter is slightly below the first quarter, and that is very much a pandemic effect. It took off again as of mid-June, late June, and the fourth quarter is back almost at full steam. If we look at the result bar chart, it's the same structure. There we see that we were able to cater for the margin or the profit in a pretty decent way. Although the turnover went down, the revenue went down slightly, we were able to present the profit after financial items. That was quite a bit better than the quarter number one. The graph is just showing that we're very solid in development. Looking very quickly into NIBE Climate Solutions, o f course, there we've had a stable growth, both in revenue and results, as you've seen. We have had some acquisitions, so we've carried those out and quite successfully. They've all given us certain features. TIKI Group, of course, is a large water heater producer in Serbia, where we haven't been geographically so well represented. Now we have a large producer on a cost-efficient platform. ÜNTES in Turkey, we've been looking at those for a number of years, ever since we bought Rhoss in Italy, because ÜNTES, they are closely related to Rhoss in Italy, and now we have a good platform between those two companies. ÜNTES, mainly known for ventilation and air conditioning equipment. VEÅ, they are producing larger boilers for industrial use. We feel that that could be combined or will be combined with our own Osby Parca operation. Nathan Holding came in very handy, l arge outlet for heat pumps and underfloor heating in the Netherlands and WATERKOTTE in Germany, of course, again, broadening our presence in Germany, also came in very handy. That's the business area where we've had pretty good market conditions in Europe, with some exceptions, the whole year, whereas North America has been a little bit different. Net sales, all in all, up some 9%, and the operating margin has taken a considerable jump with some 18%. There, of course, we are very pleased to announce that the acquired companies, they have really contributed very successfully to that growth. Of course, they came in, ÜNTES, for instance, and VEÅ and also Nathan, they had decent margins, and with their home markets increasing, it's been a pleasure to see how they have developed. All in all, of course, that has taken us up to 15% on the operating margin level, and it's quite a while since we were there. I think it's four or five years since we hit that 15%. Some other acquisitions in the past, they have not helped us immediately. Now we can say on a combined basis, we're up at the 15% where we have a chance to be if everything is running decently. Keep in mind that the market conditions, although we say it was decent, it wasn't ideal. Of course, Climate Solutions has also been hit by the pandemic. Element got hit very early by the virus being so present in Asia. Of course, Europe came, and later on, North America. They've been practicing an extremely good management style to compensate for orders drying up, then compensating with cost and still maintaining the most important functions. Two segments that haven't really been hit that hard are the heat pumps and semiconductors. Of course, they've been carrying the results and the volumes during more or less the whole year. We haven't had that many acquisitions here. We had one in Italy in the middle of the year. Being a sub-supplier with all our customers being exposed in such a different and varying way, we are very pleased to again announce that we've improved revenue, margin, and results. I think that's a extraordinary performance for the management and the people in that business area. Of course, we did not hit the 10%. We improved our operating margin from the previous year from 8.9% to 9.1%, and sales is up. Here we have an organic contraction, but still we demonstrate our strength by coming out with an operating margin that is still above last year at some 6%. Jumping over to Stoves. I think Stoves were individually hit the hardest in the springtime where it almost came to a standstill during some weeks. Just for the other two business areas, demand picked up. In this particular business area, we've had two factories that have been hit very hard also by the governmental, should I say, rules saying that we had to close both in Britain, we had to close in British Columbia and in Canada for certain weeks. The market came back, and again, the management respectively, again proven to be very, very flexible and strong. I dare to say, we dare to say that we have not been hurt, in any fashion so far by people leaving us or we having had a lot of layoffs in important staff. There were some people that were laid off or when demand diminished, we of course came out with some fewer on the operational level. I dare to say at year-end, we are up and spinning like we were at this time last year. Improved revenue, operating results, and operating margin. It's almost, I shouldn't say unbelievable, but it's very impressive to sit and look at the figures as we do here in Markaryd when we all saw the train coming in towards us in early spring. Here again, the operating margin has improved from 10.5%, and Stoves, as we said so many times, they haven't had a year since we got listed some 23 years ago below 10%. That in itself is a very good sign of strength. Just in summary, we can say now that we are on a SEK 27 billion level and we are two year into the term heading for SEK 40 billion. Of course, we had SEK 18 billion, then we arrived at some SEK 22 billion, then last year 2019 was SEK 25 billion, and now it's SEK 27 billion. We are very determined to hit the SEK 40 billion. When we see this graph, this graph contains both the Lehman Brothers crisis, the bank, financial crisis in Sweden 1993, and now the pandemic. Anyone looking at this graph has to observe that there's tremendous strength and determination behind our growth. Looking at the development of our profit after financial items, it's pretty much the same. There you see, of course, that it continued neatly in profitability in 2020 compared to 2019. Very consistent. Of course there we had some 21.6% average growth, whereas on the revenue side, you might have noticed that we had some 18%. We are not quite at a 20%. We have not given up. We are very determined, very positive. The world is certainly changing towards sustainability. That word is used too much, we believe. I think we all have gotten signs saying that we have to be cautious with our planet. Otherwise, something bad going to happen to us. We feel that we are correctly positioned when it comes to saving the planet. We cannot save it but w e can add a little bit to betterment for a climate and a lesser abuse to the climate. Again, we talked about seasonality. I don't know if we've shown you this graph before, but it's amazing if you go back all the years since 1997, the seasonality is so consistent. The first quarter is between 21%, 23%. The first six months, they add up somewhere around the 45%, 46%. Then the third quarter accumulated there, we're up around 70%-72%. Then fourth quarter is always the strongest. It's the same thing on the result side, but even more pronounced. Of course, the first two quarters, typically some between 35% and 40%, and then the two last quarters, during the year, that's where we really make a lot of money. I think this graph is good when it comes to analyzing NIBE. It's very very stable, although we are so differently presented now geographically, and the products are changing or being modified, we still have the same pattern. Very interesting to look at that. When we take the three business areas and just compare them, where are we? Almost the same pattern as before. Climate Solution, almost 2/3 of sales. NIBE Element, a little bit better than a quarter, and the remaining NIBE Stoves. We will look at the result line on the operating level, of course. With Climate Solution having some 15% operating margin, they represent almost 3/4 of our results. NIBE Element some 18%, and then Stoves 9%. That picture has pretty much remained the same for a number of years. Here we see that Europe and the Nordics, they have grown slightly. North America has dropped back a little bit, and particularly on the Climate Solution side, we haven't had that positive development there. That's one reason. Also on the Element side, we have some headwinds, particularly in the first six months. I think with that, I hand over to you, Hans. Did I - n ow it took 20 minutes. Was that too much? I'll try to be quick and leave some room for questions, of course. I'll just jump into Climate Solutions. Thank you, Eric. As we said, it's been a very different year, of course. Maybe the least for Climate Solutions in the sense that it's been the most stable business area for us. One thing that the pandemic has shown is the sustainability trend, and that it continues, and that people have become more and more aware of this. When we say people, it's not only the average person like us, so to speak. It's also the politicians having increased incentive programs both in Europe and in the U.S., where the tax credit was prolonged for another couple of years. This has led to this business area being fairly stable for the year. We finished off the fourth quarter in a rather stable fashion, although that was also the quarter where the currency hit us the most, the translation effect into Swedish krona. The quarter as such grew by 9%, driven by acquisitions. As I said, the currency hitting us more than in the quarters before. A stable gross margin, an operating profit increasing by close to 23%. For the full year, we are seeing a growth in the business area of 9.2%, getting very close to SEK 18 billion in turnover. On this generating an operating margin of 15%. What we've seen underlying that is, of course, that the Nordics have been stable in general, maybe with the exception of Norway. That mainland Europe has continued to be very good for us, whereas North America has been slightly weaker. That's really what you see on the next slide as well, the pie chart, where North America now represents some 21% of sales. They were up to 27% a year ago. Mainland Europe there was 42% a year ago, is now 49%. Also the Nordics playing a slightly smaller role, so to speak, in the average picture. It's a reflection of Mainland Europe really taking on now the sustainability trend. In terms of profitability over the years, it's a stable trend, you can say. We are far above the 10% operating margin target, and of course, that is the target for the group in general. Once we've reached it for a business area or for a company for that matter, we of course do not want to fall behind, a t the same time allowing ourselves to invest, of course, in product development and acquisitions. Here, rather around the 13%-15% operating margin level than 10%. Jumping quickly over to Elements. This is, as you know, our most global business area, both in terms of geography and the exposure to different industries. As such, it has, of course, been exposed to the pandemic. As Eric said, starting out in China, then coming to Europe, then over to North America. It's been a very volatile and shifting demand over the year. HVAC and semiconductor continuously very strong. The volume segment being much weaker, but coming back at the end of the year, not the least in the white goods industry, with a lot of people obviously spending time at home and either replacing because they're worn out or because they want new products. The automotive industry at crossroads, as we've said before, and parts of the industry actually in decline. Having said that, the overall trend of electrification is definitely continuing, which is a positive outlook for the business area in general. It's been here a little bit of a struggle for demand and capacity and staffing in the factories. I think we've managed that quite well, coming out with a solid result. The business area definitely picked up in Q4, grew by some 4.5%. You may argue that it was all acquired, but again, the currency has been working against us in Q3 and especially in Q4. Gross margin has come up to 24.2%, and we were able to grow the profit here by some 21%, almost reaching an operating margin just below the 10% mark. For the full year then, we've grown by some 4.5%. Organically a decline, as Eric said before, but still keeping the costs very much under control and being able to land in an operating margin of 9.1%. It's been a very good cost control. Also, as we mentioned in our last report, a very well-timed acquisition through Therm-X, both being a sizable company and of course in the currently very attractive semiconductor industry. In terms of distribution of sales, the picture is very much like it was a year before. North America, just around 40% or just below Europe, exactly 1/3, and then the Nordics around 17%, and others then being Asia and Australia at some 14%. In terms of profitability, this business area has, of course, when we look back ever since 1997, not been at the 10% level at all times. It's been a consolidation process for us actually to step by step adding on businesses to build a global and tier 1, tier 2 supplier. Ever since the restructuring cost was taken in 2005, which is the bar going downward, so to speak, the trend has been on an upward trend. We were above 10% a couple of years ago, which partly was driven by a one-off business. The last two years, we've been able to pick up again, and I think it's more than possible to reach the 10% and stay there. Last but not least NIBE Stoves. It's really been a roller coaster ride for our Stoves business area. Q1 started out fairly stable, a slight decline in the latter part of the quarter when the pandemic became more evident. With a huge decline in Q2, just to be met by an even stronger recovery in Q3, which then has continued in Q4 with a very strong organic growth. Here, we've had some tough actions in the sense that factories were forced to be closed in the U.K. and in Canada. It's also been a juggling to meet resources and to keep staff in a good fashion. In terms of the numbers, we grew sales by some 11% in Q4. Given that we also here have currency working against us, it's been a very strong fourth quarter, which has made it possible for us to increase profit up by some 12%, reaching an operating margin of some 17%. For the full year, we came in at 10.5%. I saw that in one of the previous pictures it pointed to 11.1% last year. That was actually a small error in the presentation. We apologize for that. Last year we came in at 10.1%. We beat last year, this very difficult year, which is very pleasing to see. It's of course, been a matter of very good cost control. When the demand really kicks in as it did in Q3 and Q4, that has good effect on our numbers. In terms of sales per geography, the picture is exactly the same as a year ago. Europe being close to half, an even split you can say between North America and the Nordic countries. Looking at the profitability over time, this is the only business area that actually always has been above 10%. It was then very pleasing to see that in this difficult year where our own projections at the beginning of the year pointed somewhere else, that we actually were able to meet this. Summing up a little bit then, when we look at the performance between 2016 and 2020, it truly is a robust performance. Being able to increase sales by some 7%, let it be that it came very much from acquisitions, but still being able to achieve this is very pleasing for us. Of course, it's not quite where we have planned to be, but it's a solid performance. Especially on the profitability side, where we were able to increase it then without the revaluation that Eric talked about before, with some 16%, bringing us to an all-time high operating margin of 13%, which continues all the way down to the net profit, which also increased equally much you can say. Over these years we've basically, or very close, we've been able to double in sales and utilizing the same business model that we've had all along. We were really up for a test this year, whether or not our business model would prevail, and I think it's fair to say that it did. Just a quick look on the balance sheet. The total assets have not changed that much. The one big item we have there, just like every year basically, is the intangible assets, which of course is a natural result of us acquiring companies according to all accounting rules and procedures. We, of course, do the impairment tests needed and have very good headroom regarding that. We also have rather good headroom, so to speak, in our financial current assets, meaning our cash, which puts us in a good position for further acquisitions. The one item that might stick out a bit is on the equity and liability side, and it's the equity, which basically is the same as last year. Of course, it's been improved slightly, but not as much as one might have expected given the good performance of the results. This has to do, again, with currency effects. This comes from, if you look into the report on the other comprehensive income, this is the exchange differences that we get when we translate our foreign operations into the Swedish krona. It's an inevitable effect that hits us and every industrial company, you can say, with foreign subsidiaries. The hit, if you like, in Q4 was quite large, SEK 1.5 billion, and on a year-to-date basis, SEK 2.3 billion, which then goes against equity. We should not forget that in 2019, the effect was close to SEK 800 million plus, and the year before, SEK 1.2 billion plus. It's over these two years, close to a zero-sum game. Cash flow, just a quick comment on that, has been very strong, up some 20% from last year. What really has generated a tremendously good cash flow is the change in working capital. We've come down there from some 18% to slightly below 13% over the year, which has generated some SEK 900 million, which makes the operating cash flow after investments twice as high as a year ago. This despite the fact that we have increased our investments over the last couple of years. It's fair to say that we might be a little bit low on the working capital given that sales have over exceeded expectations in some parts of the organization in Q4, making our inventories lower than they usually are. Just on the next page or next pages, a few comments on the key financials. I think it's fair to say that we are in a good position when it comes to financial stability in general, and also when it comes to being able to acquire companies going forward. I mentioned the cash just a little while ago. If we look at the net debt to EBITDA, it's down to 1.1x or the 1.2x. That's actually 1.15x if you would use another decimal. A strong equity assets ratio, although it didn't improve that much due to the currency effects, but overall strong. The only item maybe that sticks out a bit is the return on equity, where we still have the target of 20%, which is a result of us, of course, being strong on cash and equity assets ratio. You saw the working capital there being just below 13%. Overall, I think it's been a very solid year, not the least given the situation that we all have been experiencing and still are experiencing. I'm sure there are questions regarding this. I think, Eric, you explained the SEK 353 million quite well, so unless someone has a question on that. All right. Again, I apologize for the 11.1% there on the sold side. It was 10.1%, no, because of 2019. I think with that, we have some 25 minutes roughly for questions and hopefully some decent answers. Try to get finished by 12:00 P.M. Just shoot, please. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. We have a question from Viktor Trollsten from SEB. Please go ahead. Your line is open. Thank you, operator. Yes, Viktor here from DNB. Hello, Gerteric and Hans. Thanks a lot for taking my questions. Just firstly, what you're seeing in terms of geographical development within Climate Solutions, you obviously are facing quite a hefty FX headwind, especially in North America. Still excluding that, it seems that organic growth was quite negative in Q4. Could you talk a bit about that development in North America and how that has developed during the quarter? I think that for some reason, it's been fairly decent in Europe, and we can't really say that we have exactly all the answers there. When you look at the news or watch the news and listen to radio, closedowns, closedowns, closedowns. Everybody's talking about that. It's surprising to note that when it comes to heat pump installations in Europe, they've been running fairly equally as before. Of course, private individuals or private families, there are quarters when a person or installer will come, but they do not close their doors, so they're fine. They just leave the utility room, and they can install the heat pump. I think it's been more dramatic in that sense in North America, also on the commercial side. Perhaps the closedown or lockdown, people have taken that more seriously, or they've been more scared. That's the only explanation that we really can give. It's very pleasing to see that the big markets in Europe, they are moving in the positive direction despite all the bad news. In North America, people have been more anxious. I guess that's the two answers we can give on that question. Okay. No, that's clear. My second question is on the same topic. Just adjusting for FX also in the Nordics within Climate Solution, it implies a clear improvement in organic growth year-over-year in Q4. Would you say that demand is accelerating in the Nordics from maybe increasing replacement demand? Well, when it comes to the Swedish market, we saw that the statistics came out from our heat pump association, and giving pretty neat improvements there. I think it's important to know that it's one additional company participating there now. The market is slightly up, but not with the percentage as indicated. I think that the fellow running the heat pump association there, whatever his name is, should have put an exclamation mark saying, "Well, due to the following, the market has not really grown, but there is one more company leading figures." Certainly, in Finland and Denmark, we can say that the market is really developing or has been developing well. In Sweden, a small increase, but not the increase that you saw on the statistical figures. In Norway, it has contracted. Norway, again, is almost the exception in Europe, where they have had a very hard lockdown, and that has taken down sales considerably. To say two very positive markets. The whole market still positive but not tremendously growth. Norway, very negative. I think that's summary of the Nordics. Okay. No, that is clear. That relates to Q4 isolated also, I suppose, not for the full year? Well, it's pretty much the same pattern. Norway closed down very early or locked down, whatever they call it. Also, we follow, of course, Finland and Denmark doing the same, but that has not affected the operations in such a way as it has in Norway. They've gone further. They've been much stricter. Okay. There's been a difference the year and the quarter. Yeah. No, that's clear. Thank you. Just a final question from me. We've heard recently about refrigerant prices starting to increase, which I guess triggers some memories back to 2018, where at least I believe your profitability took quite the toll from higher purchasing prices. Could you talk a bit about what you're seeing in terms of that and maybe overall raw material cost inflation and your expectation on margins for 2021 from that perspective? Well, I think that the refrigerants, they might go up a little bit, but I think that it was more of a shock, 2018. I think everyone in our industry is now working in a very professional and determined way towards a solution where you're going to be well below or at least on the level of 675 GWP. If now the refrigerants will go up a little bit, we do not see the pattern of three years ago at all. Of course, we already have the steel goes up, and I think that you also have to consider that things have gone down. We don't have a crystal ball, but we look at it, I think, very rational. We shouldn't overreact, we believe. Of course, 1% or 2% or 3% in price increase, and some say, "Well, it's going to increase to 10%." We do not believe that. We think that companies have been suffering on the raw material side, and they're trying to get back. We do not foresee a dramatic price increase as it looks right now for the year, if that's what you're asking. Yeah. Okay. Thank you very much. I'll get back in the line. Thank you. Mm-hmm. Thank you. We have a question from Pam Liu from Morgan Stanley. Please go ahead. Hi. Hello. Thank you very much for taking my questions. The first question is that the German Heat Pump Association posted a 40% increase in volume in 2020. Would you be able to share with us your market share in Germany or the growth you have achieved roughly in the region, particularly given the very positive market backdrop? My second question is regarding your M&A focus in 2021. How much would you like to spend? Any specific product or geography? You didn't ask about my shoe numbers and my shirt size. You should be asked both. Market share-wise in Germany, they are not disclosed. We are one of the leading ones, and we are following the market well with our brands. That's the answer to that one. As far as in acquisitions, of course, neither do we forecast acquisitions. We have very precisely described that 10% as an average per year should be acquisitions, and 10% should be organic growth. Of course, 2020, there we arrived almost at 8% through acquisitions. There, we almost fulfilled our prophecy. On the organic side, it was lesser, naturally, and coupled with the currency, what we call a headwind, that we've talked about so much now. We are ready. Hans said we have a very strong balance sheet, so we are ready and we are discussing with a number of potential, of course, targets, if you like to call it that. Nothing has happened. We are, as before, on our avenue towards the SEK 40 billion, and we are very pleased to know that we have all the ammunition needed for relatively large acquisitions as well. That's all we can answer you on your questions there. Okay. Okay? Cool. Thank you. Yeah. Thank you very much. Just squeeze in one more on the margin sustainability. You already talked about in the previous answers about the managing the raw material price impact. Obviously, in this year, the good margin is also a result of productivity and cost control. Do you expect those to continue, or would you expect some of that to unwind as market pick up throughout the year? The productivity and the cost control, that's in our DNA set up. That's something we've always been monitoring. There is always room for improvement. We call it always more and never enough. That's our saying. Whatever you do, you can always do it better. The day you slacken, you start to lose. You should never be satisfied with your productivity. That's the headline of all our companies. As far as price increases from our suppliers, we've always said that one should not overreact. Of course, we always have the possibility of increasing our prices, but we like to monitor and observe what our suppliers are doing. They can't just push a tremendous amount of price increases upon ourselves without a reason. We don't necessarily like to push higher prices into our customers' faces unless it's totally necessary. That's why you don't observe a month or six weeks. Of course, if prices, if economy were to go up, eventually we also would have to monitor our prices. Would our budgeted purchase prices not match the actual ones? That's just common sense. We would love to see the economies starting to spur again. In that sense, once volume really comes back, it's just name of the game that sub-suppliers might increase their prices a little bit, and the final producer, like ourselves in this particular case, of course, we're going to benefit from the larger volume. If that's not sufficient, we might have to monitor prices, but that's not the first thing we're going to jump on. All right? Yep. Thank you very much. We have a question from Gustav Österberg from Carnegie. Please go ahead. Hello, everyone. I have a short question here on pricing. You've detailed a lot here on the cost side, but you talked a little bit about pricing pressure in the Q3 report as helping margins a bit. Could you elaborate on the origin of that ease pricing pressure? Is it still present? Is it related to a higher mix of new models, or is it changed competitive behavior? Could you give some more flavor on that, please? You're talking now about in general, or you're talking about any particular business area here? In particular, Climate Solutions, please. Well, I think that in Europe, given the market, we haven't noticed any real price pressure. It's been fairly civilized, if we can call it. Of course, from time to time, not so much on our side, but we've seen some shortages of components. We've had some short experiences ourselves when our sub-suppliers have been missing out on some components in their turn. We haven't been suffering that much. On the price side, we can't say there's a price war on heat pumps. Of course, there are different categories of heat pumps. The lesser value added in some, but that shouldn't be interpreted like the price pressure. Of course, it's like having different car models. Mercedes has many different ranges of prices, and I think it's, again, fairly civilized within the different ranges or categories of heat pumps. All right. Perfect. That's clear. Thank you very much. We have a question from Max Frydén from Danske Bank. Please go ahead. Thank you so much. I have a follow-up question on Germany there, which we talked about already. You had a strong market growth, but also had tax credit application going more than doubling. My question relates to the dynamics in the German market during 2020 and going into 2021, if you can share something on it. The question is basically, did you see that the restrictions on the COVID-19 related pandemic held back the market growth, or could the installers operate as normal in 2020? Yeah. We believe, of course, the percentage is important to talk about, but if you compare to the total numbers of heat pumps being installed, it's still not that dramatic. I think just to give you some sort of reflection on that, we believe that there are some, just on the residential side, some 700,000 heating devices installed per year in Germany. Now that the German market is approaching some 130,000 heat pumps or something like that, if the statistics would be fully comprehensive, we are still lagging below 20%. Of course, those installers installing gas burning boilers and gas or oil burning boilers, they're still there. Of course, they have to be re-educated. That's the game for our task. All manufacturers. We should not make heat pumps so complicated that it's a science in itself. It should be relatively easy to install a heat pump, and that's what we are working on, that's what our colleagues are working on. It shouldn't require a different squad of people installing heat pumps. It should be, just like in Sweden, there are no oil-burning boilers installed anymore but there's still approximately the same number of plumbers or installers, and they have been re-educated over the years. That's what's taking place in Germany as well. Of course, from time to time, you might say, "Well, I called a plumber and he couldn't come for eight weeks." That's not the new phenomena. That could have happened also in the past. Okay. I tried to make it sort of a leading question, seeing if there will be an acceleration that goes in 2021. I understand that. I think it's important to not to be over-optimistic. We've been waiting for Germany, and we've been, should I say, talking to analysts and investors for some 25 years, talking about the excellence of heat pumps, and that Germany one day would arrive at some 120,000, 130,000, and then arriving up to some 180,000, 200,000. Of course, that's the target that we have. Considering that the new construction in Germany of the residential homes, let me just take it with a pinch of salt here. It's like 90,000, 100,000 homes per year. If they were to be equipped with a heat pump, 100%, then you have 100,000, and that would be included in the 700,000, roughly, per year. We don't foresee that the new construction going to be terribly much larger. It's a matter of how do you attract the present owners or the vast majority then of owners of gas boilers and oil boilers. That's the name of the game. How do you come in there and convince them now you're going to buy a heat pump rather than buying another gas burning boiler. Right. That going to take time. That's why we are very optimistic about Germany, but we are also realistic. We don't say, "Well, in five years, we're going to see none of the gas boilers installed there." We don't believe that. It took a long time here in Sweden to go through that process. Yeah. At least 1/3 of the market are going to be heat pumps in the foreseeable future. I guess that's more precise than that, I think it's difficult to beat. No, that's optimistic. It's more than 200,000 then. Again, having half of the market with gas and then the lowest gas prices in Europe. Yeah. Yeah. I hear. Yeah, that's a strange thing. We talk about sustainability. Everybody's talking about sustainability. Everyone talks about saving the climate. All of a sudden, we start to say, "But then, gas prices are low." All of a sudden, the consumer or everyone forgets that, why are people still buying gas then? When we should try to avoid it, we should go electrical, everyone is saying, the politicians. All of a sudden, you return very primitively, not yourself, but a lot of people return very primitively to that, but now gas prices are down, so that could be difficult for heat pumps. We could dwell for hours on why prices on gas and oil are extremely low. Why are they allowed to sell that devastating media to private consumers? It's like selling alcohol for on SEK 1/L, knowing that it's very bad for you. There you have a much higher price on liquor to trying to make it livable. We don't understand really how people reason or politicians reason in many instances. It should be so clear to everyone we should just stay out of the gas and oil, period. Now in some countries, they try to even boost it. We are talking about the Nord Stream now, which is a big political debate. How could that phenomenon take place? Talking about Paris Treaty and everything. I'll stop to preach now, Max, I'm sorry. Yeah, you are. I don't want to interrupt, but maybe we should leave the floor for another question. I just want one last one quickly, if I may. All your competitors, all the good ones at least, are German or Austrian. Have you seen any increased competition here in terms of either existing players on price or mid-market, lower-end players coming into your premium segment in the German market? Just quickly, if you can. No, in many ways, I think Northern European players are, if we dare to say that German and Sweden would be in that category. I think we're all looking for quality, and people like to acquire or buy long-lasting equipment. I think that we have the same philosophy in that sense. We think it's good to have German competitors, if we put it that way. They bought Thermia, and they bought IVT, and we bought CTC. We have a very solid platform, and they have a solid platform. We bought Alpha Innotec in Germany, and we have the three main contenders there. Plus, of course, Stiebel, they're four. Now we have NIBE, we have Alpha Innotec, and we have WATERKOTTE. I think that we're all up there fighting with each other. Again, if I may use the word, in a civilized way. Okay. Thank you. We have a question from Jacob Edler from Handelsbanken. Please go ahead. Thank you, operator, and thank you for taking my questions. I just have two quick ones here. You clearly described that the earnings have been boosted by the revaluations of these earn-outs. Are you able to give some flavor to which acquisitions these primarily are related to? My second one is just a general question on costs. Is this a sustainable cost level going forward? Have you been able to take out some costs here permanently during the pandemic? Where do you anticipate that costs will return to more normal pre-COVID levels? Thank you. Absolutely. I can jump in and take the first question. We don't disclose the individual companies in this. The revaluation that we do of these additional purchase prices, that's really done on a yearly basis. Typically, they come out with much smaller numbers, which doesn't lead to us having to disclose them separately. Since it was such a big number this time, we said for fairness reasons, we would like to display it with and without. I think what's triggered it a little bit more this year was the COVID in a way, where an owner had a put option, which was utilized when the market looked rather dark, so to speak, which led to this. With hindsight, I think that that owner would have liked to stay on board. That's as far as we go. Okay, that's very clear. Thank you. Yeah. We have a question. On the cost level, just the second question, we can combine our thoughts here. It's like communicating vessels. If the order intake is a little bit less, of course, you save, you start to look at your cost. Of course, we've been traveling less. We have been participating lesser in shows and stuff like that. There is also sold less. The organic growth is not tremendously high. Of course, we haven't really skinned ourselves saying, now we have the same money, so we can present a decent result. I think we live very naturally, not damaging ourselves for a long-term target. We know where we have to be in a certain number of years, and then there's a milestone of SEK 40 billion. If we would slacken now in R&D, and if we would slacken in marketing, it would be devastating for the long-term growth. Of course, there is a correlation between lesser saved and then your specific courses with cost. Yeah. I guess there's nothing strange with that. No. Yeah, I think that's very clear. Thank you so much. That was all for me. Thank you. Thank you. We have a question from Karl Bokvist from ABG Sundal Collier. Please go ahead. Yes. Thank you. Hi, Gerteric. Hi, Hans. One question from me, really. You have [geothermal], you have air-water, exhaust air. Given the ramp-up of the different markets out there, the speed of technological development, would you, in the future, consider entering the air-to-air segment, or it will continue to be and will remain a lower price point market, and it's more focused on price rather than quality and reliability compared to the kind of usual product segments where you are in currently? Yeah. It's a market that's been, I shouldn't say bastardized, but perhaps I also already mentioned a word. There's been a lot of actors in there, and it's difficult to really penetrate that market in a profitable and successful way. That's what we consider, n ot producing that category of product, w e wouldn't exclude any possibility of that kind. Of course, the drawback on the air-to-air, which perhaps I shouldn't criticize it, but it's a relatively expensive device when you use it for air conditioning. Talking about sustainability again and saving energy, that's a little bit of a question mark. As you say, it's also a device that you do not heat or cool your home with completely, whereas you have single units in the living room, in the hallway. It's a little bit of a different concept, where we talk more about hydronic systems or ducted systems, if you talk about North America, heating and cooling your whole home at the same time. It's more like solitary devices that they represent. We wouldn't exclude that but n ot a high priority on that. Understood. Thank you. Just on that subject, are there similar segment differences in the commercial space where you have actively decided to focus on this particular part of a commercial market rather than others where you see it's a bit more commoditized, in lack of other words? No. I think that in the commercial market, there is more the customer categories. What we are in right now is, of course, apartment buildings and hotels in North America. We are not so strong in hospitals, for instance. That doesn't mean that we exclude that. It's just that the profile of the CCG in Oklahoma, they have not been particularly, let us say, pointing out hospitals. There are other categories of producers. That's more a marketing philosophy and not so much of a pricing difference. Of course, to say that we would be 100% supporting all the segments within commercial ventilation and air conditioning, that would not be true. We haven't stayed away. It's more that you have to concentrate on some of them to be successful there. Understood. Thanks for that. Yeah. Well, we appreciate all the questions. I hope that we haven't had any hide and seek game. Some questions, of course, we could answer, but we don't want to answer. We hope that we've been as clear as we possibly can be. It's always very educating to get your questions, and it's a nice challenge to have you out there. Please continue to call in and to challenging us with your questions. With that said, Hans? Well, thank you very much. I look forward to speaking to you again on the next quarterly call. Exactly. Next time, it's May. We hope that the snowstorm has stopped a few hours before then. You all have a good day, and thank you again. Thank you. Bye-bye. Bye-bye.