Welcome to the NIBE Q4 presentation for 2024. During the Q&A session, participants are able to ask questions by dialing star five Welcome to the NIBE Q4 presentation for 2024. During the Q&A session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the CEO, Eric Linkvist, and CFO, Hans Backman. Please go ahead. Thank you very much. Good morning, everyone out there. Good morning. And we're going to follow the same procedure as usual. We have a number of slides that we're going to go through, and then we open up for questions, of course. And as usual, we have until noon, and we would appreciate if there would be only two questions per individual to allow as many as possible to put questions to us. With that said, let's dive into the first slide, which is very much a summary of what you've seen in the report, of course. It's a year characterized, we say, of several challenges. I mean, we were hit with a very, very slow market in the beginning of the year. But as the year has been rolling on, we've also seen clear signs of improvements. The market has not totally recovered, of course, but we're looking at a combination of clear signs and still some cautiousness out there. The last quarter is really confirming what we've said all along, that as the year goes by, we're going to see a gradual improvement. The fourth quarter comes in fairly close to what we anticipated internally. There's been a combat all year with the inventories, of course, out there. There's been too. They were too big in the beginning of 2024, and they've been digested over the years. That's been a little bit difficult to really determine what is the demand really at the end, at consumers' level versus the production level or the producers' level. I think as we go by now, we're going to be in more of a direct link between the end consumers and the production output. The action program, of course, has been one very dominating during the internal months and quarters. We came out with an idea of some $1.95 billion. When we now summarize everything at the end of the year, we are up at $11.52 million. So perhaps we shouldn't pat ourselves on the back, but it was fairly accurate. The savings on a 12-month rolling month basis is slightly better than we anticipated in March-April when we lined everything up. Interest rates are falling. They started to fall here in Sweden before the summer holidays, and it continued. Of course, that is having an overall positive effect for the economy. Whether they're going to continue to fall, well, it's very difficult to really predict, but that's up in the air at the moment. And then we've had a positive impact from revaluation of additional considerations, and I'm sure we're going to come back to that. That's on a $597 million. And that's also a reflection of the difficult 2024, which has, of course, affected the tranche two and three in many instances since we are not fully owners of a number of companies out there yet. And then we expect a gradual improvement in sales. We've seen that sales gradually have come closer and closer to what it was like a year ago, and now we foresee a slight improvement in sales going forward. And of course, which is not said only today, our ambition is to be back at operating margin levels within the historical range, and I'm sure we're going to get a number of questions regarding that. Just very quickly, the figures themselves for the quarter and for the year, it's a quarter of like SEK 11 billion in Swedish crowns with a margin, of course, adjusted for these one-off effects of SEK 1.1 billion Swedish crowns and with a margin of 10.2%. And that's kind of very important for us to just notice that we are back to a double digit, at least one quarter here now. And on a full year, it's like 8% operating margin and a full revenue of some SEK 40 billion crowns. And that also gives us quite a courage for the future. And we must say that we really would like to say thank you very much to all employees. There have been a tremendous, should I say, effort on all employees' behalves to come out with results like this. And we are really motivated to move forward now to improve the result and sales and really demonstrate our strength. And the typical bars that we indicate, of course, they visualize the downturn in sales. And when we come to the profitability, it's the same thing. But the promising thing is that at least it's almost flattening out now on the rolling 12 months. And looking at the profitability, we also see that it doesn't continue to dive as it did before, but rather coming to a break. And we are very determined to continue to encourage that break. If we look very quickly at each respective business area, of course, Climate Solutions is very much a reflection of what we said initially here, that the demand has been pretty good on the heat pumps, but the manufacturers, including ourselves, have not really seen that because the inventories, they've been digested by the distribution chain. The exception might be Germany, but as we said in Q3, we expected that to be digested over the three coming quarters. And now we indicate that it's another quarter that should also be down at more acceptable levels. And we also see, which is promising, that the applications, just particularly in Germany, are coming up to a healthy level again. When it comes to the commercial segment, there we see that it has a better resilience. That's something we would like to, of course, address in the future, where we like to become stronger in that particular segment. It doesn't have the same; it's not as vulnerable to interest rates as the residential side. Action program, fully implemented and full effect impact in 2025. I'm sure we're going to come back to the details regarding that. Here again, same thing, a gradual improvement in sales. And of course, try to be back at our historical level when it comes to margins. We're going to show you some graphs of how it's been looking or how it looks in the past, coming back to that when Hans is presenting the numbers more detailed. Just very quickly there for the year, the full year, of course, it's a drop of SEK 5 billion. We come out with a margin that is just south of 10%, which is unusual for us, particularly when you have figures like 2023 to compare with. From now on, we are just very motivated to come back. If we look at Element, they have had the same issues because they are affected, of course, not only by the heat pump industry, but also by the white goods sector. They also have a time lag, we can say, that when inventories are built up at the distribution chain, also the manufacturers typically would have inventories built up, which means that they are going to come out of this crunch a little bit later. There are very positive signs in other sectors. I mean, the commercial vehicles and the semiconductor, that is really motivating to be in that. The low construction, of course, is never a good sign. So that has a softening effect, of course, on not only Element, but also on the climate solution and stoves. Here, also a very determined attitude towards the action program. Everything is implemented and full effect 2025. And we also expect here that sales will gradually improve as 2025 goes on. And we see also in the coming slide here regarding sales, of course, that we've taken a hit. We've lost almost SEK 1 billion. And of course, when you lose that amount of sales going from 11.9% to 11%, then of course, you're bound in the short term to lose both profit and action numbers, but also in margin. So that's also something we're going to correct as the next year or this year comes about. A quick look at stoves. So, I don't dwell too much before the questions are coming in, and Hans is able to present his number of slides. It's pretty much a copy of the other two business areas. We can say that now we are back to a more seasonal pattern because stoves have always been very much seasonalized. The second half year, in particular, the third quarter, the second part of that, and the fourth quarter have always been the strongest ones. We believe that we are now going back to that. We see that the fourth quarter is coming out in 2024 in a relatively decent fashion. If we just have a quick look at that, of course, we've taken a hit here also. We've lost quite a bit of sales from 4.7%-3.8%. And again, of course, the result in actual numbers are lower, and also the operating margin. But at the same token, we feel that we've done a very strong determined job to cut down costs where we can cut down, still leaving the group with a very strong muscle where it has to be strong with the product coming out, products coming out, the new ones, and also the marketing departments, respectively, that they have to be alert. And no one is waiting when you have a downturn for new products. They have to be there when the tide turns again. A little bit of history. If we look at our growth pattern, of course, the 2024 comes down as one of the few years where we had lesser turnover than the previous year. And perhaps we say internally that 2024 was almost extraordinary, but that's no excuse. We have fallen down with some SEK 6 billion. And I think the pattern of the graph itself indicates that that's our DNA setup, expansion and growth. And sometimes you take a hit, and we are very determined to continue now to prosper again. And of course, the profitability when you're hit with such a sudden downturn in demand, then of course, the profitability also takes a hit. So that's something we are going to curb or just a cure as soon as possible. A few more slides before Hans kicks in here. The distribution of sales is pretty much the same. Climate Solutions is typically at the 64%-63% level. And the other two fairly much in line with history. When it comes to profitability, it's also fairly close to history, perhaps a little bit stronger for Climate Solutions because they came out with relatively seen better margins than the other two, although all three had weaker margins. The geographical spread at my last slide here is, of course, pretty much the Nordic home. That's our home turf. And then the rest of Europe of 44% and North America is 31%. I'm sure we're going to come back to that regarding what's happening in the world. So we're fairly pleased with the geographical spread compared to where we've come from many moons ago, having a fairly good distribution of sales. Hans, I'll leave over to you. I spent 14 minutes. Perfect. Thank you very much. Yeah, I'll continue and jump into the numbers immediately, so to speak. If we now look back at Climate Solutions, we had sales here in the fourth quarter of 7.2%, which then is a decline of 6.4% compared to last year, so to speak, but that is one of the signs of improvement, actually, because if we look at the quarterly development during the year, we had a decline to start with of some 25% and then 20% and then 17% in Q3, so coming in at 6.4% is, of course, a clear sign that things are moving in the right direction. And also, if we jump down a little bit into the income statement there, looking at the gross margin, it's step by step coming back. It came in at 32.1%. And as you can see, for the full year, it was at 31.6%, which means that we've gradually improved that over the year as well. And then, of course, in combination with the savings program that has been kicking in gradually during the year, we did come in here at a profit of 12%. And if we look at the full year, I mean, we had this decline of 17% altogether coming down from the 31.4, basically down to the 26. It's, of course, a dramatic drop. And if you compare the year before, we had an increase of some 20%. You see the swings that we have experienced this year coming from 2023, the best year ever, to 2024, one of the toughest ones. But also here, we did come in overall at 9.3%, not where we're used to being, as Erik said, but after all, given the year as such, a decent performance, I dare to say. If we look at the, excuse me, the geographical distribution of sales, the North American piece of the pie there has actually been a little bit larger this year. It was around 22% last year, showing that North America has had a better resilience altogether in the economy, but also our commercial program is bigger over there, which then has led to that pie chart being a little bit larger than normal. But we're pleased with the distribution as such altogether. If we also look at the history a little bit for Climate Solutions in terms of operating margin, this is how we have performed ever since we went public back in 1997, 10% being the group's target, so to speak, which is not the target for Climate Solutions. That's where we want to be between 13%-15% in that range. And as you can see, where we have been also for quite some time, but with these years sticking out a little bit, 2022 and 2024, with this almost crazy demand we experienced at that time. Moving on to Element. Element has, as Erik said, also, of course, been affected by the decline in the HVAC industry and also semiconductor industry, but not so much in the remaining segments, having followed more the general trend overall in the world. So here, we've seen a decline of some 6%-7% for the full year, whereas the growth in 2023 was around 9%. So also some drastic swings, you can say, but not as drastic as in climate solutions. And the full year here, we came in with an operating margin of some SEK 630 million, basically an operating margin of 5.7%, also not where we're used to being, but given the difficulties, also a defendable margin, I dare to say. And if we look at the individual quarter, the decline was less, meaning that also here we see improvements over time. In the beginning of the year, in Q1, we had a decline of some 10%. In the last quarter, Q3, there was a decline of 8%. So things are definitely moving in the right direction here as well. And the gross margin is slowly but surely picking up again. So for the fourth quarter, we came in at 6.7% operating margin. Distribution of sales, as we typically say, this is our most global business area where we are present in most parts of the world. Also here, the North America and the other portion there, which basically is Asia, has been a little bit stronger in 2024. The Nordics and Europe, the rest of Europe represented some 48% last year, 44% this year. I'm not talking about 25 now, of course. I'm talking about 24, what we're going through. North America has shown a little bit more resilience there. Also here, looking back at history, we see that we've had a gradual improvement in operating profit within Nibe Element ever since we went through the last savings program there, you can say, around 2007, 2008, making us come in above 10% during several years, which clearly is our target. We have a range, given that we are faced or confronted with various segments throughout the world. The range here is to be within 8%-12%, 8% in tough years, 12% in good years. That's what we're aiming at, of course, and then stoves. Also here, it's. We're coming back to a stability in the stoves area and also this traditional seasonal pattern where Q3 and Q4 are the stronger quarters during the year. Sales here for the full year climbed by almost 19%, whereas they almost increased by 19% the year before. One should not forget that during COVID, which one would expect to have a very negative effect initially, became very positive in a way because people were at home renovating their homes and we had a very strong consumption. Then the war in Ukraine led to people looking for a stove as an independent heating source. Now it's coming back to a more seasonal pattern. So the full year with these swings, we came in at the 5.3%, also not a margin level we're used to being, but where we at least made a good portion of money during such drastic swings. And the Q4 as well, we've seen improvements in gross margin and an operating margin again in double digit. If we quickly look at the geographical distribution of sales, this has also become a fairly international business area for us with our representation in North America. And that piece of the pie has actually increased somewhat. It was at 29% last year, up to 34%, so some 5 percentage units. And then also here, a bit of a historical picture. The operating margin since 1997 for NIBE Stoves. We've always been proud to say that this is the business area that always has been performing above 10%. That's not where we came in this year, but with the very large swings that we just saw on the other picture. I mean, there was obviously a challenge in there, but we came in with a good profit and are determined to come back here as well. And the DNA setup for us is really to be at the level above 10%. And here, the range that we talk about is between 10% and 13%. Then just a few comments on the balance sheet and we'll come into cash flow also. No major movements here. Total assets amount to around 70 billion SEK. I think it's pleasing to see that the financial current assets have actually increased during the year. Came up from 4.3% in 2023 up to 5.6%, meaning that we've actually generated some decent cash. And I will come back to the cash flow analysis. If we look at the liability side, we've actually increased the equity during the year. And following this revaluation of additional considerations, as we call it or as it's called, we've actually reduced the long-term liabilities and current liabilities, which are non-interest bearing, which are those amounts that are to be paid to companies that we have acquired, but not acquired to 100%. So it's overall 16 companies roughly where we have revalued the amount to be paid. And this is what we do every year, especially in Q4 when we have the full picture for the next year and the coming years where we take in a three-year plan. It's only that during normal years where the swings have not been as dramatic as now, it's been easier to predict the numbers, you can say. But we did have a similar adjustment back in 2020 when COVID broke out and one co-owner, so to speak, decided to cash in at that point instead of staying on board. And that's where we made similar adjustments and had a similar effect as this time. So it's normal business in a way. It's just that the numbers became large due to the very special market. Then coming back to the cash flow that I just mentioned, we've generated from the operating activity some SEK 3.8 billion, which of course is much, much less than the SEK 6.5 almost a year ago. But the change in working capital is much better than it seems in a way. It was negative to SEK 3.9 billion last year, meaning that the net operating activities after change in working capital at that point in time was just below SEK 2.6 billion. And now with this positive effect of SEK 180, it came in just above SEK 4 billion. And then in the last quarter now in Q4, we actually had a positive effect from working capital of some SEK 430 million. So we're definitely making improvements in that area. Investments are continuing, but at a lower pace. Obviously, when we run a savings program, we also try to question each and every investment. But of course, we continue with those or complete those where we see a value in doing so, of course. So overall, a positive change in liquid assets of SEK 1.3 billion, whereas we had a negative 500 last year. So I think that is actually a number that is quite decent. Coming into some key financial figures, I think I will only dwell slightly upon the net debt to EBITDA. As you have seen in the report, we actually have three numbers in there, and it's an attempt to be very clear and transparent in a way. The 3.9% is the accounting when you look into the books, but actually, we should add back to that the change in these additional considerations of some 600, and that leads to these 3.5%, but if we also take out the program, the amount lands at 3.2%, so we think this is quite a decent number and we have the best relations with our banks and have no problems with covenants whatsoever, and overall, the equity assets ratio has actually increased somewhat. Working capital, I mentioned it. We've definitely made improvements in that area. Came in at 22.8% for the full year. An intermediate target is, of course, to come below 20% and take it even further down from there. That's an ongoing improvement process that we are working upon. Next slide. Yeah, you can read these numbers in the report, I would say. Of course, Return on Capital, Return on Equity will move upwards from these levels going forward. Then similar to the pictures we saw for each and every business area, these are now summarized for the groups, our four financial targets, where you can see the grade, so to speak, or where we have come in over all of these years. There you can see exactly how these operating or key financial targets have developed over time. Then last but not least, a summary of the Action Program. As you know, we initially announced about a year ago that the program would cost around SEK 900 million and bring annual savings of SEK 600 million. When we came out with our Q1 report, we had done more detailed analysis and calculated it more in granularity. And we came in there with an estimated cost of SEK 1.095 billion that Erik mentioned before and expected annual savings of some SEK 750 million. And then during the whole year, we've obviously been working very hard with this program and reviewed costs and projects and people in each and every company. And when we now have concluded the program for the full year, and now it's finalized as well, the total costs came in at SEK 1.152 million with expected savings, annual savings of some SEK 800 million. And in the chart below, you have the split per business area. And in terms of savings for 2024, we've written in the report that around three quarters have been achieved on a rolling 12-month basis. And since the program was launched in Q1 and then really kicked in in Q2 and Q3, it's of course been a gradual introduction or effect of the program as we move along. And we estimate that the true effect in the year of 2024 has been around 450, meaning that we have some upside in the year to come. And by that, I think we are through with our slides and we open up for all the Q&A unless you would like to add something, Eric. Thank you, Hans. I had a coughing session in between here, so I have a cold. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. All right. The next question comes from Carl Dienberg from Carnegie. Please go ahead. Thank you very much. Thank you for the opportunity. So could I start asking a little bit on your North American business? I mean, as you pointed out, it has become a little bit bigger this year and trending nicely here in Q4 as well. And I just wanted to ask a little bit, given the new administration and also the production facilities that you have, for example, in stoves in Canada, are you planning to make any changes there given how the communication has been? And maybe the second question is also, has there been any changes in, let's say, your customers behaving following the new administration, or is that too early days, would you say? Well, the second question you can ask right away is too early. The first question, of course, takes a little bit more diving into it. And when it comes to the heat pumps, I mean, roughly everything is produced in the United States. So their customers wouldn't affect it. We have a smaller production up in Toronto. When it comes to elements, of course, there we have big facilities down in Mexico and also in Canada when it comes to stoves. And our attitude here is that we're just going to sit still in the boat for a while and look at what's happening. Typically, our experience is that the currencies, they adjust themselves, not 25%, but to a large degree. And if they're going to be prevailing for a long time, of course, we could always transfer production into the United States. Not that we are planning that immediately, but that's, of course, possible for the stoves. On the element side, we don't believe there's any way back because everyone, well, contenders, they're also producing there. So I think there would be more of the customers that would take a hit. So perhaps we are too cynical when it comes to the attitude here. We sit still in the boat. We're fairly comfortable, but of course, we're going to react accordingly if something occurs. Yeah, yeah, yeah. Yeah. Very well. And then my second question would be on your own inventory development. I mean, I was a little bit curious here because it continued to trend down here in Q4 as well, roughly SEK 550 million versus Q3. And I just wanted to hear a little bit the values or, let's say, the inventory composition now. Are you satisfied with the levels or do you see that there are further potential of reductions here when you're into 2025? Tell you, if I answer yes to that question, that we are satisfied, Hans is going to pinch me. No, of course, it's an effort further down. Absolutely. We are on the way, but we have to bring down inventories further. Absolutely. Okay, very well. I'll stop throwing you back in line. Thank you very much. Thank you. Thank you. The next question comes from Vivek Midha from Citi. Please go ahead. Thank you very much, everyone, and good morning. My first question is just wondering if you could follow up and elaborate around your thoughts around volumes into 2025. So in which markets are you most optimistic in 2025 versus where are you maybe a bit more cautious? It sounds like France, Germany, parts of Eastern Europe. You're thinking maybe a bit softer. By extension, should we think that it's the Nordics where you're maybe more optimistic? Thank you. I think that to answer very precisely on that question, it's not so easy because the digestion, as you call it, of the inventories, they are, of course, a little bit of a hide-and-seek game. How much have we lost on the manufacturers' level versus the real demand? And we estimate that the demand has been bigger out there or better than what the manufacturers have seen. And when now is it going to be a better balance between the inventories at the distribution chains and the end users and the manufacturers? We estimate that to be an improvement at the manufacturers' level at what percentage we can always reason. So that's, I think, the answer to that question. Hello? Appreciate that. Thank you. And just hello? Yes. Sorry. Thank you very much for helpful. And my second question is just again around pricing. What's your latest views and thoughts on pricing? What are you seeing in the market as of now? Thank you. Well, we believe that there is, but not only believe, we see, of course, that when the distributors and so forth would like to reduce their inventories of goods, not necessarily that they have a big turn of, of course, there's always a risk that they're going to cut down prices on that. But that is really not hitting the manufacturers' levels. That's something that has been sold at full price, 2023 or even earlier. And now it's trying to get not rid of it, but trying to reduce those inventory levels. So I think that's mostly where you see price reductions. There's also a phenomenon when refrigerants are now being phased out. And of course, there is a fight against time. Everyone has to be ready at latest January 1st, 2027, with new refrigerants, natural ones. And that means that those machines or heat pumps, for instance, sitting out there in inventory levels with older refrigerants, of course, someone would like to get rid of that or sell it out quicker to allow for more modern machines to come in. I think that's most of the phenomena you see out there. We don't feel that the regular premium manufacturers have been taken into any price war. All right? Thank you very much. Very helpful. Thank you. We lost something there? The next question comes from [crosstalk] Douglas Lindahl from DNB Markets. Please go ahead. Hello. Yeah. Hello, Erik. And Hans. Douglas here from DNB. Two questions from my side as well. I wanted to focus a bit on the gross margin development, especially within Climate Solutions, which is obviously down from the 2023 highs. But you're also down in a historical context. What's behind these numbers and the trend? Well, I mean, when you take a hit, of course, as we've done, all numbers become extraordinary. I think that's a major explanation because we had a very decent setup in 2023. Then demand was phenomenal, and we could hardly keep up with demand until the fourth quarter. So then, of course, all the stars were aligned. And then we were hit with this drop in demand. And we were hit very hard when it comes to the cost structure. We didn't have time to align ourselves immediately to the bad demand. And at the same time, we had to also plan for the future. We could, of course, take down costs even further. But you also have to believe in the future, which we firmly do. If you streamline yourself too much, it's almost impossible to regain your speed and your power when things are picking up again. It's been a very delicate balance between how much should we cut down and how much we should save of power for the future. I think that's, all in all, explains the deviation. Okay. I understand that from 2023 levels, but just from a historical context, does that stand as well then? I mean, yeah, of course, the margin then. We'd like to come back, obviously. There's no particular reason other than what I've said. You shouldn't reason around any price reasons or anything like that. No. Okay. Fair enough. Thanks, Erik. Moving on then, you talk about that in the long term, you see clear volume growth for heat pumps in Europe, but also in the report, you mentioned that it's likely to come at a lower level than the previously very optimistic forecasts. I know that historically, you've actually mentioned a few numbers on this. Would you sort of want to put some sort of numbers to that statement, a broad range? Well, I mean, very quickly then, if I take 60 seconds on that, we were predicting that the number of heat pumps at 2030, I mean, it's always very, very difficult to predict. We're in around three and a half to four million to 2030. You've heard that figure. During the hype, if we may call it 2022 and 2023, those figures became too conservative. Everyone said in the industry, they're going to be like 8 to 10 million. It's okay. Okay. That's hard to really take in for us because the reference we have is Sweden that took like 20 years to change from oil into heat pumps, 20 years, and if we were to take those figures, if we were to take the change over in Europe to become predominantly heat pumps, that would take 20 years at least, possibly a few years more. And then I think that our conservative figures were more realistic around the three and a half or something if you just had a very, shall I say, straight graph. So that's pretty much what has happened, that we were taken into this hype, and we didn't really believe in it, but of course, you couldn't say, well, we don't believe you're going to sit still. So we did as good as we possibly could, like all the other ones in the industry. But it doesn't mean that the industry as such now going to meet the market they're going to contract. We'd rather see that from it going to at least be a three times or a two and a half as big as it is now in six years. So it's not a catastrophe. That's not how we view it anyway. And perhaps it's more realistic than the figures given because to expand 40% per year consecutively, that's not very easy. So those figures were a little bit of a pipe dream, you can say. All right? No, I understood. It's a difficult question. I appreciate the answer. Thank you. The next question comes from Carl Ragnestam from Nordea. Please go ahead. Good morning. Hi, it's Carl from Nordea. Two questions on my side as well. Firstly, on the quarter here and the organic growth in climate solutions, Netherlands, it's a fairly substantial market of yours. We saw data coming in quite strongly. Some speculate it's a form of pre-buys. Have you experienced that during the quarter, sort of boosting sales to some extent? And also, have you seen any new buying patterns in Germany here ahead of election as well? Well, there was one question, right? And of course, we predicted very much the same as we're seeing now in this report. Q3, we came out and said that most likely two quarters is going to be a little bit sluggish, and then demand is going to pick up more at the manufacturers' level. Now we indicate one quarter. And that's not in contrast to the brighter outlook. I mean, the applications have come in in a far larger number. But there's a lag between the application going in and, of course, getting the admittance, and also when the actual installation comes and when you actually buy the heat pumps. So that is to come. I don't know whether I answered your question correctly there, but that was an attempt anyway. Okay. That is definitely fair. And also, my second question here is a little bit on the cost savings again. Good to see that they're materializing quicker than you thought and are more quick to come in 2025. But I'm curious to hear because you've also built up capacity, right, which will come with higher depreciation levels. So how do you look at the sort of net effect between the higher depreciation and the cost savings materializing in 2025? That's the second. Thanks. Yeah. No, there'll be still a positive effect from the savings. But you're correct to say that the depreciation is going to be higher. But there'll still be a positive effect compared to the depreciation. And no quantification, I guess. Well, I apologize, but although it's Valentine's Day today, we have to be a little bit modest. Okay. Thank you so much. Thank you. The next question comes from Uma Samlin from Bank of America. Please go ahead. Hi. Good morning, everyone. Good morning, Eric, and Hans. My first question is to follow up on the demand side. I guess in previous years, you always had a target of 10% organic plus 10% M&A. But it seems like in your 2025 outlook, the growth part of that equation is fairly vague. So what are the sort of demand trends you're seeing right now, given the inventory has come down to a more acceptable level and you perhaps have a bit more clarity? How do you see the year to come out? And what is your expectation of organic growth in 2025, especially when we think about your margin targets to return to the previous levels? Thank you. Well, I think to elaborate on the growth pattern, I think that's, as you well understand, difficult. Had we had a very precise idea, then we would have presented that in the report. I'm not trying to be impolite. But of course, without mentioning the exact figures, when we so clearly say that we expect sales to improve, that has to be interpreted that all three business areas will grow organically. And the percentage is such. I think we have to remain more, again, modest in giving out those figures. I hope you appreciate that. Thank you very much. That's appreciated. I guess my second question is on the German elections. And there has been a lot of noise on whether the current subsidy scheme will be abolished. What is your sort of anticipated exposure to the subsidized part of the market in Germany? Do you have any sort of rough assessment on how much sales or margin impact you might expect if the subsidy is to be completely abolished? Well, as we say, the political issues, we just have to combat somehow. And we have not really, as with the Canadian, Mexican, American issue we discussed earlier, we just have to react accordingly. Of course, if things change dramatically, then we have to act accordingly. We just find it, would find it strange if the government of Germany all of a sudden would absolutely abandon the green ideas of sustainability after all the efforts been done and all the efforts in process. But of course, if that's the case, then we have to revert, and how do we combat that? It's not something we sit here and daily worry about. We follow the discussion. We know how it is politically. With the constitution they have there, it's just like we have here. You have to have coalitions. It's not like in Britain or in the U.S. where the winner takes it all. Here, there are always compromises. And we're very certain that things are going to come out, if not as grandiose as they've been, still supporting the changeover to sustainability. That's very helpful. Thank you very much. Thank you. The next question comes from Christian Hinderaker from Goldman Sachs. Please go ahead. Hello, Eric, hello, Hans. I'm not really looking for guidance here on numbers, but would appreciate some help maybe in the first question on mechanics. You've invested SEK 10 billion in CapEx since 2020, as you said in the report. I think there's also been around SEK 13 billion spent on M&A. So quite a lot of investment that's taken place. Given those investments and also maybe the cost actions that you've taken, has there been any change in the operating leverage for your business? Specifically, you've cited previously incremental margins of 20%-25% for climate solutions. So just trying to think, if we assume SEK 100 million of additional revenue for that business, should we still see SEK 20 million-SEK 25 million of additional EBIT when we think about modeling? That's the first one. That's a math task worth the name. I don't know where we start. I mean, did you interpret the question correctly, Hans? Maybe not fully, but if I start to say, I mean, if you look at our development over the years, and we've shown these graphs showing the development ever since we went public, I mean, we have had a combination of growth through acquisitions and organic growth that has led to where we are today, where we've seen an average growth of 17%, I think it is, if you look back over all of these years, taking now 2024 into account. Some years have been more through organic, some more through M&A. But I mean, over all of these years, we've faced a lot of different situations, if you call it that. And when you do the math and do the modeling, it looks pretty much the same after all over the years in terms of how much is hitting bottom line, so to speak, when you get an additional dollar of sales on board. So I don't think or see that there have been huge changes. Having said that, if volumes would really kick in, we are extremely well positioned to bring on volume into our factories and the newer ones, which are also better automated, you can say, than the older ones. Thank you for answering the question. I don't know whether you were satisfied with that, Christian, or. We can come back on that maybe. But maybe just secondly, you had SEK 26 billion of revenue in Climate Solutions for the year. Just interested in some color on the mix, how much of that was from heat pumps, maybe water heating. And then you've also mentioned in the report commercial cooling and ventilation as a growth area. Just be helpful to know the current size of that product area for your business. Thank you. Yeah. Well, I mean, we are not very precise there, but of course, the commercial segment is certainly double-digit of the turnover, as we said before. And the water heaters, they are more stable. That is correct. They have not taken the hit as the heat pumps because that's typically for refurbishment. So if you compare the three segments, of course, heat pumps for residential use have taken the hardest hit, but still being clearly the largest segment. All right? Sorry, just to clarify, commercial is double-digit% of Climate Solutions or of the group as a whole? No, of Climate Solutions. Understood. Thank you, Hans. Thank you, Eric. Thank you. Absolutely. The next question comes from Viktor Trollsten from Danske. Please go ahead. Thank you, Operator, and good morning, everyone. So firstly, I guess the question to you, Hans, but I thought I caught you saying in the presentation that working capital today is around SEK 23 billion, and you have an intermediate target of SEK 20 billion as a first. Is that an exercise for 2025, or just any color on that list? Well, I think what I said there, if you looked at the picture there with working capital, we're above 20% today. And we brought it down reasonably well during the year. We're at 22.8%. But especially from my point of view, being the numbers guy, so to speak, I'm never satisfied with the working capital level. And we have an intermediate target to first bring it down to below 20%, which, of course, is a target that we set as we speak now or have set also to get there. And then after that level, we want to bring it down even further. And if you look back at our historical levels, we've been below that level as well. But it's been a challenging market, and I think we've done reasonably well during the last part now. Okay. No, that's great. That's clear. And then secondly, just on the cost savings program, I'm thanking for the clarification of basically SEK 450 million in savings during 2024. But I'm still a bit puzzled because my interpretation was that it was quite limited impact in the first half. I think you said quite little in Q3 also. So how is that spread across 2024, if you can give any color on that? Yeah. We started naturally. Even when we announced it the first time, we started naturally to reduce cost already in May and June, not only during the second half of the year. And from the very beginning, of course, it was the most obvious one. When consultants are cut, I mean, that's an immediate cut because we had a large number of consultants, just as an example. And the notice time for that crowd is very short So that gave immediate effect. So also during the second quarter, we had those; it might be cynical to say, low-hanging fruits, but they were the most obvious ones. Negotiations with fully employed people, that takes a longer time. Okay. Fair enough. Thank you very much. The next question comes from Gustaf Schwerin from Handelsbanken. Please go ahead. Thank you very much for that. Outside the operating leverage, depreciation, savings net a bit different. I mean, with the investment programs that you've taken now, which added substantial assets, have you actually started to depreciate that in any major extent at all? Because if you look at it from, say, 2022, the picture here is quite blurry, given that you have the Climate for Life acquisition effect on EBITDA as well. And I'll take them at the same time, actually. When you say positive effect between savings and depreciation, is that independent of where volumes are headed for 2025? Thank you. Well, I mean, we expect some kind of growth without specifying that very clearly. But we repeat that. If things go as we plan, of course, the savings are going to be contracted a little bit or diminished by the depreciation, but still the savings are going to be on the better side. If I understood the question correctly. And if I just fill in there, I mean, the annual savings that we have announced and which you have seen now in the presentation of some SEK 800 million, if we say that the effect in 2024 is some SEK 450 million, means that we have some room for additional savings kicking in here now during 2025, and the depreciations will not increase with that corresponding amount. All right. But just then to be very clear, I mean, going back to the first part of the question, if we look at underlying EBITDA step-ups in, say, 2022, how big is that number? The underlying which one? Increase in depreciation, you mean, or? I mean, if we exclude the effect on EBITDA that you got when you acquired Climate for Life, I mean, what's the underlying increase in depreciation, which would then be tied to the investment program that you have made? Okay. I don't know whether I have that figure right away. Well, I don't know. Could you explain that? Yeah. I think, why don't you give us a buzz regarding that specific issue? I think that we have to, if I'm not impolite now, I think that we have to stop here. I would just like to correct Hans for one thing. I know that. Because you were so enthusiastic. You said that element has been eight and 12. I think it's with the eight and 11. Absolutely. I think we all noticed that. I heard that myself. I was going to do it. We just correct one another. So once again, thank you for calling in. We're going to run to the next show, if we call it. And we wish everyone out there a nice weekend. Don't forget your celebration when it comes to Valentine and whatever comes with that. Thank you very much.