Welcome to Sandvik's Capital Market Day. Welcome to you who are here, and of course, equally welcome to you who have joined us via the web. I must admit we are a bit extra excited to host this particular Capital Markets Day. Of course, because of the topics we will cover, but also we have been facing restrictions for so long, all of us, and it's therefore such a pleasure to see so many of you having been able to join us here at Epicenter in Stockholm. We will have the full afternoon together. Here is the agenda. I will soon invite our CEO, Stefan Widing, up on stage. Stefan and Cecilia Felton, our CFO, will take you through our shift to growth strategy, where we are today, and what we have achieved so far. Also, of course, our increasing ambitions, including the new financial targets. You will listen to our BA presidents, also, of course, covering the same topics, but also deep dive into their specific strategic priorities. After each presentation slot, we will have a short Q&A session. We will prioritize, of course, the audience here. If time allows, we will also take questions on the conference call. Note that we do have a group Q&A in the end, and here we actually devote the last 10 minutes for questions on the call, if needed, of course. I think this is it for me. I hope you will enjoy this day and that you are energized. We are for sure. Let's now welcome our CEO, Stefan Widing, up on stages. Thank you, Louise. It's great to see so many of you here today, as we will talk a little bit about our strategy, what we have achieved so far, and our ambitions going forward. As Louise said, I think you will find also the BA presentations very interesting with a lot of new and interesting information relating to all of our businesses. Sandvik, of course, like any other company, we need to adjust and adopt our strategy to the world and the context in which we operate, and there are a number of global trends that impacts our business. We have, first of all, of course, sustainability. Sustainability, and in particular, of course, electrification, which has a lot of opportunities for Sandvik as a company. We also have economic developments in the world. We have a growing middle class, which is positive for the demand of Sandvik's products. We're also facing, of course, the economic consequences right now of a global pandemic. We also have geopolitical developments. Now we have a war in Europe, and we have for a number of years faced trade barriers, which has impacted the way we operate our business. We also have technological breakthroughs, and for us, as an example, the continuous development of battery electric vehicles is both a fantastic opportunity for us, as well as a headwind that we will face in some parts of our businesses. Of course, digitalization and connectivity, with software playing an increasingly important role in most industrial companies, and connectivity which will allow us to advance and develop our business model In this world, we at Sandvik has defined our role, our purpose to be part of making these shifts and help advance the world through our engineering capabilities. We do that also supported by our core values, customer focus, innovation, to play fair, and my own personal favorite, a passion to win. These values has been with the company for a long time, and they are well ingrained into our culture. To make this shift, we have defined our strategy based on six strategic objectives. There are three shift objectives, the shift to growth, the digital shift, and the sustainability shift, and then three supporting objectives, to be an employer of choice, to be our customer's first choice, and to be agile through the cycle. For each of these six objectives, we have defined specific concrete targets where we wanna be in 2025. Each year, we define what we want to achieve in that year and by each quarter. This is to drive strategy execution. We are convinced that if we can deliver on this strategy and these goals, we will deliver profitable growth, providing value for all our stakeholders and ultimately for our shareholders. We have a strong foundation from which we execute this strategy. As Sandvik Group, we have world-leading positions in the market segments in which we operate. We have a winning culture in the organization. We are leading our industries in the digital transformation, and we have sustainability embedded into our business models. All of our businesses work closely with our customers. In many cases, or in most cases, we have a direct sales engagement. We understand our customers' needs, and we work to helping them become more productive, more efficient, and thus more sustainable. For us, sustainability is embedded into the core of our business models. I will now take you through these strategic objectives briefly and what we have achieved since we met last time. I will start quickly with the supportive objectives. First of all, we want to be an employer of choice and to have exceptional people with a winning culture. We believe this is crucial because there is a war for talent, and Sandvik will need to attract, retain, and develop new talents to be able to execute on our strategy. We introduced last year a quarterly employee survey, which has been a big success, and we can see increased participation rates quarter by quarter, and allows us to understand the health of the organization. Currently, we have an employee engagement rate of 79%, which is a good score and something we strive to continue to evolve. We also focus on safety, and we have one of the industry's leading safety performances. Last year, we had a total recordable injury frequency rate of 3.5, so that's per million hours worked. This was actually not our best year. Our best year was in 2020. We are now working towards getting back to that strong performance. This is already a leading data or statistics in the industry. We also work with customer-focused, and all our divisions are engaged in programs to ensure they understand their customer satisfaction, working with structured methods to understand and improve what our customers think about us. Agile through the cycle, where we have a trough margin target up until today, that we have delivered upon through a global pandemic. We have also, as we have now been ramping up in the recovery phase after the pandemic, worked hard to ensure that we build the new capacity through flexible cost structures to ensure that we can be even more responsible in the future in the event of a new economic downturn. Being agile through the cycle is not just about flexible cost structure. It actually starts, of course, with the top line. That is why several of our businesses are working with a clear strategy to enhance their aftermarket offerings and grow aftermarket and consumable businesses. Those businesses are today at an all-time high level. Our software offerings also play into this. With software revenues come either recurring maintenance contracts or software as a service contracts, both which are at least as good as the aftermarket business in terms of resilience. If we look at our shift objectives, there is a lot to be said about those, but I want to highlight a few things. We have, of course, had very strong organic growth, five consecutive quarters of double-digit organic growth. On top of that, we have also added over SEK 10 billion in strategic inorganic growth in 2021, basically fully compensating for the spin-off of SMT. These acquisitions have been handpicked and strategic to ensure we either strengthen our core business or expand into adjacent value chains that we believe will strengthen the overall business. One part of this has been to expand our digital offering, and last year our annualized sales of software and digital was SEK 3.3 billion, up from below SEK 1 billion only a year prior to that. On climate and sustainability, we have a goal of reducing CO₂ emissions by 50% until 2030 based on a benchmark of the years between 2016 and 2019. We are so far at -44.1%, so well on our way to meet that target. We are making this shift. We have enhanced and focused our core business. The focus, of course, taking a big milestone through the spin of SMT as Alleima. We have expanded in the value chain, we have expanded our digital offering, and we have embraced sustainability as part of our business model. Let me take you through a few achievements in these areas. If we talk about strengthening our core business, you will see SMS talking about the strategic priority to become the market leader in round tools. We have added, in the past few years, SEK 2 billion in revenues in round tools, making us, taking us on a path towards market leadership. When it comes to growing our aftermarket business, last week's announcement of our intention to acquire the Schenck Mining business is a big milestone. This is a SEK 2 billion business with 70% aftermarket. It will make a step change in the aftermarket exposure of Sandvik Rock Processing Solutions. We are broadening our solutions offering through digital. Here we have a goal that by 2025, across our group, we should have SEK 6.5 billion in sales from software and digital offerings. Another example of growing through the value chain is specifically in underground mining. Here, the acquisition of Deswik makes us the market leaders in mine planning software. The acquisition of DSI made us the market leaders in ground support. Both of these adds crucial steps in the value chain of underground mining. Of course, Deswik also contributes to our digital target, and DSI being 100% an aftermarket consumables business also contributes to our resilience. The digital shift, of course, impacts a lot, or across the board in our business, including a lot of internal aspects. It is first and foremost driven by our customer needs. Sandvik is in a unique position to take specific position in software and digital in the industries where we operate. We have a world-leading footprint and hardware solutions. Leveraging that, we can make these software assets grow faster than they could have done on their own. We can create joint solutions that are stronger than each solution would have been independently. Our software offerings will also help drive the hardware business. Because in many cases, these software are sitting earlier in our customers' value chain at control points where hardware selections are either made or can be influenced. When it comes to sustainability, it is integrated into the whole value chain of our business. It impacts our customers, our own operations, as well as our customer offerings. As I already mentioned, when it comes to Scope 1 and Scope 2, we have a target to reduce CO₂ by 50%, and we are already at -44%. Last year, we signed up for the Science Based Targets initiative, which means that these targets and this progress will also be validated independently by a third party. I believe that the biggest opportunity for us when it comes to sustainability is actually in our customer offerings, and you will see that throughout the presentation today. I just wanna highlight a few examples. In rock processing, we have our Reborn crusher solutions, where a customer can get basically what amounts to a new crusher by replacing wear and spare parts, with a significantly lower footprint from an environmental perspective. SMS is launching the Data Matrix or a digital tagging of each individual product. Here we go from labeling a package when it leaves the factory to early in our production process, marking each product. This means that we can make our own production process more efficient. We can provide our customers with data related to each individual insert or product. For example, giving them higher tolerances, improving their operations. It also means in our recycle program, where we buy back these products, we will know exactly what the material contents of each product is, also enhancing that step of the value chain. I believe we are only in the beginning of understanding what business models and the benefits this type of solution will provide for us and our customers. Of course, we have our battery electric mining equipment, which you will hear more about today as well. Here we are continuously launching new products. We see a strong demand in the market, and we have patented unique technology that are years ahead of the competition. This shift is working. We can look at our revenue and order intake. We have had five consecutive quarters of double-digit organic growth, and in the past three quarters, we have also added a strong component of inorganic growth. Although these numbers exclude SMT of course, you can see that we are on a rolling 12 months basis, well above SEK 100 billion, the level that Sandvik has never been in at before. We also see on the margin and profitability, excluding the trough during the pandemic, the margin has been sitting at about 20% EBITDA. In the past two quarters, we have had a margin or a profit of over SEK 5 billion, a level we have never been at before at Sandvik. The shift strategy is delivering also on the numbers. We are delivering on the targets we had from before. We had a target of growing at least 5% through a cycle. We have been through a pandemic, but still we have delivered on that target since 2016. We had a trough margin target, which we have delivered upon, and last year we were at 18.3% EBIT for the whole group. We have a balance sheet target, and we are currently at 0.35 in our gearing. We have a dividend payout ratio of 40% versus a target of 50%. The main gap here coming from the pandemic year of 2020. As we have delivered on our targets, you have already seen that we have now increased our ambitions. By enhancing our core business, expanding in the value chain, expanding our digital offerings, and embracing sustainability, we are ready to increase our growth target to 7% through cycle inorganic and organically. We have set an Adjusted EBITDA range between 20%-22%. I want to emphasize, though, this is not a peak to trough target. Cecilia will explain more how you should interpret this target in her session. We have also changed the definition of our debt target to be financial net debt over EBITDA, and that should be below 1.5x, representing a fairly conservative target, still giving us room to continue to grow. This is roughly the same ambition as before, but it is in a new format, if you will, and more easily understood and more commonly used. We have kept the dividend payout ratio of being the same at 50%. I want to talk a little bit more about the growth target. You will see in each of the business area presentations that they will also show you what their growth targets are. The group growth target is not for a specific period in time, it's just through cycle growth target, if you will, in perpetuity. The business area targets are based on 2019 to 2025. Those targets we want to be actionable, and they will show you where and how they will achieve them. If we look at the business areas then, Sandvik Mining and Rock Solutions has a target of growing 10%. Rock Processing also by 10%, Machining Solutions by 5%, and Manufacturing Solutions well above 10%. If you do the math there, you will come to a number above 7%. Here, then again, our group target is a through cycle target. We have been through a phase where we have been using part of the balance sheet capacity, but of course, long term, the inorganic growth component will be driven by our cash flow generation. If you would summarize the group target for the same period, you will maybe arrive at a different number than the long term group growth target. When we talk about growth targets in the current environment, of course, it's also important to consider inflation and price. We have decided to have a growth target based on what we could call a historical nominal inflation rate. It doesn't make any sense for us to try to speculate on what the inflation will be in the future. We have market leading positions. We have a differentiated offering. We typically work with value-based pricing. We believe that whatever the inflation will be, we will be able to offset that through our own price increases. Of course, if inflation is high for a sustained period of time, also our price component will be higher, and then the target will have to be revised. That context is important to understand. There are some of our businesses with order backlogs that might see a lag between price and cost inflation, and you have seen that in the past couple of quarters. We are confident that it's just a matter of time before we can catch up. Here I also want to highlight that SMS is, of course, more protected from this through their vertical integration. They are not insulated from cost inflation, but they are helped, both on the supply chain side and on the cost inflation side. Since many times the vertical integration in SMS is seen as a negative because of the higher fixed cost it gives, I want to highlight that in a world we are currently in, it's actually a strength. When it comes to our sustainability targets, they stay the same. We will continue to work with fair play and compliance programs with our vision of zero harm, where we are already industry-leading in our safety performance. We'll continue to focus on circularity, where our goal is that 90% of the input material to our products will be recycled by 2030, and we will reduce our CO₂ impact by 50% until 2030, and now also backed by the Science Based Targets initiative. Sandvik's transformation journey continues. We believe we have a strong platform across the group to build from. We are successfully executing on the shift strategy. By doing that, we have enhanced the growth profile and resilience of the group. We have increased our ambitions now through the new financial targets. We are executing towards 2025, but I want to assure you, if you're a long-term shareholder, that we're not only looking at 2025. Everything we do, we also keep an eye towards 2030 and beyond to ensure that we always build Sandvik to be stronger in the future. With that, I think we should focus even more on the numbers. I will now hand over to our CFO, Cecilia Felton, that will take you through some more details. Thank you, Stefan. Welcome stage. Thank you. All right. What we'll do now is to go through the numbers in a bit more detail than what we normally do during the quarterly presentations. We will look at the financial development from 2018 onwards, and also talk a bit about what will happen going forward. Starting with order intake and revenue development, you can see in the graph here that we came from a period of strong growth back in 2018. Halfway through 2019, growth started to come down, especially for our short cycle businesses. That downturn was then further accelerated in 2020 with the outbreak of the pandemic. From the end of 2020 onwards and throughout last year, we've now been in a recovery phase with strong growth, both from an organic point of view, but also in terms of acquisitions. If we look on a 12-month rolling basis, both order intake and revenue levels are now well above 2018 levels. If we continue with gross contribution, and that's looking at the direct costs of cost of goods sold, you can see the trend line here. There are two effects impacting the trend here. The first one is a negative mix effect from the relatively higher share of SMR revenue compared to SMM revenue. That has a negative impact of about 1 percentage point compared to 2019. The second effect is acquisition of DSI that we did in the third quarter last year. You can see the dilutive impact that that's had on contribution margin for the group. If we exclude these two effects, we've shown resilience in gross contribution. As Stefan mentioned, building resilience starts with building a less cyclical top line. Here we work really hard with increasing the aftermarket penetration and also growing our software business. We also have good pricing power to be able to mitigate the higher inflationary pressure that we're currently facing. As Stefan mentioned, there are lags within the SMR and SRP business areas. That's not visible here in the gross contribution graph, but rather when we come down to EBITDA level. If we then add fixed costs in cost of goods sold, we end up at gross margin. Here we still have the negative mix effect from the higher SMR revenue impacting the trend line here and the dilution from DSI from the third quarter of last year. On top of that, we also have a volume impact as some segments within the SMM business are still in a recovery phase. We've been working hard with agility and efficiency and our geographical footprint throughout the last few years here. In the second quarter of 2019, we announced a savings initiative with structural savings of SEK 1.7 billion. Most of those were realized during 2020. We, in the second quarter of 2020, announced a second savings initiative where we had structural savings of SEK 1.2 billion that we've now fully realized. If we continue down through the P&L and look at the SG&A development, you can see that we came from relatively high levels above 25% back in 2018. That's gradually come down through the years. What I want to highlight in particular is the development last year. 'Cause you can see here in the graph that in absolute terms, SG&A costs went up. In relative terms, we managed to stay below 23%, and I think that evidences a controlled ramp-up. We will continue to work with efficiency, our geographical footprint, and agility. This morning, we announced a new cost savings initiative with total costs of SEK 1.7 billion. That will generate run rate savings of around SEK 610 million, and we will have delivered 90% of those by the fourth quarter of 2024. That's an indicated FTE reduction of 580 FTEs. If we bring all of this together and also add SMT, so looking at the total group and the EBIT development, that's the blue lines in the graph here. You can see, as Stefan said, that we've clearly delivered on our trough margin target, even during the pandemic in 2020. If we then remove SMT and look at continued operations, that's the bars and the orange line. You can see that we've had strong earnings growth in the last year of 27%, and our EBITDA margin has been around 20%-21%, so in line with our new financial targets. If we then look at our new financial target in a bit more detail, what we've communicated is a through cycle EBITDA margin range. It's not an absolute peak-to-trough margin target. That means that there may be quarters where we will be above the range, and that should be interpreted as a margin that's not sustainable in the long run. There may also be quarters where we will fall out of range, and in these cases, we will take action and activate our contingency plans to get back in range. That means long term through cycle, we will have an EBITDA margin range of 20%-22%. If we continue with the balance sheet and cash flow, and I think it's quite interesting to look at the graph on the left-hand side here, where you can see the cash conversion development. You can see that in the period of 2018, where we had strong growth, you can see cash conversion was around 80%-90%. As the downturn hit in 2019, cash conversion went up and peaked above 100% during the COVID downturn in 2020. Now we are in the recovery phase and a period with strong growth again, and you can see cash conversion coming down. That's because we are investing in growth, but also a response to the supply chain and logistics challenges that we are currently facing. If you look at the net working capital development, you can see that we've been below or around 25% for most of the quarters here. With a couple of exceptions, we've had sudden drops in the top line. We've had a gearing target of 0.5x, and you can also see here that we've been well below this target for the historical period. Also, in 2021, when we started our shift to growth journey and took on some more debt in our balance sheet. Looking at our new target for financial net debt over EBITDA, you can see that at the end of Q1, we ended up at a level of 0.6x, which indicates that there's still good headroom for future growth given our target to remain below 1.5x. I've also included here a table that shows a simulation of what Alleima's and Sandvik's balance sheet would have looked like if the spin would have taken place in Q1 this year. You can see that Alleima would have had a cash position of SEK 1.5 billion. If we then add on the pension liability and capitalized leases, we would end up with a net debt of SEK 0.2 billion. With an equity of SEK 13.8 billion, that's a gearing of 0.01. A very strong balance sheet position for Alleima. You can also see the impact on the remainder of the Sandvik Group, where gearing goes up from 0.31 to 0.38. Also there, a good balance sheet position. I would also like to highlight that Alleima will have their Capital Markets Day in August. I hope that you will all sign up and register for that to learn more about Alleima. I also wanted to take a few minutes to talk about capital allocation. You can see here that during the years of 2016 to 2020, we focused on getting the balance sheet in shape for growth, and we allocated a fair bit of our capital to also reduce the debt level. We have had CapEx and the dividend and a smaller part of the capital allocated to acquisitions. If you look at 2021, you can see that, you can clearly see here that our shift to growth journey began, and we got off to a really strong and accelerated start. We will continue with our shift to growth journey, but not at the same accelerated speed that we had last year. That's both from a balance sheet perspective, but also from an organizational perspective, where we need to make sure that we also integrate these acquired businesses in a good way and realize their business cases. We've guided CapEx to be below SEK 5 billion for the year, and we've left the dividend payout ratio target unchanged at 50%. All in all, we have a balance sheet that provides a solid foundation for growth, both organic and inorganic. We have a solid cash flow generation, and with our financial target of a net debt to EBITDA below 1.5x, that indicates that we still have good headroom for future growth. Finally, shareholder rewards. We've had a targeted payout ratio of 50%. We came in at 40% for the years 2016 to 2021, as we didn't have a dividend during the pandemic. You can also see here that we've had very strong growth in adjusted earnings per share, which has increased from SEK 5.48 in 2016 to SEK 11.24 in 2021. That's an increase of more than 100%. On that positive note, I will invite Louise and Stefan back to stage, and it's time for Q&A. Thank you, Stefan and Cecilia. I'm sure people are eager to ask some questions to you. I will ask you to raise your hand. We have already Klas raising his hand. So we can come with the mic. Yeah, let's start with Klas. Please do state your name and company name. It's a little bit dark down there, so I cannot see. Yeah. Please, Klas. Thank you. Klas here. First on the 7% growth target, I was just wondering, I know it's not 2019 to 2025 for the group, but only for the divisions. I still wanted to ask about the split between organic and M&A that used to be 50/50 before. If I go through all the slides, it looks like quite a big organic jump for SMR in upstream mining, but I was just curious to hear the split and if that's correct, if it's SMR driving it. Thank you. No, I think you will see in the presentations that will come that basically across the board, there's been an increase in the growth ambition. In SMR, yes, of course, strong mining business right now. SRP as well. Also SMS has increased their target from 4%-5%. I shouldn't repeat everything that will come soon, but, and SMM, of course, on top of that. I would say it's increased ambitions across the board, but of course, the strong mining cycle right now, of course, contributes. Yeah. A split, Stefan, between sort of if it was 2.5 more M&A before, is that roughly what we should assume going forward? The uplift is more organic. That's my question. I would say, there is some uplift in both. We maintain that we think our balance sheet and cash flow generation, I should say, going forward, long term is SEK 2 billion-SEK 2.5 billion of added revenues inorganically, and the rest should come from organic. In this period, of course, because of what Cecilia mentioned, as you know, 2021 was strong inorganically, so that contributes specifically in 2021. Of the overall uplift, it's more on the organic side. Yeah. Okay. My second and final one is just on the trough margin, Cecilia. When I eyeball that chart, it looks like pro forma 16% to 18% ex SMT, and you haven't really changed that. I just wanna see how you reason at the trough. Because obviously you have 1.4% temporary dilution from M&A currently that maybe gradually goes away. I'm just trying to understand like for like, if you have lifted the trough margin or if it's the same pro forma. Thank you. I think it's important to understand that, and also, as you said, it's not a trough margin target that we are communicating. There may be times we might fall below the range where we will take action to get back into range. So it's a slightly different target to the 16% trough target that we've had before. Totally. Now if you add something, Stefan. Sorry, maybe misunderstood. I know that 20% at the low end of the range is not the trough. Mm-hmm. If I eyeball that chart, I'm just curious whether pro forma has changed, i.e. the 18% ex SMT. Thank you. No, I would say this. I mean, you can do the math, just take SMT out. And I would say we have absolutely not lowered our ambition levels also when it comes to the trough. It's not what we will measure ourselves against in the same way going forward. Yeah. Okay. Yeah. Thank you. Yes. We have a question from Daniela Costa. Hi, it's Daniela from Goldman Sachs. Thanks for taking my question. I'll just ask two things. One is a follow-up on the margin. Understand sort of it's not peak to trough, and it's a range 20%-22%. Given your structural improvements that you're expecting on manufacturing, which I think somewhere down the slide, say 10-ish% now to 20% in your ambition, is it fair to say that within that range, you do see year by year, assuming you have the same growth conditions and improvement? That's question one, and then I'll ask the other. I mean, if everything else stays the same, I think you should see a gradual improvement in margin as we grow, as we take out cost and so on. At the same time, we know we will continue to have an inorganic agenda. Typically, when M&A comes in, it is at a structurally lower margin than Sandvik. We happen to have world-leading margins, right? M&A comes in at 13%-16%. It has a dilutive impact, and then we work to improve that. It means that at any given point in time, if you look at an EBITDA bridge, the way I would prefer it to look like is to always have contribution from organic growth, always a bit of dilution from inorganic. If we can do that consistently, it means that we're creating value by bringing in companies and improving them. It also means that the margin improvements we get from some of our initiatives are always a little bit diluted also by M&A coming in. That's why, yeah, we stick to the range, but like for like, you should probably see a gradual improvement. Just curious, wanted to follow up on, like, why didn't you set the return on your invested capital target, given you have a lot of M&A still in the pipeline and the adjusted margin target is an Adjusted EBITA target, but there's a lot of, like, cash and other things that could still fall below, especially in a highly acquisitive company. It's not that we looked at it and just said we should absolutely not have it. We benchmark other companies. There are some reports from people in here around, you know, what companies have as financial targets, what do investors want to see as financial targets and so on. We concluded that we were quite happy in general with the ones we had, but we have done the tweaks that you have seen. There was no specific thing that made us say we should absolutely not have a ROCE target more than we don't want to have too many, and these are the ones we have had, basically, so we continue with them. Yeah. Thank you. Yes, we have more questions over here. If we can get the mic there. Hi there. It's Charles Armitage from Berenberg. I just wanna know if I could start by asking about the cost savings plan that you've announced. I was just wondering, in terms of the cost of SEK 1.7 billion, I think there's SEK 600 million of recurring cost savings. I mean, without wishing to be uncharitable, is that sort of in line with the sort of return that you've got on previous cost saving measures. Also, I think you say that there's about SEK 400 million of non-cash costs within that as well, so I just wondering if you could elaborate what that is as well. With your first question regarding whether this is in line with previous initiatives, I would say largely yes. In terms of the non-cash items, that's related to some parts of the business that we will exit, and a part of that is a write-down that's of a non-cash nature. Uh, but- Here we won't go into the specifics. No of exactly what that is. I would add also that in the past we have had some of these programs where some of the adjustment was pure volume adjustment. You typically have a much quicker return because the return is basically just a severance package. All of these things we have announced today is pure structure. It's site consolidations, it's sort of permanent efficiency improvements, which tends to be a slightly longer than the average. Otherwise, as Cecilia said, we typically end up around three years, even if the mix of programs can be slightly different. Thank you very much. Andreas Koski. Thank you very much. Andreas Koski from BNP Paribas Exane. Two questions. First, a follow-up on the non-recurring items related to the cost savings program. Should we expect a new program or should we not expect a new program before this has finished in 2024? Or can it be that you will announce more programs in 2023 and 2024 as well? Well, someone said Sweden will never join NATO, and it happened anyway. It's not our intention to come with these, you know, frequently. I don't wanna give a specific timeline. We continuously always work on finding ways to improve, find efficiencies, and make the cost structure more flexible. We are indicating or we're telling you how this will play out in terms of the benefits, mainly 2023, 2024. It should also say that the intention is not to come with these things too often. Thanks. The second question is on the business areas growth target. I have already looked at the slides and I come to a revenue number of almost SEK 140 billion by 2025 for the group. What kind of business cycle development have you assumed to get to SEK 140 billion? We have not made assumptions on when the next downturn will come, so, you know, guessing where we will be in 2025. You know, we basically work with CAGR numbers, and then it will go like that. So, I guess that's the answer. We know economy will go up and it will go down, but on average, we are confident about the CAGR numbers, where we will be in 2020. That's why we have the group through cycle target as well because, yeah, 2025 should not. Where the cycle is in 2025 should not be determining whether we feel we have met the target or not. Will the business area heads' KPIs be based on this 2025 target? You're talking about bonus now, or? Yes. Yeah. How they are measured. We have in general two types of incentive programs. One is the short term, which is the yearly sort of performance, and one which is long term, which is also actually based on a yearly measurement, but on earnings per share. There is nothing saying where we should be in 2025 in that sense. Of course, the yearly targets are set based on the trajectory you need to be on to hit that. Thank you. Yes. Hi. Over here. Anders Idborg, ABG. On SMM, right here in front. Oh, there. Oh, yeah. You have a growth target of above 10%, which gives us a pretty wide range of options, but then you also have the SEK 6 billion target. I was just wondering, you've had a few of the most important pieces in there now for two quarters. If you could update us on what you think the sort of underlying growth is of those assets. Mm. that now form SMM. Secondly, do you think there's another, you know, you need to add another, you know, big piece to get to your targets? Can I suggest that we hold that until the end if you haven't got it answered when Christophe presents? I think he will go through that in a quite good way. I'll keep that in mind. Yeah, yeah. Thank you, Anders. Yes. Another question over there. Yeah. Olof Larshammar, Danske Bank, in the dark in the back. I'm not sure if you see me. One question regarding the gearing. I think you said that you met that EBITDA at 1.5x, but you could go, you know, above that level. If transforming in acquisitions, could you know, please, you know, elaborate on, you know, what transforming acquisition could be? Will that be in the existing business areas or, you know, in new ones? Yeah. I would say it's more of an asterisk that it doesn't mean that we're going for transformative. It's just an asterisk saying if something unique and once in a lifetime thing would come up, we want to be transparent with that, then we will do what we believe is right for Sandvik in the long run, and that could then lead us to exceed that level. So it's speculative what it would be. What I will say, though, is I don't see it being outside of our existing core businesses. We have so many opportunities in the businesses we're in and very close adjacencies to them. So there is no reason during the time that I can foresee that we would have to broaden our business in any material way. Thank you. Yeah, you have to wave a little bit so we can see you because it's really challenging. Hi. Sorry. It's Charles from Berenberg again. Stefan, I know you get asked this question a lot by investors, but just curious to hear your latest iteration of your answer. With SMT obviously hopefully completing the spin-off of that this summer, where do you stand on the sort of broader question about the structure of Sandvik and whether any thought has been given by the board about separating the business into two? No, I think what I showed here, in my presentation is I think Sandvik is a very strong platform. We have good leading positions. We have a strong culture. We have a decentralized operating model comprising of 21 divisions that can put their own flavor and touch on their strategies and what they want to invest and what M&A they want to do. There's nothing holding them back. I think it's a net positive to be part of the Sandvik Group. We are focusing on delivering on these targets and on our strategy, and no focus on whether we should split up the group or not. There are probably a few bankers in here that would benefit from that, but other than that, we are quite happy with the group as it is. Thank you. Yes, we have one question here in the fourth row. Yes, thank you. Sebastian, [Audio distortion]. Just for clarification, when you showed the value chain in underground mining, I think when you acquired the DSI a few years back, you were quite clear that you were not going to get into the blasting part of the value chain. Of course, since then you bought the software part as well. Is that still the case? Just thinking about the title on that slide, that you're completing your presence in the whole value chain. I think I don't wanna comment on any specifics. I will just say if it's in our value chain, really where we are, everything is on the table. If we believe it's something where we can also contribute and add value to. There's always gonna be things in your value chain where you simply should not get into, you should partner. That's my general answer, and then I don't wanna go into any specifics, but I think blasting is very much on the fringe of that comment. All right. Do we have any more questions here? Take the opportunity. You have our CEO and CFO here now, and less questions for me tomorrow. No? Yes. Thank you. It's Mattias Holmberg from DNB. I think in conjunction with the Q4 results, you mentioned that we should expect a bit of a slower pace in terms of M&A compared to the very active high activity that we've seen in the past year. So far this year you seem to still be on a quite high activity level. Can you just elaborate a bit on how we should think about this? Is sort of what we've seen so far this year part of the agenda for the rest of the year as well? Or is it now we should expect to sort of wind down a bit? No, but I stick to that comment. Okay, so far this year we have done Schenck and done Peterson Tool, which is a small round tools company. Schenck was on my mind already when I made that comment. You never know what will happen. Schenck Mining, when we defined the strategy where we wanted to be in 2025, also inorganically, there were a number of areas. We felt this, we want to be in these areas to strengthen the group. You have seen it in CAM, industrial metrology, in mine planning, in ground support, in round tools. This was also something we were really keen on doing. I would say it was the final piece in terms of achieving the strategic agenda we set out. Now, there is still interesting areas on top of this, and we wanna continue to reinforce the core business. I would say we have done what we felt we really wanted or in a way needed to do, in inverted commas, maybe. Really happy with that. It also means that from here on, we can manage this in a way where we will look at the state of the economy, our balance sheet, our cash flow generation, and then continue with the inorganic journey at the pace we feel is appropriate and continue to add where we want to add even more, such as, for example, in round tools. I think also you can look at last year we acquired companies with a total enterprise value of SEK 29 billion. If you look at where we were at the end of Q1 at the 0.6x financial net debt over EBITDA, look at the headroom that's left to the threshold of 1.5x, you can see that there is good headroom, but that's less than what we spent last year on M&A. Thank you. Yeah. I think we can check in with the operator if we have any questions on the conference call. Thank you. Just a reminder to participants on the phones, if you wish to ask a question, please dial zero one on your telephone keypads now to join the queue. Once your name's announced, you can ask your question. If you find your question has been answered before it's your turn to speak, you can dial zero two to cancel. Once again, that's zero one to ask a question or zero two if you need to cancel. It seems currently there are no questions from the phone lines. Okay. No question. We have more Q&A, so that's good. We will actually then do a little bit of a detour to the agenda, and you will have the possibility to stretch your legs, take a coffee, visit the ladies room, and please be back in 2:10 P.M., but we will call you in. Thank you, and I think it's good. Welcome back after this short break. We will now move on to the next speaker, and I will invite Henrik Åger, President of Sandvik Mining and Rock Solutions. Welcome. Thanks, Louise. Good that you remember the name of our business area. Like Louise, I also think it's great to be here in person. We did this 18 months ago. We were talking into a camera. This is a lot more fun. I'm gonna give you a lot more detail about Sandvik Mining and Rock Solutions or SMR, as we normally refer to it. Before doing that, on the front page, what you see here is our 50-ton battery electric truck, and two batteries, two chargers, and a cooling cube. That is what you need to run one of these machines underground. You don't need any fixed infrastructure or anything else, which allows you to essentially keep the same mine and go electric. I'll get back to electric in a short while and in quite some more detail. If we take an overview of SMR in 2021, we were a SEK 41 billion revenue company. That included six months of DSI revenue. First quarter this year, we had revenue of SEK 12 billion, quite a higher run rate than the 41. We have nine divisions, which I have on the bottom left. Ground support is DSI, so it's a new division within SMR. With DSI, we've added to our aftermarket business. Last year, we were 37% equipment and 63% aftermarket. First quarter now, we are 30% equipment and 70% aftermarket. Almost all mining for us is in tunneling, road and railway tunnels and quarries or road construction where you need to drill. When it comes to the commodity exposure, it's dominated by gold and followed by what we call the electrification minerals. That's copper is the big one, zinc, nickel, and cobalt and lithium. I'll get back to those in just a second. Geographic. I'll take you through how we see the underlying industry fundamentals or the growth drivers of our business. I'll start with the growing middle class, which is a very strong driver for us. What I mean by that is when a person goes from making $10 a day to making $100 or $200, he or she starts consuming a lot more consumer durables, mopeds, motorcycles, cars, refrigerators, et cetera. That drives growth for our minerals. They also need more power. Now, when that growth happened in a country like India, which is taking up a significant share of that middle-class growth, you also get a higher demand for gold, 'cause that's a very common way of saving in India, is you invest in gold or in jewelry, actually. We have some important digital and sustainability shifts in our business. Automation and more and more autonomous equipment. I'll come back to that. The increased focus on connecting the equipment and capturing data from it with digitalization. The rapid growth for electric equipment and we'll spend some time on the dynamics of that. I was just in South Africa at a big mining fair, and there was enormous interest in electrification and battery electric equipment. A sustainability shift that we don't so often talk about is the shift to underground. There is a gradual shift. These things don't happen fast, but more shift, more focus on creating underground mines and not surface mines because they have a smaller impact on the environment, at least a smaller impact that we can see. We have the high demand of electrification, minerals, nickel, copper, zinc, lithium, and you see the expected growth rates here on the bottom right. One thing that's important to notice or to note is that, if you take the slice of copper, it's about. Compared to cobalt, it's more than 600 x bigger than cobalt in volume, in mining volume. A small growth in copper means a lot, and it's around 200x bigger than lithium, just to give you a flavor. Now, with these drivers as the context for us as well as our own position, we've outlined what we see as the most important strategic shifts for us in SMR. They're fully aligned with the group strategic shifts that Stefan presented, but a little bit more specific to what we are driving. If I take them one by one, the first one is to focus on the high or the fast-growing upstream hard rock. What I mean about upstream is from mine planning, drill and blast, ground support, load and haul. That's the value chain we focus on. After that, it goes to the first crusher, and that's where Anders takes over, and you'll hear from Anders in just a bit. We target growth in this upstream value chain, primarily in gold and electrification, 'cause they are the fastest-growing minerals. With fast growth comes higher commodity prices, our customers make more money, and they buy more equipment. Second strategic focus area for us or strategic shift is to shape the sustainable underground mine of the future. In underground, we have a very strong position along the value chain, and we are in a position to shape how that evolves through driving and being leaders in digitalization, electrification, and automation. We feel we have very good trajectory in that and good momentum, and I'll show you some examples of that. In surface mining, it's a little bit different. We're only in surface drilling in the surface mining value chain. Here, our focus is to take a leading position. We have a great offering across rotary, DTH, and top hammer. Those are the three ways you drill on surface. We have a great offering, but we have work to do to be a leader market share-wise. We've taken some great steps, and I'll show you that in a second. We wanna be a customer-first performance partner. We wanna take, put skin in the game and take a bit of performance risk of our equipment and our service and support so that when our equipment runs well, we get paid a little bit more. When it doesn't run well, we get paid less. We take a little bit of that operational risk from our customers. That's something that they request from us, and that we wanna do. To be able to support that, we need the best service and support, both basic, the right spare parts, the right technical expertise on-site, and advanced services. Connect the equipment, collect the data, analyze it, provide preemptive maintenance to the equipment, and treat the equipment as the individuals they are. They're made by different people. It's operated by different people. It's maintained by different people. Each drill rig or loader becomes an individual. They're not all the same, and they should be treated as such. Last but not least, building a high-performing and agile organization. Keep our decentralized structure with our nine divisions. Let them define their own strategies aligned with this, but they have to be specific to them, and drive that and move as much of the accountability and decision-making to them as possible. What I'll do now is give you a few examples of what we have achieved recently, and then go into more of how we see the path to 2025 in terms of growth, and then a little bit about our vision of the sustainable underground mine of the future. We start with a few examples. On the digital shift side, we capture the biggest automation order ever in the industry, at least underground, from Codelco, about SEK 250 million. We acquired Deswik, and I'll talk more about Deswik in a second, which it gave us a leading position in mine planning. Then Newtrax, some of you would remember we acquired a digitalization and equipment connectivity company back in 2019 called Newtrax. They took a single order for SEK 155 million for a collision avoidance system from Sibanye-Stillwater. So good traction there. On the sustainability side, I'll come back to electric, but we do have the biggest underground battery electric fleet of anybody. We've launched the biggest underground battery electric truck, and I'll show you that. Also on the surface drilling side, we've launched a big top hammer drill that can drill with 50% of the fuel of a normal DTH rig. You don't eliminate the carbon footprint, but you cut it in half by going from one drill to the other. Of course, you also save a lot of money, so it makes sense for multiple reasons. We've done well on reducing our own greenhouse gas emissions and reduced that by 25%-30%. The shift to growth, we got DSI, Deswik, and Tricon are our three latest acquisitions here on the page. With Deswik and DSI, we then capture that full value chain that Stefan showed. Deswik will remain OEM-agnostic. As a mine planning tool, it has to be OEM-agnostic. We can, of course, make sure that they have all the benefits of our equipment in that platform. Then last but not least, the shift to growth in surface drilling. For our boom drills from 2020 to 2021, more than 60% growth in order intake. Here we're really taking market share with surface drilling, and we're starting to get there with our rotary drills as well. What we'll do now is go into battery-electric. I'll show you two video clips. The first one is our 18-ton loader that has some sound to it with our customers speaking to it. The first one, availability of the unit. Second, how long was the battery life in typical operation? Third, what were the typical operating parameters with the equipment? How fast did it muck? How fast did it tram? Was it comparable to a diesel? For all the trial parameters we evaluated, the LH518B exceeded all of our expectations. Probably the biggest surprise in terms of a difference comparing it to a diesel piece of equipment was the sheer power. The LH518B has significantly more mucking power. In a traditional diesel, you have to rev the engine to get all your hydraulic power, whereas in the BEV, it's the maximum amount of hydraulic power right from the get go. For me, it was the lack of noise and the lack of heat. Compared to our current diesel LHD fleet, the battery produces maybe 10% of the heat comparatively. It's astounding how much less heat it produces. It's been just great for our underground workplace and environment. Sound, huge impact. You can basically have a one-on-one conversation next to the operating piece of equipment, which you could never do with a diesel. From a productivity and efficiency standpoint, it's miles ahead of the competition in terms of the diesel equivalent. We're seeing increases in productivity compared to the diesel equivalent, LHD. Tramming up ramp on grade, we typically estimate our diesel LHDs to move at about 7-8 kilometers per hour, whereas we're seeing speeds of 12-14 kilometers per hour with the battery LHD. Pretty cool equipment. With this and what he said better productivity. Let me give you some numbers 'cause that's more fun. The diesel equivalent does the cycle. When you load tram, as we say in mining, which means drive, you load it, drive up, uphill, unload and drive back. The diesel will do that in ninee minutes in this particular mine. With this loader, we did it in four and a half. Cut the cycle time in half. Actually, they did it in just over four. More took out more than half. It's a much more productive machine. Now, we also launched just recently our 65-ton truck, we'll see a video clip. What we did. This is the largest truck. We sell a 63-ton diesel truck. That's our biggest selling. It's almost half of the revenue for trucks we get from that 63-ton truck. Here's the 65-ton equivalent for battery electric. We took the best from our 50-ton battery truck. We took the best from the 63-ton diesel and put it in this truck. We've also upgraded the batteries. It's easier to service, and it has more than 30% more kWh in the battery. Quite proud of that. It's now on its way to be on show in South Africa, going to Australia, and then going in the field for some extensive testing. What you don't see in these pictures is that this equipment gets banged around underground, so that's the challenge. You have to make it rugged. Must withstand operators driving into the wall and a bunch of other things. Now some more detail on what we're doing on electric. Today we have our mechanical cutting equipment. It's 100% electrified, more focused on coal, but we're expanding it to do more in potash, platinum, and gold. We, as I mentioned, have the biggest fleet of battery electric vehicles. By 2025, we will have very strong offering in load and haul, so you can see the loaders and truck sizes here. We'll also have underground drills, battery electric for every application. That's tunnel development, production drilling, and bolting or ground support. By 2030, we expect more than half of our sales for underground hard rock to be electrified. A question we often get is around what happens to the aftermarket with electric? What does that look like? We did an analysis comparing the diesel to the battery electric. Now with the battery electric, there's also the battery part. We did the analysis of Battery as a Service, so we provide the battery, but our customers pays it as a service. That analysis looks like this. With the diesel-powered, it's about a 50/50 split over the lifetime of the equipment between equipment, CapEx and aftermarket. With a BEV, the aftermarket part. The equipment part's a little bit bigger, and the aftermarket part is a lot bigger. We're nearly doubling the aftermarket potential and the addressable market for us goes up by 60%. It goes from 100, if you index it, to 160. Now, the reason our customers then buy into this is because with those higher speeds, so it loads faster, it drives faster, and it carries more tons. That 18-ton loader you see there on the screen is the same size as a regular 14-ton loader. You get four extra tons every time. You get more tons out of the mine, or you can run the mine with less equipment. We look at a few other successes that we had. I mentioned Codelco and El Teniente is the mine where we received the SEK 250 million automation order plus SEK 150 million of equipment orders in quarter four. Now we recently or last week actually received another automation order for SEK 87 million. We also last week got a new BEV fleet order for SEK 140 million for 11 pieces of equipment. Then I mentioned the Newtrax order of SEK 155 million, and this is for collision avoidance to allow for equipment and people being together, and the equipment automatically stopping should it come up on a person or another vehicle. Our surface boom drills, the growth of more than 60%, but that's the focus, so boom drills, that is DTH and top hammer drills. With this as the backdrop, thought I'd show you how we see the outlook to 2025. Starting base year 2019 and then the growth that we see. Obviously we see growth in our current business. The business that we had in 2019. Adding in core mining, but adding to our value chain exposure. DSI is a big part of that middle box. Where we see the fastest growth is in battery, electric, and digital. There we see growth rates of more than 40% per year. Overall, we see growth of 10% per year over this time period, going from SEK 37 billion-SEK 67 billion in revenue. With that, I'll switch over and give you a little bit of a flavor of how we see the sustainable underground mine of the future, looking at these three major areas, electrification, automation, and data and analytics or digitalization. If we start with electrification, obviously you have the 100% electric equipment. As I mentioned, they are more productive. They can be faster, load more. They don't emit, obviously, any diesel particulates. A lot less heat. You can survive with sometimes you can reduce ventilation needs by 30%. That's a big cost saver, especially for expansion projects in greenfield mines. If we go to automation, it's obviously the autonomous equipment. We also see that supported by drones scanning the different areas of the mine, and then having that collision avoidance system on board to allow you to mix the fleet or mix equipment with people underground. What we're developing with our next generation automation system is also AI on board of the equipment, so artificial intelligence on board of the equipment. The equipment can plan its own route. Now it's all predetermined, the route that the machine will take, and sometimes there's congestion in the mine. There's too much equipment or people in any one place. With that dynamic path planning, you can get a lot better productivity 'cause the equipment can then take a different route, avoid the congestion, and keep moving. Finally, on the data analytics, if you start at the bottom, obviously all the equipment is connected. On the left, you see actually then measuring the rock conditions as we're drilling, as we're moving the rock to understand the rock. You can optimize how you charge and blast and get more productivity as you develop the tunnel or, when you blast for production. Of course, you need a digital control room and an AI center or engine that will run in the cloud. Those are the different components that we see in the sustainable underground mine of the future. To sum it up, we see strong market fundamentals, especially in the space where we're exposed. Overall mining production is looking to grow about 2% per year, but our exposure, we see growth of 3%-4% in mining production. We're exposed to the faster-growing side of mining. We are making the shift, so we have good momentum in the direction that we want to go, with the commodity exposure that we have, what we're doing in surface drilling, what we're achieving in digitalization, electrification, and automation. We see we are in position to capture leadership in surface drilling as well as be a shaper of the sustainable underground mine of the future. That was my final slide. With that, I'd like to invite a few easy questions. No easy questions, Henrik. Okay, Klas is first again. Sorry. Didn't mean to. Klas has it. First, Henrik Åger, in load and haul, you say 60% more addressable markets are mainly Battery as a Service and a bit higher ASP. You have drill rigs in the mix as well, and drill rigs, they don't move as much, and they are also more electric already. If you would blend the two, what would that take the addressable market for SMR as a whole? Good question. Well, they are about half and half, so probably then the addressable market goes up by maybe 30%-35%. Now I'm doing the math in my head. Yeah. Okay. It's true that the TAM is lower? Yeah, yeah. I mean, the drivetrain in an underground drill is a small piece of the equipment. Yeah. It's not that important. You drill on electricity already. Exactly. My second one is on surface drilling. Here, last time you said 15% market share to 30% is the ambition. The last conference call was one of the first times where Stefan said, "We are taking share now in surface drilling." That created a lot of debate on who you're taking from. Is this Furukawa, Boart, or is it Epiroc? That's the first one in the same question. The follow-up is, really, what are we talking about in terms of growth potential? I obviously know there's a $40 billion addressable market. If you double your market share, you get 1%-2% additional growth. Just if you could get some numbers on that. Thank you. Yeah. Well, first in terms of who we're taking market share from. Let me answer it in a different way. Our fastest-growing product is DTH for large-scale surface mining. There's been one supplier of rigs into that market. Yeah. that's Epiroc with their D65. I think that probably answers that question. Yeah, totally. We're hopefully taking market share from other people as well. Yeah, yeah. Thanks. As for the numbers, yes, I agree with you that those are the sizes that we are looking at. Now, the landscape changes around a little bit, but you're roughly right in your assessment. All right. Thank you. Yes. We have a question here. It's Daniela from Goldman Sachs. Just one question, actually, probably an easy one. You talked about the 3%-4%, which is production growth. Can you elaborate on your view regarding mine expansion? We hear a lot about shortages of copper and, what's your expectation on sort of new greenfield? Yeah. Greenfield usually accounts for a fairly small share of the growth in our sales. Most of it is replacement. There is a large part that's brownfield, and then there's a little part that's greenfield. I don't see that changing. Well, with current commodity prices, our customers make a lot of money, and they will keep investing. Should the commodity prices change, well, that will change as well. I don't think the share of greenfield, brownfield, and kind of sustaining CapEx is gonna dramatically change in this environment. We've been in this environment for a while now with high commodity prices, and yeah, the brownfield and greenfield does go up a bit. Thank you. Mattias Holmberg, DNB. Could you please help us with how big a share of your perhaps backlog or current sales that is battery electric today? Also some thoughts on perhaps how long the penetration will take to reach sort of some significance in the market. Last year-to-date, we were at. Now I'm focusing on the load and haul division. It's a little less in underground drilling than in load and haul, but last year-to-date, it was 1.5% of our order intake. This year, it's 3%. Still low numbers. It's doubling. It's rapidly growing. I think, you know, give it a couple of years, two to three, this will be a big part of every pretty much every major tender that we have. Some customers decide to go full on early and order a fleet of battery electric, like the order that I showed, and there are a few other examples. Most go and test the machine, so they want a loader, they want a truck, they wanna try it. They rather try it for maybe a year, build the capabilities to understand. This is very different to maintain and service an electric drivetrain and a battery. We have to build new skills. We have a big labor force out there in mining that has serviced diesel equipment for 100 years. We need to build a lot of new skills. That was a long way of saying, probably in the two to four year timeframe, I'm guessing where it's really start to impact from a volume point of view. Thank you. Yes. Hi. It's Charles [Spungin] from Berenberg. I was just wondering if I could ask about the load and haul platform that you have. Presumably, it's based on the architecture you acquired with Artisan. Is there a significant advantage to having a platform that is always being based on battery as opposed to sort of retrofitting into an existing load and haul truck? I'm just wondering whether the same rules apply as maybe do in the passenger car market. Well, I don't know the passenger car market that well, but yes, we see a significant advantage. First of all, yes, you're right. We're basing it on the Artisan platform that we acquired in 2019, so that's correct. When you design the equipment around this new electric drivetrain and battery, there are a couple of things that you can do. One, you can make the equipment smaller for the same capacity, so hence the 18-ton loader is the same size as a 14-ton diesel loader 'cause you can take things away and optimize in a different way. Second, you get a lot more efficiency, so you use your power a lot better. With a diesel engine, it's always running, so you got hydraulics, pumps, and other things that are just running off the diesel engine. It doesn't matter. You run electric, it does matter. If you just retrofit, you gotta keep those things running, and it eats a lot of power. Last, you get that power when you optimize around a new drivetrain, you get that power so you're faster, you can load faster, you can drive faster. I don't think you know, in the short term, there are some benefits to retrofitting because you have more of the same parts. It's a little bit easier for the technicians 'cause there are fewer things that change. In the medium term, I'm 100% convinced it has to be designed around electric. That's how you get a productive machine. That's how you get something that's better than diesel. We don't want a me-too. We want something that's better than diesel. Just like Tesla wants a car that's better than petrol. Thanks for that. Then maybe just a slightly different question. As the volumes of electric vehicles sort of ramp up in your factory, sort of, you kind of touched on it, but what are the major challenges from sort of a production perspective of moving from producing IC trucks to electric trucks? How does it impact the supply chain? Well, where should I start? Lots of challenges. First, we're building very few, or a low volume of units, so you don't get that repetition, and it's hard to drive efficiency. We're changing technology 'cause we're learning faster, which we do with new technology. Compared, diesel is more stable. You got both of those. I think we'll see a rapid cost decline for battery electric as we grow the volumes, get repetition, and learn, and also then work cost out of the product. Thank you. I think we had two raised hands. Yes. Thanks very much. Vladimir Sergievskiy from Bank of America. Easy questions on the cycle, if I may. First of all, your revenue target for 2025, does it assume any slowdown on the mining cycle between now and then? Because obviously we're already quite high up out there. We have been growing for a few years. Equipment demand probably back to previous peak cycle already. Within that, another question. Obviously electrification is a big driver for this upcoming mining cycle, but that's about 30%, maybe a little more of equipment demand. What else is driving this mining cycle? What are the key drivers for the remaining 70% of the equipment? Well, maybe I start with your last question. I mean, it's really the general growth in GDP. I mean, China is still investing quite a lot in infrastructure. You have other economies that invest in infrastructure like India, like Indonesia, that drive the commodity demand growth, the growth in commodity demand. I mentioned the growing middle class. The growing middle class, which drives infrastructure investment, but it also drives then the consumer durables and so on. Quite a stable trend to rely on, also. We have to really mess up in the world for that not to continue. In terms of the outlook to 2025, no, we have not built in a commodity crash in that scenario. It's assuming 3%-4% growth in production. When you have that, you tend to have high commodity prices. They don't have to be at $2,000 an ounce for gold, but they probably $1,500-$1,800. That's a very healthy range, at least with the current mining assets that are operating. Our customers will generate the money required to invest in these projects. That's what we've assumed, that 3%-4% and how that then carries into investments in both new mines and into equipment. That's great. Thanks very much. If I may, another question, more long-term one, beyond 2025, on one of your key commodities, which is gold. In the past few years, we have seen a number of examples when demand for certain commodities is effectively restrained by environmental agenda. We can call it coal, we can call oil and gas. Do you think long-term gold could be a victim of that? Because of course the CO₂ footprint of operation is one of the highest across the mining space on one hand, and on the other hand, well, we only use gold for jewelry. Yeah, your last comment is almost right. We use gold for a lot of other things like electronics and so on, but you're right that jewelry is the primary driver. Then you have financial investment as well, and central banks buying gold. I don't see that happening. I do see the gold companies being very active on their ESG agenda and driving their net zero targets and we see that translating into action where they want the electric equipment. Like we've got four battery electric trucks with Barrick in Nevada. There are lots of other gold mines that are going hard for battery electric to electrify and reduce that carbon footprint. I don't see that yet as a threat to gold. Now, having said all of that, I think gold is the hardest commodity to predict because such a big part is both jewelry and financial investments. You know, with financial investments, if the mood swings, well, demand drops a lot and then prices come down a lot and those swings go faster. I find it easier to predict copper, zinc, nickel, iron ore, and coal. Thanks very much. Yes. Do we have more questions? One here. Yeah. Yeah. It's Andrew ABG. So the 60% higher addressable market, that was interesting. Could you help us with the profitability as well? Because, you know, slightly lower sales of spare parts, which we know are very profitable, and then Battery as a Service, which we don't know at all very well, you know, it's a completely different business model. How should we think about profitability on that higher addressable market? Yeah. I join you in the club where we don't know a lot yet, which is correct. Really we're innovating at the moment, so it's really hard to predict. Obviously, we have the ambition to get to the same margin level as we currently have. We have a plan to get there, to the same profitability of that bigger pie that we're going after. But we're gonna have to do a lot of work, number one. Number two, we also have to prove to our customers that, A, the equipment is worth it, so it's worth investing in that equipment, and you get that productivity benefit, 'cause then they will be prepared to pay for it. Second, we gotta be one of very few to make the best equipment to be able to do that. There are lots of providers of mining equipment that is far lower quality, far lower productivity, but a lot cheaper than ours, and our customers are still buying from us. As long as we can achieve that the same, which I think we can, we can achieve the same margin level as we do for traditional diesel. Thanks. Just a very short follow-up. How big part of your customers choose the Battery as a Service option, you know, when they're buying electric? Yeah. Currently, quite a few, actually. We see, and when we look in the near term, we see like three-quarters of our customers will take the Battery as a Service. It's also a technology, a safer technology bet, right? 'Cause then the onus of fixing the battery, making sure it works is on us. We see that going down over time. We're guessing to maybe 50% or 60% of total. All right. Shall we take a final question, if there's any? There's not. Now it's actually time for the real break, where you're allowed to take the cinnamon buns and smoothie. Fill up with some coffee and do take the opportunity. I know you've been doing that already, but we actually have our head of strategy from our different BAs here at the screens. They can also give you more color on how we are creating value, our recent acquisitions and innovations. Please do, and we meet back at 3:10 P.M. We're not just replacing diesel in the underground space, we're making equipment more productive, more powerful, more capable. It is not just to take a diesel unit out and put an electric unit in. There is a lot more into it. It's quite unique in our industry that the power need is so big and huge in our equipment. We are not talking about small vehicles. We need to electrify small vehicles, equipment, what we have, but we have a 60-ton dump truck and big loaders and the main purpose is driving, so we need to have energy and power on board a lot. The best way to get more power to have a more capable vehicle, faster speeds and climbing steeper hills is through increasing the voltage. Generation by generation of electric vehicle technology is increasing that. Every time there's a new technology for better insulating materials, there's a higher another voltage push. You know, electric vehicles 10 years ago were 300 volts, and the latest stuff is getting to 900 volts. Battery-powered machines are very powerful. We can typically overpower a machine by 100%. We could have, you know, twice the horsepower of a diesel machine in the same application space. Our cell-swapping technology is really going after the infrastructure impact of refueling. Swapping batteries means that you can charge batteries at the same rate that you're using the energy, mitigating peak power draws from the infrastructure, minimizing the amount of charging power you need, and really optimizing all of your equipment. Even on a 13-kilometer haul cycle on a 15% ramp, there's two swaps in that entire operation, and the truck travels 10% faster than a traditional diesel machine. Really, net, you're equal or better in productivity using battery. The self-swapping battery system, the clear advantage of that one is that it is the quickest way of getting energy on board for the machine to operate. You come to a battery swapping station, you simply kind of drop off the battery to the floor. You move to a battery that has been charged up, you pick it up, and you continue the operation. You are done in a few minutes and ready to move on. It is a kind of also a global trend in underground mining that the mines go deeper, the ambient temperatures go higher, which then again needs ventilation from the mine. Electrified machines are more efficient, and they have remarkably less heat load for the environment that they operate in, so they reduce the amount of ventilation needed. Particularly for deep mines, ventilation costs can be the highest operating expense for the business. Reduction of mobile source heat in the underground environment can be a huge benefit to those type of operations. Most obvious advantage of electrification is, of course, that it is completely emissionless in the underground mines. Removing diesel particulates and improving the environment for the workers underground is really a high priority for all mine companies. It's not just a health benefit, and it's not just an economic benefit. There's also a sustainability aspect. It's really kind of a one of those best of all worlds type of technology, and I think that's why largely it's so pervasive and it's getting such a push right now. Over the coming years, I see electrification in mining picking up pace tremendously. It's already over the last 18-24 months gained a lot of momentum. I think that electrification is gonna be one of the biggest technology shifts that we've seen in the conservative mining environment for a very long time. This will evolve and the demand for these machines will go up, and three, five, seven years from now, I think this will be a major part of what we do. There are three main benefits with electrification in mining. There's health and safety benefits. With health, you get the diesel particles out of the mine, and we get the temperature down because electrified equipment emits less heat. There are economic benefits. With less heat, you need less ventilation and less cooling. There are sustainability benefits. With electrified equipment, we use less fossil fuels, so we have less greenhouse gas emissions. You have major CapEx savings for an expansion. You can build smaller tunnels because the electric equipment is smaller for the same capacity. You can build less ventilation, less cooling. You have OpEx savings, so your fuel is cheaper. The trucks and the loaders, they move faster. The machines move faster so they can move more tons. When you compare electric equipment versus traditional diesel equipment today, and you compare the CapEx and the OpEx, they are now, when we look at the full life of the machine, on par with each other already today. The CapEx is higher for the electric, but the OpEx is lower, and OpEx is the energy cost and the maintenance cost. When you factor in the savings that the mine can make on ventilation and cooling, then there's a strong business case for electric already now. Electric equipment is exciting. It's exciting because we have an opportunity to change the environment both locally in the mine and globally. I like our equipment. I like the swappable batteries because it's a very pragmatic way of implementing something completely new into a mine. I like the machines. They are strong. The torque with electric is just enormous. We are the leaders in electric equipment for mining already today. We have the widest range when it comes to offering a battery electric, both for underground drills and loaders and trucks. We have the most advanced equipment with the battery swapping technology that nobody else has. I think in the next two to three years, every large contract will have electric equipment as a part of it. Electric equipment has clear potential to be better than the equipment we've had up until now. It takes a bit of time to prove it up and make it as reliable. What our customers want from us is they want as reliable or better, as fast or better, the same price or better. The world fell apart. I knew from the start. There's no dry, there's only dew. That's the way it works with you. Because I knew from the start. That they can make you whole again. I know in this heart. We're stronger than our weakest part. I knew from the start. That I would see you laugh again, smile again. I'm walking. Yes! This is Amanda. She has something that she shares with 600,000 other children in the world, diabetes. Amanda Rosengren, a then four-year-old, lively, and happy kid, living her life just like any other girl. In 2011, her parents noticed that she was often tired and weak and thirsty. After doctor visits and some tests, the doctor told them that their Amanda had type 1 diabetes, a disease that will affect Amanda every day for the rest of her life. This is where the pancreas is located. If it is unable to produce enough insulin, the body cannot absorb sugar from the blood, resulting in a high blood sugar level. Amanda's pancreas does not work properly, so she has to constantly monitor her blood sugar levels. It's a never-ending dance between eating and pairing with insulin to keep the blood sugar at a steady and normal level. In the beginning, it was a constant hassle taking manual blood samples and injecting insulin with cannulas. In 2014, that would change. In Palm Coast, Florida, Sandvik produces Exera precision medical wire and wire-based components. Katina Whitten has been working here for 20 years. She was on the team that developed the wire used in continuous glucose monitor devices that measure glucose levels in the blood. I am a type one diabetic. I have late adult-onset diabetes. We manufacture wire for a CGM, which is a continuous glucose monitor, and that's exceptionally passionate for me because I actually wear one. In particular, Amanda comes to mind because she is also wearing a device similar to mine, and this is very beneficial for her and her family because now Amanda's parents can, you know, have peace of mind when she is doing an activity or a sport or even if she wants to spend the night at a friend's house. They can remote monitor her blood sugar, and they can have peace of mind that their little girl is okay. The advantage of using Sandvik wire in this product is the quality. The quality is very consistent, which in the end product you have no failures. When I'm doing recruiting, I often get asked, "Why, why do you like working for Sandvik and why have you been there so long?" My answer is always because I know that we are working on products that are ultimately improving the quality of life for people, as well as, saving lives in many cases. It's really rewarding to talk about it. I'm actually gonna cry thinking about it, but, it's really rewarding to know you're getting up in the morning, you're going to a job where you're able to save people's lives. Today, Amanda's sensor can read her blood sugar level and send the information in real time to an app on her smartphone, which instantly warns her if her blood sugar level is going high or low. Now, Amanda doesn't have to think about her blood sugar level all the time, and she can easily inject insulin from an electric pump on her stomach when needed. Instead, she has the freedom to do what she loves most, like any other 12-year-old. That I will still laugh again, smile again. This jump is impossible, or rather it would have been impossible. My name's Mike Schultz. I'm the owner and founder of BioDapt prosthetic manufacturing company, and I'm also a multi-sport athlete, motocross, snowmobiles, snow bikes, and snowboarding. Going into 2008, 2009 winter season, we line up on the start line for the first qualifier of the weekend. About halfway through the race, I hit a hole funny, and it pitched me off the side of the machine. On impact, my left knee took the bulk of the hit and hyperextended 180 degrees in the wrong direction. Three days later, at the hospital, the medical team and Mike's lifelong teammate and wife, Sarah, convince him to give them approval to amputate the crushed leg. Once I realized I was gonna become an amputee and, you know, shortly after, you know, I just thought I'd have to give up everything that I love to do and just have to settle for far less. In 2010, we started my company, BioDapt, with the intent of manufacturing the best action sports prosthetic equipment for lower limb amputees. You know, it's all about having the right tools to create the right product, and Sandvik's definitely on the leading edge of some of the most innovative high-quality tools in the industry. Mike's prosthetic needs to hold up to extreme environments and high stress impacts. Everything starts with great designs and then being manufactured by using the best quality tooling to ensure a precision fit. Sandvik's role in that process is really to help in the machining process. The materials that are used in the medical field for prosthetics, for joints, bone screws, those materials have to stand up to some pretty tough conditions. Sandvik has created machining techniques and tooling to stand up to those materials. Having tight tolerances, choosing the correct grades and speeds and feeds to machine these materials is really important. It's very amazing to me that I am part of the manufacturing process. It's one of the things that really drew me to the industry. To know that Mike is out there doing all the things that he wants to do and live his life the way he wants to live. With our tools in Mike's hands, he could create some totally groundbreaking stuff. Today, 12 years after he lost his leg, Mike Schultz is not only still a professional athlete, he is also a successful manufacturer of his patented bionic leg that allows himself and all kinds of extreme sporting clients from around the world, from veterans to elite athletes, to continue enjoying the sports they love. Mike has made us realize that even the impossible actually is possible. Smile again. Imagine waking up one morning and not being able to hear anything. This is what happened to Jacob. Cogan syndrome, an extremely rare disease affecting one in a million, and with painful symptoms that gradually break down the infected person's balance, hearing, and vision. Jacob Johannen, a happy-go-lucky guy from Gothenburg, Sweden, just happened to be that one in a million. What started with dizziness ended with waking up one night in total panic. Death. I woke up one night, and I realized I cannot hear my own voice. I was so scared and felt so helpless and frustrated because I could not hear anything. As Jacob Johannen's auditory nerve no longer could absorb any sound waves, a regular hearing aid was not an option. In Palm Coast, Florida, Sandvik produces Exera precision medical wire and wire-based components. In Jacob's situation, he's lost his hearing, so he has a cochlear implant. On the outside, he has the microphone, which you can see. Underneath, he has the implant itself, which consists of a coil, which is typically made of pure gold, and then an electronics package and some very fine wires that go from the electronics package into the cochlear implant. The sound travels from the microphone to the electronics package, and then electrical stimulus is passed through the wires, which goes into the cochlear, which moves the fluid around, stimulates the hairs that are in the cochlear, which stimulate the auditory nerve going back to the brain so we can hear. The greatest challenge now that we have with the new products that are coming out is they're obviously getting smaller and smaller and smaller. Right now, we can make wire down to half of a thousandth of an inch, which is basically a spider web. Trying to handle that kind of wire and make components out of it gets to be more and more difficult. Solving these challenges we have in front of us, we rely on our process engineering group, who has a lot of experience in coming up with ways to put on different types of coatings, draw different materials down to smaller sizes, or turn that wire into small components that we'll sell to our end customers. I'm very proud to work at Sandvik. The products that we provide to our customers end up in devices that completely change people's lives. They can hear again. It's really emotional to be able to see what kind of effect you have on someone's life. Together with groundbreaking research, new materials, and technology, cochlear implants have become a standard procedure in the Western world. It took a couple of months for Jacob Johannen's brain to adjust and interpret the signals as sound, but today he can hear and live a perfectly normal life. This is when Jacob Johannen got to experience hearing again after his hearing loss. I knew from the start that I would see you laugh again, smile again. Welcome back after the break, and also a warm welcome from my side, Nadine Crauwels, President of Sandvik Machining Solutions, to this session on Sandvik Manufacturing and Machining Solutions. I will do this session together with Christophe Sut, so he will join me soon on stage. Starting with a bit on the facts on Sandvik Manufacturing and Machining Solutions, we are a business area with around almost SEK 37 billion in 2021 on revenues, and with an EBITDA of 23.1%. Here, we must say that both of the business area segments are, as all parts in Sandvik, built in a decentralized manner, so we have in total eight divisions. Within Sandvik Machining Solutions, we have five divisions. Each of them is a really strong brand and really a leading global in their own territory. Meaning we have three multi-brand approaches in the premium side. We have one mid-market brand, and then the fifth division within Sandvik Machining Solutions takes care of logistics as well as the powder supply for the other divisions. This really makes us, as we previously heard as well, vertically integrated. Sandvik Manufacturing Solutions is built slightly different. They are built more from adjacent manufacturing processes and technologies. They have additive manufacturing, design and planning automation, as well as industrial metrology. When we look to our product offering, you see very clearly that it is still majority-wise based on hardware, meaning half of it is coming from inserts, then we have round tools and holding tools. We are proud to say that also the software part that is in our business area segment is growing and counts today in 2021 for 3% of the total. In the 5% others, you can see here it's the powder from additive, for instance, and also the equipment from the metrology that is counted in that sub-part. When we look to our business, then we can say that geography-wise, we have half of our business or slightly above in Europe and North America and Asia are taking each a kind of equal part of the remainder size. When we look to the segments where we are playing most, and that is for us the most impactful and also the most powerful is the general engineering, counting also for half of the business, followed by automotive and then aerospace and other. Needless to say, with the pandemic in between, for us as Sandvik Machining Solutions, aerospace was on the previous Capital Market Day version a higher share because that, of course, is still the area that is most under recovery. The story that we are going to tell you today, so together with two business area segments, is a story of growth, is a story about expanding our offer above and beyond. Above what we can do as two separate business area segments, and also beyond the core businesses and beyond hardware, creating new software solutions, creating new business models. This is also the explanations we are going to hear, listening first to the deep dives of the two business area segments separately. Those growth opportunities in each of them are quite different. We have truly different growth opportunities in all our leading positions. When we put our two areas together, we create truly a unique market position. That unique market position is easy to visualize with this customer value chain that you see on the picture. We see that on the blue side, Sandvik Machining Solutions is very strong and has its historically foothold in the machining part, where the manufacturing processes happen. We know that machining is not only about inserts and tools, and even more and more about the know-how, the data that is available and can be used in efficient ways. That availability of data and usage goes and gives us opportunities left in the value chain as offers and ability to create new business models. When we look to Sandvik Manufacturing Solutions, they have an alternative to machining, and that is with additive in the manufacturing middle space. Besides the additive, they are very strong in the outbound sides of the value chain, or they're very much on the left when we talk about design and planning, and also very much on the outer right when it is about verification. We are in total having a market potential of SEK 375 billion, and we will talk today more around in the later part of our joint offer and how we are building a platform to accelerate our common goals there as well. Before going there in this common part, I would like to introduce and invite Christophe Sut on stage as he will take you through the Sandvik Manufacturing Solutions part first. Thank you, Nadine. Good. To start with, let me give you some glimpse on what is Sandvik Manufacturing Solutions with a couple of numbers. During 2021, we reached a run rate of SEK 3.1 million of revenue, which was, as you noticed, came from a big chunk of acquisition. We acquired for SEK 2 million of revenue in sales. We have an EBITDA of 10.4%, which is actually a mix of two things. We have in our portfolio companies that are established and that are growing and scaling very nicely, and a few startup projects that are here to build the future. We have 1,900 employees. Our organization, as Nadine mentioned, is built around three divisions. One is design and planning automation, industrial metrology, and additive manufacturing. I will get back a little bit later on those to make you understand what they are doing. What you can notice when it comes to our footprint, we are very heavy towards North America and mainly due to the asset we have acquired that have a very strong footprint on the North American market. In terms of customer segment, general engineering is extremely heavy, for SMS, which means that we have a very broad reach, when it comes to type of customer we address and not a dependency to a single sector. Finally, a number that is important and interesting is, after acquisition, we have a portfolio and a mix in terms of product that bring us to 45% of our sales being software sales, 7% being services that are usually the enabler you might need in certain scenario to implement the software, and then around 48% is hardware. Hardware, as Nadine mentioned, is two things. It's additives, powder that where we have a leading position, and then it is some metrology hardware that in many cases is an enabler for our software suite. Going to the different division, as I mentioned before, we have three divisions. The first one, design planning and automation, is going from CAD to automation tool prior to the manufacturing exercise. Additive manufacturing is driven mainly by our powder business today, which is a new alternative, you could say, to subtractive manufacturing and a complementary alternative to subtractive manufacturing that is driven and developing through the drivers of sustainable manufacturing. Finally, industrial metrology, where we have both a software and a hardware play and where we are trying here to move towards in-line metrology, meaning moving the metrology closer to the manufacturing workshop. Looking at the acquisitions we had during 2021, we had four significant acquisitions acting in different spaces. Two for the DPA division and two for the industrial metrology. Mastercam and Cambrio that joined us during October last year are two brands or two companies actually that are acting towards the CAM type of software. If you look at Mastercam, which is the brand that is used for CNC software when it comes to their CAM solution, plus GibbsCAM, that is the brand from Cambrio toward that segment, we have a leading position in number of seats on the market and a number three position when it comes to the revenue. It gave us a very strong footprint within that market. When we look at the metrology acquisition, we got with the DWFritz. DWFritz automation capability, but also the opportunity to move metrology to the manufacturing line, and that's what it brought us. DWFritz is a sizable company, $78 million size. Then finally, DCS is a software components that is built to provide a solution when it comes to quality verification and tolerances verification for the metrology components. That's a smaller company, very niche, but complementary to other software we have like Metrolog X4 from Metrologic. Those are the four assets we acquired during 2021 that gave us a strong position in those markets. I would like now to walk you through the dynamics we see on the market and starting by the change of customer behavior. I mean, as it was mentioned a little bit earlier today and in some of the booths, I mean, we can see that we have aging population when it comes to manufacturing, and it has a significant impact in terms of behavior. This is the following. I mean, we have a lot of people that have been extremely experienced and know how to run a machine. In many cases, those people have been able to just stand by the machine, listen to the noise it produce, and know the outcome they will get. That is going away. Therefore, there is a need to automate those things to ensure repetitivity of those things. That's one of the drivers that is very important to us because it means that people are looking for solutions that will replace experience and it's automation. A second element is the nature of manufacturing and design itself. Engineers have evolved. They develop more and more complex solutions, and at the same time, the tools you use to produce and the machines you use to produce are more and more complex. For example, we can see a very strong expansion of multi-axis machining, so five, six axes. As you go to more complex machines, you need to have a way to prepare the code you will use to produce. Those are examples that are changing the environment. All those things, they get supported by a shift towards digitization. On the one hand, you need help because things may get more complicated to produce, you are losing competence, and at the same time, you get a world that becomes more digital and people used to digitization. Those factors become very favorable to the business we are in. Looking at the impact it has on the growth, you can see that there are three markets where we are mainly active in, which is computer-aided manufacturing, where the PA is acting as a division, additive and industrial metrology. The CAGR for those businesses is between 7%-21% for the coming period, which means that we have an opportunity that is above GDP and above the average in the industry. What you can also see is that the addressable market we are approaching for all those markets is sizable. By doing the first acquisition we have made, we are starting to have a serviceable market that is significant. We are not at the end of the road. There is still work to be done. The way we do the shift to growth is, first of all, we are part of the industry, meaning that we have a lot of connection historically because of our initial background, because of our connection through the tool we produce, and that's something that is key in the way we operate. I mean, we capitalize also on the knowledge we have, both in terms of players, but also in terms of technology and how do you implement, how do you produce, and how do you capture the outcome. What we are aiming at is really at closing the loop of manufacturing and having a software offering that is agnostic, that will function with anything you find on the market and that will enable improvement of productivity. The way we are doing it is by meeting customers, building cases, and I will cover that a little bit later and give you some example, and shaping new market based on real cases. Okay. Looking at the workshop, what you can see here is that we are acting from component design to the verification, and we have mapped the workshop to be able to identify what are the different steps that needs to happen in order to be able to produce a component. Looking at those different steps, one of the main challenge you have is that today, those steps are taken as independent and silos, meaning that very seldom you will share data from one step to the other, which means waste, complexity to move on and to move to the next step, but also loss of productivity. A very simple example. You might decide the type of tool you want to produce at an early stage, but then you might not know if you have it in stock or not. You will have to go back, maybe order it, or maybe look for another alternative. This is very practical challenge that people face on a daily basis during their manufacturing process. What we have done over the last 18 months is being able to line up assets that allow us to be a player in the different steps of the manufacturing. Which means that now we are starting to get the possibility to have a play because we understand and we have the capability to offer a solution in the different steps of the manufacturing. How we are working and moving forward. We have started during 2021 to really build a portfolio of company, making sure that we have the asset that enable to have a play on that market. That's why company like Mastercam, like GibbsCAM, SigmaNEST, and others have come into play and have joined us within Sandvik. From that, all those assets are very interesting asset, and we have started to continue their own case and their own goals. I mean, obviously, those are companies that have been here for long, but that still have growth opportunity. It's a market that is extremely dynamic. There is a case on its own to ensure the profitability and the growth of those companies. On top of that, we are starting to create values and synergies, and the way we are doing it is we are looking at the customer cases, how we can create value beyond the individual value that the company can bring, and we transform it into the market. I will cover a few examples to try to help you to understand a little bit what we are talking about. This is an example of synergies that have been created after acquisition. What you can see on the movie, and now the timing was wrong because the component disappeared. Here it is. This is a rotor of an electrical motor. As you can see on that movie, this component is extremely complex. It's a lot of different shape on it, and each of those components has to be absolutely perfect in order to reach the right level of efficiency. The challenge that the manufacturer are facing is how can I be able to measure every single component at the speed of manufacturing. I don't want to send one component to a lab that's gonna check it and come back a couple of hours later that tells me it was wrong. I want to be in line and to be able to verify the component and say, "This component was good." It has to go at least at the same speed as you will manufacture it, because another one will come and another one will come. What we have done here with the capability of the DW Fritz and the metrology software we have before, we have pulled together a solution that enable both the scanning of the component at the appropriate speed, but also because of the capability of our software, we can manage the point cloud and check that the component is good. That's the way we believe we will create value. We identify an area where there is a problem that is part of the big loop that I showed you before. We make it happen for a customer, make sure that we can scale it to other solution. I think the first customer we met was somewhere in October, November. Two weeks ago in Control show in Germany, we were presenting a series of four machine integrated with that software and starting to capture the first opportunity. Very exciting. Another example of added value we can create is between our CAM software and our tools. As you might know, our tools are quite intelligent. It's a lot of data related to tools, but it's also a very broad range of tools. The main challenge you will get when you launch a manufacturing is to make sure that you pick the right tools and that you get the right data associated to the tool to have the right outcome. What we have done in that scenario, for our centralized tool, we make sure that the data are available within the Mastercam software, which allow people to really gain in efficiency because they know that the data they will get are correct and right. But also allow to capture a better productivity in the workshop because the outcome of it will be in line with what you expect because it is a proven process. Those are two examples that are practical example that we have been able to realize because we own the asset and because we have an understanding of the technology and what can be reached. When it comes to financial target and what we are aiming at, we are SEK 3 billion today, and we are aiming at moving to SEK 6 billion by 2025, which is a doubling. One is organic growth, where we will grow at the middle of the range that you saw before in terms of the CAGR of the different markets. The remaining piece will be bolt-on acquisitions. It will bring us to a level of EBITDA margin around 20%, knowing that a lot of the components we have are software that are highly scalable as you grow the revenue. Finally, as we continue to grow, we will shift our mix towards higher weight of software since we have a target to have, by 2025, 60% of our revenue coming from software solutions. To conclude, we believe that we are operating in markets that have very strong market growth. I mean, you saw it before. I mean, the logistics market is still having a 7% CAGR for the coming years, up to double-digit 20%. We believe in being agnostic. And what we mean by that is, for sure we want the Sandvik products to work better together than any other solution. But we will not be closed. I mean, we will also work, and we work from time to time with competitive solutions just because this is the environment we live in. People will not just drop everything they do because we come in, but they will start to adopt our solution and step by step and one after the other, they will capture it. Then we have a position with very strong brands. I would say we can measure every day the asset of the company we have acquired, and I would say the stickiness of the solution they have built, which is very important. I mean, you really want this process to work. If you run a manufacturing workshop, you don't want any failure. You want the people that operate are reliable, and that we have really acquired. The way we will create and accelerate the growth is by shaping market. I mean, we take case, we have a vision and the vision is to connect different part of the workshop that you have seen in the loop. We identify, and I will turn back a bit to that later when we conclude with Nadine. We identify the different building blocks, and then we make them work, and we connect them one after the other, delivering the value to the customer, but also creating revenue on the journey. All in all, it will bring us to a revenue of SEK 6 billion. That was for SMS. I will hand over to Nadine again for the SMS part. Thank you, Christophe. I'll take my glass of water. I have brought my own. Yeah, thank you. Good. This is going to stretch your attention levels as we are going to do another 20 minutes in a row, and we are going to dive into Sandvik Machining Solutions. As you've seen the facts around Sandvik Manufacturing and Machining Solutions in the beginning, I can directly dive more into our strategic direction, which is a shift to growth. As you can see here, it is very much related to what we previously said, so shift to growth above and beyond. We have the ambition to grow above the market levels and also beyond our core business and relate that as well to this expanded offer that we have been talking about and also Christophe Sut talked about. When we talk about our shift to growth, we have three building blocks, and of course, the first one, the big building block on the top is our extensive brand portfolio. We have these leading brands, global brands, who are carrying very, very profitable and good, growing core business, but also we are adding, as we speak, other brands to our portfolio that are also including, like with CGTech, also software solutions to advance our total machining know-how related to our core business. Here, this brand portfolio is so built together that we have premium and mid-market, so we can also maximize our opportunities to take market share in the overall market. The second building block is the Sandvik Shift, and one area in the Sandvik Shift is related, as we heard earlier, on growth. The second block I would like to highlight here as well is about agile through the cycle. Within Sandvik Machining Solutions, we are always striving to have the highest level of operational excellence. That means that we are revisiting and revising our operations as well as our setup in our sales organizations continuously to be on top of the best performance for the future. Besides those two elements, we have also four enablers that we take with us, and that is the digital shift, sustainability shift, a high focus on customer innovation, and also securing we have a great place to work. Those two blocks is driving us to the shift of the growth, but during last year, we saw and we knew as well that a strategy and in successful execution is needed to be really focused. Last year, we decided to be more clear, to be more crisp in our growth plans, and we went for six identified growth areas. Before I dive into those six, I would like to start with you together on looking into the market and where the market is developing. We go into the six areas as a result and show what we really want to focus on ourselves. I would like to take you on a third stage to also show how we are going to then grow our market shares. Because gaining market share that is, of course, above the market needs something extra, how we are differentiating ourselves, and how are we putting our opportunities even on a higher level. If we start on. Yes, now it works. On the market development, I would like to start with the main four segments as the segments, of course, is a key driver for our business. You can see here for all the segments, you see the market size, the share, and also the CAGR from the baseline of 2019. On the left side, you see our major one that we talked about, our strongest segment in general engineering. Here you see with the baseline of 2019 the highest growth CAGR from all the big segments, which positions us quite well. On automotive and aerospace, I want to click one thing further and really focus on not only the more moderate CAGR from 2019 baseline, but really focus on the 2021 onwards CAGR, what is very clearly showing a high recovery pace, especially in aerospace with 12%, and that we know that the commercial aerospace part is really still in a very recovery pace and continues for a while. When you look to automotive, also a good recovery pace in the years ahead. As we know today, we are having still some supply issues that will last also until probably beginning of next year. We can see that in automotive, we are, of course, talking a lot about something else, and that is electrification. For that, I would like to take you to this slide. The main conclusion for us on our 2025 strategy is that automotive machining potential remains flat. On the graph on the left side, a little bit more details, we can see that the amount of vehicles is growing into 2025 as well further into 2030 with a good pace. At the same time, the electrification continues, so the amount of electric vehicles, but also the amount of hybrids, keeps on increasing in 2025 and 2030. The numbers we use here for our pace in these calculations are coming from the IHS. We can here then see that by 2030, still 65% contains a combustion engine as hybrids, of course, still have one as well. That means that the cutting tool potential, the black line on 2025 as that is still flat, but by 2030, the cutting tool potential goes to 97%. That means if you calculate that into a CAGR, comes to a 0.4 CAGR impact for Sandvik Machining Solutions. One thing I would like to highlight here is as well the factor that we have been adjusting that we use for electric vehicles, and it was previously 0.4%, and we adjusted that upwards to 0.55. The background for that is that we have seen that electric vehicles are evolving. The needs and the demands of the consumers are changing. We see more complex powertrains, we see more powerful engines, and we see also more four-wheel or all-wheel drives. That has been clearly indicating that goes up from 0.4% to 0.5%. As a last point, I really would also like to emphasize that of course, in general, the aluminum, but also the lightweight materials, is growing, which create for us an opportunity to increase our market share in lightweight materials overall. We don't want to concentrate only on our big segments, but I would also like to highlight here and take a few fast-growing segments that we have put on our radar. Here we talk about medical with a really good momentum together with electronics and die and mold from a CAGR even from 2019 base, but also if we look into 2021 and onwards. Medical, very clear demographic shift. Electronics, the consuming world is increasing and more consumable goods are demanded for, and die and mold is very much steered as well by an increase of component needs. Here we see a great opportunity to build on those growing segments. Another way of slicing our market, what we need to do to understand fully the dynamics is also take a look at the geography. We can see that the biggest market for overall from a market potential as well for us is Europe. Here in the 2019 view, CAGR, you can clearly see that Asia was the strongest growing from the early indications. If we then look on what has been going on now since 2021 after the pandemic, we can see that all geographies are still giving good growth. Still, Asia is the fastest-growing, and with that pace, of course, challenges Europe on a full market size by 2025. Also Americas, of course, gives us a good potential and has a higher pace in growth than Europe. Here, definitely opportunities from a market potential. The last part, how I would like to look at the market to give some more flavor on the development and where we could like to focus on is the mid-market. The mid-market is growing faster than the premium market, and that you can see on this bubble graph on the right. On the x-axis, you see the perceived value from low to medium and high, and mid-market, of course, is in the middle of the chart. Our premium brands are perceived more on right side of this chart. On the Y-axis, you see the growth rates, and there you can see in the middle field, these orange bubbles have a higher average growth rate than the high perceived value. Here, of course, for the mid-market gives opportunities, and we also see a very different model. The quality and the performance of tools, don't underestimate that. There are very high demands on that. What the difference is with the mid-market is a lot to do with what is the service level provided regarding to this know-how and how to apply the tools, as well as, usage of much more distribution and channels into the mid-market. With these trends, I don't cover all the complex dynamics of the industry, but with these ones, I would like to take you in what do we then decide to go for? What are our six areas that I mentioned before? Here are our six areas. All these six are enforcing each other. It's not that they are like totally separate and complementary. No, they are also enforcing each other, but each of them has a really own strong plan with crisp actions that we would implement to secure growth. The first one you see here, strengthen our position in inserts. Inserts is our core business, has been our long heritage on introducing new products every single year. With an average pace of eight new products a day, we continue to build on our innovation in that field. On the other hand, insert is also used a lot in general engineering and in automotive. Remember, the recovery of the automotive as well as the general engineering pace is supporting a good insert opportunity growth. Take a leading position in round tools is the second one. Round tools is growing faster than inserts. A lot to do with more five-axis machining, more near net shape. Round tools is also very much related to the growth segments I showed before, medical, electronics, die and mold, and so on. Here in round tools, for us, it is all about securing that we have a full offer and also securing that we have our footprint in all the geography areas. Become a market leader in mid-market is the third one. We have Dormer Pramet as our division in mid-market, but we can still grow there as we would like to be on the podium on the top three in the market. Here it is a lot about working, as I said before, with international channels and also focus on Asia as the growth there combined with mid-market is a great opportunity. Number four, grow outside of Europe. Here, Americas, Asia had a growth, a higher growth pace, as we showed. There, of course, our market share relatively is still smaller as in Europe, so our opportunity is there to grow. We are focusing a lot as well on local premium, as that is in different regions like Asia and Americas, very needed to be local to customer, especially if we combine it with round tools area. Master the automotive shift. Here, we are continuing to evolve together with the electric vehicles and the electric engines as the whole industry is still evolving and getting new models there. We are securing a full offering, and that, of course, also has our focus for the future, and we build a lot on project work because of component approach is in this electrification and in the automotive shift, an extremely important part. That means you need to offer and the capabilities. Last but not least, industry leader in expanded offer beyond the tools. Of course, all the tools and the core business combined with connected machining, combined with what Christophe was talking before, the know-how and the tool data gives us, of course, opportunities to create more value for the customer and more efficiency and productivity. Gives us the opportunity for us to create new business models. With this view, I would like to take you down to the next step, and this last element is exactly the good bridge in how to take more market share. Taking market share in general, we do that a lot, as I said, with creativity and bringing new products to the market, and that we will not change. We will continue bringing strong new products to the market, but we will also start working more and more with delivering machining know-how. Delivering machining know-how also in a digitized way through connecting software solutions. We can clearly see here in the customer value chain in this bold orange areas that the areas where we are strong, where we have our offer, and where we have an impact with our offer in the efficiency and value for our customers. We have data and know-how in each area from production and operation engineering into shop floor solutions, logistics, and also in machining. The data and the know-how doesn't only stick to one single box. It transfers and goes from one into the next and cumulates there the advantages, what also creates for us the opportunity to to create those feedback loops you see on top and below. What concrete do we offer? Here you can see it is a modular approach. In each part of the value chain, we have an offer as for on the left side, securing that we have the right machine tool recommendations, but also with the CGTech offer, we have softwares that are giving tool path verification and optimization. In the middle part, we are able to secure tool identification, and if you haven't seen yet, you can take a look at the booth on the Data Matrix and the QR code. Also vending machines and inventory management to secure that we are having our amount of tools in order from a customer perspective. On the machining side, machining data, but also performance-based business models, and we will come back to that later on as well. Here we are capable of linking the total component advantage and output for a customer to a full model. These parts can be seen as separate elements, but also put together under one big project or consulting. Then, of course, the benefits that the customer will have is going to be cumulative. On the left, it is more around efficiency, predictability, but if we go to the right, it is more around productivity and CapEx gains for the customer. If they can, of course, link the full value chain together, then they have, of course, the full benefit out of that. This strategy is not something that we just started now, so we have been working with these six areas already in the previous year, and we want to show some of the highlights, what we achieved. Here on the left, we have been achieving a good traction with CGTech and our offering in the digital machining. We also have had the bolt-on acquisition from ICAM coming in and adding extra opportunity to expand that optimization and verification option. We work a lot, as we told, with automotive customers in projects where we want to prove really what customer value and efficiency we can bring to them. Then also the Data Matrix, as we mentioned a few times today, is a unique tool to really own the data and have a full traceability of your tools at your factory. We are proud of sustainability that we achieved on all four areas, our targets, even most proud maybe on safety. Safety goes high up in our agenda, and here we have had in 2021 the best results and performances until now. On the acquisition side, we have been acquiring nine companies since end of 2018, a value SEK 2.4 billion, and all positioned in one of those six areas I mentioned before. That may be in a bit more detail with round tools. As Stefan said, we have had quite some acquisitions in the past years, and that has been giving us more than 2% market share gain, and we are now close to be the market leader. Not fully there, but getting close. We see here on the round tools also very clearly the strategic direction. We want to be in all geographies, in Americas, Europe and Asia. We also want to work with our different segments, so we cover the growth segments like with Yongpu, with electronics, die and mold, and also the electric part of the automotive. Yongpu on top has a full value chain offer, meaning they are producing their own blanks. That might make it such a local premium brand. Fanar has been adding premium quality taps that was missing in our portfolio, and GWS has been supporting on general engineering and especially in customized solutions for the American market. GWS is also a company that has had a very good pace on acquisitions, and last week we signed another agreement to acquire Peterson Tool Company, so they continue on that pace also moving ahead. Another area that we talked about is mid-market. Here we have had in the past year a very good momentum. Focus is, as we spoke around Asia, we see growth rates from India and China above the GDP levels and also a lot to do with the focus on securing our increased relationships with the current international channels, but also expanding on international channels. Cross-selling is something to highlight as well. In the mid-market, it's not a given you can do the offering on both sides, inserts and round tools. We have a Dormer Pramet that can do both. So we can also support a cross-selling, so a customer has only one provider of those tool combinations. Last but not least, expanded offer. We talked about CGTech. We talk about a great asset to bring in to combine with machining know-how and the tooling brands. CGTech reports into Sandvik Coromant, so that means all of the CGTech customers today have access to tool data of Sandvik Coromant. CGTech needs to stay agnostic. They are agnostic versus the whole CAM, machine tool builders, but also all the tool suppliers. Here you see an example how CGTech has been together with Seco in the aerospace, driving a customer project that realized 25% cycle time reduction. This is definitely for CGTech further to develop with all different brands within Sandvik Machining Solutions and beyond in the market as they will stay agnostic. This all lead up to very good achievements, the last year on our road of growth. Also we have previously set a few targets that we are now having new view on. We still say that our growth will be above the market when you talk about our organic growth. We still will have 50% around acquisitions to complement our offering and in the different geographies as we spoke about. The revenue CAGR from 2019 to 2025 will be 5%, what previously was 4%. When we look into more forward-looking from 2021 to 2025, that results due to the pandemic in between into a CAGR of 10%. We also increased our expanded offer. Previously, we said SEK 1 additional billion, and now we have plus SEK 2 billion by 2025. Another way of looking at it is this bridge. In 2019, Sandvik Machining Solutions was before the pandemic around SEK 40 billion, in 2021, SEK 35 billion, and we are adding market growth component, a market share growth and M&A component into this. Then of course, when we talk about market growth and market share growth, that is including core business as well as expanded offer. This is where I would like to leave the Sandvik Machining Solutions part and would like to get Christophe Sut back on stage as we would like to give a bit of a view on where is our vision regarding Sandvik Manufacturing and Machining Solutions. I think here, we have heard a lot about expanding our offer above and beyond what we said in the beginning, Christophe. I think here what we really aim for as a vision is that Sandvik establish itself as a leading actor in the closed loop manufacturing for component manufacturing. Absolutely, Nadine. Thank you. I think that what is important is, in what we try to convey, is the fact that we are really mixing here the core knowledge of Sandvik with the best of the digital world, and that's what enable us to start that journey, actually. Absolutely. I think to emphasize that strength again, we would like to highlight what we talked earlier in the presentation about our unique market position. We are having two separate very strong business area segments with each an own agenda, an own growth plan with own strengths and own position is. If we put it together, we can highlight that we have 400,000 software seats together in Sandvik Manufacturing and Machining Solutions. That includes then across industrial metrology, across operation engineering, and as well with all the acquisitions in the CAM space, that's where we have the largest seats will also, of course, add to this picture. We are having a unique position as well within Sandvik Machining Solutions with around 100,000 direct customers, a huge reach that we can have in the market. That has been giving us 20% market share. Then maybe not to forget as well, in additive manufacturing, we also have a leading position in the powder. Many different angles, but if we combine those different elements and really see that again, the core business, together with the software solutions and the know-how, put that into a digitized manner, we are able to create a good joint offer. We are still in the beginning of delivering that, but we have a good platform to grow and accelerate from which we can demonstrate with this slide. Yeah. We promise we will not ask you to explain the slide in detail at the end, but if you have question, we will be happy to get back to it because I think it's a very important slide. This slide we can build because of the knowledge and experience we have about manufacturing. What you see of starting from the left side is all the steps you're gonna take from component design, making sure that you will optimize the tolerances from their defined measurement plan that will allow you to do the control at the end, create the codes that will allow you to drive the machine, select the tools that will be used, make sure that the tools are available, and from there, enable machining of the components. All those steps are key in order to reach the maximal efficiency. What I think is interesting is not only that we have some understanding of it, but the fact that with all the assets we have acquired, we have started to fill those boxes and make sure that we can really impact the market by creating those scenarios that enable a closed loop manufacturing. Unless you want to learn it by heart, at least you can materialize the fact that, well, a lot of assets here are closing the loop and coming as building blocks that help us to deliver the promise we have to our customers. I think if you wanna take it one step further then and say that, yes, those gives a lot of opportunities. It also creates a lot of opportunities to create new businesses and also create new revenue models. Maybe it is good to give a few examples so you can position this big graph in a few more concrete examples. One, for instance, is Pay per part. When we really kind of close the loop and connect all the bits and pieces of a manufacturing process, that creates huge benefits, as we saw previously for customers. One, ability we have now is really to go more as to Pay per part. A customer who wants to pay for performance, not for input, not for anything they buy before it's something is done, but really pay for the outputs. This is of course something that is very much related and possible for a provider who can show proven performance improvements. If you cannot show proven performance improvements, this will be a hardship to drive forward. If we then think around what Sandvik has been able to do in a lot of different sites that we have been hearing from your side, Christophe, but also from ours, is we have a really great abilities to show and to quantify the efficiencies and the gains, and through that we can really show proven improvements, and that we can then build into a performance-based model. The advantages for customers, of course, in all this is that they have one speaking partner. There is one owner that they need to refer to. There is one who takes the overall responsibility. Remember, the skills gaps, the competence gaps that everywhere is present, and all the labor issues that is ongoing, this of course gives an opportunity for a customer to really give it trustworthy to a main partner. This Pay per part is really an opportunity for us to also secure a close integrated and loyalty with customers, but definitely a customer can give in full trust a performance-driven approach to the providers. Getting back to something we discussed a little bit earlier, if you remember with the case of the electrical rotor and the machine that was doing the measurement. I mean, we believe that moving quality assurance to the manufacturing line is going to be a revolution in manufacturing. It's a needed revolution because there is many industry that request this level of quality of measurement and speed in order to scale. So that we have extremely big ambition on that one, and we are very positive in the sense that we here really enable industry that need to go, that can be electrical vehicle, it can be in-industry related to medical, where you need to take measurement of prostheses, where you need a high level of precision. The more you guarantee that, the more your production is sustainable because you're not gonna throw away parts and the lower your cost is. That is another example of how bringing things together, we really can create and make a difference. Another example is around tool data integration, and closed loop manufacturing really creates the opportunity to have a full tool data integration. We know that in the whole manufacturing process, we talk always a lot about it is the biggest data provider part in the industry, in the machining industry. If you take around tool data, what is that? It is huge, it is broad, because tool data is around the dimensions of the tool. It is the recommendations on which cutting data to pick, but it's also the methodology, how to use the tool in the right strategy into your work piece. It is also exactly know where the hell is my tool in the factory? Where can I find it? How many hours has it already been working? Does it have had a reconditioning, yes or no? Is it being ready to go on a recycling or not? There is so much tool data that is available, and tool data integration would mean that at any point in time, in all the systems and in all the different steps of the manufacturing processes, that tool data will be at hand for those who need. Meaning, if a designer needs to kind of design a component or make a quotation, they can draw on all the tool data that they need to make a fast and a most accurate recommendations on a cost per component. If we have later in the process, and you need to make a correct production planning, you will know exactly where the tools are, how many you need, how much, where you have, and how you control your utilization, maximizing on your machine. It is also around at the end when we put on exactly on the machine to optimize the strategy. At any point in time, the customer becomes having a very convenient situation, has access to all the data at any point in time. It also, it is a very trustworthy situation because they have all the data that they can rely on. Here it is more for them, a seamless flow that they get in their full manufacturing process. For us, again, the ability to integrate very closely with our customers, on the other hand, also to learn a lot. Because this tool data integration will create a lot of feedback loops, what continuously can give input to improve. Closing with hybrid manufacturing. I mean, we are in the metallic component shaping solution world, and obviously we are extremely present with our tools and our CAM software in that field, and that's mainly through subtractive technology. There is additive technology, as you saw before, that is growing at a high pace. What we can see is there is two trends. One is that workshop are going to become more hybrid. They will use different technology depending of the volume they need to produce, the complexity of the components they need to produce. The process are also hybrid. I mean, even if you will produce a component in, using powder and additive technology, you will finish the component. You'll be using subtractive methodology and using, for example, round tool in order to get the right finish of it. Therefore, it's very important that we master the two technology because then we really bring value to the customer in their transformation journey and in moving forward in adopting new technology. That's something that matter to us. It's also technology that are extremely data-driven. Tool data, powder data are element we master and that we can make our customer benefit from. Yeah. I think if you remember the big boxes, there are a tremendous amount of combinations you can find in those to find great opportunities in new models. I think here we want to close this session on Sandvik Manufacturing and Machining Solutions. I hope that you really clearly saw that we are on a journey to grow on each business area segment separately with very much different opportunities for both of us. On the other hand, we are both on a journey of expanding our offering above and beyond, and that we are there to take steps and to have a jointly offer that comes to play with combining core businesses and really connecting software solutions. All of that on the road to create a closed loop manufacturing for component solutions. Thank you very much. We ask Louise to join us for some Q&A. Thank you. Nice to see that you're so excited about this. Indeed interesting and comprehensive on how we, with our leading positions and know-how and our strong acquired assets, can create further value to our stakeholders. We are ready, seated, and now let's take a few questions. Now we don't start with you, Klas. We start with Daniela Costa, please. Thank you. Just one question. Regarding the day-to-day management of all these new businesses, especially the ones around software, basically a two-part question, are you kind of merging them all into one same structure, or are they staying largely separate? Related to that, I guess it's very different to incentivize people that come from a software background, used to grow at big double-digit growth rates versus integrating them in a more traditional manufacturing structure. How do you deal with different incentives? If you can give us, like, some- Yeah. insight into this. Well, I can start by answering your first question. I mean, obviously, we acquired companies, but companies, we acquired people and knowledge. For us, it's very important that those company keep being managed on a separate basis. What we do is we support them in their growth project, and we support them with the added value we have because of our common history in manufacturing. But I think very important, I mean, we have a decentralized model. Those company have a growth plan. They continue to deliver on their growth plan. We even accelerate it in area where we see the opportunities, and then we create synergy on top of it just because we have the same heritage, we meet the same people, we understand the same thing, and we realize, let's do that together. We can achieve something bigger. It in a way answered the second question. I mean, we have people that know how to manage salary and things like that within the framework of business they are operating in. It's just a natural step. I mean, we offer our employees packages that are in line with market expectations. It depends what you do. I think it's also very clear if we are talking about this mixed offer that has mixed sources from both sides, we can definitely see in our core business the development of a next generation inserts or tools is absolutely totally something different than developing a software solution. At the end, what we always do is put use cases with a customer in front of the picture and see what is the need and what is the problem or the opportunity that we are going to develop. Then we bring, of course, teams from both sides under one focused project also together. We build on the strength of both original sources, so to say. Thank you. Klas at Citi. I just wanna come back to slide 96 and also 95. You're saying that revenue CAGR that you're looking at is 5%. You say 50% from M&A, which is then 2.5 organic, and you say the market growth is 2%. I'm just trying to understand whether you undershot the market because the bigger arrow in the beginning of the period 2019 to 2025, because 2.5 organic versus 2% market is higher, but it's not that much higher. I'm just trying to understand the logic there a little bit more. Thanks. Yeah, of course. I mean, when we look into 2019 and 2020 and the pandemic, it had a huge impact on our CAGRs. If you look from 2021 onwards, it is very clear that we still work with 50% on acquisitions, and we have an organic growth of half of that. I think the CAGR moving from 2021 onwards in the market is more a 4%, and that we are organically want to grow 5%. Okay. From 2021 to- Onwards. Exactly. Yes. Onwards. Exactly. Exactly. Yeah. Exactly. Yeah. The half is also the 10. Okay. No, that's. Yeah. That, that's helpful. Mm-hmm. I have a question on the autos headwind, and that was helpful, and it's good to see that your content is moving up on battery electric a little bit. Yeah. Beyond 2030, I mean, eventually we will go to a world with no ICE. I think you've said before that you had as a base case, a 1% drag for the total SMM business in the long run, but you still have quite a lot of hybrids in there, and there is starting to be consensus that we will live more in a battery electric vehicle world rather than hybrids, and I get to 2%+ longer term when I do this. You are presenting a very strong message on the offsets, but are you now saying that even long term, all the six strategic areas can offset also perhaps a 2% drag? It's a big focus for investors in the market to what extent Sandvik Machining Solutions can offset the 2%. I'm interested in your more longer term thoughts. I think I would not make any confirmation on the 2% as such. I think beyond 2030, we don't really give any strong indications. I think we have our factors that we work with, and then also until 2030, we use the IHS numbers. Of course, afterwards, we know that ultimately the amount of hybrids and the combustions will decrease. I think you can calculate yourself on the pace how that goes. If we think around the impact, it is more in the area of 1% CAGR that I think we should relate that to. Yeah. That, of course, is something that when you look into our ambition plan on 2025, is not seen as a significant headwind when we talk about our growth ambition. That's my point. Yeah. Just to finish off on my point is that there is also the spillover effect from having SMM and taking share in inserts because you have this continuous offering integrated versus the discrete offering that your competitors have. Mm-hmm. Obviously, that can also perhaps help the inserts market share going forward. I'm talking longer term. I'm not talking 2025. Yeah. Is that also? I think longer term, there are opportunities, I think in all different areas. We have seen on the growth segments, of course, aerospace is still on the way up. I think long term, there are definitely for both inserts and round tools, still very good growth opportunities as the world is still consuming, and is moving on in technology. The combination, of course, when we look into ability to gain market share, as we presented, is a lot to do in the ability to differentiate from anyone else in the market. That is exactly this unique position and the combinations that we can create will give us a head start and be in front of that opportunity. That should give us market share gains in both software, but I think for us in the Sandvik Machining Solutions, it's a lot about these softwares create a revenue stream on its own, but we should not forget that is creating a lot of additional core business. That, of course, is one of the main reasons for us to be strongly committed to this combination. Clear. Thanks. Andreas Koski, BNP Paribas, two questions for Christophe. The first is on automotive. You have 24% of sales to the automotive segment, and I guess that quite a lot of components going into the internal combustion engine are being designed by the software tools that you are selling and verified by the metrology tools that you're having. What will the impact be on your automotive business when we go to more battery electric vehicles? Yeah. I think that there is two dynamics related to automotive for our software business for us. There is one dynamic that is based on, I will say, the adoption of this type of solution. What you can see is one of the drivers is the fact that today, still a lot of machines are operated by experience of the person that is running the machine. There is still a bigger upside on penetration against shift in type of component that are produced. There is a second side of it, which is we get an upside because of automotive, because it differentiate the type of component that are manufactured, meaning that it requires more precision in many cases, which is more complex machining, five axes or beyond that have difficulty to be managed, you know, manually, then you absolutely need software. The second element on the metrology side is we see a lot of component now coming that will need a different dynamic. I will say for us, the dynamic is penetration, and that will be positive. It's also more complex components to take care of from design to measurement, which from a software perspective is also positive. We have, in a way, the benefit of that more than a drawback. That's great. The second one is on your margin target of 20%. My understanding during your presentation was that a large part of that margin uplift from the 10% where you were in 2021 will come from synergies. Where are you in terms of gross margins, and what kind of organic drop-through should we expect for SMM going forward? I think there is two things to consider. One is obviously we have 50% of our business today that is software business, meaning that this part of this business is highly scalable. That one of the components to the journey to 20%. I mean, as they continue to grow at a high pace, they contribute to that for a big part. The second element is some of the business we have are in a start-up phase today, so are going to scale over time. I think that 25 into 5 is not the end of the journey. It's the first step of the journey that will build a more stable model at a level that contribute to Sandvik. Thanks. Then the last question for Nadine, and maybe I misunderstood, but did you say that you have an organic growth target now of 5% for Sandvik Machining Solutions in total? We have a total CAGR from 5% from 2019 to 2020, and 10% is from 2021 to 2025, and we have an acquisition target that is, like, almost 50% of that. If you have looked to the organic part, then that is almost half of that growth. That's including the automotive headwinds that we are seeing? Yes, of course, that is including. Thank you. Yes, we have a question in the fourth row. Thank you. First off, a clarification perhaps on the automotive headwind. Just to be clear, you spoke of a 0.4% negative CAGR to 2030. Is this true for the entire 20% automotive exposure for the division, or is there any part that is not impacted by this? No, this is the full impact calculated. Yeah. Okay. The second question is you spoke a bit about moving towards in-line metrology, Christophe. Why is this an area that you're targeting? Is it sort of a strategic fit that's good for Sandvik, or is it less competition when we look at the big dogs in this market? No, but I think there are several reasons for it. I mean, first of all, by going to in-line metrology, you address the complex manufacturing components. That's where the data you're gonna get and feedback to the rest of the loop will bring the most value at the beginning of it. The second area, it's a shaping market. It's something that is starting where place has to be taken. Obviously it's a good place for Sandvik to be in, knowing also that we have very good software to enable that. That I would say it's a combination of both factors. Thank you. Hey, Daniel Johansson, Pantechnicon Advisors. I have a question about a tailwind, at least for now. Energy, I think Stefan made a point several times on the call that energy was pretty strong for you, especially in North America, and also April had seen good trends. Can you please talk to what you actually do in energy, what the drivers are for that business, and what portion of your North American business that is? And also, if you think about the market for the energy market, how far away for your products are you from the peak, the previous peak? Thanks. When we talk about energy, it is for us oil and gas and also some of the renewable part, but oil and gas is the main part. For us, it is a lot with when we think around the threading operations, and that is then turning operations what we have in that area. Yes, we have seen that oil and gas opportunities in Americas and also I would say Europe gives us now an increase. Also here, we must say that during the pandemic, some of the business went down. It is of course partly a recovery. Of course, we see now, especially in Americas, stimulation due to the geopolitical situations, a stimulation in the oil and gas for the time being. But if we look at the sizes, you have clearly seen that for us is not one of the bigger segments. That is more a third or a fourth segment after the general engineering, automotive, aerospace, and then energy, and that is really only kind of 4% or 5% of the total. It's not for us, the total energy then including renewable. Thank you. Now we will move on to the last speaker. With the last speaker, we want you to have some energy left. I think Anders Svensson, who's soon joining the stage, deserves some more energy. For those of you who wish to, just stand up for a while and shake your legs. While Anders is coming on stage to do that, welcome Anders Svensson, President of Sandvik Rock Processing Solutions. Thank you very much, Louise. Thank you. Hello, everyone, and a very welcome to the Sandvik Rock Processing Solutions part of this presentation. We are the newest business area within Sandvik Group as we were formed on the first of January 2021. I hope you have enough energy now to go into the last presentation and listen to our strategic priorities to implement our shift to growth strategy. We start with a brief introduction of Sandvik Rock Processing Solutions, which we call SRP for short, and I will do so going forward. Our revenues in 2021 were SEK 7.6 billion. We had an Adjusted EBITA margin of 16.6%, and we have roughly 2,000 people employed that work towards our different customer segments, where 47% of our exposure is towards the mining segment and 53% of our exposure towards the infrastructure segment. 52% of our sales is aftermarket products and solutions, and 48% is equipment. We have four divisions that work across the different geographies, and we are fairly evenly split between the west to east, but we have some weight on the northern hemisphere as we have a strong footprint in U.S. and Europe within the infrastructure business. We will start by looking at our demand drivers for growth. The first one is sustainability, and our customers need sustainable solutions all the way from installation to during operations and at end of life. If we start with the mining side, the mining process is extremely high energy consuming. We need to have electrification, process efficiency and productivity, and those are key to reduce both cost and emissions. If we look at the infrastructure segment, the end customers for the infrastructure products put a lot of demands. Those end customers could be us, normal people, putting demands on sustainable solutions or productivity of houses, et cetera. We also have laws, regulations, and installation permits of, for example, a stationary crushing and screening plant. Those drive the same behaviors towards productivity, electrification, and efficiency. The second one is mineral demand and infrastructure spending. Both Stefan and Henrik mentioned previously the growing middle class and the higher consumption that leads to when those people want houses, want cars, want electrical appliances, et cetera. If we combine that with the declining ore grades, it leads to that more crushed stone is needed to deliver to those increased demands. If we look at the infrastructure segment, just the demand to maintain the current buildings and infrastructure in the world is huge. If you then add on that those new middle class people want to have cars, and they want roads to drive on, there was houses to live in. That further drives this infrastructure spending going forward. The third one is about automation, digitalization, and digital services to improve efficiency and productivity through operational insights. If we then look at our underlying market growth, we have heard a bit about this previously from Henrik, for example, but the mining industry in general, their output grows about 2% CAGR going forward. There is a combination here that you have electrification minerals that grow much quicker, and then you have bulks like coal and iron ore that grows slower. But the average is two percent of growth. In the infrastructure, we have 3% of growth, and that's normally quite well in line with GDP development. Here, Henrik mentioned, tunneling is growing a bit quicker, aggregates is roughly on par with that, and then demolition recycling is growing somewhat slower. If we weigh these subcategories versus our exposure, we then get a weighted market growth of about 2.5%-3% going forward. Now we'll talk a little bit about where we play in our customers' value chain. As we are a new BA, I mentioned this to get an increased understanding of where we play in the customer's value chain. We are not in the rock extraction phase in mining. This is where SMR has a strong position. We are in the rock processing phase, and the rock processing consists of the crushing and screening stage, but also the grinding stage. After that, you move into the separation phase, where you separate the valuable mineral from the carrier rock, and we are not in that phase either. As you can see on the picture, we have illustrated moving a bit towards the grinding phase. This doesn't mean that we will start manufacturing and supply grinding equipment. This means that we have an ambition to improve the crushing and screening step and widen that window to produce smaller sized rocks so that the grinding step can be shorter. I will come back to this later in my presentation. If we look at the infrastructure process or value chain, we're also not here in the rock extraction phase. SMR is somewhat in this phase, but we are in the crushing and screening stage. Here, the target is not to reduce stone sizes as much as possible. Here, the target is to produce stones of the right size, shape, and form because we are producing an end product here, and it could be road ballast, it could be railway ballast, it could be sand, et cetera. If you look at the right-hand side, we have a typical crushing and screening process. This one is the three-stage process. It can be for either infrastructure or mining. It starts with on top there, with a primary crushing step, and then, below you have the secondary crushing step, and then you have a tertiary crushing step. If this is the mining process, it then goes further on to a downstream process with grinding and separation. If it's construction or infrastructure process, this plant then produces the end product. The reason I want to show this is that a plant like this can last for 50+ years at our customer site. Over time then, the worn-out equipment is replaced. A lot of our business is replacement, and not only new full plants. Over time, our customers are replacing, and they're not necessarily always replacing with the same OEM that manufactured the plant. Over time, many plants has a tendency to become mixed OEM, plants. I will come back to this also later in my presentation. Now we're gonna focus on the key strategic initiatives that we do, to drive our shift to grow strategy. The first one is enhancing our core business. The next one is expanding in value chain and market, channels. The third one is enhancing our digital offering. The fourth is to provide leading sustainability solutions. We jump in to the first one, enhancing our core business. Here we target to maintain our leadership in material technology to extend life and improve efficiency. Extend life, I mean, extend life of our equipment and aftermarket solutions, et cetera. Then we target to, during the lifetime of the equipment, we should be the one that provides the most efficient and productive solutions for the aftermarket and services. We put a target for ourselves here to increase our aftermarket penetration by 30% from 2019 to 2025. To achieve that, we need to develop aftermarket solutions and services that fit all our customer needs and that can deliver high productivity. Now I come back to what I said regarding a site that lasts for 50+ years, and it has a tendency to become a mixed OEM site after a couple of decades. We want to be able to service those mixed customer sites in the future. The last point on this is that we want to enhance our business through acquisitions and strategic partnerships in core and adjacent technologies and/or markets. One example of that is what you have on the right-hand side. It's the acquisition of Kwatani, a South African-based vibrating screens and feeders manufacturer that we acquired in the second half of last year. Another example is what we should have are our recently announced acquisition of Schenck Process mining business. This is a very complementary acquisition to what the current offerings that we have today. They have a really strong high-capacity screens and feeders solutions, and they also have screening media. There's limited customer overlaps and limited, very limited geographical overlap, and this will then improve our footprint and improve our market position. It will definitely strengthen our customer value add within the mining, crushing, and screening solutions and processes because we will be able to deliver and offer a full solution for high capacity in mining, crushing, and screening. Schenck Process Mining has a very strong aftermarket position. Stefan already mentioned it. It's about 70% of the revenue. This will further enhance our revenue and earnings resilience going forward. It will take our aftermarket of 52% of sales up to 55%-56% of sales. Maybe I will change this. I don't know if the battery or something. Oh, sorry about that. The next one is expanding value chain and market channel. It's about strengthening our customer value add for being a full solutions provider within crushing and screening, and not only the mining crushing and screening, all crushing and screening. Here, one example could be what we did, acquisition of Kwatani or Schenck Process Mining. It can also be more organic initiatives. One that I want to mention is that we, through fine crushing, then want to expand in the value chain. I connect back to what I said previously, in where we play in the value chain, that we want to expand the window where crushing and screening is relevant for our customers. The reason for doing that is that crushing and screening is a more energy efficient way of reducing stone size than grinding is. It's also a dry process. If we can extend the window where crushing and screening plays for our customers, we can then help our customers to have a lower CapEx investment, to have lower OpEx running costs, and to have less energy consumption, and also less water consumption. The second part of this slide is regarding our market channels. We say that we want to grow our indirect channel to market 20% faster than we grow our direct channel to market. We'll do this through developing our distributor business, and here it's very important that we select the right partners because we want our customers to be able to buy a Sandvik crushing and screening solutions by our partners. That means equipment, aftermarket solutions, and services. You should get the full package when you buy a Sandvik product. We also intend to increase our OEM sales channel, and this is where other companies buy our products and brand them as their own. The next part is expanding our digital offering. It's about automating our customer's production process, and then connecting our equipment, collecting the data, and then through data-driven insights, giving condition monitoring, but also making predictions based on artificial intelligence. That can be failure predictions, that can be maintenance planning, et cetera. We combine that with an e-commerce and inspection tools and communication tools. We call our digital service platform SAM by Sandvik. We release constantly new services on this platform to our customers. It's an ever-evolving platform. This is to maximize our customers' productivity and efficiency, of course. It is also to enable us to offer to our customers performance contracts that are competitive. That we then can supply that with the lowest total cost of ownership for our customers. On this slide, we have two targets. One is to have more than 60% of our customers utilizing our digital services by 2025. The second one is to increase our number of service contracts by 15% per year. Next, I will show you a short video, illustrating a bit what I talked about, on SAM by Sandvik, but probably explained better than I did. Let's see. SAM by Sandvik. Your always-on digital assistant. Okay. Moving on to that we want to be providing leading sustainability solutions. Sustainability offerings will be key for the future, and it will help us to drive our growth agenda. Electrification is, of course, one of the key ones. If we look at our offering today, 100% of our stationary crushing and screening offering is already electrified. When we look at our mobile crushing and screening offering, we have today around 60% of our offering is available with an electric option. Our target is by 2025 to be able to offer above 90% with electric option. Not all of our customers can use our electric offers because they are not in a place close to a power grid or et cetera. They will need a diesel alternative or an alternative to diesel. We have, together with our engine supplier, approved all of our mobile crushing and screening units to be operated on hydrotreated vegetable oil or HVO oil, HVO fuels. HVO fuels can reduce greenhouse gas emission by up to 90% versus diesel. It's a good option. The next one is an end of life offering that we have. It's about our foundry facility in Svedala, Sweden, that buys back worn out crushing chambers from our customers, use them as raw material and melts them, and then produce new crushing chambers that we then sell back to our customers. Over 90% of the material used is recycled steel in that foundry. We also have an Environmental Product Declaration for those crushing chambers. I believe that we are the first in the industry to have that. What have we achieved so far? We have grown our aftermarket penetration through increasing our service contracts through our service techs and service engineers working together with our customers to optimize their production processes and developing suitable offerings for all customer needs. We have grown our aftermarket penetration with 9% since 2019, and we have a target of 30% to 2025. Secondly, enhancing our core. We have made three acquisitions, and we are in the process of making the fourth. The first one is Allied Construction Products, providing us with a footprint in North America. The second one was Shanbao, which provided us with a local premium stationary crushing and screening brand. Then we have Kwatani, which we acquired last year, then offering us a footprint in South Africa, and now with the mining part of Schenck Process. The third is launching our digital offering. We launched this SAM by Sandvik in the middle of last year. This is a continuous developing platform, and we will offer more and more solutions for our customer on this platform going forward. The fourth one is then providing leading sustainability solutions. Here, we still have a work to do, of course, but we still have 60% of our mobile fleet is available with an electric option. We also have HVO fuels approved to be used in the ones that aren't. Stefan also mentioned our Reborn concept in stationary crushing and screening division. This is where we can take a worn-out crusher, replace the main parts, keep the auxiliary equipment, and the customer will then have a cost-efficient solution for a new upgraded crusher with full warranty, that is also environmentally friendly. The last picture is then our recycled produced crushing chambers in our Svedala foundry with an Environmental Product Declaration on. If we look forward and a little bit backwards, we start with 2019, there we had a top line of, or a revenue of SEK 7.4 billion. We then add on to the underlying market growth. We add on our enhanced core initiatives, and those are mainly then acquisitions, but some of them are also organic. Then we add the aftermarket capture rate initiative, that we are driving. That will take us to SEK 13 billion-SEK 14 billion by 2025, and that's then a CAGR growth of 10% from 2019. That is, of course, enabled by having a strong digital and sustainable offering. Summarizing, without going through everything once again, we are leveraging our existing position to enhance our customer value, and we're also broadening our reach and also broadening our offering scope to our customers. If we look a little bit further out, our vision is to become the recognized number one within sustainable rock processing. We intend to be the market leader within crushing, screening, and breaking solutions. We want to offer a productivity leadership by data-driven insights linked to a strong aftermarket and service offering. We want to provide our customers with the most sustainable solutions within rock processing. I think this is my last slide. Thank you very much for listening. Sorry for the hiccup with the page mover. Thank you very much, Anders. Great presentation. It's indeed obvious how sustainability is such an integral part of our offering and our growth opportunities ahead, as we've seen throughout the day. Do we have any questions for Anders? Yes, please. Hi there. Just a couple of relatively straightforward ones actually. I was just wondering, within the mining part of the division, is the end market exposure in terms of the minerals that the mining part's exposed to similar to for Sandvik's other mining business or is it different in any way? I would believe it's fairly similar. The strongest one is copper, then it's iron ore, and then it's gold, in that order. Thank you. Related question basically, again, if you look between the mining and infrastructure pieces, is there a difference in the aftermarket between the two? Is it more important on one side or the other? You know, the aftermarket is stronger in mining normally, but that's not because there is no wear and tear in infrastructure. It's because you run the mining business 24/7, and that's more rare in infrastructure. Otherwise, you can have very high wear applications and hard work also in the infrastructure applications. Okay. Thank you. Thank you. Yes. We have a question over there and then over there. One question regarding the aftermarket. Could you go back a bit, you know, further, let's say to, you know, 2013, 2014. You know, what share of revenue was aftermarket at that point? I guess that you're, you know, aiming for similar market or similar aftermarket penetration as in Sandvik's other mining business, 2025. Thank you. Yeah. We have done that. You know, it's a restate backwards, et cetera, so but we have done that, so it was approximately 35% or so, and now we are at 52% then. I guess that's, you know, one of the main part for the, you know, quite nice improvements in profitability. Absolutely. If you go back to 2016 where we have more clear numbers, the aftermarket growth has been around 10%, and equipment about half of that. Thank you. Yes. Daniela? I'll ask, too. My main question was actually very related to this, but maybe just to follow up. You still have another 9%, going to 30% on top of the nine percentage points you did on aftermarket penetration. I assume aftermarket is maybe, what, double the margin of OEs. So could you get closer to the band of the 20%-22% for the group if you didn't do any more inorganic activity, just from an organic perspective? You know, with the different acquisitions that we do, like the mining part of Schenck Process, we tend to grow that, and to grow that outside where they are strong today, that needs to be a lot of equipment sales in the beginning to get an installed base. There's also a lot of investments going into automation and digitalization, et cetera. I don't think it would be fair to expect a big jump in our profitability going forward, considering we're also already basically a market leader in terms of profitability within our sector. I wouldn't expect a big jump upwards. Okay. Just following up, you mentioned obviously you're not in downstream. Some overlaps there, but why not being in downstream? Would that be interesting at some further down the line? Yeah. We're not excluding anything, right? A high energy consuming downstream process, I think is looking for a transformation going forward, from traditional technologies into something new. I'm a bit speculating. It's not on our agenda today. All right. Thank you, Anders. Stay tuned because. Sure. Now we will actually invite all the presenters up on stage and do if there are any questions left. They will all be on stage, so take the opportunity to do your last questions. Welcome. All lined up for you. No pressure, but please take the last opportunity now to ask your questions. Yes. Let's go for questions. Okay. Anders at ABG. Can I come back to the first, the question during the first section? Just going to ask you about the recent growth rates, particularly in the CAM area. I saw that you had a growth rate for that market of 7%. I probably had the impression that these acquisitions have had better growth rates, and you have higher ambitions than that. Could you fill us in? Yeah. I mean, when you look at the 7% we line up here is a five-year average. If you look at the way CAM business has been trading over the last couple of quarters, it has been above that and the assets we have been performing in a very good way compared to the market, that's for sure. I would say that long-term is in the range of 7%. We will add on with the value we bring above it, but that's the average growth of the market. Thanks. Thank you. Klas. I just had one final follow-up for you, Nadine, and that is coming back to the SMS and the M&A contribution on that slide 96, seems to be my favorite slide. Half of the SEK 17 billion from M&A, that's SEK 8.5 billion versus, for example, SEK 2 billion in round tools in 2021, I think. That's sort of buying at a high rate around SEK 3 billion going forward up until 2025. How much? The majority must be round tools, right? Because you have a clear market share ambition of being in the podium, you've said before. I'm just trying to understand, is that the correct interpretation of the SEK 8.5 billion? I think when we look to the acquisitions and the direction, it should support all offerings. Of course, round tools, as we are not there yet on our ambition as we talk about becoming the leader there, of course, we would have to continue on acquisitions. On the other side, when we look into growing the mid-market, as we also want there from a smaller position or a lower position today, also get into the podium ranking. It will also be acquisitions into mid-market, for instance. If we then think around our offering in general, like the Fanar one was also a very good example on the, in relation to taps, some parts that we are not having. Of course, it is when we talk about the growth segments, also in some of those areas where we feel that we can, through acquisitions, expand our offering or accelerate the growth base, then we will not shy away from exploring in those. I would say it's a mix, but there are clearly a few areas that you can see where we have higher ambitions than we are today. We can take another leap with acquisitions. Thank you. Stefan Gutu with Almi. I just have a general question. I mean, you have quite ambitious growth targets, which is interesting and exciting to see, and it goes both organically and inorganically. The organic growth, I mean, it's like one of your competitors says, it's more feet on the street, but it comes to the acquisition side. Could you highlight a little bit how you evaluate your acquisition targets? I mean, how much do you value the ongoing profitability? How much is strategic value? How much is cross-selling? How much is cost savings? Getting growth is easy, but to get value is more difficult. Please. Thank you. Thank you for stating that it's an ambitious growth agenda. When we were at 5%, it was too conservative according to some. I guess 6% would have been the perfect target then. Anyway, we go for 7%. To get to your question, I would say, in general on valuation and when we look at the business cases, I would say we try to be fairly conservative. We rather, you know, be honest to ourselves and say we're gonna pay an extra multiple than try to get the multiple down by coming with a too optimistic business case. I'd rather have that discussion than in the team and with the board. As always, when you do valuations, you do a combination, of course. We would look at, you know, trading multiples, DCFs and so on. Again, we try to be very careful with overstating synergies in a DCF as an example, because we all know they are easy to put in the PowerPoint. It's a lot of hard work to actually make them happen. It really depends on what type of acquisition it is, whether it's more of a cost bolt-on, where you can have more easily identified cost synergies. SMS, for example, will typically have a portion where they know, you know, they have world-class cutting tool plants, and they will look at an acquisition target and say, "We can do X, Y, and Z to improve this." Not a problem. It's a matter of some time and get the right competence there. They know they have a global distribution network they can leverage. They have supply chain. They have a powder supply. They can look at that and value that, I think, fairly good and be quite confident. We are careful with the cross synergy aspects because it's so easy to put in big numbers, and it's so much hard work to actually get it to realized. As an example. When we look at these software acquisitions, we have talked and you have hopefully seen a lot of the opportunities we see with combining our hardware and software offerings. We have been very, very conservative with putting those things into a business case. Deswik, for example, we haven't put a single extra machine into that business case, but we are confident with Deswik it will also help drive a few extra machines. You just have to put 10 machines in, and suddenly the business case is, you know, too easy, if you will. We are very conservative with those kind of things. I still think we all feel we still have plenty to do with tons of work to get the synergies out that we have promised ourselves. Yeah. Thank you. We have a question here on the first row from Daniela Costa. Thank you. I guess we talked a lot about the headroom for M&A. CapEx is stable. I was wondering in terms of capital allocation on working capital, if you could comment, given supply chain is such a big topic at the moment. I guess to grow faster than peers, you probably need to be also faster and more nimble there. If you can talk about the long term and maybe also the near term and the situation around China and at the moment given that. I'll start with CapEx, inventories and cash flow. I mean, from a net working capital perspective, if we look historically, we managed to stay below 25% for most of the quarters, both in upturns but also in downturns. I think in some quarters we've been above, and that's primarily when we've had very sudden downturns or drops in the top line. We've then been able to manage that effectively to come down to the 25% again. Okay. Did that answer your question? I guess so. No need to have structurally higher level of inventories have a big, you know, buffer in a supply chain. Mm. which is so disrupted in many industrial areas. I mean, part of the inventory buildup that we've seen so far also in the first quarter, for instance, has been to cover for that. I mean, looking forward, it's a little bit difficult to predict. I think that depends a lot in terms of what happens with the lockdowns in China, what's happening with the supply chain and logistics challenges. But part of the inventory buildup that we've had is in response to this. I don't think we believe structurally mid- to long-term we need more working capital or inventory. This is more in the current ongoing supply chain disruptions. I think we have a quite good supply chain set up already. I think SMS have a very continent by continent local setup, which I think serves us well. SMR, SRP, more, you know, big machines, low volumes, very difficult really to motivate that you distribute that type of assembly operation. There are some examples when we have a product that is popular in India, for example, in tunneling. We can feasibly set up a small shop for that, but it's more by exception basis than that I think we will do something big in that, you know, shifting the supply chains there. Yeah. We have a question from Andreas Koski at Exane. Thank you. My question was actually about CapEx, and I'm sorry if I missed your comments about that earlier. To reach SEK 140 billion in sales by 2025, will you be able to increase your CapEx levels as well, or are they going to stay below SEK 5 billion as you have guided for 2022? I mean, I can only comment on what we have guided for. It's below SEK 5 billion. I cannot really predict a few years ahead. We are not really ready to talk about that. In general, if I look at what are we investing in, it is of course maintenance and new buildings, maybe service workshops in SMR. It's replacing new machines or capacity in SMS. That will in a way, I guess, scale with growth. We are right now this year, and the reason we raised the CapEx guidance for this year was actually more driven by digital investments. We have some fairly significant ERP programs that are starting. We are also doing some more specific CapEx in, for example, SMR towards electric, to the BEV, sort of production and so on. It might be so that we need to raise the CapEx guidance further out in the outer years, but I don't have a. It's not a guidance I'm giving now. Because I assume you will have to build out production capacity to be able to meet the volume growth that you expect. I guess for this year, the less than SEK 5 billion will correspond to roughly 5% of sales. Mm. You don't think that is a reasonable number to expect also for the coming years when you're growing your sales level, i.e., 5% of sales? I think yes. Yes. I don't think we should expect a big or a major difference in terms of percentage of sales. I agree with that. Thank you. All right. No more question, it seems. Then, we're reaching soon the end, but we will, before closing, listen to our CEO, Stefan Widing, for some concluding remarks. Thank you. I will not drop any news now towards the end, but repetition is the mother of knowledge, as some wise person said. I just want to reinforce that we are executing on our shift to growth strategy. We have enhanced and focused our core business. We are expanding in the value chain, we're expanding our digital offering, and we have embraced sustainability as part of our business models, as I hope you have seen throughout the day. This is also why we have raised our ambitions. A new financial target to grow 7% through the cycle, organic and inorganic. Adjusted EBITA target in the range of 20%-22% through cycle. Debt target of staying below 1.5x net debt over EBITDA, and maintaining our dividend payout ratio 50%. We have shown here today that we are continuing to transform Sandvik. We have a really strong platform to build upon through our strengths across the group. We are successfully executing on our shift, and that is our ambition also going forward. By doing that, we have already started to enhance the growth profile and the resilience of the group. We have raised our targets, we're executing towards 2025, and we're gonna do that also with an eye towards building Sandvik stronger also for the long term, towards 2030 and beyond. Thank you for coming and listening. Thanks to all of you that have stayed for so long. I will now invite Louise up and tell us about the reward. The reward. Yes, the reward is it's drinks. No, but yes. This concludes our formal Capital Markets Day 2022. For those of you who wants to stay for the mingle, it's on the second floor, and you will go out here where the ladies are standing. For everyone, and conclusively, thank you all for attending and for good questions, and I hope you have felt that this has been informative and interesting. Thank you again. Thank you.