Good morning and welcome everyone to Teqnion 2025 Q3 Q&A. Thank you all for joining us today. We want to give you, as partners and interested parties, the opportunity to understand your business as well as possible. During the next hour or so, as always, we will alternate between the questions that we have received on our Q&A email and the ones that you can send in here live in the Microsoft Teams function. Please note that you have to press the Q&A function and not the chat. Before we jump into the Q&A session, I would like to hand it over to Johan for a short summary for the quarter. Hello everyone, thanks for listening in. We're here again with myself and Daniel in Daniel's room in our Teqnion office here in Solna. Q3 was a period of continuous improvement tasks for the entire team. We've been implementing the previously reported changes in the organization and the procedures that we now use and work according to. We've come quite a bit, which is shown in the figures. It's a better EBITDA and free cash flow. This is positive, but we have a lot more to do and we will never be content. Very little business comes easy these days. The economy still shows plenty of hesitation. Our coworkers have to work really hard to get the sales that we show. In a headwind like this, it's just to work harder and we're ready to do so. During the quarter, we're very happy to welcome two new subsidiaries into the group. Both of them are located in the U.K. First, Birkett Bogmats, who is a business specializing exclusively in the supply of hardwood timber bogmats. Fantastic product, primarily for infrastructure work. HT Servo, which supplies high-precision servo components and systems to the U.K.'s leading aerospace and defense industries. As we informed you in press releases last week, we decided to seek appointment of provisional liquidators for Reward Catering. Partly as a result of this, we have made a goodwill impairment of SEK 73 million. It's been a lot of things happening through the quarter and we're happy to try to answer the questions that you have sent in and what you maybe will supply during this call. Yes. We have received quite a few questions about different topics. Two popular topics have been goodwill, how that works. That question has come in in different shapes, of course. We have also received a couple of questions regarding how we can be better at due diligence, why we didn't see things going wrong earlier, etc. Instead of reading those questions up maybe five, six, seven times, I thought we could maybe elaborate a little bit on that just off the bat. Yeah, maybe to start off with when it comes to goodwill and how that works. According to IFRS, goodwill is not tied to a legal entity. It's tied to a cash-generating unit. When it comes to this, as long as the operation continues in other units, the goodwill can and should be transferred accordingly based on the documents and rational method that reflects where the value will be created going forward. Goodwill is a specific thing. I wrote something about it in the Q1 report in 2024. Goodwill consists of those things that are very hard to actually differentiate out. It's the experience, human drive, and knowledge with and between employees in one of these or some of these cash-generating units, which means that it's a very important asset. It's an asset that is hard to define in a balance sheet. It's hard to put humans on a balance sheet, more or less. Yeah, just to make it a little bit more concrete, of course, you know this as professional investors, but just for the benefit of everyone, a cash-generating unit can be a group of different entities. In our company, at Teqnion, we usually say that we have roughly 40 different companies right now that are not fully recruited because certain of these companies, we call them companies, but they are actually small groups of several entities because they have a subsidiary in another country or for different legal reasons. When a group like that, when a group of, for example, three companies that work very closely together or actually is a conglomerate in itself, if one is removed, the actual know-how can be transferred to the other ones. That's a short crash course in IFRS, CGU, goodwill, and accounting. I don't know if when it comes to the DD processes that we perform, we take that extremely seriously. We put a lot of effort into that, and we've been doing it for almost 20 years now. Most of the time, maybe it's worth noting that it works out just fine. We tend to find things that might be bad in the future, and we can walk away or we can mitigate that risk in other ways. In this case, we have made a mistake, obviously. Just to talk a little bit about maybe what we learned from this particular case is that we use a third party for making reports for us when it comes to the different parts of the DD work. Maybe we listened in a little bit too much on that and left our own guard a little bit too low. We will never do that again. I know that. I speak for both of us when I talk about these things. We also put into our procedure that we do a personal background check on the specific vendors. We have always been very thorough when it comes to checking the background of the legal entities and the companies in question. Nowadays, we also take that to the actual individuals who are part of this transaction. We also make sure that nowadays we take control over different systems much, much earlier on in the process. We have full insight and full control over IT system, bank control, things like that. Everything is much tighter when it comes to those things. If we see something going forward after a transaction, we are much faster to step in and take action on those topics. Those are a few things. I don't know. Yeah, I think we could unfortunately write a book about things that we can get better at. For ourselves, we've done that. Not a book, maybe, but the learnings have been a lot. It has been the biggest mistake that we've done. I think that, of course, part of it comes down to the due diligence and acquiring the company. A non-significant part of it has been the operation of it or the non-operation of it afterwards. That is equally important to bring up as a lesson learned. As I said, this mistake is ours. That's us owning it. However, we do want to point out that we will, in the future, make mistakes as well. Not this mistake, not mistakes that look like this, but other ones. What is important, of course, is that if you believe in Teqnion as an entity, you hopefully will invest in a portfolio that we have said looks like it's w e're getting back our money in five years and much more after that time period. Shall we move on? Oh, sorry, one more thing. Maybe touch upon, I mean, we are in legal procedures in Ireland. We mentioned this before, and I would like to emphasize that again, that we do not comment on ongoing legal proceedings, and we fully respect the court's request that all discussions remain within the legal process. I hope you respect that. When we have information to give and when we're allowed to give that, we will do that through our official channels. Yes, full stop on that. Related to that, we got our first question in the Teams chat. It's coming from Nai, who is wondering, what didn't you see at Reward Catering at Hemet? What did you learn from this experience? Touching upon the first point, there's a lot of things we could have done better, should have done better, and will be doing better. I think the biggest point is that on the first part of the question, we have strengthened our due diligence on the people behind the company a lot. During the three years since then, we have actually walked away from various companies, I would say roughly three, where we have felt indications or seen indications that the company looks all solid, but where there have been shaky personal backgrounds. In those cases, it's just not worth it. I don't know if we're going to say a few words about Hemet. Hemet is building wooden houses for customers that want a really customized home here in Sweden. It's been really good when the economy was strong, and it's been extremely poor when the economy had been poor. We're still struggling a lot there. We have a plan on how to make that better, but we couldn't defend the entire goodwill post there. The plan is started to be executed, and we have an idea going forward. Maybe worth mentioning is that we are not looking to buy any more companies in that sector. I think I touched upon this before, but I love the product. That shouldn't inflict if we buy the company or not. In this case, it's a very volatile business. Some years will be extremely strong, some years will be extremely difficult. It's not for Teqnion going forward to be involved in businesses like that. We got an email from Kip through the email. He's saying it's a three-piece question. The first part is, your target with your M&A is to get your money back within five years. For the companies acquired more than five years ago, has the target been met collectively? Why or why not? This is a question that you love, right? I like the question. You wrote a little bit about that in the CEO letter. We focus, when it comes to acquiring a company, we try to get our money back in roughly five years. What is really great with what I believe is really great with this yardstick is that we buy companies that don't need to tie up money on the balance sheet. Very little CapEx, very little inventory, etc. After the five-year period, the cash flow that comes out becomes just cash going to us compared to buying a machine where you get your money back in five years, and then maybe you make money in three to five years more, and then you need to buy a new machine. Here, we don't need to do that. It becomes this perpetual magical cash flow machine that we get cash from as long as we are doing the right thing. For the companies that have been around for six years, 10 years, 15 years, collectively, yes, we're getting our money back in five years, but more importantly, for a lot of those companies, the return on investment number looks really, really good. I think you wrote in the letter that we have a few companies now that are actually making a lot more per year than what we actually paid for it in the beginning, including all earnouts. Maybe to just point out what we're trying to do is that we continuously try to just improve the companies that we have within the group. If we do it correctly with small changes throughout the years, we're going to sooner or later have really, really good cash-generating units that we now have from companies that we owned for a very long time. Those companies, of course, generate more in one year than we paid them when we bought them. That's the way to do it, of course. Yeah. The second piece of the question for Kip is any data you can share with respect to the returns on M&A since 2021, roughly the time period since I joined Teqnion. I as in Daniel. Yeah, I think we wrote a little bit about that as well. Collectively. The morning sun is hitting me. Finally, some sun. Collectively, yes, they look good at getting to the five-year yardstick as well. Most of the companies were acquired recently, of course. While I'm happy to say that the companies that we bought this year are tracking on target or actually a little bit above target, actually, the statistics are just so little. I mean, some of the companies we bought a month ago and some eight months ago, it doesn't really count. If we look at the companies that we acquired three, four, five years ago, and that would include, in this case, our Irish company, it still looks like we're hitting our five-year target. Of course, that's because we have a portfolio of them where some have done better than what we believed in the beginning. Want to add something? No, I just feel that it's a question that I totally understand is coming in because whenever we talk, whenever we report, we focus on the things that we are not happy with, or we tend to anyway. Maybe that's who we are as individuals. We're trying to fight to make everything good. Not everything in a group like this is going to be good all the time. Now, the portion of companies performing poorly has been too big. That's why we focused on that so much, talked about it, and reported on it. Hopefully, we can show you a little bit of improvement there now. We're far from happy with where we are, and we know that we can do so much better. We're working towards that. I think that you also see through the figures that there's something in our group that is performing extremely well. Some things, not the most part of it, of course, but we tend to focus on the fraction that is not. I'm sorry about that. It was just. The third question here from Kip, he's saying that Teqnion has acquired nine companies in 2025, roughly double the number in any prior year. How will you know if you have acquired too many too fast, i.e., will you know beforehand if you have the management and processes in place to successfully integrate them all? It's a very good question again. I think we have managed, we have communicated internally and externally that we're targeting to acquire roughly a handful of companies per year. If you look back four or five years, that's what we achieved now with the bolt this year. We have also changed the way we work. We changed the organization here at the head office, and we are working in an updated version of the old Teqnion. We're keeping the culture, but we're making it more efficient and more structured. We see that we have so much more potential in scaling this today than we just had a year ago. I feel very confident with the pace that we performed and also what we are aiming to do going forward. Knowing 100%, you can never know, but I feel very confident at this stage. I think one interesting thing to add there is that, of course, as an investor or an outsider, it's easy to focus on the number of acquisitions. It's more difficult, of course, to see the quality of it, especially on the soft side. You know, of course, that all companies come in different shapes and various different soft sides as well. I think that the companies, I believe that the companies that we have bought this year have a higher quality. We also have more high-quality, capable people internally, as you mentioned, that can take care of them, and have been prepared for that we would acquire more companies this year. This should not be any problems when it comes to integrating the companies. I think that obviously if we bought low-quality companies with a lot of management troubles and problematic people, then even one company would be too much. Nine great ones is no problem compared to one problematic ones. Going back a little bit to what we discussed before, I do believe that we have gotten better when it comes to due diligence. Of course, now we also buy companies that on average are a little bit bigger and have better processes, governance in place, which should be helpful in scaling up when it comes to the numbers of companies. That way of walking just towards something better and better is, of course, something that we try to do all along our history and is going to continue to do going forward as well. I mean, it's a natural step to step up when it comes to acquisition as well. We continue to say that we're going to acquire roughly a handful of companies per year going forward. The natural way would, of course, be to buy better and better and bigger and bigger entities, that handful. Yeah. We got a question here from Volny on the chat. He's wondering, how do you find so many companies in the U.K. now? Is it word of mouth or do you use brokers there? No, we don't use brokers. We don't have any buy-side advisors on our side because we want to represent ourselves. We want to do it ourselves. There are, of course, various upsides of using buy-side advisors, but we have found that our way works the best by doing it ourselves. Word of mouth is absolutely, I think, the biggest piece. When we started out acquiring companies in the U.K. four years ago, it was actually very, very difficult. Nobody knew about us. We speak English like this, and we didn't know, to be honest, how to actually run a full process in the U.K. The first calls were very difficult, cold calls when we tried to explain that, you know, let us buy your business. We don't really know how to do it, but you know, let's figure it out together. That's a really hard sell. Now, more and more have gotten to know us. More and more sell-side advisors have learned that it's actually fun to work with us, that we keep our word, etc. I think that's really the biggest thing when it comes to scaling up the cases in the U.K. The second question here from Walden is, did you consider buying just a portion of a business, for example, 80% and leave 20% for the founders who want to stay in the business? I know Röko do something similar to that. Yeah, look at the track record of Fredrik Karlsson at Röko. You know, he knows what he's doing. I think I heard or read somewhere that the best performing companies within Lifco were sold that way. I think it's for us, we've always acquired 100% to make a clear cut. It's very, it's obvious to everyone involved who is responsible for running the company going forward. We have the incentive for the sellers in earnouts that is very, very strong normally. We've seen throughout the years that this is a very good way of doing the transactions. I strongly believe in it. I think there are other ways that are good as well, but we stick to this way. I think others can perform really well in other ways. Maybe not a really clear answer, but I think it's very important to stick to what you know and stick to what you believe. This is something that we know and that we believe in. We've seen different outcomes of this procedure, and we loved most of them. Yeah. An email question from Davis. Congratulations on all of the seemingly great acquisitions completed this year. I was particularly encouraged by the MITAB acquisition. I think it was that came about due to your building the relationship over many years. Yes, that is true. I really appreciate all of your team's hard work over the tough stretch. It will pay off. I have a question that you can address in the next call if you think it's worth talking about. Oh, sorry, that was the Röko question again. Sorry for that. Next one on email is James. There have been very many successful programmatic acquirers in Sweden and indeed elsewhere. They look to buy only from missionaries. Have you ever considered acquisitions in these terms? Just for the benefit of everyone, the letter is longer, and there's an explanation about the difference between missionaries and mercenaries. Simplified, mercenaries are people that jump from company to company, and missionaries are the ones that stay on for one company for a long, long time, maybe forever. You look at me as I'm supposed to answer this. Because you are the missionary. Yeah, maybe the original one. No, I think normally for our way of work is that we mainly buy from missionaries. It just comes that way. We come across the mercenaries as well. Most of them fall short when it comes to the process when we get to know them because we know that they are not looking at the world the same way as we do. Long-term, small improvements, owning forever. Of course, it doesn't rule them out as vendors to us by that fact. You can actually come across fantastic people that are really good at what they're doing and have a lot of experience under their belt. Why say no to them? It's more to make sure that you do, you have a rigid DD process where you catch everything that might be a problem going forward. I think, of course, it's also a scale between mercenaries and missionaries where you can be kind of both. Yeah, you're not either. I mean, it's always a gray scale. Yeah, exactly. My point was just going to that we don't buy from pure mercenaries. We don't buy from anyone that has, you know, started a company three years ago, and then we buy it. We want a longer track record than that. We've done a mistake when it comes to that. If someone did something else 20 years ago and started a new company 15 years ago and done it well, that is, if everything else is fine, fine for us. Absolutely. Maybe I didn't touch up on that when I talked about the DD process. We have acquisition criteria that we strongly believe in, and they should be fulfilled in order for us to proceed towards a business deal. In the case when it comes to Reward Catering, we just didn't follow our own criteria, at least in one aspect. That was to acquire companies that have a long, solid history. That is, of course, really important, and it comes into play in this question as well. Yeah. We got another question here from Karl, who's wondering how much of the margin uptake year-to-year would you say is strictly a function of the recent M&A, and how much is due to organic improvement on the cost side, mix, etc.? Possible to break out the organic EBITDA growth year-on-year? Should this pace of EBITDA growth also continue in the next couple of quarters, or is there any material seasonality in the recently acquired entities one should keep in mind? There's a lot to unpack there. Yeah, I caught a little thing regarding looking forward to what we're going to earn. We don't give forecasts. I can just put that out there again. Yeah, no, we haven't reported on the organic EBITDA piece. What I can say is that, of course, you have seen probably on the whiteboard that the margins of the companies that we have acquired this year are very good, and of course, a lot better than our average in the group, and that is part of our business. However, we're not satisfied with our organic bulk, but there is a little bit of happiness that even them have improved organically. That is a trend shift. If we look at the numbers, we knew, of course, based on organic operational changes that we've done that this would come, but now it has started to show in the numbers as well, which is nice. There's a part of the question when it comes to material seasonality of the acquired entities one should keep in mind. It is interesting. When we look at companies, we try to look at companies so we don't have too many correlated risks, and seasonality is, of course, one of them. There are certain companies there that absolutely do not have any kind of seasonality. It's just project-driven. I could mention HT Servo as one of them. We have, for example, Norlin Polymers, which is a process industry where you would expect to tick along like a clock on a daily, maybe not on a daily basis, but almost, apart from where they close for vacation. You would have companies like Birkett Bogmats, where every time it rains in the U.K., you would expect their revenue and profit to go up a little bit. You would have companies like Edurus here in Sweden, and that is probably the most seasonal one, where they sell tombstones and also install them. Due to the weather conditions here in Sweden, they do most of their work during the warmer seasons because it's too cold and then too wet in order to do it. As some kind of summary to your question, I would not expect any significant seasonality. All right. Next question is coming from email, Georgia, who has read the book The Compounders, a book from REQ Capital. There's a couple of quotes here from Annvik, who is the CEO of Indutrade. It says here, Annvik has also managed to improve processes and professionalize governance, developing people in-house to take on internal board positions, a vital necessity as new companies are added to the group. How have you, with your experience and personality, made Teqnion a better company? Do you want to start? Yeah, I can try. I've been here since 2006. This Teqnion is most of my experience and personality, maybe. If it's been better, at least it's bigger, and it's a more mature company now than 20 years ago, of course. Of course, the key to building something is the team and the people and constantly trying to be better yourself and facilitate a culture where people want to be their best and constantly try to do better and encourage each other to do so and keep the target clear for everyone, which is to just create more profitability and create more wealth with the means that we have. It's a very fun sport. If you can keep the happiness and keep the drive intact, I think there's no limit to what you can achieve. I mean, someday probably there will be someone saying that, "Johan, you're too old." Maybe I would hate that day, but maybe someone else has a better drive. Right now, I feel like maybe, I don't know, it's strange for me to talk about these things, but I feel I make Teqnion better because otherwise I wouldn't be in this position. I would step aside in one second. Yeah, I don't know if I should add something to that. Add a lot, please. I don't know what I talked about. I think that we want to win a lot, and it is very helpful to be two people or more that really want to win compared to being alone and wanting to win. It's different. Can I add just one? Sorry, short, not the... If it comes to the question, if we have made Teqnion better, it's easier for someone to look at Daniel and answer that because you can just check what the company was worth when he started in 2001 and look what it's worth today and see how the company has evolved during these years. The answer should be really clear for everyone. I think that one thing that we do well as a couple is that we let the best ideas win. We really, really try to keep the ego when it comes to that to an absolute minimum. One thing that I do believe that we are good at is to find good people. We try to figure out what is important, what makes Teqnion tick, what makes the shareholder value go up over time. Then we find the very best people to do that. I think simply, there are maybe two types of people. Either you hire people to try to be kind of your assistants because you want to keep your role and feel more important, or you try to employ people that are actually better, way better at what you're doing at certain tasks, of course. I do feel that over the years, we've had that. We have David Barton now in the U.K., who has, my partner Linnea asked me the other day, "Why don't you travel to the U.K. as much?" I'm not there to the same extent because we have David now. We have Steven here at the head office who is doing wonders. We have various many people here that weren't here many years ago. The effects of that are being shown in this quarter and even more so going forward. I think I hope that should be some kind of contribution. Next, same person. Acquisition structure. When will you start to do small bolt-on acquisitions on top of the current niche isolated companies? At what size and years down the road do you think acquisitions will have to be delegated at lower levels? I think it's a very interesting question. We are looking at bolt-ons every now and then. The thing is that in order to do a good due diligence, the process is very similar. It's still the same things that we need to go through, whether or not the company is making SEK 3 million or SEK 20 million or SEK 30 million. Of course, from a time efficiency standpoint, also when it comes to integration, it's the same steps and processes. Buying a bigger thing is usually more cost-effective and more value-creating. Of course, a bolt-on can be big. A bolt-on can, of course, also be bigger. We are looking at that. I would not be surprised if it did happen in the time going forward. It has happened in the history of this build. We don't rule anything out when it comes to acquisition. I mean, we're constantly and organically moving forward. Down the line, I think we're going to see new ways of building this group bigger and stronger and more profitable. Yeah. When it comes to M&A delegation, full delegation will probably not happen in a while. There are a couple of reasons for that. One is that right now it's not needed to come up with cases and run the processes. It's not the bottleneck. We have CEOs that are very, very focused on what they are doing. Most of them are really focused on getting the ship better and better and should continue to do that. Few of them actually have the interest or experience when it comes to M&A. When it comes to resource allocation, we would like, of course, everyone to do what they are best at. Yeah. One day we're going to have people that are better than you. Maybe not better. No, we should have that. We should absolutely have that. They are going to be added to the team or do it from wherever they're located in the group. Exactly. Exactly. A live question here from Valentin. As far as I know, this is one of the first times that one of the three financial targets, specifically doubling EPS every five years, including the impairment, have not been met. Yes, that is true. Are there any incentives tied to the goals in general, or is it more of a guiding benchmark to aim for? Do you want me to answer that? Yeah. Please start. Yeah, it's incentive tied to that. If we don't fulfill our financial targets, there are no bonuses paid out. That's a clear incentive. It's also for us, it's a bar that we're going to jump over. It's one of the most important bars for us standing in front of you today to make sure that all the shareholders get the highest return on their investment. We believe that this target is one of the most important ones. We're not happy with this, and we're going to fight effortlessly to just achieve better. Yeah. This is maybe a strange thing to say, but taking off my Teqnion management hat and putting on my Teqnion investor shareholder hat. Of course, if the management doesn't fulfill the financial targets over time, please fire them. That's also some kind of incentive. Next email question from Vibranium email. That's a really cool name. I'm an individual investor from Greece. I've been following tech for the last couple of years, and I'm a shareholder. I would like to ask if you have any insights on the impact of AI in our companies in general, and particularly that on humanoid robots. You want to start on that? I don't know if I want to start on that. We're doing a little bit of help from the chatbots, and we see the potential in quite a few of our subsidiaries using more and more AI-generated tasks. We are in the process of looking at that, where to start and where to start learning in which or which subsidiaries. Most of the industries that we are working in are very far behind when it comes to this technology, which means, or at least we feel that we have some time. Even with that said, I think we might be ahead of the bulk going forward. When it comes to humanoid robots, I think we wait a little bit with that. We need, we have plenty to do with not-so-humanoid robots for quite some time. Good. Next question from email comes from Yan, who is a French investor. He has a simple question. You're investing in industrial companies in less promising continent for industry, Europe. We will probably run out of energy and raw material. This will become a growing concern in a few years, probably. It's starting to be difficult to be an industrial in Europe with economical war in place and geopolitical friends and opponents. I know you're investing in niche only, and you don't think that much about macro. I know AI is not the main focus for small industrial companies, and that's good, but it can improve the efficiency in many ways. How do you deal with all of this? I think as this person, also Europe is standing in front of a lot of things to address, some problems going forward, of course. We also have to consider the drive and the ability of humans to just work around problems, as we've seen many times, and maybe we saw it really clearly during the COVID period. We tend to acquire small companies that Daniel mentioned that are not doing much of the production themselves, mainly design and acquisition knowledge and selling very niche industrial components into other industries, preferably very important applications that are necessary to run the society forward. I see if Europe is struggling, of course, we are also going to have some headwind, but I think that we will be positioned a little bit better than the more industrial manufacturing side. We are always looking ahead to see where we had to adjust in order to be relevant, in order to make sure that we always make money. One little way maybe you could squeeze into this discussion is that we're setting up a sourcing office in China now to make sure that we always have access to high quality, good priced goods. Maybe in the future, we will see that we can do something similar in other parts of the world. It shouldn't be so strange if we, 10 years from now, also have subsidiaries in other parts of the world as well. Just making sure that we have a differentiated group and that we spread our risks in different countries, in different segments, and we'll probably mitigate some of those risks. Yeah. Good. Next question comes from Lucky through email. Happy to hear that we are over the bump. Keep up the good work. Nice turnaround, more acquisitions, more U.K. companies, larger and better. Three questions. What is the current environment for competition when it comes to acquiring industrial niche companies in the U.K. and Sweden? Secondly, what is the purpose of the sourcing office in China? Can maybe start with those two. When it comes to the acquisition climate, obviously, I know most about Sweden, the Nordics, U.K., and then every now and then I do speak with someone outside of this geography just to start learning about the processes. I don't think that there has been a lot of change in the last couple of years. There seems to be still quite a lot of money that are interested in being put into use when it comes to acquiring small industrial companies. I think that's mostly Sweden and the Nordics. I think the U.K. is still quite similar as it has been for the last few years. Of course, overall, the climate has been more... People have been more interested in buying these kinds of companies compared to maybe five years ago or 10 years ago. I do not think that has a big impact on us because we buy so few. Yeah. The purpose of the sourcing office in China is a little bit like Johan discussed previously, and maybe it goes back to what are we doing with our experiences to make the company better? Obviously, there's a lot of things that we are not good at, but we try to lean in into those things where we do have certain natural advantages or maybe almost unfair advantages. I come from China. I speak Mandarin. I have worked quite a bit with sourcing in my previous life. Through that, we have found out that there are huge opportunities when it comes to bettering our price, bettering our products, bettering our processes, liquidity, etc., if we do it right. It's impossible to do all of these things right with a country far away that speaks a different language and, more importantly, has a different culture and thinks that all of our small companies should have an employee that understands this. We have tried a little bit with certain companies over the last year or so and felt that the results have been very, very promising. We hired one guy sitting 5 m from me, who is the best I've seen when it comes to these kinds of things. He's absolutely the smartest guy in this corridor. We're also setting up an office in China, so we have boots on the ground, as people like to say, because you need to be close. We don't know exactly how big that office will be. From a cost perspective, it's not going to be a cost. They're going to save much more than what we invest in people there. We'll just scale it up in small steps, depending on how much value-adding work we find. Yeah. Good. The third question there, just to have that completed, who are the two people in the picture on page 27? That picture in the quarterly report is one Karl, one Johan, one Daniel. Next question comes from Fabio through email. Great results. I have seen that you have made some changes when it comes to CEOs. Who is your best CEO? We have many, many best CEOs. Difficult to judge. Difficult to judge. I want to say certain things, but I'm not going to do that. I saw a study online about a correlation about strength training CEOs and performance. My question is, how much do you bench press? Less than my youngest son. I'm not sure what I do on one rep. I do, I think, 120, maybe 125. On an angry day. Maybe more on an angry day, but then I break my hand. Mark on email is wondering, "Hi, Johan and Daniel, sharing my question for the Q&A. What specific type of companies and competitive modes are you seeking to ensure sustainable returns over the next 20, 30 years? Secondly, under what conditions would you consider using stock as a currency for acquisitions? Thirdly, how do you mitigate the future risk of the company becoming too dependent on the skills and knowledge of Daniel and Johan?" Maybe trying to answer it a little bit quick. I think we covered these topics before somewhere. We're looking for companies that have this solid history mentioned that are focused on providing a physical product that is necessary to run society somewhat. We prefer a component rather than a full system. That component is just a small part of the total cost of the total system that our customer is putting together or selling or operating. We also like if it's regulated with a lot of standards or laws to make sure that there's a good moat for competitors to come in. Those are a few things. I think we can continue finding that type of acquisitions going forward as well. Using stock as currency, we'd rather use cash because we strongly believe that the stock price is supposed to go up, and it will be a very expensive acquisition after a few years if we do everything correctly. We'd rather stick to what we've done before and just use cash. Too dependent, looking forward, becoming too dependent on the skills and knowledge of Daniel and myself. I think we covered that a little bit today as well. We're trying to build a team with highly skilled, fantastic people. We're not supposed to be the only ones, and we are not the only ones that provide, I don't know, profitability into this build or knowledge into this build. It's not going to be like that in the future either. We're a part of this. We're a part of a team. We are not a team. I mean, the trick is really, of course, when we optimize for the long-term performance when it comes to the shareholders, there are a certain number of levers that are important. For those, of course, Johan and I think about those things on a daily basis. We try to find people that are better at certain aspects when it comes to those, maybe 10 or 20 different levers. That takes a while, maybe one of them, or maybe two. We try to be better at the ones that we are left with. Over time, we try to find people that are better when it comes to those things. Either we become so good at the ones that we still are focusing on that we still have something to do here, or the rest of the team will just take it over because they collectively are better at it. Both of those will make the company less dependent on people in here. Well put. I know that it's 9:00 over here, but we have a few more questions. Let's go through them quickly. Yeah. We have one live here from Pedro Leon. How good is Eloflex performing since the new CEO took over the job? Do we comment on that? One sentence. Very good. Yeah. Not going to answer that question, but maybe to the question, what is a really great CEO? A really great CEO can take a company from - 5% run rate EBITDA to 30% in 10 months. Not answering that question. Koppes live is wondering, why do you use EPS as a KPI metric rather than free cash flow per share? As a serial acquirer, FCF is a more useful metric, right? Yes, I agree. We write a short, hopefully humorous sentence about that as an asterisk on the page where you see our EPS and share price. The reason why we don't use FCF per share is because on a quarterly basis, it jumps a lot. When we become bigger, it will jump less. It's a little bit trickier to follow the company, we believe, following that measure on a quarterly basis while EPS is more steady due to accounting regulations. Yes, that is a very relevant, it is the most relevant metric, I would say. Jessus live is wondering, is the new sourcing office in China meaning that we're going to start looking for possible acquisitions there? Not really. The sourcing office is sourcing for products rather than companies. Would China be a potentially interesting country to buy companies in in the future years? I would say more probable compared to other serial acquirers, given the background and experience that we have in this room. Is it priority one, two, or three in the coming years? No. Good. Anton on email is wondering, which sectors have you seen most positive development in during the year so far? Maybe we tried to speed things up a little bit, but I think that we see headwinds in most sectors. The ones that we don't see headwind in are the ones that you already knew of. Electrification and defense, maybe. The companies that have done better this year is not because the headwind has become tailwind. It's because they have done more of the right things or less of the bad things. You have previously said that roughly 1/3 of the companies have been loss-making. How does that number look now? Depends on what time period you look at, of course. We give out this information every once in a while. We're not going to do it going forward, that we have planned anyway. It's less than 1/3. Yeah. I noticed that the price you have paid for companies has increased during the previous years. This is based on the numbers in the annual report for 2024, where you paid 9.5 x EBITDA for the total earnings 2024. You talk about getting your money back in five years. Can you give some color towards that? Maybe it's hard to do short, but we try to answer it right. When it comes to the acquisitions over a year, you can see what we have estimated to pay for the company when it comes to initial payment and also the earnouts. The earnouts are mostly over three years going forward, meaning that if you take all that into consideration during how they performed the first year, it's going to look like we paid more. We have not changed the way how we evaluate the company. We still have constructed a payment method that should give us the money back in five years if the performance we, together with the vendor, have forecasted. If not, we're not going to pay as much. It's a mitigated risk we take. We pay a little bit upfront and we pay with earnouts, which is both good for when it comes to the cash flow criteria, but also when it comes to the financial performance of that entity going forward. You will never get the correct estimate valuation if you just carve out one year and look at what happened in that year. We have a much, much longer horizon than that. If you look at the history and as we already discussed today, we see that we for most of the time fulfill that criteria. Yeah. Lastly, from Anton as well, I understand that the net debt divided by EBITDA of 2.0 is not on pro forma. That is correct. If you did pro forma, what would it be in that case? I'm sorry, but once again, we're not giving out forecasts. Yeah. What we can say is that it is not on proforma, which means that the earnings that we use in that measure are only the earnings since we acquired the companies. All right. That's the end of the list for now. Thank you, everyone, for attending. Do you have any concluding remarks, Mr. Steene? No, I think we tried to cover a lot, and we have plenty to do. I think we better get back to work. Thank you so much for listening in, and see you soon again. Bye-bye.