Hello, and welcome to the presentation Troax Group AB 1st quarter 2023 report call. My name is Francois, and I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you'll have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I'll now hand you over to your host, Thomas Widstrand, to begin today's conference. Thank you. Thank you. Thank you everyone who is listening in. Thanks for taking your time. As usual, I will present on the quarterly results. As usual also, I will follow a bit of a report that we have done to summarize and in a simple way how the development has been. For those of you who have access to the Internet, you can find this on our own homepage, troax.com. You'll find it under Investors, under that, you'll find it under Reports, then, of course, Q1 2023. If you don't have it, I think you will be able to follow what I'm saying in any case, but could easily be easier then, of course, if you follow this report. First quarter presentation, we start with talking very briefly about active and aware. This was explained a little bit how we are working right now, that we try to be very active towards the customers as regard safety, guiding them and helping them in finding the right safety solution. Obviously aware is that we try to make the customers aware and of the safety possibilities. We have recently come out with one or two in our initial business, quite interesting new development, which makes then that we can increase then the safety standards for those who are interested to do that. We think that this will be something which will become even more interesting as more and more companies and persons will understand that there are bigger opportunities for a higher safety standard than what it is today. With this short introduction, I'll go into what we do. Of course, we are safe and sound on solid ground. I come to a few pictures which are normally then describing what we are doing. Obviously, we are working with safety nets or perimeter guarding, as we call it. The first, let's call it segment that we're working with is what we call Machine Guarding, which is approximately 60% of our turnover. A typical example of what we're doing is this page here, this picture where you can see typical, or maybe not typical, but at least an installation with the car industry. You see obviously that a lot of robots are working on, in this case, welding and other assembly operations. Of course, you want to avoid that people working outside of the perimeter guarding get hurt. Therefore, of course, you have these kind of installations to make sure then that your people are safe and sound. This is also what was growing the most, I would say. I'll come later to the main drivers, but I will say that due to the continued mechanization and so forth, this is of course an interesting future growing segment. Next one, when we talk about product segments, is what we call warehouse partitioning. It's approximately 30% of our turnover. For those of you who have the page open, you can see here that this picture, which shows a, not a full Automated Warehouse, but a more traditional warehouse where you see people are running on a, well, running, but they are working on handling forklift trucks, and they are working then with some manual operations on the other side of the fence. This, I would say, is a typical example of a more traditional warehouse, where we install everything from the shelves, which you have on the pallet racks, and also the net guarding you have on the backside of the racks to prevent just what you have on the shelves from falling down. Of course, you have the dividers between the people who are working then with forklift trucks and the people who are working with other types of assembly or dispatch tasks. I go to the third one, which is called Property Protection, and this is the one where we actually got started many years ago. This is not so much of safety from, you know, protecting people. It's more to protect then, of course, bicycles, luggages, and whatever you and I have that you don't keep in your flat every time. This is, of course, primarily then aimed for multi-story flats, where you might have in your cellar a cage which is in turn where you and your family then can put your things which you don't use at the moment. This is, as I said, approximately 10% of our turnover, and it's primarily a North European, and perimeter or an installation. The next page shows what we call Automated Warehouse, and it's a variant of the warehouse installations, obviously, but we are merely using then the machine learning, which are more connected with the machines or robots. What the name implies is that this is much more automated, either than that there are no people at all working there, or at least there might be some maintenance people, but it's nevertheless by definition, very few people working with this transport of goods to and fro, the different shelving, which are the primarily place where they keep the stuff. We don't show this officially as a, as a segment, but this is a combination and of what I said with machine learning and with warehousing. Last year, this was growing very much, at least the beginning of the year. We had quite a big turnover of that. As I said, we have communicated several times already this year, we think then that this quite interesting segments long term will not have a very good development since these big international customers have, as I call it, overinvested during 2021 and perhaps into 2022 as well, which means that they have given indicators and that the big projects which they are planning won't take place in 2023, they will come in 2024 or later. Nevertheless, it's still a very interesting segment for us long term. Jumping to sales per region. Now we're talking about 2022 and not the first quarter. This is mainly for you are not so acquainted with us, but we had a turnover last year of some EUR 284 million, and euro is the common denominator for currency. We had an operating profit of EUR 51 million and an EBITDA of 18%. You can see that the sales per region of mainly Europe is 60%, North America is 17%, Nordics 13%, et cetera, et cetera. You can read for yourself. The strategy is, of course, to get bigger in the areas outside of the European area. If you look at the business area, which I already described, you have this 60 30 10, which you saw previously on the pages shown. The year in brief, last year, we are a growth company, and we should grow. To be honest, 2022 didn't come with so much organic growth. It mostly came with growth from a pricing point of view. We increased pricing because of the steel price increases. 2022 was actually quite turbulent year, and we hope that 2023 will be much more stable. The first quarter has indicated that it started in a more stable way. Our relative market share versus our biggest competitor is that we assess them that we are three times larger approximately than the number two players. We are in 45 countries, we are obviously then the market leader in this niche of safety, which we call indoor perimeter protection, or you can call it mesh panel solutions. If we go to the next page, we talk about financial targets. Regarding sales growth, we don't officially say that we should grow with X% per year, but we have historically had an organic growth excluding them, obviously. Acquisitions of some 8%, 9%, 10%, maybe 11 if you depends on how you calculate the years. I'm normally saying then that going forward, there is not, of course, any promises also, but we don't see anything which says that we could not continue to grow in those kind of figures, as we do expect the market to continue to grow with some 4%-6% per year. On top of that, we normally take market share every year. By that, we come to this kind of figures I tried to explain before. In a second, I come to the drivers, which are already really touched upon, and those are the things that makes us then enjoy then growth of the market, irrespectively of how we are doing. For the first quarter then we didn't have a good organic growth. It was actually -4%. We had a slight positive from small acquisition we did last year. I will say then that we should bear in mind and that we've had this very extreme growth in 2021, where we organically grow with 40%. Now we are going into this bigger volume. As said before, on top of this, we have this information that the Automated Warehouse, which 2021 was approximately 20% of our turnover and now more or less has disappeared for probably for 2023. Our target is to have an operating margin of 20% or higher. Now we are talking about EBITA margin. We reach for the first quarter 18.7%, which is a decent figure, not yet up to where we want to be exactly, but it shows development in the right area. We increase gross margin. The thing which is hampering us a little bit is of course, and that some of our production units have had less to do because of this volume decrease for Automated Warehouse, and especially our Polish acquisition that we did 2.5 years ago, they've been suffering a bit from loss of this kind of volume and has, of course, had a negative impact on the, well, the growth margin and on the operating margin. We think there are still possibilities to continue to improve this. Net debt is not a major issue for us actually, so we have a very good relationship between net debt in relation to EBITDA. I think we're even down to 0.5 after the first quarter. Which means that we have an excellent opportunity to continue to grow, regardless if it is organic growth or if it is, you know, acquisition. The issue with acquisition is more to find the right acquisition. If we don't find it, at least within a certain framework, we wouldn't have any problem, I think, to finance that. Dividend, we've just decided today to pay the proposed dividend of EUR 0.32. For the 1st quarter it is not relevant, but since we had the annual meeting today, I can just confirm that we decided or the meeting decided to pay this EUR 0.32. It was also the proposed dividend relating to the profit from 2022. If we go to the next page and try to summarize then the first quarter, it was then as expected, hampered then by the slow activities within Automated Warehouse. I would say then it is excluding Automated Warehouse, just for the sake of understanding. It is positive, and as we see that the rest of the market continues to have good activity levels, and we are actually growing then if you exclude Automated Warehouse. That's a good sign. Even if, of course, for all of us who read newspapers, there is a, well, possible downturn in the market coming, in the coming, quarters or maybe during the year. So far during this year, we haven't seen any real changes in activity or demand. We do have seen an improvement of orders within the automotive sector. I have in couple of previous quarters noticed that the request for quotes were increasing from automotive sector, which of course probably implies an increased possibility of getting new orders. We have seen increase of orders then in the first quarter, which is first quarter where we've seen this coming. It's not so that it's any dramatic increase of orders, but it clearly seen a trend change compared with before. Regarding sales invoice, it's positively influenced still by an effective received price increase, which we have then transferred over to our customers with approximate some 68%, if you want to compare apples to apples. The steel price have more or less been stable since the summer period. Stable is perhaps bit too strong word, but it's been stable in the sense that we have more natural fluctuations, which we'd normally have then quarter by quarter. During Q1, it went up a little bit, and then the expectations are that it should go down a little bit later during the year. We'll see about that. These are, at the moment, at least more the normal fluctuations, not the very extraordinary ones that we saw last year in connection with the outbreak of the Ukrainian War. Going to the next bullet point, that we have a positive EBITDA result and margin. We say then that it's not so we think it's any fantastic good result. It's not at all, but we think it's quite decent seen in the light of the turbulent situation and in the quarter as regards Automated Warehouse, since that was not coming in at all to only within some smaller projects. Which means then that we were hampered by the lower volume than produced in our manufacturing units. Gross margin is starting to approach the targeted levels, which are for us 39%-40%. As I said already, you have to see it then that the sales price transfer to customers have been successfully then implemented. Again, this is going then, which I already said now several times, somewhat lower volume than in the manufacturing unit. I would say then if we look at the regions, I come to that in a second, we've seen good sales levels in the Nordic region and also what we call the new markets. Otherwise, it's been a little bit lower sales levels. For the first quarter, the earnings per share was almost at the same level as last year, despite of the weak demand for Automated Warehouse. Working capital is on expected levels, the inventory is going down now. We had increased that during last year because of the long lead times in connection with first with COVID and then of course with the Ukrainian war. Cash flow was positive in the quarter. As I already started commenting, Natom will be seen in Poland as this quarter. It's similar as was in the quarter four, being negatively influenced by the lower activity from the Automated Warehouse customers. They are the ones who are mostly hit by this. They had a very good development with us first one half year. After this, of course, it's been more tough for them because of the lack of activity in this specific market where they are operating. The small acquisition we did in Spain called Claitec before the summer last year continued to develop well. The same goes for the very small one, which is called Svenska Cykelrum, which has products for the bicycle storage, also went well for the first quarter. The integration work is ongoing at full speed. This will be a partnering in the Nordic region and not so much with the other regions, at least not until in a later phase. During this quarter, we have continued to do the ground preparation for yet another expansion of the facility in the east of Sweden. This extension of the building, we hope to have finalized them by the end of the year. We are prepared, of course, over time then to do more machine purchases in order then to cope with hopefully becoming volume increases going forward. Something which we are not doing so often, we have actually changed the organization a little bit. We have appointed internally then a complete new function for sales marketing. In practice, you could say that I was doing that before, and of course, I'm not probably the right person to do that. I'm looking forward now that we have a full-fledged function, so to speak, for sales and marketing. We have a very good person who can handle that for the whole group. That's a positive thing going forward. Going to the next page, we've gone through this indirectly, so I won't go through it so much. You see, of course, that if you compare the first quarter with the same period last year, you clearly see then in the order intake that these bigger projects within Automated Warehouse have not come in. That explains more than the difference compared to last year. The sales, it's more following than the figures of last year. On the margin, on the other hand, we have increased the margin totally. The EBITDA, it's also slightly more improved or it's improved compared with last year. If you look at in absolute figures, it's almost on the same level. It's EUR 12.7 million compared with EUR 12.8 million last year, despite the fact that we have a little bit lower turnover. I would say it's a stable start of the year, even if, of course, there are no extraordinary increases seen anywhere. A stable start. Going to the next page, which I think is interesting for some people. We see here the regional development of order intake and sales. You see here that the negative impact of in the U.K., where we have a number of these big projects, can clearly be seen. Whereas if you go to the sales invoice, you also see in the U.K. that there is a negative impact, but also more in continental Europe. I would say that there you see then this Polish Natom development explained then indirectly in these figures here. For the rest, we're doing quite okay, I would say, in continental Europe. As always said, we've had very strong development in the Nordic region, and in new markets. Also North America is increasing, even if they are also hit by the development in Automated Warehouse, which means then that there will be a little bit, one quarter might be good for North America, one might be a little bit lower. Over time, of course, we should come back to the more steady growth, both in North America and in the group. Totally then, it's a little bit disappointing then order intake, but it's more than... The whole difference and more than that is related to the Automated Warehouse, as I've already explained. If I go to the next page, we try to give a bit of a conclusion. We have, as previous, continued to receive several important orders in the quarter in all segments from different companies or different customers in different places. Our clear conclusion is even if we don't have any official figures to relate to that, we are continuing to take market shares. The orders this quarter is maybe our most important to communicate, and that is mainly within Machine Guarding, as the orders for the Automated Warehouse were weak. We note, which I've already said then, that the orders are increasing from the automotive sector. It seems like they are finally, and this is a bit late in our opinion, compared to what we thought it would be. It looks now that also they've decided and that they need to do more investments then because of the new platforms, which are obviously coming out for the electrical or hybrid vehicles. Positive development in result, reflecting both improved sales cost margins, and unfortunately, we've had also lower utilization levels in some of our manufacturing units, not all, but in some of our units. Decent activity levels generally, and we've continued with good success in orders in most markets in the first quarter of the year. We have not, during the first quarter, really seen any signs of any major increase in amount. Of course, that's something which we follow closely month by month. Going to the next bullet point, the planned investments, which have been ongoing now for some time and for this acquisition in Natom, is more or less finished. We are then moving also in Natom, from another old factory. We bought two old factories. One is closed. We still have one of the old ones left. We are right now moving part of the remaining ones to the new one that we have acquired and invested i n Sora, in the, let's call it the western part of Poland. The integration of Claitec and the Svenska Cykelrum, the small acquisitions that we did last year, is ongoing in every way, so no problem there. As some sort of summary of the conclusion, we see the total development because it's positive. A bit more and more automated era has been very weak. In retrospect, the rest of the business has continued to do quite well. Just to repeat what we said before, we expect the demand from this sector to continue to be weak during the whole year of 2023, even if we do see then that longer term, this will still be an interesting growth opportunity for us. Coming down to the growth factors which are on the next page, it has not really changed compared with before. We see a main drive, of course, for this, what is called increased industrial automation, regardless if it's done with robots or with other types of mechanization, because there is a continuing increased demand for automation. People wants to be efficient, they want to grow, they want to be able to compete. Now also we see that some signs of what is called onshoring, meaning that you bring home manufacturing from faraway countries, is ongoing. It has maybe changed well for us so much because if we get a project in China or European, United States, doesn't really matter so much for us. Of course, if it's within Europe and United States, it is a little bit easier, of course, to be in control of it. That's positive. Just it's more a general comment than that. Onshoring, we see it's happening even if there are still more talks than action. We do see some action at the moment also that this is happening. We have the growth in e-commerce, which has been, as I said, substantial in 2019, 2020, and 2021. Now, right now, we are into some sort of go and stop mode, and it's right now stop, and it should go again in 2024. My gut feeling is if you have to take it for a gut feeling, nothing more, that it might take slightly longer before this gets through because we are late in the process then. They need, of course, to erect the building and get started with buying machines for the, for the whole logistic process of e-commerce within the building before they order maybe or the safety equipment and panels, let's say, one from us. It will take a little bit more by time. I do see that it is very positive in the coming years, if you exclude at least 2023 and maybe the beginning of 2024. Generally speaking, safety and regulation is generally important. Nothing is changing from month to month or quarter by quarter. Of course, overall, this has been a positive impact over time because no one wants to get stuck today that I haven't invested small money in this kind of perimeter guarding, which could have then prevented maybe an accident to happen. This is positive for us over time. As I said, doesn't really change from quarter to quarter. Next page shows our production units. Not a lot have happened there. I would say then the Polish one, where we have invested a lot in a couple of years, we have to get up the capacity utilization going forward. We're not too worried about that. As I said, 2023 will be a little bit weak. We do have some issues in China, United States, where we long term need to move to bigger premises. At the moment they're okay. We have the main ones in Sweden, where, as I said, we are extending the building as we speak. We also have the opportunity when the demand so requires to expand and buy back, just simply buying machines. Italy is quite okay. Also U.K. Next one shows that the Troax Group is working with different, you could call it brand, right? The real brands are Troax Satech, Folding. Natom is really a part of Troax and they sold as a Troax solution. Over time, this Claitec will be part also of a Troax solution where we integrate their interesting solutions within the Troax offering to customers. The bicycle storage, of course, and Svenska Cykelrum will also be part of the Troax offering. As a group, and this is how we operate today. Trying to summarize a little bit before I leave you for some Q&A. Safety tomorrow, we've been working with since 1955, and we do intend to stay in the forefront of this. For safety tomorrow, we focus of course, on climate compensating, decrease of energy consumption. We have recertified the ISO, we have regional manufacturing. We are in good situation since 90% of what we're selling are made of steel, which means it could be recycled, which is happening. We want to have increased and recycled steel long-term or midterm, and it's of course, especially important from CO2 point of view. We have also shown them that the CO2 consumption for main articles is available on our webpage, which indicates for the customers then if they want this to be a deciding factor, even if we are also saying at the same time then that if you want then a more sturdier solution, a safer solution, you will use more kilos of steel, which means that steel consumption will be high. You have to value then, of course, then the safety versus a little bit CO2 consumption. When we make new investments, we are of course looking into the possibility of using solar panels. I'm sure that will come more in the future. For Italian factory, we have it was installed just a couple of years ago, that we have solar panels cover 50% of our energy. Going to the next one, we have what we call the Safety Center, where we do then tests, and it's based on then, of course, our own development, what we do in our R&D department, but we also test competitors' products. We see in all cases then that we are always from a safety point of view, have a higher standard of what competitor is having. This is of course good because it gives us a lot of courage, of course, to go out to the market and propose to customers good solutions, both from safety point of view and also of course also from a practical point of view from the customer's point of view. We of course let an external body test us, so we don't fool the customers, so we use DEKRA lab to test then our processes. In this segment and where our lead words are we protect people, property, and processes. We have now lately, next page, turned out what we think are very interesting new solution, which we call Panel Detection, or you can actually then see if there's a missing panel. When you have bigger installations where it's not so easy to see on the other end of the installation if there is a missing panel, which could at least theoretically then be harmful for people who are passing by without knowing that there is a problem. We've done then, we think a very good solution here, where we then make all the panels connected with each other. That means then that if there is a break in this circuit, you will then either see then a red light being light, or you could actually connect it also with the customer's own safety system, which means that you can't start a robot or start a machine which is inside this perimeter guarding. This will take then the safety standard to a higher level than before. We're quite proud of that. We're of course, first in the market to introduce this. It's of course, being patented. We see a good future for this because, we think that the big companies with high requirements for safety will be quite interested in this. As this reduces the risk, and it means, of course, that those who are deciding, the safety level can sleep well at night. I think that's also quite important for this kind of decision process. Next one is just to round off a little bit. We are ready since 1955, and safety equals products. We want then people who are working in possible hazardous areas to come home to the families in a good way every day. This is really our target and to help them to work with this. With this, I'd like to end then this first quarter presentation, and now I'm eagerly awaiting your questions. Please go ahead. Thank you, Thomas. As a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, please press star two. Please ensure your lines are unmuted locally as you'll be prompted when to ask your question. Our first question comes from the line of Gustav Berneblad from Nordea. Please go ahead. Good afternoon, Thomas. It's Gustav from Nordea. Hi, Gustav. How are you? Maybe just to dig into the order intake in North America here. Can you expand this a little bit? Maybe give a bit more flavor here. Yes. Firstly, I would like to say you should be careful when you compare quarter by quarter, because since we have this a little bit erratic order coming in from our Automated Warehouse, historically, you could get the wrong conclusion if you just compare, you know, one quarter by quarter. I think you have to see it through longer period. This quarter looks decent from North America, but you should bear in mind then that the orders from these Automated Warehouse have already gone down than last year. You compare now with a quarter which is actually not very positive from Automated Warehouse in the U.S. respect. Whereas in U.K., and also in Poland, which is part of continental Europe, you have clearly effects then of orders upcoming in 2023, where you had your corresponding orders from the Automated Warehouse in 2022. That's one thing. Number two, I can say it's quite stable in most places, even if as I already said, it's in some cases then positively influenced then by price increases and not so much by volume. If you exclude then these kind of bigger international customers working in in Automated Warehouse, there is an increase in the orders, albeit not very high, I would say, for the first quarter. Let's see how it becomes now for quarter two and three, then we can draw some conclusions. The ordinary business start, I would say, in a stable and decent way. If we move to Nordics, quite solid in the quarter as well. Should we interpret that this, the decline in new builds and residential is not really reflected in your order intake yet, or? It's not at all reflected, on the contrary, we've had very good demand from this sector in the first quarter. We are expecting that there will be some sort of reduction in demand going forward, probably after vacation period. We don't know. Since we are late in the process, we also see of course that the licenses for new build is already re-decreasing substantially. Of course, the projects which are already ongoing, they will try to finalize. Since we are more or less one of the suppliers who are coming at the latest stage of the finalization, we won't see it until in a later stage. Yeah. Okay, perfect. Then you noticed some positive signs in related to Automated Warehouse among small and medium sized customers. Yeah. You said. Right. What kind of customers are these? These are more new customers, more or less smaller integrators. You could call it an engineering bureau engineering company who doesn't have own production, but they make the installations for a bigger end user who could be one of these big end users you read about in newspapers and we all know about. It could also be the smaller one. We see that as a complement to the bigger ones, we have been quite active for a number of years. We also see that some of these smaller ones come up now, showing an interesting development. Having said this is of course, so that these small ones cannot at all compensate the big ones that have said that they will not give any orders. It still shows them that there is an increase in general perception, I would say that, customers are interested to go into Automated Warehouse also when they are not these really big retail worldwide companies. It is, to me, it is my conclusion is that over time, the customer base is increasing or the potential customer base is increasing. Yeah. Okay. Okay. I see. Should we interpret what kind of end market would you assume this is? More like grocery stores or similar to that exposure, or is it possible to say? No, it's they could be not anything but grocery is of course an obvious one. Clothing is another one. You also have those who deliver the components or spares in retails. You know, could be anything from spares for cars to, you know, machines that you and I are using as private persons. Those kind of things you also see. It's quite widespread, but it's of course the common denominator is that they have a lot of articles and they have a lot of small end customers in the end. Okay. Okay. I see. Perfect. Then just the final one here, on the gross margin, heading into Q2, how should one think here? I understand it's very much volume driven, but, is Q1 sort of a good proxy for Q2, or should we expect an even more recovery, would you say? I think you should see it like we have now got the full effect in Q1 of the price increases made. We see also that the steel prices obviously is an important component, has been rather stable in Q1. I think this is a good denominator for the quarters going forward until then the volume starts to increase again, which of course will help us to cover the fixed cost and indirectly increase the gross margin and every day more. It's a good indicator I think, going forward, even if of course it can get a little bit ups and down because of steel price, energy price and whatever. At the moment, this is a bit typical, I would say, where we are at the moment. Okay, perfect. That's, that's all for me. Thank you. The next question comes from the line of Daniel Lindkvist from Danske Bank. Please go ahead. Hi, Thomas. This is just keeping it at the gross margin, just a touch more. That would mean that the cost reductions in Poland and Chicago has kicked in already in the gross margin in Q1. Yeah. not then in. The main part of that has kicked in already in Q1. Yes, correct. There is a small amount, small part still remaining, Daniel, but the main part has kicked in Q1. Okay. That would also mean that there's no major difference from selling out old inventory and selling out newly bought inventory? No, there's no difference in that. No. Correct. Cool. Just on North America again, but not on the order intake this time around. On the sales in Q1, the Q1 sales came as a bit of a surprise given the order intake we had in Q3 and Q4. Was there something special in the quarter? There were one or two projects that were postponed by these big Automated Warehouse customers. I still wanted one or two of these products to be delivered in quarter one. That came not as a surprise, but let's say a little bit of a positive signal during that period from a delivery and invoicing point of view. Okay, perfect. Sorry, go on. Yeah. Another thing as well, we've had quite decent deliveries also to the automotive industry in the U.S. in the first quarter. Deliveries. Okay, perfect. Many things that we've been waiting for then quite some time there. Yeah. Yeah. Just lastly from my side on the M&A, I guess now with the EBITA instead of EBIT and you have put more emphasis on the M&A side. The questions on that is, have you seen prices come down on objects? What about competition? Has something changed with the competitive landscape on M&A targets? We don't see that. You know, we don't have so many objects, so we could say there's a trend also. Yes, we can say that the valuation at the moment are more realistic than before, so it's positive. Yeah. We do also have a feeling, it remains to be seen if we can succeed, that it's more possible today to close deals compared with one or two years before. It is just, you know, very early stage to say something like this, so nothing might happen this year. We do see it's, that, the gap between seller and buying is getting smaller at least. You asked about something more on the M&A side. Sorry, I forgot that part, yeah. Yeah, it was on the competition. Competition. Has something changed now with the new financing landscape? No, not really. It's more or less the same as far as we can see. There are a few things happening out there in the market right now. Maybe we will get some new players who are interested. What we know up until, let's say the end of the first quarter, nothing has changed. Perfect. Just my final. You have a financial target now, or a target at least on the gross margin of 39%-40%. Mm-hmm. Is that just out of curiosity, what's been the target before? Has there been changes in this area, or is it just to give some guidance for your-? This is more just to give some guidance to people like you and others, of course, to get a feeling of where we are going. Of course, when we bought Natom, because of the more simpler products with lower added value, everything else equal, the gross margin will increase in the group when you consolidate with approximately 1 percentage unit. On the other hand, of course, we think that since we are growing, we should have possibilities to continue to improve costing and efficiency. This goes a little bit against each other. That's why we've just given some, not official guidance, but more, you know, just more meat to the bones, so you get a bit feeling where we are striving for. Okay. Perfect. Thank you so much, Thomas. Congratulations on a really strong report. Thank you, Daniel. Thank you. Thanks. The next question comes from a line of Gustav Österberg from Carnegie. Please go ahead. Thank you, operator. Hello, Thomas. One question from my side on the CapEx. Could you elaborate a bit on if there are any particular reasons for the increase? Is this related to sort of anticipation of a better order intake in Automated Warehouses from very, very low levels or sort of what's driving the CapEx decision here? You mean from the customer point of view? Yes. No, no, sorry. Yeah. From your point of view. From expanding- Oh, from our- Your production footprint. Yeah. No, we haven't done a lot, I would say, CapExes lately. If I remember correctly, we did EUR 2 million or so in first quarter, which I think is more or less in line with what we should do. Bearing in mind that we are still finalizing the CapEx in Poland, which has been decided for quite a long time based on that we want to go from these old-fashioned factories that we bought to a much more modern factory which is much more efficient. We are still in the process of doing that. Besides that, we are not doing any big investments at the moment, with one exception, and that is that we have one main line which is being commissioned in the Hillerstorp unit as we speak, and that has been taken as CapEx quarter by quarter. There's probably some parts still left, but not any major figures. We are not changing any, let's say, strategy to either to increase CapEx or not to reduce short-term because of orders going up or down for a quarter. It's more based on the long-term expectations we have on the volume, which basically is a positive one from our point of view. The question is more how quick can it go. Perfect. Thank you for clarifying that. That was all the questions from my end. Thanks, Gustav. We currently have no questions coming through. As a final reminder, if you'd like to ask a question, please press star one. All right. There are no further questions, so I'll hand you back to Thomas to conclude today's conference. Yeah. Thank you very much for listening in. We're very grateful for your interest and for your questions. Look, as usual, looking forward to meet you again then in August when we deliver the second quarter results. Let's see then how it is with the orders and sales. I think Q2 will be a quarter which will be quite important because obviously it will decide a lot for the rest of the year. Thank you for listening in and talk to you again soon. Bye-bye. Thank you for joining today's call. You may now disconnect your lines. Host, please stay on the line and await further instruction.