Alleima AB (publ) (ALLEI) Earnings Call Transcript

Hi, everyone, and welcome to the presentation of the second quarter 2025 interim report for Alleima. My name is Emelie Alm, and I am Head of Investor Relations. I'm joined by Goran Bjorkman, President and CEO; and Olof Bengtsson, CFO. So as usual, Goran and Olof will take you through the results, and then we will have a Q&A session. [Operator Instructions] And as always, safety is our top priority, and we trust that you know the safety routines of where you are located. So with that, I would like to hand over to you, Goran.

Thank you, Emelie. Hi, everyone, and thank you for listening. So I'll start with the highlights of the quarter. Well, I think we're performing okay in a challenging market environment with a mixed demand. Our broad exposure reduces volatility. But of course, we note a negative organic top line growth. Our order intake rolling 12 months declined 2% and revenues in the quarter minus 4% from high comps last year. Our backlog is still good in important segments such as oil and gas, in nuclear and in medical with good product mix and visibility for the near-term future. In the more volume business like Industrial segment and in Chem-petro, in Europe, in particular, the backlog is weaker. Our adjusted EBIT margin declined to year-on-year nearly 9.5%, which I think considering the lower revenues and a significant FX headwind shows resilience and a good leverage. And I take this as a proof that we are doing a lot of things right with our strategy. We have a good product mix. Excluding FX, the margin would have been 11.4%. But at the same time, there is room for improvement. So I think part of the business is performing well, while others clearly have some challenges. We did not have any significant direct effects from tariffs, and we have been successful in passing along these costs to our customers. But even though we have production in the U.S., the pricing has, of course, increased, which is impacting demand. And the ongoing turbulence stemming from tariffs, trade barriers has been over the global economic environment and demand, which we now see effects from with an increased uncertainty and customers postponing their investments. Our financial position enabled us to stay with our strategy, where we have several ongoing profit growth projects. At the same time, we are actively reviewing our footprint and capacity, ensuring profitability also moving forward. To move to sustainability. As I said many times before, we are generating positive impact both through our operations and our product offering. If I start with operation. Safety is always the top priority in Alleima, and we are continuously and actively implementing measures to maintain safety as a top priority. And the development is again trending in the right direction, and the accident frequency is actually now on record low levels, which is something I'm very happy with. Our share recycle still remains high and over 80%. I think that's a good figure given our product mix. CO2 emissions are steadily decreasing both on a rolling 12-month basis and year-over-year, and the reduction is 6% and 15%, respectively. And the proportion of female managers continue to increase now to 25.4%. And again, important to recognize this is only one aspect of the broader diversity and inclusion initiatives. During the quarter, we announced that Kanthal, together with their strategic partner, Danieli, will deliver pilot scale electric process gas heater to Emsteel DRI plant in Abu Dhabi. This is the first time Kanthal delivers its patented Prothal technology for commercial purposes. The heater, which is compatible with hydrogen and natural gas as well as a combination of the two, enables retrofitting and adds flexibility in our customers' choice of technology. The technology as such plays an important role in the transition towards more sustainable steel production and reduce the dependency of fossil fuels. I believe this is an important step in the scale-up development of Prothal technology. We will collect data, experience and know-how and will serve as a reference point, I would say, proof of concept moving forward. Moving into the market development. Overall, we continue to see mixed market sentiment and the macro environment uncertainty has increased. The market sentiment weakened, especially in Europe and demand was, in general, continued low in North America. In Asia, demand held up better, but also there, we noticed some signs of hesitation. We have momentum in several of our key segments, and I will walk you through the development in each segment, starting with Oil & Gas. And we noted, of course, the volatility in oil price and the uncertainty has increased. However, we still view the underlying demand on high levels and the project list of upcoming tenders and potential future order is solid. Last quarter, we said that the backlog for umbilicals were getting shorter but we have now booked more orders and we have not consumed backlog. The book-to-bill was above 1 in the quarter, and OCTG backlog remains very strong. Chemical and petrochemical year-on-year down. Europe is down the most, while North America, more flattish, but on low levels. We also see an impact of higher uncertainty in Asia but still on an okay level. Industrial segment. Last quarter, we noted an improving year-on-year demand in the Industrial segment. This quarter, demand is worsening on the low value-add products, which is what we normally is done prioritizing when we don't need that volume. And this is especially clear in Europe, but also in North America, we noticed -- I mean in North America, we noticed some rebound in quarter 1. If this was due to prebuys, it's difficult to say, as this business has been running low for quite some time. The biggest impact on North America, we saw in quarter 1 came from Oil & Gas, Nuclear and Medical and those segments are segments where we're not -- where we would not expect such pre-buys. And Industrial Asia still on an okay level. Industrial heating, flat demand year-over-year on continued hesitance from customers in placing orders. which refers mainly to CapEx related to the business. For the Solar segment, especially, we also have high comps from last year. However, demand was continued positive in some applications, for instance, Ceramic elements for electronics, both including semiconductors and the glass industry, but weaker in solar and metals. Consumer demand is now on a good level, mainly driven by the white goods industry in the Strip division. Medical continues to be strong with several drivers and momentum is strong across the product portfolio. Mining construction, flat underlying demand year-over-year. Nuclear, the high activity and growing demand continues, where we're building good backlog to execute for over a long time. Transportation demand decreased year-over-year Aerospace has a really long backlog, but with some tendency of inventory adjustments among customers -- sorry, automotive worsened. Other Renewable energy is still a bit mixed. This is a wider segment where some businesses are doing better than others. We booked orders for carbon capture and storage and for biofuels, but no clear signs that this is taking off quite yet. Looking into order intake and revenue. Order intake rolling 12 months amounts to SEK 18.9 billion with a negative organic growth of 2%. This is mainly coming from the Chemical and Petrochemical and Industrial segment, especially in Europe. North America is weak overall and Asia noted a slight setback, but on high levels. Industrial heating was flat year-over-year on a continued low level. Nuclear Medical consumer grew while Oil & Gas was quite stable, though on a high level. Revenues declined organically 4%, where Tube and Kanthal declined, while Strip grew. Chemical and Petrochemical, Industrial Heating noted the biggest declines where we could see that the weak order backlog for those 2 segments impacted revenues in the quarter. Rolling 12 months book-to-bill of 97%, building backlog in Oil & Gas and Nuclear, while consuming backlog in Chem, Petro, Industrial and Industrial Heating. This means that the order backlog is still solid in important segments like Oil & Gas, in Nuclear and Medical, and overall positive product mix. But total volumes in the backlog is on the low side going into quarter 3. Let's move into earnings. Adjusted EBIT amounted SEK 454 million with a margin of 9.5%, and considering the SEK 150 million negative impact from currencies, meaning that the underlying margin would have been 11.4% adjusted for FX. I think we're performing okay given the lower revenues and the uncertainties in some of the segments. I think this is due to several factors. We are seeing margin contribution for more segments now than in the past. Of course, Medical being the prime example of this, but also in Oil & Gas and in Nuclear. But also the way our Asian business has involved. We also managed to improve our performance in the OCTG business as well as in the Transportation segment, both contributing to the margin resilience. All in all, product mix is solid with higher contribution from highly profitable segments and less deliveries for low refined business, being mainly the Industrial segment. Looking at divisions, I think Tube performed well, and Kanthal continued to mitigate lower volumes in a good way, while Strip's performance was not in line with expectation, but I will come back to that. Free operating cash flow of SEK 347 million lower than last year, impacted by lower operating profit, lower working capital and higher CapEx. Overall, I'm confident in our long-term strategy. We are benefiting from our diverse exposure, and we continue to drive positive product mix or shift -- mix shift while maintaining our order book in discipline in a weaker market conditions. We also adjusted cost and capacity to mitigate lower volumes and we're prepared to do more if volumes continue to decrease. But I think at the same time, we should stay cool and not make too hasty decisions. We need to be ready to deliver once the market demand and volumes bounce back. Let's look at the division, starting with Tube. Tube noted an organic order growth of minus 6% for the rolling 12-month period, where we continue to see a weak Europe with more uncertainties now than a quarter ago. North America, still on low levels, and a general sense of caution. Asia is still on high levels, although also there, we noticed a small decline in quarter 2. In general, we see customers hesitating in taking investment decision, which impacts our business. The Chemical and Petrochemical and Industrial segment noted the largest decline. Backlog in key segments like Nuclear and Oil & Gas is still solid, and we maintain our positive view on both those segments. Organic revenue growth of minus 1%, mainly driven by the negative development in Chem, Petrochem and the Industrial segment, somewhat mitigated by Nuclear. Book-to-bill was 94% rolling 12 months. Adjusted EBIT margin amounted to 11.2%, which is a good level given the lower revenues as we continue to utilize our capacity in a good way by prioritizing more profitable orders. As mentioned, the product mix was solid, and we have a positive contribution from performance improvements in Oil & Gas. The OCTG business have improved well both commercially and operationally, also the business within Transportation segment, where we have had problems has improved well. Also had some positive one-off effects like, for example, inventory buildup during the first half of the year ahead of this year's maintenance stop during the summer, which will be somewhat longer than normal in one of the larger factories in Sandviken. We will be replacing the expansion press in the largest extrusion press. This is a maintenance investment replacing a plus 60-year-old machine, but it will also bring advantage with a higher level automation generating increased productivity and also safety for operators. This is bringing some positive cost absorption effects, both in quarter 1 and in quarter 2, which will reverse in quarter 3. The lower volumes from mainly Chemical and Petrochemical and low refined products to the Industrial segment, both in Europe and North America had a negative impact and we are expecting these low volumes to have an even more visible impact in quarter 3 as volumes and absorption of cost is low anyhow for normal seasonality reasons. FX headwind of minus SEK 81 million, meaning that the underlying margin was strong at 13.6% in the quarter, we considered to be on the weaker side. Moving over to Kanthal. Organic order intake growth for the rolling 12-month period of 1%, still on low comparables. Medical is strong and industrial heating remains soft. Demand was still positive in some applications for ceramic elements for electronics, including semiconductors and glass industry. And the previously announced investment in both Sakura in Japan and Perth in Scotland are both related to those customer segments and is part of our ceramic heating elements offering. The Medical segment is maintaining its strong momentum, growing in order intake and maintaining a good revenue level and backlog remains solid. Book-to-bill of 102% rolling 12. This is partly due to the negative revenue growth, but also an increase in the Medical backlog. Kanthal has, for some quarters now being affected by lower volumes from the Industrial Heating, a segment with several end markets and development difference between these end markets and regions where Europe is the weakest. But in general, customers are hesitant to make CapEx related to this investment decision and it's difficult to foresee when that demand will turn positive again. But the sentiment is not getting worse. Adjusted EBIT margin was 16.7% in the quarter, which is solid, considering development in Industrial Heating and an FX headwind of SEK 29 million. Underlying margin adjusted for FX would have been SEK 19.6 million. I think Kanthal has proven ability to adjust capacity to reduce costs where needed, which is why margin levels are maintained. And I'm confident they will continue to do so moving forward as well if that will be needed. But short term due to low volumes and with expected FX headwind, we expect some temporary under-absorption effects hitting the margins in quarter 3. Moving to Strip. Facing low comparables, Strip continued to grow its top line with organic order intake and revenue growth in all segments. Organic order intake grew 30% on a rolling 12-month basis with growth in all segments. The Consumer segment is the main driver where the main product is compressor valve, steel for white goods and air conditioners. Organic revenue growth of 19% in the quarter, all segments contributing and with that a book-to-bill rolling 12 month of 140%. Adjusted EBIT margin 2.4%. And I have, for several quarters now, made comments related to the Strip is consolidating the pre-coated strip steel for fuel cells and that, that business due to low volumes has a negative impact on Strip margins. This is also true in this quarter. However, this is not the main reason for the low margin in Strip. The underlying Strip performance is not in line with expectations. Main reason are production efficiency issues, poor mix in the Sandviken site and some inventory write-downs. They also had an FX headwind and in that case, minus SEK 9 million. Mitigating activities are ongoing, and we expect an improvement during the second half of the year. But since Strip's production is located in Sweden, they normally have a significant impact from underabsorption of costs in quarter 3 due to the maintenance stop during the summer. We expect that to be the case also this year, and that performance improvements will be more visible in quarter 4. And with that, over to you, Olof.

Thank you, Goran, and then let's go to the financial summary for the quarter and the half year. So if we look to the right to the bridge there, you can see that the order intake amounts to SEK 18.9 billion on a rolling 12-month basis. That corresponds to an organic growth of minus 2%. And we show a total growth on the rolling 12-month order intake of minus 6%, where in total of 4 percentage points of those come from currencies and alloys with a stronger Swedish krona and lower metal prices impacting. Quarterly revenues, just below SEK 4.8 billion, with a 4% negative organic growth, coming mainly then from the slower European and North American markets. Revenue also affected by the stronger Swedish krona, mainly against the U.S. dollar and with total currency effect of minus 4%. Alloys, somewhat negative alloy effects on orders, minus 2% on the rolling 12-month basis and minus 3% on the quarterly revenues. And we see a continued negative alloy effect, both on the rolling 12-month order intake and revenues going into the next quarter. On structure, we have our latest acquisition of Amdocs in Kanthal. It's fairly small, so it doesn't show up in the table, but it's contributing positively to both order intake and revenues in the quarter. And going to the big table on the left, and I'll come back to the adjusted EBIT in a minute. If we talk about the reported EBIT, the margin decreased to 5.9% compared to 12.8% last year, and this is impacted by the lower revenues, currency headwind and by the negative metal price effects amounting to a negative SEK 171 million this year. Last year, we had a positive effect of plus SEK 96 million, so quite a big swing that line. Metal prices have come down during the year in U.S. dollar terms. They have been fairly stable quarter-by-quarter. But in addition to the prices in dollars, we also have a strong Swedish krona that impacts our Swedish krona metal price effect. Net financial items in the quarter amounted to a positive SEK 18 million compared to a positive SEK 137 million last year. And the finance net consists of the positive interest net on our cash balances in the quarter, yielding approximately 2.2%, but also of interest charges on leases, pension liability and bank charges. And in addition to this, also revaluations from derivatives not qualifying for hedge accounting, and that gives a positive effect this quarter. Last year, the high positive number was affected by accounting adjustments in the hedge reserve and we had in total positive effects of SEK 125 million from this in that quarter last year. The normalized tax rate comes out at 24.1% in the quarter and in line with the guidance by the reported rate it's not in the table, but the reported rate was 32.2%, which is a high number. And that high number comes from one-off items, in this case, a nondeductible withholding tax on an internal dividend. Free operating cash flow was SEK 347 million in the quarter, and I'll get back to that as well soon. Finally, adjusted earnings per share in the quarter, SEK 1.35 per share, impacted negatively from the lower adjusted EBIT, the high tax rate tenders and the lower finance rate. Going then to the bridge on adjusted EBIT, going from last year's SEK 592 million or 11.1% to this year's SEK 454 million or 9.5%. We note an organic decline of SEK 26 million in the quarter, and that gives an operating leverage of 12% on lower revenues, and we find that to be a fairly good outcome in this foreign revenue scenario. So we mitigated the lower volumes in a good way, we think, in the divisions. Main impact in the quarter comes from currencies where we're impacted by the strength in Swedish krona, mainly against the U.S. dollar, but also, for instance, against the Chinese yuan. And the split between transaction and translation is about 50-50 in that number. And this corresponds to a margin dilution of 1.9%. Structure is the acquisition of Amdocs that is contributing to our earnings. And then we go to capital efficiency, looking at the balance sheet. Net working capital lower than last year. In absolute terms, coming mainly then from currency effects and lower metal prices. It's higher as a percentage of revenues at SEK 36.1 million compared to SEK 32.7 million last year, and this comes mainly from the lower quarterly revenues, that is a calculation. The sequential decrease is mainly driven by currencies, a decrease of accounts receivables and inventories. And to continue on inventories, they are lower in both value, both sequentially and year-over-year, coming from both lower volumes of tonnes in inventory and lower metal prices. We have a lot of focus in our logistics on controlling the physical inventory. And despite the fact that this year, we had built extra inventory volumes for the long summer stock, we are lower both in tonnes and value compared to last year. Year-over-year, capital employed, excluding cash, increased to SEK 16.4 billion from SEK 15.8 billion last year. This increase comes partly from our increased CapEx levels, I think to the fixed assets. And then looking at return on capital employed, excluding cash, and this is then based on the operating profit, including the metal price effect. It was 9.2% in the quarter based on rolling 12 months and roughly at the same level as last year's 9.3%. Cash flow then amounting to the free operating cash flow amounting to SEK 347 million. That is lower than last year, coming mainly then from the lower earnings, including the negative metal price effects. And noncash items that refers to, for example, provision releases in the operating results that have no cash flow impact. We have a positive impact from lower working capital in the quarter. It's mainly lower accounts receivable and inventory. The CapEx increase comes from our growth CapEx projects. And if you look at the year-to-date number, the extra cash flow impact from CapEx is about SEK 100 million compared to the same period last year. Next slide, amortization of lease liabilities on par with last year. So in total, we have a lower free operating cash flow compared to last year, but the lower earnings are from a cash flow point of view, compensated by a working capital release from the lower invoiced volumes and metal prices in the quarter. And if you take this in round terms, looking at the total cash flow, the business has generated about SEK 400 million, including finance net items in the quarter. Then we paid taxes and dividends in total, approximately SEK 800 million, and that gives a net change of approximately SEK 400 million on our cash balance compared to last quarter. This leads then to the strong financial position. It remains strong. We are well below our targets. So our financial target of net debt to equity of being below 0.3%. We're actually at 0 at the quarter end. If you prefer to use the net debt to adjusted EBITDA, it also comes out at very close to 0. And looking at the components then of the net debt, the net pension liabilities, they increased from SEK 761 million last year to SEK 813 million this year, coming mainly then from lower discount rates compared to a year ago. Leasing liabilities of SEK 462 million, more or less on par with last year's SEK 457 million. Cash position remains strong. I mean, this year, we have spent SEK 130 million on an acquisition and then paid the dividend in May of SEK 577 million and still we have a cash position of SEK 1.3 billion, and a net debt position then of SEK 33 million, it's actually a net cash position. And we also have, of course, our unutilized SEK 3 billion revolving credit facility. So we have a very strong financial position in total. And this gives us room to execute and operate on our strategy of profitable growth. Looking then how well we managed to guide you ahead of this quarter -- of the last quarter. Year-to-date, CapEx of SEK 456 million, we're guiding for a full year of SEK 1.2 billion. So I would say we are well in that range as we normally have more CapEx in the second half of the year. Currency transaction and translation effects at SEK 123 million in the quarter, fairly close to the guidance of SEK 130 million. And if you look at the total currency effect, it came out at SEK 115 million in the quarter. Metal prices affected us negatively with SEK 171 million in the quarter. We guided for a negative SEK 150 million. I think the main difference here is that is strong Swedish krona, gave an extra effect here on the metal price effect. Normalized tax rate 23.8%. Our guidance is 23% to 25%, and that's the year-to-date rate, the 23.8%. So in the lower part of the range of actually fairly close to the middle. For the quarter, the normalized tax rate was 24.1%. Then looking at the guidance for the coming quarter. We guide for our full year CapEx of SEK 1.2 billion. We're staying at that guidance. As I just mentioned, we are normally having more CapEx in the second half of the year. Currency effects still quite considerable, SEK 115 million for Q3 for transaction and translation. And then for the metal price effect with the strong Swedish krona and the metal prices at the end of June, we think that we will be around SEK 150 million negative on that line. And tax, the guidance remains at 23% to 25% for the full year 2025. Then I would like to hand back to you, Goran, for the outlook.

Yes. And before I do that, I think I was wrong on 2 numbers. The margin, excluding FX should be 13.1% in Tube and 18.3% in Kanthal, nothing else. So outlook for the third quarter, I would say the general economic environment weakened during the second quarter and considering the change in global trade policy situation, the uncertainty concerning future development has increased. Backlog is solid in several key segments where we have good visibility in the near-term deliveries. At the same time, challenges were noted in other customer segments, particularly in Europe and North America, which may impact near-term deliveries. Order intake, revenues and adjusted EBIT margin normally lower during the third quarter compared with the second quarter due to seasonal variations stemming from maintenance stoppage during the summer and the stoppage in one of the larger production sites in Sandviken this year is planned to last slightly longer than last year, which is expected to lead to temper higher-than-normal underabsorption effects in the third quarter. Product mix is expected to be similar to the second quarter, and we continue to expect a currency headwind in the third quarter. Cash flow is normally high in the second half of the year compared to first half. Having said that, to summarize, overall, we showed continued earnings resilience. The company is in good shape, and we deliver on our financial and strategic targets. In quarter 2, we noted a continued mixed market sentiment with weakened demand, especially in Europe. North America remains soft. And what we see is delays in some customer investment decisions. The near-term future is difficult to foresee as of the turbulence in the market related to trade barriers and geopolitics. In key segments like Oil & Gas, Nuclear Medical, continued good momentum. And I think our diversified exposure to customer segment different stages of the business as well as our strategy to grow within more profitable and less cyclical niches have proven to be successful. Revenues declined organically in the quarter, mainly on back on weak development in Chem and Petrochem, Industrial and Industrial Heating segments. EBIT margin declined year-over-year mainly due to FX -- adjusted FX margin grew year-over-year. And this shows how we long term has driven a positive product mix and maintain our order booking discipline in weaker market edition, thus able to maintain profitability. We need to continue to stay agile and adjust cost and capacity where we have a weaker backlog. Quarter 3 is seasonally a weaker quarter due to maintenance stops during the summer, and we expect some margin dilution from under absorption of cost as we have a longer than normal stop plan for this summer in the larger extrusion press. In addition, volumes are low in segments like Chem, Petrochem and Industrial, mainly in Europe and North America, and we also expect FX to remain a headwind in the near term. We have several ongoing growth initiatives, which will strengthen the company in the long term. Our strategy has always been to have global footprint, meaning production close to our customers. And all the announced divestments are strengthening this further and they are progressing according to plan. Financial position remains strong, which will enable us to continue to execute on our strategic agenda. And I hand back to you, Emelie.

Thank you, Goran and Olof. It's now time to start the Q&A session. So operator, please go ahead.

[Operator Instructions] The first question comes from the line of Adrian Gilani from ABG.

I'd like to start off with a question on Tube, where I see the book-to-bill fell quite sharply compared to Q1. And of course, you mentioned this is to an extent driven by the short cyclical Industrial orders. But I guess, is there a component here also of order backlog in Oil & Gas starting to come down? And are you still as confident in the Oil & Gas outlook for the coming 2 to 3 quarters, let's say?

We are quite positive on the Oil & Gas outlook. On umbilicals, the order backlog grew slightly. And there is quite a lot of projects still out there. So now Oil & Gas was not the main reason for that.

Okay. Understood. And now a bit of a similar question in Kanthal here. Rather, the book-to-bill came up a bit. And is that entirely driven by Medical? Or are you seeing an increase also in Industrial Heating orders?

It's -- I think, as I said, the 2 reasons why book-to-bill went up. One is lower revenues and then Medical has a good development. So it's mainly Medical.

Okay. Understood. In Strip, the organic EBIT is down SEK 21 million in this bridge that you show while organic revenues are up 8%. So it seems sort of the cost efficiency has gotten significantly worse compared to last year. Can you sort of explain what drove that?

I tried to do that in my presentation. I think -- I mean, first of all, we are not pleased with that, to be clear. There is a number of reasons. One is production efficiency reasons, due to where Strip is coming from with lower volumes before that is still orders that we invoice. So there is a, say, time -- takes some time to flush through the poor production efficiency we had before, and it will be better going forward. Another reason is that we have had some bottlenecks issues to the most profitable products produced in the big production site has had bottleneck problems. So the invoice mix compared to quarter 2 last year, is much worse. And that is, I would say, the main effect. And then there is some inventory write-downs due to yield issues.

Did you specify the amount on the write-downs as well?

SEK 10 million, I think it was. All the issues are addressed and actions are ongoing.

Okay. Perfect. That's helpful. I guess a final one for me. For Q3 specifically, you first of all, have the SEK 115 million FX headwind. And I guess that in isolation would take you to around SEK 200 million on adjusted EBIT. And then when you mentioned sort of longer-than-usual maintenance shutdowns and greater underabsorption, I take that as sort of soft guidance that organic EBIT will also be negative year-on-year. Am I sort of assuming that correctly because that would take you somewhere below SEK 200 million on Q3 EBIT?

That's the -- I mean, that calculation makes sense.

We have now a question from the line of Viktor Trollsten from Danske Bank.

So firstly, on the Q3 guidance and under absorption that you flagged. Just wondering from a broader sort of perspective, how much of a one-off is this in business, just how we broadly should treat it beyond Q3? Is this something that we should count on happening quite a number of quarters? Or is it truly a one-off? I'll start there.

That's a one-off. Yes.

Yes. Yes, that's clear. And then secondly, I guess it's quite volatile and difficult times, of course. But in the context of some of your industrial peers talking about signs or the start of some sort of a short cycle recovery and volumes finally turning slightly positive. I do see that Q2 has been massive. But could you speak a little bit more around how the quarter has developed in a month to month, perhaps if there's any difference from your CapEx customers to OpEx customers. I'm just trying to understand here why you don't see the signs that some of the others are seeing into Q3?