Detection Technology Oyj (DETEC) Earnings Call Transcript

Well, good to see you all of you here, and good afternoon. and welcome all of you online and on-site to Detection Technology Capital Markets Day 2025. We truly appreciate your presence and commitment to learn about our journey and future. My name is Hannu Martola, I'm the President and CEO since 2007. And I'm really pleased to lead you in scanning into our business, technologies and markets. Today is about transparency, sharing our strategy and demonstrating how we create long-term value to our shareholders. We will start with a presentation by Nordea's Chief Economist, Tuuli Koivu, and she will be scanning Asia's role in the world economy. I will outline just recently published DT 2030 strategy and its execution. And then further, we'll scan through the medical markets. have an insight into the security and industrial markets, further focus on DT's technology and innovation through manufacturing footprint and supply chain and financials at the end. Then I will come back on stage. We'll conclude, summarize, and then we will have a joint Q&A. And before we dive in, here's the small print. The full DT management team is present here, all 8 of us, and I would like to introduce them to you. So please come to the stage. We are all excited to show you on how our innovation and disciplined execution position us for growth through presentations and answering the questions. I'd like to start with the first -- Chen Wu, President of APAC; Arve Lukander, President for EMEA and Americas. Jyrki Still, our Chief Technical Officer, Chief Technology Officer; Kai Utela, Vice President of Operations; Matti Nylander, Chief Financial Officer; Sari Holopainen, Vice President for People and Culture. And last but not least, you have Juha Talasmäk, Vice President for business development. Thank you. Our keynote speaker today is Nordea's Chief Economist, Tuuli Koivu, and she will share us inside of Asia's fundamental role to the future of world economy. Welcome to stage, Tuuli.

Thank you, Hannu. Thank you, DT, for inviting me here. It's a great pleasure to give a short overview about Asia, but actually, China's outlook, how I see it after having been following more than 20 years of this very interesting economy. Let's start what we already know. China has been rising very rapidly to the top of the world economy. It's now one of the biggest economies, but on the other hand, since COVID development has been quite sluggish. As we can notice from the left-hand side graph, actually, the comparison between the U.S. and the Chinese economy has not been that simple as we thought 10 years ago. And China's GDP has not -- especially in U.S. dollar terms increased to the pace as we expected. On the other hand, we cannot get rid of China, definitely not. China is the world factory as we all know it. It has been very successful in increasing its exports. But we also know, of course, that many supply chains, most of them in the world related to hi-tech related to good supply are somehow related to China, either at the raw material level or at the final stage. Certainly, China's role in the world economy is really key. How do I see China's development, first in the short term and then in a bit longer perspective. Let's start from the short term. Chinese economy is extremely interesting. It always -- it has always been like that. But at the same time, it's extremely difficult to put that huge economy and country into one picture. And I would say that at the moment, the sectoral differences are exceptionally large. So even more than ever, it's kind of difficult to talk about China as one economy when we know that it's so much diversified many sectors doing very differently at the moment. If we start from the weak point, that's anything basically related to consumers, households and housing markets. of course. Everything related and tied together, as we all know. On the left-hand side graph, we see that China's consumer confidence never recovered from COVID shock basically and some high lockdowns in the spring 2022. Severe hit to confidence at the grassroot level, how people feel about Beijing, how they feel about their country and especially how they feel about their personal economy. It's much more difficult now to find a new job. Wage increases have clearly slowed down. environment is much more challenging. They are not getting soon back to where it all started. One of the biggest hits for the households, of course, stemming from housing market. China built too many apartments. Nobody knows exactly how much too many, but still, there is still a lot of overcapacity vacancy rates are low, et cetera, et cetera. There's really a lot of overcapacity in the housing market. We expected the housing market to start stabilizing or at least show some signs of stabilization in 2025. But actually, what happened during the summertime was that all indicators started to decline again. Price declines resumed at the same time, housing starts hit new low records, et cetera, et cetera. None of the people that I know in China is planning to buy an apartment, neither for his own or her own purpose or even less so if it's about an investment. And this certainly creates a huge challenge for Chinese households and consumption going forward because we know that most of household worth is invested into houses. And not just invested, but also the dreams were built on rising apartment prices and housing basically an apartment with a good location, was your pension fund. It was your fun for your kids, education, et cetera, et cetera. Now those days are gone, the whole environment has changed. And this is part of the reasons why Chinese households are saving a lot -- high share of their income. They don't want to consume. They are much more cautious when it comes to their consumption. And it's very difficult to see these trends to turn around anytime soon. But at the same time, I would say that it's a huge mistake to stop there and think that, okay, numbers are probably always stated as, for example, financial stair -- at times, it is rightly saying today because at the same time, we see sectors that really are booming new innovations, new technologies I visited China last time in March. And I think this was really the biggest reason for people to be much more optimistic than they were in autumn 2023 when I visited many cities the previous time. And China is investing really a lot when it comes to high tech. This is really like a growth boom. This is innovation boom. And of course, from a European perspective, this creates a lot of competitive competition in the world market. And China seems to be very successful, very competitive at the moment. On the left-hand side, just one of examples. If everything turning south, basically when it's about housing or consumption, high tech is not looking like that. High-tech curves are something like this. Production multiplied in a few years' time, et cetera, et cetera. Also, exports are booming. China's competitive is now at higher level than for many, many years. due to weak currency, but also due to deflation that has kept wages down, get all kind of production costs down I meet regularly now Nordic retail chain companies, which have actually concentrated their supply chains more and more to China during this year because they see prices declining and they see it again, easy to buy from China. So at the moment, the sectoral differences are really huge. At the same time, we see problems in the housing market problems when it comes to consumption but then booming high-tech booming innovations, a lot of investments into these industries and of course, really ambitious government and leaders taking China to the next level. And when it comes to China's next level, let's figure out how it could look like in 5 years' time or so. It's impossible, of course, to forecast how China will develop. But I think it's useful to spend some time to think about China in kind of cycles. They do it themselves. They are now writing and finalizing the new 5-year plan. And I think it also gives us a kind of a nice framework to how to think about China, how they see their country changing, how they see their economy changing and how they try to especially tackle these huge challenges that we all know do exist in the Chinese society and in the Chinese economy. If I take 2 of the most kind of urgent impactful perhaps I should say, impactful problems in Chinese economy. I would say that those are the high level of debt and then again, the demographic problem. When we look at the left-hand side graph, the red line is China. We are used to a high level of debt, both in China and here in the Western countries course. And we have become more and more tolerant about high levels of debt. We discussed about the U.S. deficits, et cetera. But to be honest, of course, the upward trends have existed in almost all developed economies for many years. But China, of course, is exception. In China, if we look at the red line, the level of debt has increased at a very rapid pace. And what has happened since pandemic is not kind of stabilization as we have seen in many developed economies quite vice versa. This problem has only increased. And we all know that most of the debt in China is concentrated in the company's corporate sector, in state-owned companies. It's partly hidden, but there's certainly no way around this problem. I don't expect any kind of debt crisis in China. They are not dependent on foreign currency debt. The most of the money practically all of it is domestic. -- doesn't have to go via crisis, but certainly, it's not kind of logical to think that they could start booming the economy by just printing more money easily and distributing it to the households. Second challenge that they have is regarding the population. This is not the kind of urgent problem just like in the housing market. It's one of these crane renos that the President is talking about. They know that they do exist. They do anything they can to solve this, but it won't go away for many, many years to come. I heard yesterday rumors that the new new statistics that has not, of course, been published yet for '25 shows that the number of bids has declined to close to EUR 7 million. And this, of course, is dramatic decline when we think about China's demographics. It doesn't matter for next year growth or next 5 years cold, how many birds there are this year in China. But certainly, this also is part of the problem. People do not trust -- they don't invest into their future so much because they are more risk averse than they used to. When it comes to China's labor force, it starts really declining in 2035. It has been declining already for 10 years or so. It will continue doing so, but it's not dramatic. And by raising aging pension age, et cetera, China can overcome most of this problem. But in 2035 things turn much more challenging than the declining the labor fall starts to be quite dramatic. And how is China then aiming to answer to these 2 problems in the next 5-year plan? I will -- this is my last slide, and I will concentrate a little bit on this new 5-year plan. The new 5-year plan will be published only in March. It has to go through the National People's Congress. Now the party have been decided about it. It has given its recommendations to the state side, and we basically have an idea how China sees its next 5 years, how does it see the world, et cetera. And there are many things that have changed. And even if it's really -- I guarantee you it's kind of annoying to read list of promises. We will do this and that and they promise basically everything. I really recommend everybody to read it. It still gives an overview how China sees the world and especially, if you still have energy after doing that, please read also the forcing plan so that you can make some comparison and see how the plans have changed. I think the most important changes that I have recognized so far are partly related to how China sees the world around it and how China sees its own role inside the world. I think that will have a huge impact also on us here in Europe, but also on many companies operating in China. First of all, they see the world as a more complex place, I would say, a bit more risky place than they did 5 years ago. they have noticed the world around them changing. Nobody basically driving -- being a driving force for free trade. And China is also giving up those kind of ideas. Actually, what happens now if these current versions continue to exist in the final format, then when they 5 years ago promised to lower the tariffs. Now what they aim to do is to prepare more tools for export restrictions. And this is certainly something that we all need to pay attention to, of course. They will continue to open their economies and sectors, but that is mainly based on their own terms. China has been always doing that. They have wanted to pick up the winners. They have been very selective which sectors they open up. But I think it will become even kind of more serious process this time. They just want to have the highest standard investments, and they will be really picky when it comes to foreign companies that are allowed to operate there. There won't be that many changes in industrial policy. They continue to invest a lot in high tech. This is, of course, partly a reply to the problem that they see in the labor force. If you have less and less labor force, you need to have high productivity in order to grow by more than 4% a year as this seems to be still their target until 2035. We can then discuss, of course, whether 4% is a realistic target. But anyway, the level of ambition is still extremely high. Then regarding the growth model, which is also, of course, very important. Everybody has been waiting for words, promises regarding more stimulus to households. Yes, the new 5-year plan will pay even more attention to consumption than the previous plan. But at the same time, it clearly kind of aims to establish self-enforcing process in the household sector, which could then carry itself on and on in order to grow and be an engine for China's GDP growth. Whether they will be successful, I think that will depend a lot on the labor market. They need to increase people's purchasing power not by subsidies, but by increasing wages increasing probably the share of wages in the economy. And now they promise also to increase the share of consumption in the economy. This is a huge challenge. China has not been successful in achieving this for many years. They have been talking about this. Now I would say that the words are stronger than they were last time. But it remains to be seen how much emphasis they will have on here. I think it's easier to say that the first 2 goals, regarding foreign trade and investment policy as well as the industrial policy kind of easier to fulfill than the last overhaul of the whole economy. So what does this then imply for China's growth? Well, in the short term, I recommend not to believe the 5% growth numbers. They continue to publish. Those are domestically important. It's very difficult to not keep your promises in China. But please, at the same time, notice also the huge sectoral differences. This makes and will make China as a very complex environment for all of us. we need to really be careful when we think about our own operations there, our own opportunities, but perhaps also risks and challenges. One thing is clear, even in 5 years' time. And I think that is thinking about world without China would be a huge mistake. Thank you.

Thank you, Tuuli. We have just published Detection Technologies 2030 strategy. And together with my colleagues, we will get deeper into the world of X-ray into the DTS exciting world of scanning for growth. We are the most trusted partner imaging the unknown. We are the highest for the X-ray equipment serving the OEMs, the big original equipment manufacturers. By the way, due to the loss of physics, x-ray is the only means for penetrating through -- selectively penetrate into the objects of human scale. So there is no substitute. And this is the basis then for X-ray imaging. We work in the areas for medical, security and industrial other markets with all the technologies now for X-ray imaging. We are a data company. Huge amount of data daily is created by our detectors. And this data is a massive asset for our future we are one-stop shopping for all kinds of detector needs. We have CT detectors for medical and security, line scan detectors, flat panel detectors now like this jumbo over there. photon counting detectors up and coming and more and more now software and services. The biggest customers we have actually have a need for various technologies. As what we're very proud of, GE Healthcare, who has selected us as the supplier of the year. I mean they need detectors for computed tomography, but as well, they need flat panel detectors for like surgical imaging or for oncology for cancer. So it is very important that we have now the full set of products to our big customers. In the big picture, we have estimated that -- with our products, 2 billion scans are done daily. So far, close to 10 million products have been shipped out, out of which 2 million the most demanding compute tomography detectors. More than 10 of the Fortune 500 customer companies, our customers and more than 500 global brands. The growth for the last strategy period from '21 to '25 was about 4%, but still clearly exceeding the [ 1% ] market growth that we have estimated. And by the way, this 1% market growth, it's more probable but it would be actually the market growth would have been less than more. And due to the various issues, okay, we -- first, we had the COVID. Then from that, we had the supply chain shortages we have seen for even longer period, a generic China security market, the market decreased because of 2 things. One, the volume has been less because there's less need investment plus the prices have been coming down. The China medical reform a couple of years ago, that's now passed but still affects. And then the huge price war that also Tuuli was explaining. It's really tough to compete, but I think that's good news. That's good news because we get better when survive and learn. And then the latest Trump was elected in January, we have these tariff issues and then also currency. And as base here, I'm using -- '25 actually, the analyst consensus, but then we have corrected it with comparable currencies. Analso looking at '24 now looking after, we believe that there's also some stock building took place in the second half of 2024. So the '25 bar should be slightly higher from that point of view. And of course, then the '24, slightly lower. Very critical for us actually is this [ Haba ] acquisition that we performed in '23, and that has provided us doubling the addressable market. And we have now the vast EUR 1.5 billion flat panel market ahead of us, conquering the world as is part of our strategy. And another interesting area for future is moving downstream, still supporting our customers, but with more subsystem, more software integrated products. So we have our learnings, and we have adopted. Regarding risks, there are various risks, but by far, number 1 now is geopolitics. And the core challenge for a company like us, a small company in the global market, is how to navigate through these speeding up challenges and obstacles in the geopolitical turmoil. But on the other hand, I mean, we serve in all the markets. I mean we are in China, we are in Europe and Finland. We are in India now. We have, by the way, the grand opening of India factory in December. Also, we have our foot in the U.S. So as small agile company, we have much better and easier to navigate in these conditions. So we are at a great position to capture on opportunities. We estimate now the detector, X-ray digital imaging detector market to be EUR 3 billion in 2030. We thought, by the way, that this EUR 3 billion would have been already this year, '25. But due to these challenges and so on, I was explaining, the market didn't grow. So this EUR 3 billion takes place in 2030. And this is also verified from various sources. And the big drivers for the market are the steadily growing aging population all over, except Africa, by the way. various security concerns, we see quality and efficiency needs. Also, this jumbo will be used in the high-level NDT type of applications. Environmental and sustainability issues are still with us a severe topic that needs to be addressed. That drives our business to as an example of sorting or waste. And in coming more and more, Mother Earth is getting poor on minerals. There will be shortage or anything of everything. And that is a big driver for use of X-ray. And all of these, by the way, are driven by the developing digitalization and AI. And for AI, what you need, you need data. The markets are developed. If you look on the left side, we see there by application. Actually, about 75% are health care driven. That's health care plus veterinarian. Veterinarian is more, but it's same products but without government sort of regulatory approvals. And then about 25% is DT's bread and butter, line and city scan where we have been and are market leader. By technology, on the right side, ring. We see there the biggest is TFT plus CMOS similar. That's about 60% market. And this is now the best opportunity for us to find new also pockets. Where we can help our customers and do good business. About 1/3 of the markets by technology line-scan and CT and very much for Industrial and Security. And then there is a small slice on photon counting, which is up and coming and Jryki, still our CTO, will be a little bit telling us what's there about. And by the way, there's interesting, there's still as a sign of how slow this kind of technology is developing, there's still film-based x-ray as a very small, tiny 4%, which is used in the developed world. So this is the full sort of focus that we are heading to. As next, I want to explain our strategic targets. So we target to outgrow the market by driving customer success with smart data generating X-ray detectors and outstanding usability. We estimate after all that's taking place, the market to grow forward at about 3%. And we have stated us a very tough target of tripling that in our growth. So the growth target is 10%. And the means to reach the target is developing easy-to-use detectors and services together with the core customers and clearly adding value then to their needs. And this data from our superior hardware is then further conditioned through software. And these are then the cornerstones of our detectors and business. The decisive factor is our products and services, simplicity and usability. And the key foundation thing is how we interact with our customers. This is our technological sweet spot. We are not a huge company having possibility to send -- spend hundreds of millions into fundamental research. -- but we are a company that spends enough into research and development, learning the technologies so that we can help our customers to adopt. Our biggest success case was actually when we were in -- already in the medical city and we saw the need for the security world, security companies to move into computed tomography. And we, as a first mover, then we took the pole position and became the market leader there. So we help customers to adopt emerging technology or the mature technology with a twist. How we then position ourselves strategically. The generic value disciplines are mentioned to be cost leadership or technology leadership or customer excellence. So we are positioning and will be positioning us as a company with superior customer excellence. Our trusted position requires understanding the customers' needs and having the capability to serve them flexibly. And I think very good proof of this customer success is the supplier award we have just received from General Healthcare. So DT was selected among thousands of suppliers, among by way, $10 billion spend as the #1 supplier for General Electric Healthcare. We also -- if looking back 5 years, I mean, in our customer surveys, our average score is 4.4 and that's with a scale from 1 to 5. Net Promoter Score in the last survey was 70 for B2B company, that's really top world class. I was, by the way, looking a little bit from AI, Apple had 61, but this is according to AI but I checked both also ChatGPT and CoPilot both. So 70 is some kind of number. We are not pleased, we can be better, but that's a good basis. The foundational elements in our strategy are improving our performance, improving the performance culture and relentlessly developing -- working with our customers. These are the 2 foundational layers there. elevate performance culture, being the most trusted partner, driving customer through customers access through exceptional usability. Then we have 4 pillars. The first pillar is base. This base is relentlessly developing everything we are working with. Our products and services, our sales work, our speed to develop new products and better technology, productivity in our production, supply chain. Then TFTs play a really important role in our strategy. So this is the second and the most important growth part of our strategy. So we are looking and we are moving into Concur in the world with our TFT products. We have just, by the way, launched 60 new products for TFT and looking this year, I think by the end of October, we have 60% growth on TFT. So that's a good start. And this is just in China and industrial market in China. Added value. So as a hardware company stemming from, by the way, Institute of Cern, -- the new claim Institute of Cern, DT was developed in the early '90s by 3 Finnish scientists in the Cern. So we have really are rooted deep into the physics, electronics and hardware. And now we are jumping up more to having also software layers. We are today already 20 people developing our firmware and software. So we move forward downstream, adding more intelligence, more services into a product by seamlessly integrating hardware with software. And to be able to help customers for future, we need to develop our technology further. This is the new tech part. We are now investing to photo accounting, but also we are exploring various software areas. As an example, we are ice of the equipment. We see what is the health of the equipment. It could be fairly easy and natural for us to develop as an example for preventative maintenance software products. And as a system, how we are leading this, we are using this OKR based, which is I think it's developed by Google. Quarterly setting targets, dynamic targets that we are changing, reviewing them, and we call this system 1 plus QR for us. So every quarter, we are dynamically depending how the environment is moving, how we are achieving our things we are moving forward. And this with a system of stretch targets. After learnings, we still hold on to our market growth, our company target growth of 10%, which is about triple of the market growth. That is ambitious. But we are not limiting ourselves from, for example, M&A. But the primary avenue is organic growth. Profitability target is 15% minimum EBITDA. And then out of the net proceedings, 30% to 60%, we then plan to return to our investors. How do we then achieve this? How do we achieve the 10% growth? So today, as I said, this is Analyst Consensus 101 million for '25 as a base number corrected with the comparable currencies. And looking forward to 10% mathematically, we should be in 2030, EUR 170 million in revenue. And looking around, we believe that and have set as a target out of the we will get EUR 20 million more. Medical and Industrial, CT and Life scan another EUR 20 million. security, CT and Life. And now due to the good geopolitics and global issues also cargo is quite exciting. Lukander will tell more about that. We've set a cargo target into 10, coming down to EUR 65 million. Looking then this from a regional point of view, APAC 33. By the way, APAC is expected to grow double in GDP compared to the Western world, EMEA, 20 and Americas totaling to 65. And our CFO, Matti Nylander, will then be explaining a bit more detail here. So to conclude, key takeaways from the presentation. We aim to outgrow the market. We drive the TFT growth across regions and applications. we have an extremely good start in the most demanding and toughest market in China. We achieved added value through integration and software and we spend and invest into new technology or front accounting for our future. That's trust in action. So Chen Wu and Lukander will then introduce more deeper actions in the markets and applications. And I'm very pleased to hand over to Chen Wu, DT's President for APAC.

Not me. [Foreign Language], which means by the way. Another expression that you guys perhaps more familiar with [Foreign Language] actually, [Foreign Language] would mean a Delaware when you're a one-to-one communication and occasion like this, [Foreign Language] would be the correct exploration. Yes, Chinese language is difficult. Therefore, I decided to take us English for today's presentation. So first to introduce myself. My name is Chen Wu, I'm the President of DT's APACB U. I joined the DT in the end of 1999, after I graduated from Chungha University, which is a top technology university in China. I lived and worked in Finland for 11 years. I started the University of Olo and get the doctor degree in Microelectronics. In my long career in DT, I came to this position in the beginning of this year before that I had been leading DT's medical BU since 2007. That's briefly about myself. Today, I'm going to cover 2 topics. First, I'm going to talk about the global medical market, then next, particularly about the China market. And thanks to 2D such a very good stage for the big picture of China, then we can take a look at how we through a small micro lens how we see the China market. Let's start. So then I will come to my first topic about the global medical market. In this part, I will explain a bit how the market is, what's the dynamics there? What's the driver for the growth than DT's market position, our target in 2030 and how we will achieve the target. By management's estimation, we estimate the total global actually imaging medical market to be EUR 1.8 billion. By application, it can be divided into these 4 segments. Medical City, about EUR 400 million, 27% dental surgical, about EUR 250 million each 17%, then the rest is radiography. Worth of note is that by technology, if we would segment the market, it can be segmented to 2. In Medical City by these is a CT detector. Then the rest are pretty much the flat panel detectors. And then looking to the growth, we estimate to 2030 to CAGR, it's 2%. And the growth in the medical market are mostly driven by these 3 elements. One is the aging population, which the global issue generates the new demand for the actual imaging than the increasing demand in the emerging economies. Then thirdly, there is a shift on the technology. As Hannu also mentioned that actually part of the medical imaging are still using film or other analog device, and this will be digitalized, which means that they need X-ray detectors. Now we see the photo accounting era is coming, which will create new applications in medical, and that will also generate new demand of the detectors. Now we also see that the AI technology is more and more widely used in medical imaging as well, and that will also widen the use of the imaging devices. DT has well established market position in medical CT. We have about 20% of the global market share by volume. That means 1 out of every 5 CTs manufactured in the world are equipped with DT's devices. And the medical CT accounts for 85% of our medical revenue, a picture of a product, the typical product. Then flat panel, which, as I explained, is taking the majority, 73% of the market, we have contributed only 15% of our medical revenue. So by playing with the mathematics, you understand that we just scratched the surface of the flat panel market, which also suggests that there will be a big potential for TFT to grow our business. Worth to mention here is that we have a full technology portfolio on flat panels, meaning that the CMOS flat panels, more silicon flat panels and IGZO for the flat panels. We have already did some pilot testing with some customers, including some large medical OEM, and we get very good feedback and remarks on the performance. So we are confident that we are ready to capture this market. Globally, right now, TdT has more than 60 active customers in medical, including 4 out of the 5 largest medical OEMs. And then why it selected as a vendor to this medical equipment manufacturer the fundamentals of the image quality of the performance, the #2 is the quality. Why these are important? The high -- the better performance means that the doctors can have a better image with less dose, both are very important for clinic diagnostics. Then reliability, naturally, that's very, very important for the patient because nobody wants to have a surgery and then have a breakdown in the equipment. That's not going to happen. So those were the fundamental features of our products, which are built on our hard core technology, which our CTO will explain. Besides that, it's a service. So we -- as I explained that we have the full technology portfolio basically all the medical actually detectors. We have the technology in house. It's a one-stop shop. Then we have throughout this 30 years of practice, we have built a deep technology know-how. And why that matters is that when the customer has an issue, we know what they are talking about. And we know that why that is important to the customer. And we can link the requirement to the fundamental detect the physics. Therefore, we can offer the value. We can show the problem to the way that the customer would like to see. We usually have a long-term R&D partnership with the customers which means that we are not only developing today's generation of the products. We are also sharing our R&D road map with the customer. Some of the customers, they will do the same with us so that we can have a aligned mutual future. Now we have a global presence, which is important to some of the customers who had a global operation, and they can get the local service from us. Another feature worth of mentioning that medical is a slow moving industry, basically because of it's a highly regulated industry, which actually creates a barrier for the new commerce, so that either protect the players already in the market. So a customer case. Usually, we are not allowed to share our customers' name, but this time, thanks to our dear customer, they allowed us to make this announcement. So in the recently GE Healthcare Supplier Day, DT was awarded to be the supplier of the year of GE Healthcare in 2025. This is quite an honor we have to realize that GE Healthcare has thousands of suppliers, more than a $10 billion annual spending and the DT was selected to be the one. It's a great honor. And also look back into the history with GE Healthcare, I think this is also quite a typical way how we collaborate and grow our business with the medical customer. The collaboration with GE Healthcare dated back about 20 years ago. We started with 1 project, a small component we succeeded then we were granted more business and we succeeded again, then we are granting more. And year-to-date, we are considered to be the strategic supplier partner to GE Healthcare. And then I listed a few issues that -- or the achievements we did with the GE. So first of all, we had outstanding technology and the product performance that a very few companies in the world can match. Thanks to our operations team, great job in our quality. So in 2024, the customer claim rate is 7 PPM. for the highest volume product. So PPM means that parts per million. And I heard from a guide that this year, 2025, the number is going to be even better, and we still have 1 month to go. So let's hope that nothing happens. Naturally, the compete price, on-time delivery, short lead time, those were the things that we have to do and a big cell. So then looking to the future. In this DT strategy the target for medical business is to grow EUR 20 million on top of where we are today. And if we look this into 2 segments, on medical CT, the expectation by percentage, is not so aggressive. And what we're going to do here is to do better at what we are already good at. So meaning that we need to be even more innovative in cost-cutting and improve our operational excellence. Then we do see that the photon-counting CT, rates coming, and IT has already invested heavily in this field, and we will continue to do so. Then we will be exploring also the more value adding into the CT products, for instance, readout electronics, software and even subsystem and so on. Then flat panels like the bigger hope for the -- or the plan for the growth. Basically, what do we need to do in the flat panel is to repeat our success in city. And these 2 technology or products, they actually had a good overlap of the customer base, meaning that many of our existing big CT OEMs, they're also a big user of the flat panels. So that we need to leverage our existing customer base and especially, we see the opportunity outside of China. So inside of China, there's already fierce competition for TFT, but also in China, with the cost base we can achieve with our manufacturing and the technology that we've developed in China that we think that we can be more competitive outside in the Western countries. And then we have the manufacturing facility inside China and in EU that we can leverage. Also that on flat panel, we will also explore to provide added value, more added value with our software features. And talking about the target of $20 million, maybe worth of mentioning that the Medical City, we have 20% of the global market share, as I said. And then if we could reach 2% of the global market share, flat panel that we would already reach this target. Okay. So that was the part I prepared for the medical market, then I will come to China market. And this China market that I will be talking -- not only about medical but also security and the industrial market. And the reason why we raise a topic, make this a special section for China that we understand that maybe to some of the investors that the China market or DTs exposure in China market is concerned. But in our opinion, it's not, in our opinion, it's opportunity, and hopefully, I will explain well in the following slides. So to put a short, China is the largest and toughest market now and beyond. Talking about the largest if we look at the upper right pie chart, that APAC accounts for 2/3 of DT's revenue. And we can tell that the China revenue from China is dominating majority of the APAC part. And talking about the toughest, I believe you guys all heard that the fierce price competition in manning other industries like solar cell, EV car and so on and someone call it cut throat price competition, which unfortunately true and it's also a similar case in our industry, maybe to a bit less extent. Besides the price competition, another thing that will make China a tough market is that the customers in China, they have exceptionally high expectation on the service level from the vendors. So we are talking about a clock speed, how fast you can respond. So that's the what China marketing our eyes, what it is? And then DT's performance in the past few years, if we look at the lower right hand that the has been or the China market has been the growth driver for DT for a number of years. But in the past few years, the growth has not been there. In our opinion, that is not because we are losing market share, we believe that our performance is in line with the overall market. So we, first, China had the -- I mean the COVID from 2020 to 2023, which brought the security income to be less than half and even today, the market is still far from recovered. Then we had to meet 2023, we had the anticorruption in health care, then generally, the China economy has been staggering in the past few years. So we think that if we -- since we are playing in all these fields, so that this -- the overall market is staggering. Then now we see signs of recovery that we see that the medical market started to pick up already this year. Everybody who has been traveling in China must note that the security equipment in airports are quite outdated these 2D systems when it needs to be upgraded to CT. It's only a matter of time when this will happen. Than in the industry, we also see that China will be -- remain to be the big manufacturing house for the world and there is demand for the productivity and also the application of the AI technology in the industry that turns a lot of previously off-line done inspection to be in line, which generates also new needs for the actually imaging. So in the mid- to long term, we fully agree with this conclusion that China is a market we cannot give up. And DT has been played well and built a strong position in China that in medical CT, we estimate that we are 30% of the market share. And in aviation security, which is the high end of security, we are about 50%, perhaps even more. And that is because of the long history we had in China that we came to China in 1994 already. And we are one of the early first detector vendors. Many of our customers, they build their first-generation systems with the DT detector. And TTS name is well recognized and the customers, they are willing to pay a premium for TT quality. We have built up already a strong -- very strong team, including R&D, sales, service, manufacturing and so on. So it's a self-sustained the team. I would say the team the strong team we have in China is the core reason why it succeeded and will be successful in China. One proof that after we acquired Haobo 2023 -- Hannu mentioned that we achieved more than 50% growth in this year and the TFT market is actually highly competed in the market. So we are able to do that. Another customer case, TFT is supplying to several leading EV battery makers already, including the very leading one. And then actually, in this very leading battery maker that we were appointed by the end customer because usually, there's 1 layer between us who is a system integrator, but we are appointed by the end customer to be the detect winter. So this is all achieved in -- through hard work with our strong competence in China the battery makers, they have a very high expectation of the customer service level. So they -- sometimes they call you 2:00 in the morning and they expect you to respond immediately to their request. It's very tough. And usually, the battery manufacturing line, the environment is pretty tough with the heavy battery moving around, so there's a huge amount of electric and magnetic disturbance. So to make the product work with the production line, it usually takes time to it. Naturally, the higher imaging performance and the costs are 2 basic reasons. So looking to the future, that I think we will continue to do what we are already good at. That's our brand and leverage our customer relationship to be -- to succeed in China then 1 more point that we need to be more Chinese in China. Compared to many Western companies, we are already very, very much more Chinese compared to many others, but that's still not enough. And that means mainly the clock speed. So we have to adapt ourselves to the China clock speed. And then the other things that we can leverage is also the supply chain in China. Okay. So key takeaways from me on medical that our target is to outgrow the market in the legacy market and how to do that is to do better at what we are already good at. Then we put high hopes on TFT and we will leverage our existing customer base to achieve our goal. We will invest into photo accounting, which is the future of the actual imaging. Then in China, we have all the reasons to believe that we will continue to be successful there. Okay. Thank you. That's my part. I will now hand over to Alvar for the security and the industrial market.

Hello, everyone. My name is Are Lukander and I'm the President for the EMEA and Americas business units. I've been working for DT now for 4 years. But before this, I've been working within the security and the medical fields also including our customers at -- so in this part, I will scan through the security and industrial markets and starting with the security markets. So we estimate that the market size for the detectors in the security market is approximately EUR 300 million. And this market is divided to approximately same size segments, aviation security, which means carry on and hold baggage and air cargo scanning at airports. Then urban security, which then means hotels, train stations, subway stations, et cetera. And then cargo inspection which is at the borders, border control of containers, trains, vehicles. We believe that this market will be growing around 3% until 2030. Driven by aviation, growth in passenger numbers. In Europe this year, the passenger numbers grew in 5%. Also in India at this moment, there are tens of airports under construction at this moment. Urban threats are on the rise all over the world. And also now at this moment, in the geopolitical situation, nations are investing more and more in more modem control. So we, at DT have approximately 17% global market share of the security detectors and our sales split from security CET comes 55%. So in security, CT means that the passengers can leave their bags or their laptops and liquids in their bags instead of taking them out. So that improves the people flow at Airport. 40% of our business comes from line scan detectors and then 5% of cargo detectors. So they are -- this picture has been taken a few days after these guys together of some other our teams. We did the layout change. So this behind line is a 36 equipment. And we decided that we need to make the new layout. So every those equipments will relocate and not only a few meters totally. We make -- it was one line and we made 2 UAP lines. So like this kind of lean principles. We try to get a better flow of production, less conflicts and then, of course, less working process and many other targets. But we did everything ourselves, 2 days, 3 days, and then we needed 2 guys from outside to calibration, and that's it. We do all assembly, electric assembly, everything ourselves. So that's now proof that we call it -- we have a relocatable lines. So we are very flexible. A few days basically, if we have a clean room ready, we can move the lines. So then I mentioned lean and now this is something I want to a little bit explain more deeply because this is one which is very close to my heart, as [ Jrgim ment ] the other stuff. But this is the first little bit of lean, what it means. So it's a Toyota production system basically. So I have been privileged also my history to work even directly Toyota electronics supplier to the Toyota. And now we are doing also in China, we do cooperation with Toyota Tianjin so that we are implementing these Toyota systems. But what is typical for Toyota and lean is that they reduce waste, waste in any format, waste of overproduction, waste of scrap, waste of space, waste of time. And then the other thing is they do continuous improvement. And that is something very unique. And then what is typical then as those lean practitioner companies, they are high-quality, low-cost companies. They are industry leaders. And then together with lean and with Six Sigma. Six Sigma is then when we have processes like us, so how to improve processes, how to reduce variation. So together of those 2, it's a competitive advantage. And how then us because we are not Toyota, and we don't copy anything. We take those best practices and then we do our own DP lean. So we are Lean Six Sigma AI. AI, of course, is the quite new thing, but we are combining and using that already our data handling in production. So what is unique then our lean is that we are putting these kind of principles in place. So we have one principle, which is also here is quality first, safety first, on time second. Why it's so strange, safety first as well. Well, U.S. investors are very happy if I say that safety is so important for us because we don't want to ruin our factories by one accident, for example. So there it comes to other principle what we have. So we have a principle that our Chinese factories, there is no unmanned minute anywhere. So when we started 2015, there is 1 minute, not even COVID time, by the way. COVID time, people were in and we close the doors. There were no unmanned time. And even now today, every minute, there is a person. So that's the one safety thing. The other thing what I now want to highlight is Toyota and what we have really understood through this period of together with Toyota. 2015, we started this cooperation. And it's how to make improvements because also how to do changes because all the change is improvement. And that's Kaizen. You may have heard word Kaizen. So it's nothing very fancy, but it's improvement and its improvement is done so that it's proven to be better than it was before. We started 2015, we did a couple of hundreds of Kaizens per year. Then we noticed that actually volume is very important because it tells the speed, faster and faster, the better we are. So 2020, we reached 1,500 Kaizens per year. And last -- sorry, 2020 was 1,000, 2025 was 1,500. And now this year will be more than 1,700 Kaizens. So it's about 6 Kaizens per person per year. Is it a lot? It's not. Toyota is now 15 to 50 even. But yes, we are going in that direction. Why the number is important? You can see other number in this slide is PPM 50. So the more we do guidisens, more we do improvements and we all the time know that we can be better, our quality and all these KPIs go right direction. PPMs goes down and then our yield, the quality inside goes up and our cost goes down. So as Chen mentioned, is our GE Healthcare, our dear customers, which actually location quite close to our factory in Beijing. So yes, this year is less than 7. I can release it 0. We have none failures this year so far, 1 month to go. So then the other thing which is also very close to lean, and this is the sustainability because reducing waste, sure, it's sustainability. We reduce the time, we reduce the space, everything. We reduce CO2. Those are our KPIs to sustainability. So this year, we applied this EcoVadis and we just last week get the score, 63 out of 100, it's not very good. 97% of companies which are applying EcoVadis get lower than that in the first time. So 65% is advanced. So we have still a way to go, more Kaizens. So then a little bit those factories and where we have -- where we are. So Beijing, 2015, we went to the new factory. We have been there early 2000. So that's a 4,000 square meter, it is our main factory at the moment. There's ISO 7 clean room. It's not, let's say, foundry level clean room. It's just this kind of enough for us, about 10,000 old particle numbers. So it's a good clean for us. So then we expanded China 2019 to have opened other factory in Greater Shanghai area. So there, we went because we wanted to have, of course, safety. Also, we have a risk mitigation. We have 2 factories. And then the other reason is there's suppliers and customers also in the greater Shanghai area, a lot of resources available. There, we have still expanding possibilities. Now those panels, they need a lot of space. Even the lead times is very fast. All of Finland, we have had production as long -- the company has existing, but now 2024, we moved to the new facility where we have now 1,000 square meters as a production, but the facility is actually now when we built it or renovated, it done so that the whole 2,000 square meter can be taken into the production very fast. So it's an office even have the ESG floor. They don't know it yet, but that's ESG floor, we can just throw them out and take the production use. And India, I will have one slide. I will tell that later on. So here a little bit then this global supply chain and what are the risks and how we mitigate there. So we have global sourcing, meaning that we have a lead sourcing in Finland, but then both factories in China, we have global, local sourcing managers, procurement teams and also supplier quality engineering. So we are very close to our suppliers there and managing those and faster as we have been hearing today. So then the other thing we have this dual supplier strategy. We have chosen key material components. We have always actively 2 suppliers. Even so that when we have chosen -- we have one supplier in Europe and one supplier in Asia. So those decisions we have made, of course, we are scanning the customer needs and of course, cost quality are the key things as well. Okay. Here, shortly about India. It was -- so new case. So we started -- early this year, we started the factory project, which means that we built a clean room and small office there. So end of June, then we were ready to make Made in India products. So now we can do Made in India for local customers. Then depending on the products, we can do panels, cards and so on. And of course, customer service near the customer. So it's only 400 square meters, which is small, but because we put our processes, we put our lean system, so it's very easy then to scalable. And okay, so then a little bit of future. So Yes, we are following closely, of course, the global trends. Tul is visiting our factories actually also very often, I have met Tul in our factory there. We are following those what happens in China, what happens in the world. So how then -- how fast we can and we need to change. Of course, we're listening all our customers and what they are thinking. But we can provide in the future, definitely made in China, made in EU, made in India. So who knows then if change, we can also very fast to relocate this [ aniremant ] testing. Quality, we are not there where we want to be. This -- less than 10 is the good target for 2030, and then we must be faster. We have seen that faster is also we need to faster for improvement. So we now from 6 to 7 per person, we think that 12 Kaizens per year is a good target for 2030. So resilient global supply chain. At the end, I would like to a little bit borrow one lean gurus wording here because this Mr. James Vomak actually work in GE Healthcare at the moment. So very famous lean guy. I met also him a few months back. So he's saying this way that lean is all the time making more and more with less and less and going all the time like doing exactly what customer wants, no other adding value, only those that customer is ready to pay. So I would say so that we do less, we do more in the future. So that's how we get the trust. Thank you. I will give now to our CFO.

Thank you, Kai. My name is Matti Nylander. I'm CFO for Detection Technology now for the past 1.5 years. Prior to that, I spent more than 6 years as a CFO for Finnish technology start-up and then before that, more than 15 years in various finance and IT roles in the mobile phones industry in different companies. In today's presentation, I'll be covering the financials broadly from 2 aspects, one being the historical and the background information regarding the DP business and then elaborating a bit further on the financial targets for the upcoming strategy period. Starting with some historical view. So if you look at the DP revenue for the past years, from 2017 to 2019 was kind of characterized by strong drive in the APAC security, China in particular. It was a result of us having great products available at the great time meeting the market demand, resulting in high revenues as well as high profitability. And then came COVID pandemic, which caused quite a bit of changes also related to DP. So security market since traveling more or less ceased for a while, dropped dramatically. It went into half. In China, actually, the security market went even below that. At the same goal, medical market, on the other hand, got a boost for the CP business, particularly. So that was kind of a reset for the market from DP perspective. Since COVID, security market has been growing fairly steadily, last year being very good already, but it still was not on the level it used to be. So despite the growth, it has not recovered fully yet. And if you think of this year, then as we referred earlier already, there was some customer inventory buildup in the '24 figures, which partly shows then in the '25 in security. '25 also has been has been impacted by the regulatory challenges in the EU area with the so-called 100-millimiter regulation changes, which has caused slowdown in the implementation of the aviation CT. Medical, as mentioned, grew quite nicely after the COVID or during the COVID and after it and then got a bit stabilized until then there was a health care reform introduced in China, which again, then caused slowdown in the investments in China for the medical and impacted '24 medical sales clearly. That has now for '25 shown signs of recovery. So towards the end of the year, the situation has been already improved. Our third application area, the industrial, we have been reporting separately from 2019 onwards, and it has been growing steadily. It's now close to double what it was in 2019. We have the Haobo acquisition in the mid-'23, which currently contributes mostly for the industrial sales. 2025 still has one bit of a peculiarity compared to the other years, and that goes to the exchange rates. So in the past, the rates -- the exchange rates have been more stable, but now with the recent fluctuations fairly fast and fairly high have impacted also the DT's reported numbers. I'll come back to that in a moment. Then if you look at DT financials on a bit more granular level on a quarterly level, you see certain seasonality within the years. So it's commonly so that first quarter is the lowest sales quarter and the fourth quarter is then clearly the highest. And then second and third quarter are typically in between and the pattern seems to repeat quite typically the same. Then if you look at individual quarters and particularly if you look at individual quarters for individual application areas, you will start to see quite a bit of more fluctuations already because of the sheer numbers, numbers are smaller and so on. So if you think of individual deliveries for certain systems, those can be worth of hundreds of thousands of euros. So timing of individual deliveries, particularly if you talk about industrial customers can mean fluctuation between the quarters. So system delivered late in the previous quarter or early in the next quarter easily kind of keeps fluctuation to the numbers. Also, as we are providing our products towards the next year in the supply chain, i.e., the manufacturers, they may, at any given time, be either building up or clearing their inventory, which again may cause temporary fluctuations in the numbers. On the other hand, if you look at the 12 months rolling average figure, it is actually a lot more stable as you would expect. So judging performance for one given quarter, you should probably look a bit longer term to not draw too strong conclusions on any individual quarter. Then coming back to the exchange rates briefly. So we are a global business. As you've heard, like 2/3 or 60% to 70% depending on the year of the revenue comes from APAC. And then we have Americas business as well. And as you -- as anticipated, of course, most of the revenue or practicality of that revenue is other currencies than euros, namely in Chinese yuan or U.S. dollars. Also some part of the EMEA revenue is in USD. This then means that if euro appreciates against the mentioned currencies, it will have fairly direct impact to our euro reported revenues, even if the business as such wouldn't really change. So for example, if euro appreciates around 3%, it will be more than 2% impact on our top line without the business itself changing practically in any way. At the same go, our costs are also largely in other currencies than euros, mainly in Chinese yuan as well as U.S. dollars. So materials and services predominantly are purchased in the mentioned currencies. Also, personnel and other costs are more than half of those are in Chinese yuan and U.S. dollars. And this leads into the situation that our profitability is not impacted in a similar manner as the top line. So fluctuation will impact top line. It will have much less or limited impact to the profitability. Then shortly about the profitability of the main drivers for the margins. In the short term, it comes from the application mix. So if you think about our application areas, medical tends to have fewer customers. They are larger customers. They are quite demanding. They are the ones with whom the new technologies are typically built with. With the high volumes with large customer size, cost to serve the customers, the administrative things and other things are kind of lower, but with the pricing power and the volumes or the negotiation power of the customers, medical products tend to have lower gross margins. Meanwhile, it's compensated on a long run with the better efficiencies otherwise. Industrial is kind of the other extreme where the customers are typically a lot smaller. They are more labors to serve, more kind of individual customer needs again some care and attention. Meanwhile, the margins, the gross margins for those products are clearly above the average for DT. Security is a bit of a mix. Security has big customers. It has also a bunch of small customers. Margins in security are above average and then the operational efficiency obviously varies depending on the customer. Further country mix has certain bearings also there are, like mentioned in China, there is very fierce competition in certain areas. And obviously, if the revenue comes from those sales, then the margin is being impacted. All in all, in short term, the more -- the higher proportion of the sale coming from Security and Industrial will mean higher relative profitability. However, for the longer perspective, the medical has certain benefits kind of balancing the situation. Then looking a bit from the balance sheet perspective, we have very strong net cash position that provides us clearly some resilience about the turbulences, so we can sustain a good amount of headwind without being in troubles. Also, that gives us ability to seize opportunities should those appear. We also have had a continuous cash flow from the operations, which enables us to invest for growth. Cash flow slightly fluctuates with the changes in the net working capital. So since we need to hold inventories to provide delivery capability or ensure the delivery capability, that causes some challenges or causes fluctuation in the cash flow. For instance, in this year, we will need to increase the inventory in order to ensure our delivery capabilities. Then as Kai mentioned, we have asset-light business model. which facilitates the scaling of the business. So we don't need to invest tens of millions or hundreds of millions for the facilities or the production processes in CapEx terms, but it's rather in individual millions. Also, as you can see from there, there's the Harbor acquisition. So we have ability to execute M&A cases if those are seen viable. Also, that provides us ability to pay continuous dividends. DT has been paying for the past 5 years quite consistently around 60% of the earnings as dividends. And as you heard, the financial target remains to be 30% to 60% dividend also going forward. And from a return on investment perspective, if we compare to the peer group of certain selected competitors and related companies, those have been less than 10% ROI in '23, '24, and we've been performing quite nicely compared to those. Then coming back to the growth and to the financials for the strategy period. So as Hannu mentioned, we aim to grow 3x the market growth. So it's an ambitious but yet achievable target. And as you heard from Ten and Arve, the growth comes from the following applications. So first, TFT panel business overall. That's the biggest market for us. That's also the market that we have been for the shortest period involved and where we have very low market share. So there is a lot of room to grow both in APAC as well as particularly in the Western markets. Medical industrial CT and Lim scan businesses are our stronghold, and we have good share. We will grow with the market. There are certain specific areas like the battery inspection and other things which help us grow faster. We also will introduce more value-added solutions in terms of hardware and software as well as then aim to tap into the adoption curve of the photon counting. So that's where we should hit the sweet spot of DT in terms of the technology cycle Jyrki was talking about. Then for security CT and line scan, as Arve mentioned, there is still a lot of room to grow in the aviation CT, for instance. There's plenty of airports, which still will eventually move into CT, both in the Western world as well as particularly in China and India and then later on in the developing countries. And finally, there's cargo business in security, which has had quite good start now and promising get-go for the sales. And this is also a market that is clearly growing, and we are -- we have a high-performance product available. Region-wise, APAC is our biggest region and will continue to be. Growth though is even stronger than in EMEA and particularly in Americas. And about the EBITDA improvement. First, of course, the top line growth drives also the profitability improvement. This comes from our asset-light business model, so we don't need to invest heavily in order to scale up our businesses. Also, our gross margins for the products are on a good level. So that helps to improve here. We will provide more value-added and integrated software and hardware solutions, which will help us to increase the prices, maintain the prices, keep the customer commitments and so on. Further, there are new opportunities, as mentioned, photon counting, growing with that, hitting the adoption curve of the photon counting and also expanding our offering in the software business. And finally, we will continue to improve our efficiency in line with the strategic actions, goes for the lean things, goes for all the operations, it goes to the performance culture, both in business as well as in the operations and then promoting the modularity and platforms for our products. We will need to invest, particularly in the middle 2, so the integrated solutions and photon counting and software things in the near term. So hitting 15% EBITDA in the next year is going to be a challenge. So to summarize my part, since the market reset after the COVID, we've been growing faster than the market, although not quite up to the level as we would have hoped for. Our cash position is strong, and our cash flow is continuous, which provides us resilience, enables us to invest in growth as well as continue to pay dividends. And for the future growth, there are plenty of growth areas identified, and we have actions in place to drive the profitability through the growth as well as through the strategic actions. With that, I'd like to welcome Hannu back to the stage to summarize.

Thank you, Matti, and thank you, all of you for your time and engagement today. I'm going through -- as a summary, our DT 2030 strategy. Our goal was to give you today a clear view of strategy, the growth drivers and long-term value creation. As a recap, first of all, I think the strategy is very simple. It plays on 2 foundational bricks. First is the performance culture. And what does that mean? That means that each of us as DTNs, we are continuously giving feedback. We are setting tough targets, and we are trying to reach those -- reaching those and learning also by the mistakes and then moving forward. We need to be working close with the customers and looking at the customer success through our products, exceptional usability and the service we are giving them. The base is very important. The base is our balanced, diversified portfolio, the cost-efficient solutions with smart features, driving growth in Security, Industrial and Medical, the quality agility, efficiency, asset-light business model and the geographic, we are local. We are made in China, we are made in Finland, we are made in India. And then as a basis for base, we have a strong presence in China, the toughest and highest competitive market. And that is a foundational base to step out and conquer the other markets. I think the base is also very important as each DT employee has a special role in here. So everybody can here help us. to succeed. Then number one, growth comes from TFT. So already more than 60 products, wide portfolio, we are expanding with our tough cost competitiveness and our quality to Western markets and then giving solutions for advanced industrial and medical applications. The strong demand already has started in battery inspection. And by the way, battery is going to be important and EVs also in U.S., also in Europe. And then we add value with our software also to the TFTs. Then the added value part. That means going downstream, helping our customers, taking, by the way, certain things they are doing right now, taking that and doing that for them and then integrating the hardware with the new software we are creating. And the future part is the new tech going also beyond 2030, developing the photon counting and also exploring the software. Then why to invest to DT? And I would like to take one example here of our culture. I think we have a great diversity. On the other hand, we have very serious disciplined technology and R&D engineers. And then we have also people who are challenging that and who are then willing and wanting to take risk. I remember during the idea and life of this jumbo so far, I've heard twice you can do that. The first is that we got an idea that, hey, we should try to do something new, something different, something that nobody has done before. So we made a mockup. We made a mockup of that into industrial NDT exhibition. I think it was in the U.S. And that was the first you can do that because we didn't have it. We didn't even have an idea how to do it. By the way, it's -- physically it's pretty challenging to distribute the voltage through this long sort of path of the detector to read all the pixels. So you can do that. So we went with a mockup to exhibition, and we were surprised that there was a lot of interest. There was so much interest that even the competitors got interested and so why there's so much interest in our -- at our booth. So we thought, hey, this is something we should try and do. So we started to develop it and also then we were selling it. And actually, this product has been sold before it existed to an Italian luxury vehicle manufacturer. So twice, you can do that. But yes, there were people driving it and doing it, and I'm sure that we will have a good success at the end. But then why to invest to DT? You've heard, I mean, the global trends are driving our growth. We are the trusted leader in CT and [ life scan ]. We have the big over 30-year history with the routes to Institute of Nuclear Institute of share. We are fighting and winning in the toughest markets in the world. And by the way, there's a lot of Western companies who have not seen it yet, and that's coming. We are now positioning ourselves as a growth leader in the EUR 3 billion digital x-ray imaging detector market with high entry barriers. There's plenty of room to grow for us. There's plenty of nice pockets where the competition is not so red hot. And we're also expanding to new segments. We are targeting double-digit growth and profitability with very strong financial position. So the first headwind is not going to pull us down. And we have an asset-light business model, enabling the profitable growth. It's easy to scale up from that point of view. And we also are sufficiently investing into future for new technology, including the software and data-driven next-generation solutions. And the manufacturing footprint is there. So the agile and reliant global footprint supports then our risk mitigation. So I would like to thank you, and we would then finalize this with the Q&A, and I would like to ask the management team to the stage for Q&A.

So we are here to answer your questions, and we already have some online questions. But I mean, if we start first with the people here on site.

Walter Rosi from Danske Bank. First of all, thanks for the presentation. Really good one. I'll start with the sales growth. If you look at the last 3 years, your growth has been below the 10% target, mostly due to market, I guess. But what gives you the confidence that the market will improve next year? Or will the recovery take more time?

Yes. If I start this and then maybe then Sen and Albert can continue. But I think the basis is if we first take the security, I mean, we see that this 100-milliliter, for example, issue with in Europe is now behind. We already see forecast and orders from our customers. So that starts to then flow through, and that's why we are quite confident on the first quarter. That's one thing. Another thing is that -- I mean, if we take the security in China, that has already as a market come quite the way down from it was, which means that it probably will not continue going further down. So we should be somewhat reaching bottom there. And then we have the medical on -- like the China, I mean, after the health care reform and so on, that's passed, there already are bids and we see some orders coming in. It's a bit bumpy, by the way, the medical business will be more bumpy than it was before because of the nature of it. And then overall, I think the industrial market with the TFTs you heard, we have a precise number, I think, is 57%. Chen was saying as an number guy, over 50 and I was talking 60%, but precise numbers, we have 57% growth from cumulative this year so far on that. So that helps. I think in together, if we look at -- I mean, due to the structural things, there are certain things have been going down, especially the security in China. And even though we have been growing there and so on, and we have been compensating, but we have not been able to compensate and grow beyond so much that we would have been able to reach the 10%. And there are currencies and these kind of things also affecting. Anything more that I didn't mention or Chen or Arve?

Well, I could add that we have clear signs that our share of wallet of some of the biggest companies in the security business will increase a lot.

Well, from my side, I think naturally, we cannot -- we don't have a crystal ball. I mean we cannot predict what's going to happen. But we do have an understanding of the current market situation and the customer cases. I mean that's the best estimation.

So the fourth quarter still be fairly challenging. We go down as we have guided, but then first quarter is we start to then step up.

All right. The second one relates to the fact that the market -- you see that the market hasn't been growing that much. I think it was 1% over the last few years, yet you have been growing a bit faster. You also now estimate that the market will grow a bit lower -- at a lower pace compared to your previous estimates. What kind of makes you think that your competitive advantage has, therefore, even improved over the last few years?

Well, I think we have exceeded the market growth so far. And then actually, we -- I mean, we have not been in this DFT business before. I mean our sales was really, really small last year. This year, we are already some nice single-digit million of euros there as sales. So that gives us also an extra boost for future.

Then actually about the TFT sales. So that seems to be the most important growth lever. So where are we with that today? When should we expect TFT sales in medical and industrial segments?

Should Jen and Juha maybe answer on that. So we have already sales, like I said, single-digit sales, but I mean...

Yes. I mean we already have good sales already in industrial. So the 60% year-over-year growth that Hanno mentioned mainly come from industrial and particularly from battery. And we do see that the battery industry, it's growing very fast. And as I also explained that we have already a good position. We have a good customer base, and I mean we are just at the starting phase of a strong growth. Medical is a bit slow moving. We have good leads. I said that we have good customers and we are offering. But with those big OEMs, I mean, they are talking about years when they adopt a new vendor into -- that's true and we have to wait for our opportunity.

I actually meant to say security instead of the industrial. But what about security and TFT potential?

Maybe Arve can answer on here.

Yes. So in security, the TFTs are not playing a significant role. There are some niches there, but those are pretty small, and we don't expect to have very big growth from that area, but from some pockets, yes.

Okay. And last one, about the software sales, what's being done there today? And what are your software and service sales? How do they look today?

So it's integrated. And Jyrki, you want to describe a little bit on our subsystems with software?

Yes. So basically, as I was showing in my presentation is that we are building enablers right now by adding more value and building subsystems first. And that's the enabler for our software -- upcoming software business. So currently, we don't have a sellable software, which we are actually selling out to our customers. So we are working number one on the subsystems so that we have the enabler. And then now we are exploring the software opportunities. So, so far, no software sales.

It's Matti Riken, DNB Carnegie. A couple of questions. You have talked about the software as an enabler, as Jirka said, for a long time. But still, we kind of failed to see that how that leads to revenue or actually margin increase. So which year do you think that we should be penciling that kind of numbers into our estimates coming from software or hardware software packages?

Well, it's actually the software is in many of our products already in. It's in the kind of TFT panels. It's also in what we call as XScan for industrial scanning. But the question here is that we will be increasing the share of software in our overall offerings.

But is it already meaningful in your numbers? Because if you look at your profitability for the past couple of years, of course, there's been unusual times, but we kind of failed to see that what value add the software actually brings and that raises the question that when should we start to expect that you would gradually start to climb in your margin numbers because of software and maybe the volumes as well.

But if I answer that, so it is gradually increasing our growth and it's inside. I mean, what if it's integrated, what's the value of hardware or what's the value of software when customer buys the package and you need to have both. So do you -- I mean, recognize the hardware as cost or so it's actually -- it's a sort of subsystem.

All right. Then moving on to the price competition, particularly in China that has been particularly severe at the moment. You would always like to see from bad things that they come to an end. But it seems that as long as there are players in China, there will also be the very fierce price competition. And is there a risk that your growth targets would be diluted significantly because of prices just coming down more than they used to because the players in China are not disappearing at least in the short term.

Yes, they will not be disappearing. There is some, I mean, planned in some price erosion and so on. Jen, you want to describe, elaborate a bit more on that. Well, we have our own estimation of the market price erosion level. And then when we make the plan forecast, we take that into account. And that explains why the CAGR I presented for medical is 2%. The volume increase is actually much more than that. And then I think that -- for DT as a company, I think that we are not afraid of price competition. Reason being that, first of all, we -- in this industry, we still have the volume. So combined with medical security and so on, we still have the volume compared to our competition in the selected market. So therefore, actually, there's a lot of things we can do to leverage from our volume to reduce the cost. I mean we -- there are things we can do better than in the past. Plus that DT has a reputation, as I said, that a brand name that the customers are willing to pay a premium. So that sort of that if we -- all the players have to be on theirs, I mean DT would be the last one because we still have a little bit of headroom there.

Okay. You have earlier talked about 5% to 7% as the normal price -- price erosion annually. Do you have a new estimate for that at least for the next 1 year, 2 years? Or I mean, clearly, it has been more, but what's your internal estimate for prices coming down?

Well, it's probably -- I mean, it's very specific to products and competition and bases, but probably this 5% to 7% is a good ballpark number. What would you think? Yes. Like Han said, it kind of varies quite a bit. It varies by the product and the customer segment as well as it varies by the market. So in the low-end businesses, in certain cases, in China, it is very fierce competition, whereas in some other cases with the regulated systems and others, it might be much less.

If I add to that, so that I think we try to be very selective also. I mean, sometimes there might be some case that we just want to take because we want to prevent from the competition getting in there. And then I call it the marketing cost and so on, it might be a very, very tiny. But of course, we can't have too many of such cases. And the basic public infrastructure, critical infrastructure security market in China is very, very highly competed. So I mean, like bus stations, subways, these kind of things. So we are not there as much as we were before.

All right. Final question. When do you expect that you would start to get more material photon counting revenue from your products?

That's a good one. We've had some small revenue already. I mean, but it will stay as fairly small. Ji, you want to elaborate a bit on that on our road map?

Yes. So I think truthfully, like major revenue from PCCT, especially so that goes beyond 2030. So market peaking at probably 2035. And actually, Siemens has a plan to replace current technology with photon counting by year 2040.

But it's one of the components in your 2030 plan. So at which stage of the 2030 plan, you start to make kind of a couple of million revenue at least in the photon counting.

This pillar is for future. This is also beyond 2030. And this is also that -- I mean, we are talking -- we are in the industry where the clock speed is very small. I mean our customers' architectures are typically 7 to 10 years. We need to be also lucrative from the point of view, future to our customers. And I see our technology development as synonym for marketing. So we need to be interesting also interesting and competent player for the future. here.