Hexagon Composites ASA

Jon Erik Engeset - CEO David Bandele - CFO

Hans-Erik Jacobsen - Swedbank Fredrik Steinslien - Pareto Securities

Welcome everybody to Hexagon Composites' Quarter One 2017 Results. I will actually start with the highlights.

Go on through the financials. And then, Jon Erik will come and take us through the outlook for rest of 2017 near-term Q2.

Also Jon Erik will lead us through the Q&A session. So highlights then.

Very pleasing. Return to profitability generally for the Group, driven by a low-pressure segment, LPG, 42% year-over-year growth.

That is actually be the record high for sales, record high of all-time. In addition, we had our first delivery of this cylinder, you see to the right, the Viseo cylinder design.

And this is great because we have invested not only in our high-speed lines with more standardized product sizes, but this also marks the ability to do more, you can say, specialized or flexible production on that same line, and this is an example of a product with enhanced features for the customer. Second consecutive solid Mobile Pipeline sales.

That's great. These were mainly deliveries to the North American oil and gas sector, also a very key indicator for Hexagon going forward.

Substantial orders received for hydrogen gas transportation in Germany. This is also a pretty key.

Here we have delivered hydrogen cylinders to a customer that's actually transporting industrial hydrogen gas for industrial applications. So very interesting growth sector, and Jon Erik will take more of that later.

On Agility Fuel Solutions investment, definitely on track. Good underlying cash, EBITDA generation.

Of course we'll go through the numbers in a little more detail. But also in the year, Agility have been busy on the innovation side.

They have launched Blue iQ, a natural gas fuel product, and this is a product that enhances the performance of the natural gas vehicle units, uses telematics. It's unique in that it's connected to the Cummins engine diagnostics platform and other great features.

Going onto the financials then. To the top right-hand side where you see in orange, actual reported basis, we made operating income or revenues of NOK346 million.

EBITDA, earnings before interest tax, depreciation and amortization of NOK35 million and a net profit of NOK7 million for the quarter. You'll recall hopefully in quarter four, we had two significant transactions that changed the shape of how we report.

One, deconsolidation from our results, the Agility Fuel Solutions are now reported in equity method below the line, and the second, an acquisition of our largest competitors, xperion, which then increases the - or is fully consolidated into our numbers. So of course throughout these next few quarters, we will try and ensure that we can give you a comparable picture, and there you'll see not only on a headline basis that we've grown significantly but also underlying.

And if you look to the left-hand side, that was quarter one 2016, we recorded revenues of NOK292 million and NOK19 million for EBITDA. Now we carve-out the CNG portion that's gone to Agility, so it's now reported below the line.

So let's strip that out to make the last year's numbers more comparable. And that will be stripping out NOK128 million of revenue and NOK17 million of EBITDA.

So we get to the next column in the light green here of NOK163 million of revenue and NOK2 million of EBITDA. This is then comparable to our numbers next column alone, this year, quarter one 2017, before xperion acquisition of NOK296 million in revenue and NOK41 million in EBITDA.

So you could see a considerable growth when we compare like-for-like. And then in addition, we have the xperion results coming through, an additional NOK50 million in revenue.

This is slightly lower than the NOK71 million we reported last quarter and we'll go into that later, and a negative NOK6 million EBITDA. Key factors impacting EBITDA this quarter.

Obviously the strong LPG performance. That is something that you will see as a feature through 2017.

Mobile Pipeline sales have really helped the high-pressure segment significantly, and also very pleasing is the stronger hydrogen sales, and this includes quite a lot of very high percentage of product sales as opposed to funded development. And this traditionally is a dilutive, you can say business unit in its early stage, but certainly these stronger sales performances we are on track for, as Jon Erik mentioned, tripling last year's full year amount.

In fact we've almost achieve the full-year amount in this quarter. So the negative was relatively weak Light-Duty Vehicles performance and that's pulled down some of the numbers, but we will go into that a little bit later.

Below EBITDA and actually below the line, the Agility contribution was steady, as I mentioned. However it's way down by non-cash accounting entries and we'll spend some time on those as well.

And then on the balance sheet, negative working capital movements, we swing from quarter-to-quarter, however good liquidity was maintained and these adjusted cyclical swings. So looking at our income statement.

Concentrating on the three columns in the middle. One in orange is the quarter one 2017.

Next column is 2016, and the variance between those. We recorded operating income precisely of NOK346.2 million versus NOK291.6 million in the previous year's quarter.

We didn't have any exceptional gains this quarter unlike quarter four 2016, and that took us down to EBITDA of NOK35.1 million versus NOK18.6 million previous period. Steady depreciation on tangibles.

We've split this out, so the depreciation on our tangible fixed asset, you can say, ordinary depreciation, and then amortization and impairment. This is depreciation on intangible assets, mainly connected to the IPR and the customer relationship value of the xperion transaction.

So that takes us down to EBITDA or operating profit of NOK16.6 million versus NOK3.2 million, and that's an increase of NOK13.4 million for the year-over-year variance. So below that then we've split out Agility's results of share of profit or loss from associates, negative NOK1.2 million and obviously zero in the same period last year.

And we've split also the amortization of the intangible element, again of that Agility transaction, that will be a constant factor going through the period. So that's a negative NOK3.5 million.

Off to other financial items. Negative NOK5.7 million this year, negative NOK5.8 million previous year.

We then recorded profit before tax of NOK6.3 million versus a loss of NOK2.6 million previous year. That takes us down to a bottom line profit after tax of NOK7.2 million versus NOK0.4 million same period last year.

So again very pleasing. The EBITDA double-digit margin there, 10.1% versus 6.4% same period last year, even under the new reporting structure, and that takes us down to a net profit margin of 2.1% for the year.

Just to remind that full-year 2016 figures which I've given on the far right hand side, these are obviously heavily impacted by one-off gain, exceptional gain there to do with the Agility transaction, that was NOK348 million. We attached a tax provision to that, both entries are non-cash of course, and that tax provision was precisely NOK122 million.

So the net impact then to net profit was around about NOK226 million on that transaction in those exceptional items, otherwise we'd love to repeat the 30.7% EBITDA margin. When we look at the revenue walk, again I think it's in important to be able to compare.

So you can see the real underlying growth in the business or the businesses actually. And again we start with the quarter one '16 number, headline number that was actually reported on the previous business combination NOK292 million.

We strip out the CNG Heavy Duty and Medium Duty results, which are now part of the Agility results below the line, and we have the NOK163 million as a rebased amount. There we could see clearly that the high-pressure growth year-over-year of NOK81 million, very much fueled by the Mobile Pipeline's performance year-over-year, and again these record sales in low-pressure driving a positive earnings of NOK54 million.

So we walk up to the NOK296 million before xperion. Of course we fully consolidate xperion results, and that takes us to the NOK346 million of revenue.

So strong underlying growth in both our high-pressure and low-pressure segments. Looking at the same walk then for EBITDA.

We start with a NOK19 million we reported same quarter last year. We carve-out the results now going to Agility of minus NOK17 EBITDA effect, so we have a rebased amount of NOK2 million in EBITDA.

Here we see again driven by the larger volume difference, high-pressure has increased - has a underlying increase of NOK27 million in EBITDA year-over-year, very pleasing, and low-pressure also contributes with NOK14 million year-over-year. So that takes us to a NOK41 million EBITDA that's comparable, which is before xperion, and then adding the xperion results negative NOK6 million in EBITDA, that was NOK1 million-plus in the previous quarter, quarter four 2016, so slightly reduced results for xperion.

But nonetheless, we come to a pleasing NOK35 million EBITDA for quarter one 2017. Yes, our color charts are getting brighter as we put in more divisions.

On the left-hand side, we have the quarter one 2016 revenues broken out by our main business units and the same for quarter one 2017. And again, I think this illustrates the size of revenue that we had last year within the revenue lines.

That doesn't appear in 2017, and yet we have quite a market increase NOK295 million to NOK349 million. This is before Group eliminations .

What we do have Light-Duty Vehicle from 2016 was NOK10 million compared to the NOK26 million that we have now in 2017, so a growing division for us, but again a division that was impacted this year this quarter, so we can even demonstrate further growth in the future. Of course a big change was Mobile Pipeline, NOK20 million in the same quarter last year and NOK104 million, so very, very pleasing return to sales volumes for Mobile Pipeline.

Here you see the impact of the hydrogen, it was only NOK4 million same quarter last year, NOK31 million this quarter. And again I think we did NOK39 million for the full-year last year, so really on track for substantial growth.

And as I say, 80% of that figure of the NOK31 million, over 80%, was commercial product sales in hydrogen. The MasterWorks and some other business units that we have delivered NOK11 million last quarter and NOK17 million this quarter.

So looking at high-pressure alone, so we've talked about the Mobile Pipeline sales. But again just to focus on hydrogen then, we have communicated it quite strongly.

This is a dilutive business unit for us short-term. It's still in its incubation phase but we believe longer term this will be one of the major drivers of our business.

However, as I said, those solid product sales actually got us down to almost breakeven EBITDA in this quarter, so that gives you a feel for the level of sales that allows us to breakeven. So Light-Duty Vehicles.

We were impacted in the quarter by product acceptance delays so we've had some technical parameters at one customer on one product line. Has asked to revalidate and as so towards they are getting the best product out there in the markets.

So we are doing that, but we should or we are focusing on realizing sales again by quarter three. More to that from Jon Erik.

And despite the good news, you can see from the financials that we are still making operating losses in high-pressure, so focus is still very much on profitability. And what can drive that in high-pressure?

Obviously more volumes. That is key.

We have a typically dilutive business unit in hydrogen, so we need to absorb that. We need more volumes of course, but also as we see Light-Duty increased throughout the year.

That would be a positive factor. And of course without, we will still all so be looking at our cost base just to ensure that that is optimized for the levels of revenue.

In addition, we do expect to realize synergies as we go through for the xperion transaction or the xperion results, so that will be another factor that helps profitability going forward. So in that then on a headline basis, we made NOK175.4 million in revenues for this quarter versus NOK172.7 million same quarter last year.

On EBITDA basis, that took us down to minus NOK2.3 million versus minus NOK6.9 million same quarter last year. And after depreciation and amortization, we have operating loss of minus NOK16.4 million versus minus NOK17.5 million same period last year.

So yes, there is some effect of CNG going out and xperion coming in. xperion is a smaller business than CNG of course, but still we want to be recording obviously operating profits in high-pressure going forward.

Agility Fuel Solutions. They made revenues of US$40 million for the quarter.

This is a 9% increase against the comparable previous quarter, quarter four 2016. So very much on track.

They reported EBITDA of US$1.4 million. The adjusted EBITDA for non-recurring and non-cash items is US$3.5 million.

So healthy margins in what is still a challenging and rather flattish market for Medium and Heavy-Duty. Net cash, very good position, US$1.7 million.

So very good on the balance sheet and liquidity. And what we'll see through what we started to seeing in quarter one and we will see through 2017 is they've had a strong focus on cost of goods sold and there has been various planned footprint optimization initiatives are now delivering, and also the vertical synergies from this transaction will drive - continue to drive these reasonable profit levels throughout 2017.

As we know, Agility Fuel Solutions' results are recorded below the line. And if we go to the next page, we can see how this impacts the Hexagon reporting.

So those positive EBITDA results from Agility then diluted by share-based compensation, so this will be your Black and Scholes valuations, so you have on the share instruments. And in Agility's numbers, this will be US$1.9 million but when we translate to IFRS, there are some differences and we record US$1.3 million for those.

And then there is ordinary depreciation relating to Agility of US$2 million and interest costs of US$0.4 million. When you take this all down and we take our 50% share of the profit or loss, we record minus NOK4.7 million, and this is versus minus NOK11 million we reported in quarter four 2016, so positive trend.

Breaking down the NOK$4.7 million; NOK$1.2 million is from - negative NOK1.2 million is from the operational results in Agility, you can say, and that's an improvement versus the negative NOK7.5 million same period - sorry, quarter four 2016. And here is a NOK3.5 million that I mentioned earlier, the depreciation on intangibles, which will remain a feature going forward each quarter.

Well, tax effects from my Agility are reported within the Group tax cost line, and you contract the investment value on our balance sheet. This was $976 million when we closed quarter four and obviously that's NOK971 million, a drop of this NOK5 million contribution from Agility.

On the low-pressure side of things, as I said, what more can you say, a 42% year-over-year growth and record sales, very, very pleasing. The deliveries in quarter one traditionally obviously gearing up for the summer season, so our core European markets heavy sales there.

But also in addition to that, we had Qatar, which is a very good Middle East customer for us. So deliveries to Qatar increased that revenue further for the quarter.

And again, we have a very strong order book at the end of quarter one. On the financial position versus previous quarter.

There is not been any changes to the balance sheet. Actually the main fluctuations have really been contained to working capital, as I mentioned previously.

On working capital, we've had inventory buildup, which we should see it released by quarter three. We've also then, due to the fantastic results in low-pressure, obviously our trade receivables have increased and expanded, so that's good news and we will see the cash coming through in the next quarters.

And also at the same time, so all things going in a negative direction but at the same time we've also reduced outstanding payables and there is also deferred income changes in the quarter. Solid balance sheet.

To the left, we retained NOK135 million in cash. And to the right, we can see our net interest-bearing debt position is NOK312 million, which is very comfortable from either from a bank covenant leverage perspective or versus our balance sheet versus our certainly market cap, so comfortable levels.

And also a solidly equity ratio of 56%. The net interest-bearing debt last quarter was NOK241 million, so you can see the impacts of this working capital cycle.

Just to illustrate that in terms of uses of cash. So underlying operations have contributed plus NOK32 million to our opening position of NOK208 million in the quarter, and then the combination of the increase in inventory, expansion in receivables and reduction in payables is as large minus NOK159 million, but of course we have movements in other accruals and payments of NOK63 million.

So net within the operating working capital is movements of NOK64 million negative, which is well within our normal cycles. Very modest CapEx results for the quarter minus NOK8 million.

We would expect some increase of that going forward, but again low activity in Q1. So in summary, how are we doing?

We're pleased with the results. Profitability is back, and actually the headline results do hide the underlying growth.

Very, very pleased about the growth year-over-year. I'm very pleased about the growth versus the previous quarter, quarter four '16.

And now I'll invite Jon Erik for the outlook.

Thank you, David. Good morning, everybody.

We will start by taking a look at this rig count curve, which I know lot of you follow, and there is a continued increase in the U.S. onshore rig count from the previous quarter, and we see that if you go one year back, there is more than 100% increase.

And that is very important driver for Hexagon in the Mobile Pipeline segment. So as I've repeatedly explained, we suffered two years of zero orders until the market came back in the fourth quarter of last year, and we have expectations that we will have a sound market going forward.

I will, in a minute, show you a video explaining the operations of our main customer in this segment, the trailers, and I think it's a very good explanation of how the Mobile Pipelines are used to fuel the rigging operations in North America. [Video Presentation] So not a dry eye left in the audience I see.

So you see clearly from this video, the effects that Mobile Pipeline's can play, and as an important measure to drive down the costs in the onshore drilling operations. So we see sound project funnel going forward with the oil and gas sector, the main driver.

This second bullet, sub-bullet there is not completely accurate. What we mean to say is that the most of the 2017 opportunities are expected to materialize in the second half.

That is not to say that there aren't a number of opportunities that we see from still 2018 and beyond. We see some risk still that Q2 will be softer than Q1.

We still have to go and get orders for June delivery, but in any case, we will fully utilize capacity in the second quarter but then four deliveries in Q3 and Q4. We announced yesterday, long-term agreements with our esteemed customer, Certarus, and at the same time, we collected an order worth NOK177 million.

We have previously discussed that there is - the market is attracting new competition in North America and we have sharpened and will continue to sharpen our swords to meet that competition and we feel prepared. If we turn to hydrogen.

I have to say this is a very exciting market space to be in for the time being and we see continued substantial growth. So far, a lot of attention has been on the LDV segment and there has been a lot of debate if it is battery electric or fuel-cell electric that is the solution.

We still believe in the LDV opportunity but we are also maintain that it's a fairly long-term gain. But in parallel to that, there is very dynamic development in the other segments.

Clearly infrastructure is required in order to enable growth in the other segments, and we see a lot of things happening there with filling stations, distribution systems, et cetera. Also we see that the non-LDV transportation segments are starting to get attraction.

When we developed this illustration a couple of years ago, we felt that we were very visionary and we included applications like marine but we expect that it frankly to materialize maybe in a 10-year horizon. But we see it is now happening.

I was attending a conference last week here in Oslo and it focused entirely on the maritime opportunities. And in this sector in Norway is now taking the lead.

The maritime clusters are focusing on this. We have previously discussed the car-ferry segment.

Another very important segment is the fast-ferry. Down to the right there, you see a project which is being planned by a yard and design group called Brødrene Aa on the West Coast.

And you see Titans, the blue Titans on deck and it's a very nice illustration of how we are taking our technology from land to sea. By the way, these fast ferries catamarans, they are among the main polluters in the Norwegian waters, so they actually pollute more per passenger kilometer than an airplane, so it's a prioritized area and an area where the fuel-cell electric is required at least to fuel the fast ferries for certain distances.

We announced an intention to enter into a joint-venture with Nel and PowerCell in Q1. Meanwhile in Q2, we have confirmed that and the JV has been established.

And this JV is set-up specifically to address opportunities like the maritime ones. It will combine specialized hydrogen knowledge of the participants with integration capabilities, enabling us to meet customers like ship designers and yards to support their complex configurations.

I feel very encouraged by all the opportunities that we see for this JV. If we turn to the Light-Duty Vehicles segments, there were some very exciting statements from the management of the Volkswagen Group last week where they communicate a clear strategy to work on CNG as part of their efforts to improve the CO2 balance of their fleets.

They have entered into a letter-of-intent with several other partners, like E.ON, TOTAL and Gazprom to promote CNG mobility, with an ambition to increase the CNG fleet in Germany alone tenfold to one million cars and also to facilitate that, expand the filling station network to 2,000 locations. So that is very encouraging and we have said all along that we believe that CNG is part of the solution for the next - at least for the short and medium-term, and that value - that environmental value proposition will be enhanced by the biogas.

So biogas produced by certain agricultural wastes is the only carbon negative source of fuel that we know of. Another interesting concept, which may become relevant is the Audi e-gas approach.

What they do in test facility in Germany is to produce hydrogen based on renewables and then they mix that with CO2 and create methane in the zero-emission loop. So in a way they are doing it the reverse way from producing hydrogen from natural gas.

And then they are guaranteeing their customers that for every liter of CNG that they fill on their tank, Audi will supply the same amount to the network. So very encouraging for us, especially after our xperion acquisition, that the reception that renewed interest in CNG and the acknowledgement that electrification alone does not solve the CO2 challenge.

There is healthy underlying growth, but at as David mentioned, Q1 and Q2 negatively impacted by one specific issue in one program. I'll not go into a lot of detail.

Just state that there are no field issues and also the products stay within the requirements, but there are certain observations that have led us to take a closer look at some of the configurations. Relaunch is planned for early Q3, and we expect that much of the loss volume in the first half will be recovered in the second half.

Agility, as David mentioned, it had a very healthy improvements in Q1. We expect that to continue despite relatively flat market, but we see some signs of recovery in the second half.

Meanwhile we are expanding that business into new markets internationally. So far it's a very North America-focused business.

And we are taking or using the time and opportunity to optimize our operations, and thereby, we expect to gradually improve the profitability and the competitiveness. Agility announced, a few days ago, that they are establishing a new business unit addressing the LPG segments, and by leveraging the capabilities and the technologies and the customer base that we already have on the CNG side.

Propane and CNG are complimentary fuels. While CNG is the right solution for the Heavy-Duty segments, propane, in most cases, is the optimal solution for the media class vehicles.

And LPG offers a number of advantages in addition to the environmental advantages. It also offer fuel costs improvements, and LPG has a wide distribution that which makes adoption maybe a faster alternative than it is for CNG.

LPG continues to deliver and will continue to deliver above our expectations. Q2 is now sold out.

And the order backlog for the second half is strong, still stronger some room to add additional orders. Going forward, we are now making a new drive in America.

The U.S. is one of very few examples where we have not succeeded yet and we have taken two steps back and we'll make a new drive to penetrate that market and it's the barbecue segment that we are addressing now in the first round.

We see continued strong growth in Europe, and that means that we are nearing a point where we will have utilized fully our capacity. So we have decided on a NOK75 million investment program, which will do a number of things for us, but the - one of the main effects is that it will increase our capacity by 200,000 cylinders by mid-2019.

That will not stop us from also considering other expansion opportunities, and that might lead to establishments in other geographies. Then the lights went off, but am I still on?

Yes. So in summary, we have to say we feel good about the situation.

This is the first time in my four years, as CEO, where all business areas actually seem to be on an upward trend simultaneously. Positive Mobile Pipeline outlook, sound market growth development for LDV, very strong indications for LPG.

We've said tripling of hydrogen. We maintain that guiding.

Relatively flat short-term markets for agility but indications of improvements towards the end of the year. Meanwhile the integration of xperion is according to plan and we have started now harvesting synergies.

Still we are not satisfied with the profitability. So while top line growth means to improve profitability, we will also manage the other parameters that will be required to get back to highly satisfactory margins.

So with those closing remarks, I invite David back here to the stage and we welcome questions please.

Hans-Erik Jacobsen from Swedbank. Given the promising outlook for hydrogen in a number of new areas and the cooperation with Mitsui, previously you planned for - or at least you had a possibility of constructing a new plant in Japan together with Mitsui.

Is that still on the cards, or it's more likely that you will construct a plant other places, given that it seems like maritime and other applications are maybe moving faster in the short-term at least?

So first of all, we have hydrogen capabilities both in Lincoln and in Kassel, Germany. So it is not a question of either or, but if we should also establish a footprint in Japan.

So the feasibility study that we are conducting, we aim at completing now by end Q2. So when we meet again in August, then we will be able to explain what the strategy will be in that area.

And in terms of entering the U.S. market though, or not enter and you try for long time and have a small scale sales operation there, but what's different this time that make you believe you will succeed now?

Now you're referring to the LNG of course [ph].

Yes.

So I think sometimes things take time. Things need to mature.

I think a lot of good work has been done. Maybe we have, over the years, tried too many things without focusing sufficiently.

So I think it's a combination of that. A clear focus now, at the same time, we hope to, in the end, benefit from the investments that we've done in meeting people and developing and promoting the products.

But of course it's a big step for the industry, which is today based on type 1 steel cylinders and that step has been taken in other markets and we remain hopeful that we will also get the breakthrough in the U.S.

Thanks.

Fredrik Steinslien from Pareto Securities. Can I make some comments on the xperion profitability and when you expect to work to breakeven or positive figures there?

And also with regards to synergies, the amounts you expect to see there and when you expect to be able to have captured these synergies?

Yes, I can take that. So the problem maybe conduct synergy will now take the profitability.

Profitability, so you saw in quarter four, we were slightly positive on plus NOK1 million on EBITDA level and then minus NOK6 million now. And the main impact is the Light-Duty was the product delays.

So I think with the restoration of that, then we're back on track. And then in addition, Mobile Pipeline is still a lumpy business unit also on the xperion, now we call, the rest of the world side, so that will naturally move in cycles.

Good sales in the quarter obviously, better profit margins. And then secondly, it will be then the full harvesting of the synergies.

And maybe, Jon Erik, you can touch.

So we assumed at least €4 million in synergies when we made the acquisition and we will deliver more than that. We will start harvesting synergies now in Q2.

Obviously we will not get the full impact in 2017, but we should get the full impact in 2018 and onwards. So we remain fully confident in that acquisition.

Thank you. In terms of the LPG [ph], it's a very solid result in Q1 and seems like Q2 results also should be very good.

In terms of looking into second half, you're commenting that you see satisfactory order book, and you commented in your report on double-digit growth. Does that apply for a second half as well.

Is the way you see right now?

You're addressing the LPG segment, all right?

LPG, yes.

So yes, the answer is yes. We still have to go and get the orders to completely fill the second half, but it's frankly looking good and it's still time to win orders but always as long as it's not in the backlog, there is some risk.

Great. Thanks.

No more questions? We have one question here from [indiscernible].

It's related to Volkswagen and TOTAL's ambition for CNG expansion. To your knowledge, in Norway, which happens to have a lot of natural gas, do you see any similar CNG developments within the Heavy-Duty Vehicle segments on the drawing board?

With TOTAL and the other European fuel players finding CNG a great interest, why not for interest Statoil? One should think that CNG could become an efficient contributed to meet also Norway's commitments under the climate related to Paris agreement.

So of course in Norway, we have a special energy mix with a lot of hydropower and that is why of course the electrification is especially tempting in Norway. That is so far at least primarily in the Light-Duty segment.

I don't think there is a lot of enthusiasm in Norway for CNG, as CNG is not a zero-emitter. But as soon as you start adding biogas, then of course it becomes so much more interesting proposition.

And in Norway, the main NGO is the organization called ZERO, and we know positively that they are now looking at compressed biogas as an alternative, especially for the Heavy-Duty segment. Then there is a need for an infrastructure development, so that is precondition to drive that.

If you go to Sweden, biogas is already on top of their agenda. So I think there are these variations which are explained why the specific energy mix is available in the different countries.

But if you ask us, which I have to admit we are not fully objective maybe, but if you ask us, it's a very compelling alternative, especially for the Heavy-Duty segment.

Thank you. There are no further questions from the web audience today.

Okay. Thank you very much for visiting us this morning and have a good rest of day.