{"segments": [{"speakerId": "S1", "sentences": [{"start": 1, "end": 6, "text": "Hello, everyone, and welcome to the Konecranes Q3 Earnings Conference."}, {"start": 6, "end": 10, "text": "My name is Kiira Fröberg and I'm the Head of Investor Relations at Konecranes."}, {"start": 12, "end": 20, "text": "Here with me today, I have our usual team, our CEO Anders Svensson and CFO Teo Ottola."}, {"start": 20, "end": 28, "text": "Of course, before we go into more details, just a kind reminder that the presentation includes forward-looking statements."}, {"start": 30, "end": 33, "text": "And the agenda is as usual first.<br /><br />"}, {"start": 33, "end": 42, "text": "And Anders will talk you through the group results, after which Teo will focus more on the business segment data."}, {"start": 42, "end": 44, "text": "But I guess now."}, {"start": 44, "end": 46, "text": "Oh, we have the Q&A of course too."}, {"start": 46, "end": 50, "text": "And I guess now, Anders, it's your turn to take over."}, {"start": 50, "end": 51, "text": "Please go ahead."}]}, {"speakerId": "S2", "sentences": [{"start": 51, "end": 52, "text": "Thank you, Kiira."}, {"start": 52, "end": 59, "text": "And a warm welcome from my side as well to this webcast for the third quarter results."}, {"start": 59, "end": 68, "text": "The headline of the quarter is continued strong performance and our demand environment held up really well in the third quarter.<br /><br />"}, {"start": 68, "end": 84, "text": "The orders were up 12.5% year on year in comparable currencies, and sales were strong in the execution, and we delivered almost 1.1 billion, which was up 6.8% in comparable currencies versus the previous year."}, {"start": 84, "end": 95, "text": "That gave us an all-time high margin for the third quarter, with an EBIT of 13.4% and EBITDA of 13.4%."}, {"start": 95, "end": 105, "text": "The year-on-year profitability improvement was driven by pricing versus inflation, higher volumes, and strong strategy execution."}, {"start": 106, "end": 114, "text": "Profitability improved in all of our segments, and we had an excellent cash flow of 187 million for the quarter."}, {"start": 117, "end": 121, "text": "Looking at our market environment, I'll start with our industrial segments."}, {"start": 121, "end": 135, "text": "The operating environment was challenged, as you can see, by the macro indicators, both in terms of manufacturing capacity utilization and manufacturing PMIs."}, {"start": 135, "end": 140, "text": "They were really challenged in Europe, the US, and also in China."}, {"start": 140, "end": 145, "text": "But despite that, we managed to maintain a strong order intake for the quarter."}, {"start": 147, "end": 150, "text": "Moving then into our port solutions."}, {"start": 150, "end": 159, "text": "And here we follow the container throughput index, which has remained strong at up 8% on a year-on-year comparison."}, {"start": 159, "end": 167, "text": "And we can also see that in our order or sales funnel on the port side, it becomes very strong."}, {"start": 170, "end": 180, "text": "Moving then into the group order intake, we delivered €956 million order intake for the quarter."}, {"start": 180, "end": 186, "text": "And that is up 12.5% versus the previous year in comparable currencies."}, {"start": 186, "end": 194, "text": "And the increase was driven by service and port solutions, while we observed a decrease in industrial equipment."}, {"start": 194, "end": 203, "text": "That was driven by the lower order intake of process cranes, while standard cranes and components were above the levels of the previous year."}, {"start": 203, "end": 210, "text": "We saw an increase in EMEA and a decrease in Americas and APAC in net sales."}, {"start": 210, "end": 213, "text": "As I said, strong sales execution."}, {"start": 213, "end": 221, "text": "We delivered €1,000,000,070, an increase of 6.8% versus the previous year in comparable currencies."}, {"start": 221, "end": 227, "text": "And here we saw an increase in all our segments and also in all our geographies."}, {"start": 229, "end": 239, "text": "The strong sales execution gave us an order book-to-bill ratio in the quarter below one, and the order book was at the end of the quarter."}, {"start": 239, "end": 242, "text": "Approximately 2,850,000,000."}, {"start": 242, "end": 247, "text": "And that is then 12% down versus the previous year in comparable currencies."}, {"start": 252, "end": 267, "text": "If we then move into our profitability, we observed a sequential decline, just as we discussed in the quarterly webcast following the second earnings report."}, {"start": 267, "end": 273, "text": "But still, we delivered a strong performance of €143 million."}, {"start": 273, "end": 276, "text": "And that's equivalent then to 13.4%."}, {"start": 276, "end": 280, "text": "And as I mentioned, it's an all-time high for any third quarter."}, {"start": 281, "end": 285, "text": "We had an increase in all of the segments."}, {"start": 285, "end": 293, "text": "And the increase was mainly driven by price versus inflation, increased volume, and strong strategic execution."}, {"start": 293, "end": 297, "text": "Also, the gross margin improved on a year-on-year comparison."}, {"start": 300, "end": 309, "text": "If we then examine our progress towards Konecranes' financial targets that were communicated during the Capital Markets Days of 2023."}, {"start": 310, "end": 325, "text": "So we can see that, given the strong performance in both the first and second and now third quarter of this year, both group and service in industrial equipment are performing within the target profitability range."}, {"start": 325, "end": 331, "text": "And we can also see that port solutions are getting closer to the target range as well."}, {"start": 331, "end": 334, "text": "At 8.8%, rolling 12 months."}, {"start": 334, "end": 339, "text": "If we instead look at the year-to-date performance."}, {"start": 339, "end": 342, "text": "So, year to date, we start with the volume."}, {"start": 342, "end": 347, "text": "Then, for the group, we are up 7.4% in comparable currencies."}, {"start": 347, "end": 357, "text": "And that's clearly faster than the estimated nominal world GDP development for 2024, which I think is around 4.5%."}, {"start": 357, "end": 360, "text": "So, good performance in sales."}, {"start": 361, "end": 363, "text": "If we look at the profitability for the group."}, {"start": 363, "end": 366, "text": "Year to date, it's 13.0%."}, {"start": 366, "end": 370, "text": "Moving into the service sector here, we have achieved a growth of 7%."}, {"start": 370, "end": 374, "text": "Also, here the growth is clearly faster than in the defined market."}, {"start": 374, "end": 379, "text": "And then the profitability is 21.2% year to date."}, {"start": 380, "end": 386, "text": "Industrial equipment, where we targeted a focus on profitability, not growth."}, {"start": 386, "end": 389, "text": "Year-on-year, we observed a 2% growth."}, {"start": 389, "end": 391, "text": "Year to date."}, {"start": 391, "end": 397, "text": "And if we look at the profitability, then it's 8.8% year to date."}, {"start": 398, "end": 405, "text": "Import solutions and very strong sales execution, a growth year to date of 13% versus the previous year."}, {"start": 405, "end": 407, "text": "And here, if we look at the profitability."}, {"start": 407, "end": 412, "text": "We can see that ports are actually at 9.2% year to date."}, {"start": 412, "end": 416, "text": "So, also here, the ports would be within the target profitability range."}, {"start": 419, "end": 422, "text": "We then proceed to our demand outlook."}, {"start": 422, "end": 425, "text": "We start with the industrial and customer segments."}, {"start": 425, "end": 432, "text": "And here we say that our demand environment within industrial customer segments has remained good and continues on a healthy level."}, {"start": 432, "end": 436, "text": "And we have seen that throughout 2023."}, {"start": 436, "end": 445, "text": "Also, in the first three quarters of 2024, despite the weakening macro indicators, we are managing to deliver a strong order intake."}, {"start": 445, "end": 450, "text": "And we believe that the situation as it is will continue within the industrial segments."}, {"start": 452, "end": 463, "text": "I mentioned last time that interest rates are impacting customer decision-making processes, especially here with the processed grains, which is then delaying orders."}, {"start": 463, "end": 471, "text": "We don't see any cancellations in the order book, and we have an influx of new cases into the order funnel as well."}, {"start": 472, "end": 475, "text": "But it's delaying the decision-making process."}, {"start": 475, "end": 480, "text": "We don't see that effect when it comes to standard cranes and components."}, {"start": 483, "end": 502, "text": "If we move then into our port customer segment here, we say that global container throughput continues on a high level, and long-term prospects related to global container handling remain good overall, and we have seen here that our order pipeline is strong, both when it comes to short cyclical products."}, {"start": 502, "end": 507, "text": "There's activity, but the funnel is strong when it comes to projects of all different sizes."}, {"start": 508, "end": 512, "text": "But as you know, and as we have discussed many times, this is a lumpy business."}, {"start": 512, "end": 514, "text": "It's a project business."}, {"start": 514, "end": 520, "text": "So we get the order intake when the customer has matured the project into a decision-making time."}, {"start": 520, "end": 525, "text": "And that's when we can get the order intake if we are the provider."}, {"start": 525, "end": 528, "text": "So that will continue to fluctuate going forward."}, {"start": 528, "end": 531, "text": "And that's the nature of a project business."}, {"start": 531, "end": 545, "text": "We still believe that Q3 of last year was the trough when it comes to order intake regarding ports, and this quarter actually was the strongest order intake in the last five quarters with imports."}, {"start": 545, "end": 550, "text": "And if we look at our funnel here, we have interesting discussions on several projects also going forward."}, {"start": 550, "end": 555, "text": "But you never know in what month or even quarter."}, {"start": 555, "end": 562, "text": "These projects will then materialize into the decision-making stage where we can secure the order intake."}, {"start": 562, "end": 564, "text": "But the funnel looks strong, as I said."}, {"start": 566, "end": 571, "text": "I then move into the financial guidance for the rest of the year and for the full year."}, {"start": 571, "end": 582, "text": "Net sales are expected to increase in 2024 compared to 2023, and the comparable EBITDA margin is expected to improve in 2024 compared to 2023."}, {"start": 583, "end": 597, "text": "And as a summary, we had then a quarter with a very healthy order intake, strong sales execution that enabled us to deliver an all-time high profit margin for a third quarter."}, {"start": 597, "end": 602, "text": "And they're complemented with the free cash flow."}, {"start": 602, "end": 604, "text": "That was on an excellent level."}, {"start": 605, "end": 619, "text": "And we, of course, aim going forward to also continue our journey on improving our profitability and keeping our streak of now seven quarters in a row with year-on-year EBITDA margin improvement."}, {"start": 620, "end": 631, "text": "So with that, I will welcome our CFO, Teo Ottola, to go more into the segment financial details."}, {"start": 631, "end": 632, "text": "So please do."}]}, {"speakerId": "S3", "sentences": [{"start": 640, "end": 641, "text": "Thank you, Anders."}, {"start": 642, "end": 653, "text": "And actually, before we delve further into the segment level data, let's take a look at the comparable EBITA bridge on a quarterly basis."}, {"start": 653, "end": 658, "text": "So, Q3 2024 versus Q3 2023."}, {"start": 658, "end": 662, "text": "And when we take a look at the EBITA between those two quarters."}, {"start": 662, "end": 669, "text": "So we actually made 20 million more EBITA now in the third quarter of '24 than one year ago."}, {"start": 669, "end": 672, "text": "Let’s unpack this one a little bit."}, {"start": 672, "end": 678, "text": "So first, we can comment that the pricing impact on year-on-year comparison was roughly 5%."}, {"start": 678, "end": 684, "text": "Now, as Anders mentioned, our sales grew slightly less than 7% with comparable currencies."}, {"start": 684, "end": 688, "text": "So this does give us an underlying volume improvement."}, {"start": 688, "end": 694, "text": "But the volume improvement is quite modest, somewhat a little less than 2%."}, {"start": 694, "end": 719, "text": "These 2% underlying volume improvements of course provide us with positive operating leverage for the result, but not as much as in the second quarter, for example. We did not have a meaningful mix impact this quarter, but we did achieve efficiency improvements as a result of the optimization program, as was previously mentioned."}, {"start": 719, "end": 724, "text": "But when we combine all of this and take a look at the profitability improvement of 20 million."}, {"start": 724, "end": 728, "text": "So the vast majority of this comes from net inflation pricing."}, {"start": 728, "end": 734, "text": "So the price increases of 5% have surpassed the corresponding inflation."}, {"start": 734, "end": 749, "text": "When we take the weighted inflation between materials and labor, fixed costs are increasing in a year-on-year comparison, broadly in line with what we had, for example, in the second quarter as well."}, {"start": 750, "end": 761, "text": "Overall, there was nothing very specific or extraordinary in the third quarter of 2024 in comparison to the situation a year ago."}, {"start": 762, "end": 766, "text": "And then, if we take a look at the segments and start with service as usual."}, {"start": 766, "end": 777, "text": "Service order intake reached €372 million, representing an increase of 4.5% with comparable currencies year on year."}, {"start": 777, "end": 784, "text": "We actually had an increase in field service and parts, and we had an increase in all of the regions."}, {"start": 784, "end": 786, "text": "We have a small decline sequentially."}, {"start": 786, "end": 790, "text": "But as we already commented regarding Q2 earlier."}, {"start": 790, "end": 804, "text": "So that was actually a very good quarter from the volume point of view when it comes to the service business; our agreement base continued to grow more or less in line with the order intake growth."}, {"start": 804, "end": 809, "text": "Our agreement base grew 4.7% year on year with comparable currencies."}, {"start": 811, "end": 814, "text": "Then when we take a look at sales, €392 million."}, {"start": 814, "end": 826, "text": "That is a 7.2% year-on-year improvement with comparable currencies and also an increase in all regions, as well as in both field service and parts."}, {"start": 826, "end": 834, "text": "Parts order book came down a little by some 7% to €444 million."}, {"start": 835, "end": 839, "text": "Then, if we take a look at the EBIT, a good performance continues."}, {"start": 839, "end": 857, "text": "The €85 million, or 21.6%, and there is a 0.7 percentage point improvement year on year, which comes from higher volumes as well as from pricing, and gross margin naturally improved as well."}, {"start": 857, "end": 862, "text": "In a sequential comparison, we have a small decline compared to the second quarter."}, {"start": 863, "end": 869, "text": "The main reason being that the second quarter was also good from the volume point of view."}, {"start": 869, "end": 875, "text": "It was also very good from the execution point of view and was just a very good quarter from the service business point of view."}, {"start": 875, "end": 880, "text": "So nothing more extraordinary in that small decline either."}, {"start": 882, "end": 897, "text": "Then if we go into the industrial equipment and again start with orders €289 million, actually, when we take a look at it from the external orders point of view and comparable currencies, we have a decline of 2.7%."}, {"start": 897, "end": 898, "text": "Here."}, {"start": 898, "end": 907, "text": "Within the business units, we experienced an increase in standard cranes and components, but there was a decrease in process cranes."}, {"start": 907, "end": 915, "text": "And as Anders already mentioned, there has been slowness in the decision-making within that subcategory of products."}, {"start": 915, "end": 916, "text": "That has continued."}, {"start": 916, "end": 926, "text": "Now also during the third quarter, again, if we take a look at the sequential comparison within the industrial equipment."}, {"start": 926, "end": 930, "text": "So, component orders were more or less on the same level as they were in the second quarter."}, {"start": 930, "end": 936, "text": "Standard crane orders decreased slightly from the second quarter."}, {"start": 937, "end": 942, "text": "Sales reached €317 million, marking a 6.1% increase once again."}, {"start": 943, "end": 945, "text": "External sales showed improvement with comparable currencies."}, {"start": 945, "end": 953, "text": "There was an increase in standard cranes and process cranes, but a decrease in components in a year-on-year comparison."}, {"start": 953, "end": 960, "text": "Order book down here as well, by about 11% to approximately €870 million."}, {"start": 961, "end": 964, "text": "And then EBIT showed a very good result."}, {"start": 964, "end": 972, "text": "Uh, €31 million or 9.8%, more than a two percentage point improvement year on year."}, {"start": 972, "end": 975, "text": "Of course, driven again by volume growth and pricing."}, {"start": 975, "end": 979, "text": "Also, the optimization program that has been mentioned."}, {"start": 979, "end": 994, "text": "This is also a very good result in a sequential comparison because, as you may remember, we had some one-time gains in the second quarter that did not repeat themselves in the third quarter, and yet we have the margin on the same level as we had in the previous quarter."}, {"start": 996, "end": 1002, "text": "So then moving on to the port solutions order intake, €334 million."}, {"start": 1002, "end": 1009, "text": "That is as much as 43% higher than what we had in the previous year, Q3."}, {"start": 1009, "end": 1017, "text": "We actually had good order intake in Mobile Harbor Cranes, Straddle Carriers, AGVs, as well as port services."}, {"start": 1017, "end": 1030, "text": "And actually, the order intake now includes one significant deal, particularly in AGVs, and by 'bigger deal,' we mean we have been using a definition of more than €80 million."}, {"start": 1030, "end": 1037, "text": "So that is now included in the order intake numbers in the third quarter."}, {"start": 1038, "end": 1049, "text": "Then when we take a look at the sales number, which is €401 million, that is 6.6% percent higher than what we had a year ago."}, {"start": 1049, "end": 1056, "text": "Also, the order book is down by 16% to approximately 1.5 billion."}, {"start": 1056, "end": 1062, "text": "And then finally, EBITA yielded a good result here as well, €39 million."}, {"start": 1062, "end": 1071, "text": "This is a margin of 9.6% and an improvement of more than one percentage point in a year-on-year comparison here."}, {"start": 1071, "end": 1078, "text": "The improvement primarily comes from pricing, and gross margin increased in both solutions as well."}, {"start": 1080, "end": 1084, "text": "Then, a couple of comments on the balance sheet and cash flow."}, {"start": 1084, "end": 1089, "text": "Net working capital was about 400 million at the end of the third quarter."}, {"start": 1089, "end": 1092, "text": "So it's 9.6% of rolling 12-month sales."}, {"start": 1093, "end": 1097, "text": "There is a decline in a sequential comparison from the second quarter."}, {"start": 1097, "end": 1101, "text": "It primarily stems from inventories, which is obviously advantageous."}, {"start": 1101, "end": 1105, "text": "And then this is also visible in our free cash flow."}, {"start": 1105, "end": 1125, "text": "So we had an extremely good free cash flow as already mentioned, of course driven by the good result, but also by the release in the net working capital. Our cash conversion on a year-to-date basis is again close to 100%, where it has typically been."}, {"start": 1127, "end": 1132, "text": "And then, as a final slide regarding the presentation, gearing and return on capital employed."}, {"start": 1132, "end": 1136, "text": "Of course, the positive impact of the good cash flow is also evident in this slide."}, {"start": 1136, "end": 1140, "text": "Our net debt is now €267 million."}, {"start": 1140, "end": 1143, "text": "That is gearing as low as 15.4%."}, {"start": 1144, "end": 1148, "text": "And then, our overall capital employed has continued to be quite high."}, {"start": 1148, "end": 1160, "text": "We also have a lot of cash at hand, but still the return on capital employed is improving, or let's say flat to improving in comparison to the previous quarter."}, {"start": 1160, "end": 1165, "text": "And we are reaching 20.4%."}, {"start": 1165, "end": 1169, "text": "And this one basically concludes the presentation.<br /><br />"}, {"start": 1169, "end": 1172, "text": "And before we move on to the Q&A."}, {"start": 1172, "end": 1176, "text": "So Kiira probably has a small announcement to do."}]}, {"speakerId": "S1", "sentences": [{"start": 1176, "end": 1177, "text": "Thank you, Teo."}, {"start": 1177, "end": 1182, "text": "Yes, I will take the opportunity here to do some marketing."}, {"start": 1182, "end": 1197, "text": "So we are excited to announce that we are planning to host our next Capital Markets Day in London on May 20th next year to discuss our future ambitions as well as what's next for Konecranes Abp?"}, {"start": 1197, "end": 1201, "text": "So please, save the date in your calendars."}, {"start": 1201, "end": 1207, "text": "And we also have an Investor and Analyst newsletter that you can subscribe to from our investor website."}, {"start": 1207, "end": 1215, "text": "So then you get to hear the news about, for example, site visits and other events in advance."}, {"start": 1215, "end": 1217, "text": "So please go and subscribe to it from there."}, {"start": 1217, "end": 1224, "text": "But now I think it's time for the Q&A, which I believe the analysts are at least eagerly awaiting."}, {"start": 1224, "end": 1229, "text": "As a reminder, you can also send us questions through the chat function."}, {"start": 1229, "end": 1230, "text": "Thank you."}, {"start": 1230, "end": 1234, "text": "So, operator, please open the line for questions."}]}, {"speakerId": "S4", "sentences": [{"start": 1236, "end": 1243, "text": "If you wish to ask a question, please dial Pound Key five on your telephone keypad to enter the queue."}, {"start": 1243, "end": 1250, "text": "If you wish to withdraw your question, please dial Pound Key six on your telephone keypad."}, {"start": 1256, "end": 1261, "text": "The next question comes from Daniella Costa from Goldman Sachs."}, {"start": 1261, "end": 1263, "text": "Please go ahead."}]}, {"speakerId": "S5", "sentences": [{"start": 1264, "end": 1264, "text": "Hi."}, {"start": 1264, "end": 1265, "text": "Good morning."}, {"start": 1265, "end": 1266, "text": "Thanks for taking our questions."}, {"start": 1266, "end": 1268, "text": "I have two questions, if possible."}, {"start": 1268, "end": 1280, "text": "The first one is whether you can give us a little bit more color; obviously, pricing format was a very strong component still this quarter, especially in the equipment divisions."}, {"start": 1280, "end": 1281, "text": "As we move forward."}, {"start": 1281, "end": 1284, "text": "Are you continuing to increase prices at the moment?"}, {"start": 1284, "end": 1291, "text": "What are the raw material trends, or do you expect this impact to fade through 2025?"}, {"start": 1292, "end": 1293, "text": "I will ask the second question afterwards."}]}, {"speakerId": "S2", "sentences": [{"start": 1296, "end": 1296, "text": "Yes."}, {"start": 1296, "end": 1304, "text": "So if I may start, I think our main ambition with pricing is of course to compensate for inflation levels."}, {"start": 1304, "end": 1309, "text": "But we don't adjust our prices continuously throughout the year unless we have to."}, {"start": 1309, "end": 1324, "text": "So we saw a somewhat raw material benefit in the second and third quarter especially, I would say within, maybe, ports and the industrial equipment side."}, {"start": 1324, "end": 1335, "text": "But we believe that we are in a price-leading position within our industries, and we will continue to compensate for inflation with pricing also going forward."}]}, {"speakerId": "S5", "sentences": [{"start": 1338, "end": 1339, "text": "Okay."}, {"start": 1339, "end": 1339, "text": "Thank you."}, {"start": 1340, "end": 1347, "text": "Um, and then the second question is more just trying to understand a little bit, um, on service, what you are seeing at the moment."}, {"start": 1347, "end": 1352, "text": "Can you talk a little bit about the utilization of your installed base across the regions?"}, {"start": 1352, "end": 1357, "text": "What indications is that telling you at the moment?"}, {"start": 1357, "end": 1357, "text": "Thank you.<br /><br />"}]}, {"speakerId": "S2", "sentences": [{"start": 1359, "end": 1360, "text": "Thank you."}, {"start": 1360, "end": 1369, "text": "So what we can see is that we have a TrueConnect system where we have connected equipment around the world which we measure utilization."}, {"start": 1369, "end": 1373, "text": "And here we can see the trends that are also visible in the macro indicators."}, {"start": 1373, "end": 1381, "text": "So within the industrial side, we can see that we have fewer moves with the same equipment compared to what we had in the previous year."}, {"start": 1381, "end": 1388, "text": "And within ports, we can see that there are actually more moves, just as the increased container throughput index indicates."}, {"start": 1388, "end": 1394, "text": "So I believe that those are quite similar trends to what we see."}, {"start": 1395, "end": 1402, "text": "But despite that, we have managed to keep our service, order intake, and sales in a good way."}, {"start": 1402, "end": 1410, "text": "Just like we managed to keep up with the standard equipment sales or standard crane sales, we also kept up with the components."}, {"start": 1410, "end": 1419, "text": "So it's difficult to know any market data, of course, but to me, that indicates that we are taking market share in those areas."}]}, {"speakerId": "S5", "sentences": [{"start": 1420, "end": 1421, "text": "Got it."}, {"start": 1421, "end": 1421, "text": "Thank you."}, {"start": 1421, "end": 1422, "text": "Thank you."}]}, {"speakerId": "S4", "sentences": [{"start": 1430, "end": 1434, "text": "The next question comes from Antti Kanninen from Seb."}, {"start": 1435, "end": 1436, "text": "Please go ahead."}]}, {"speakerId": "S6", "sentences": [{"start": 1438, "end": 1439, "text": "Hi guys."}, {"start": 1439, "end": 1440, "text": "It's Antti from SEB."}, {"start": 1440, "end": 1442, "text": "A couple of questions from me."}, {"start": 1442, "end": 1464, "text": "First is on the port side, and I wanted to maybe better understand the revenue outlook going into 2025, in the sense that your book-to-bill ratio has been below one this year and the backlog is down year over year, but could you talk about what you expect for deliveries, let's say in the next 12 months, the composition and length of the backlog."}, {"start": 1464, "end": 1474, "text": "And also, it might help to gain some visibility on the size of the, let's say, more short cyclical businesses like lift trucks and so on."}]}, {"speakerId": "S2", "sentences": [{"start": 1476, "end": 1477, "text": "Yeah."}, {"start": 1477, "end": 1487, "text": "So if we start with the order book to be delivered in 2025, we don’t reveal that more than once a year."}, {"start": 1487, "end": 1489, "text": "And that's after the Q4 report."}, {"start": 1489, "end": 1494, "text": "Then we go through how much we have for each year going forward."}, {"start": 1494, "end": 1512, "text": "But if we look at what has happened, we are, as we can see, roughly 400 million below where we were one year ago at the same point in time in the order book; what has shifted is primarily, I would say, the longer projects."}, {"start": 1512, "end": 1519, "text": "So when you get large orders within the port solutions, they are rarely to be delivered within the next 12 months or so.<br /><br />"}, {"start": 1519, "end": 1522, "text": "So they normally have a longer delivery time."}, {"start": 1522, "end": 1526, "text": "So I would say we haven't perhaps built as much from a longer-term perspective."}, {"start": 1527, "end": 1537, "text": "While it might not have as big an impact as you might assume for the next year, it's also, of course, dependent on the mix of products we have."}, {"start": 1537, "end": 1548, "text": "We have some products that may be performing better than before, and there we need to increase capacity, and there can be other product lines that are performing worse than the previous year."}, {"start": 1548, "end": 1552, "text": "And then we might need to reduce our production capacity."}, {"start": 1552, "end": 1556, "text": "But I would say that's business as usual in a company like ours."}, {"start": 1556, "end": 1559, "text": "Then the second part of that was regarding lift trucks."}, {"start": 1559, "end": 1565, "text": "Lift trucks are a bit on the softer level compared to their peak."}, {"start": 1565, "end": 1574, "text": "But if you look at it on a year-on-year comparison, order intake in this quarter was similar to the previous year, and also sequentially."}, {"start": 1574, "end": 1578, "text": "It was similar to the order intake versus the second quarter."}]}, {"speakerId": "S6", "sentences": [{"start": 1581, "end": 1591, "text": "Do you feel that in the lift truck business, it's pretty much in line with the underlying demand, or are there still some types of distributor or inventory reductions being done?"}]}, {"speakerId": "S2", "sentences": [{"start": 1592, "end": 1598, "text": "Inventory reductions are continuing at our distributors."}, {"start": 1598, "end": 1602, "text": "And you know, when you have short lead times, etc."}, {"start": 1602, "end": 1607, "text": ", then distributors are less prone to invest in floor plans, for example."}, {"start": 1607, "end": 1609, "text": "So there is an effect here."}, {"start": 1609, "end": 1611, "text": "And that's sort of the bulwark effect."}, {"start": 1611, "end": 1616, "text": "You get both going up and going down with that type of go-to-market model."}, {"start": 1616, "end": 1624, "text": "Of course, I would say the issue is not at all like it was previously."}, {"start": 1624, "end": 1627, "text": "So I would say it's more imbalanced now than it used to be."}, {"start": 1627, "end": 1634, "text": "And we can also see that since we are now flat year on year and flat sequentially also in lift trucks."}]}, {"speakerId": "S6", "sentences": [{"start": 1636, "end": 1636, "text": "All right."}, {"start": 1636, "end": 1640, "text": "And then the second topic was on capital allocation."}, {"start": 1640, "end": 1644, "text": "And I mean the balance sheet is very strong right now."}, {"start": 1644, "end": 1647, "text": "I'm not going to ask you about any extra dividends or such."}, {"start": 1647, "end": 1654, "text": "But maybe on the M&A front, could you remind us what you are doing in terms of what type of organization do you have?"}, {"start": 1654, "end": 1665, "text": "What's your process for scoping targets, and where do you see the most attractive opportunities, whether it's expanding offerings or geographies, or what is the logic?"}]}, {"speakerId": "S2", "sentences": [{"start": 1666, "end": 1667, "text": "Yeah."}, {"start": 1667, "end": 1674, "text": "We have, of course, an M&A strategy, which focuses on expanding our presence where we already are."}, {"start": 1674, "end": 1680, "text": "It could involve bolt-on service acquisitions both within the industrial sector and within ports."}, {"start": 1680, "end": 1683, "text": "And I think we have seen that in both those areas."}, {"start": 1683, "end": 1688, "text": "And then it could be geographical expansions to cover white spots, etc."}, {"start": 1688, "end": 1698, "text": "And we could also then expand our product offering, which means going into neighboring product offerings that are sold to the same customers, etc."}, {"start": 1698, "end": 1702, "text": "to sort of diversify our offering a bit."}, {"start": 1702, "end": 1711, "text": "And we are working within all of those avenues, and we have a funnel which we started with, I think, 1100 companies."}, {"start": 1711, "end": 1716, "text": "And we have a prioritized funnel, which we work with and keep track of continuously."}, {"start": 1717, "end": 1721, "text": "And of course, some of those move forward and some of those don't move forward."}, {"start": 1721, "end": 1726, "text": "But our ambition is to continue with the bolt-on acquisitions."}, {"start": 1726, "end": 1736, "text": "And then if we find the right sort of diversifying acquisition, we will also continue to pursue that if we can be successful within that."}, {"start": 1736, "end": 1745, "text": "So I think we are working quite systematically, of course, with M&A; it's very difficult because you can't speak about it until it happens, right?"}, {"start": 1745, "end": 1750, "text": "So we can only talk about the directionally wise, what we are doing as a company."}]}, {"speakerId": "S7", "sentences": [{"start": 1751, "end": 1751, "text": "Yeah."}, {"start": 1751, "end": 1752, "text": "But, I mean."}]}, {"speakerId": "S6", "sentences": [{"start": 1752, "end": 1757, "text": "This has been a bit of a mixed year in the sense that perhaps some of the targets haven't performed as well as you."}, {"start": 1757, "end": 1766, "text": "So do you kind of feel that it's getting more opportunistic when maybe all of the targets are not performing as well as you in terms of valuations and so forth."}, {"start": 1766, "end": 1769, "text": "So, how has that been this year?"}]}, {"speakerId": "S2", "sentences": [{"start": 1770, "end": 1781, "text": "Yeah, I mean, it increases our ability to acquire the worst-performing companies at potentially even lower multiples than would have been otherwise."}, {"start": 1781, "end": 1786, "text": "So it's of course an opportunity for us, especially when it comes to bolt-on acquisitions."}, {"start": 1786, "end": 1800, "text": "If you're engaging in diversity, diversification, investments, or acquisitions, then you're talking about different measures to think about and how we can leverage that in our existing structures, etc."}, {"start": 1800, "end": 1800, "text": "."}]}, {"speakerId": "S6", "sentences": [{"start": 1802, "end": 1803, "text": "Fair enough."}, {"start": 1803, "end": 1803, "text": "Fair enough."}, {"start": 1803, "end": 1804, "text": "That's all from me.<br /><br />"}]}, {"speakerId": "S2", "sentences": [{"start": 1804, "end": 1805, "text": "Thank you."}, {"start": 1805, "end": 1806, "text": "Thanks, Teo."}]}, {"speakerId": "S1", "sentences": [{"start": 1807, "end": 1808, "text": "Thank you."}, {"start": 1808, "end": 1809, "text": "Let's take the next question, please."}]}, {"speakerId": "S4", "sentences": [{"start": 1809, "end": 1814, "text": "The next question comes from Ponyo Lahteenmäki from Danske Bank."}, {"start": 1814, "end": 1815, "text": "Please go ahead."}]}, {"speakerId": "S8", "sentences": [{"start": 1817, "end": 1818, "text": "Hi."}, {"start": 1818, "end": 1818, "text": "Thank you."}, {"start": 1818, "end": 1820, "text": "I have a few questions."}, {"start": 1820, "end": 1823, "text": "Firstly, returning to the topic of pricing."}, {"start": 1823, "end": 1827, "text": "So you said that in sales the impact was 5%."}, {"start": 1827, "end": 1828, "text": "But."}, {"start": 1828, "end": 1829, "text": "But by how much?"}, {"start": 1829, "end": 1835, "text": "When considering the new orders, how much higher is the pricing compared to what it used to be?"}]}, {"speakerId": "S2", "sentences": [{"start": 1836, "end": 1837, "text": "Short answer."}, {"start": 1837, "end": 1840, "text": "Is that a similar level or slightly lower, maybe?"}]}, {"speakerId": "S8", "sentences": [{"start": 1843, "end": 1846, "text": "So, are you taking in new orders at a lower price than a year ago?"}]}, {"speakerId": "S2", "sentences": [{"start": 1847, "end": 1849, "text": "No, no, not a lower price than a year ago."}, {"start": 1849, "end": 1858, "text": "But maybe the gap is not 5% on everything that comes in, because it needs to match raw material prices, of course, and labor inflation."}, {"start": 1859, "end": 1865, "text": "We're not accepting orders at lower prices than what we did a year ago or in the last quarter."}]}, {"speakerId": "S3", "sentences": [{"start": 1866, "end": 1869, "text": "Maybe, maybe, maybe just a bit to fill in for that one."}, {"start": 1869, "end": 1873, "text": "So, if you take a look at it from the segment level point of view."}, {"start": 1873, "end": 1876, "text": "We have still been in the P&L as well."}, {"start": 1876, "end": 1884, "text": "We have still been in the situation where, essentially, in all the segments, prices are now at a higher level than what they were one year ago."}, {"start": 1884, "end": 1888, "text": "And as Anders was mentioning, we are still increasing prices."}, {"start": 1888, "end": 1894, "text": "So I mean, of course, you will need to exclude those kinds of cases where you have a project with a lot of steel content."}, {"start": 1894, "end": 1897, "text": "So, of course, that is reflected in the price."}, {"start": 1897, "end": 1914, "text": "But when you take a look at more standard and list price products, what we have now seen, particularly in the industrial equipment area, is that the raw material costs from a material point of view have started to go down."}, {"start": 1914, "end": 1927, "text": "And this is part of what Anders was also mentioning, which is visible to some extent in the crude profitability of the industrial equipment in the third quarter, as it was also slightly in the second quarter."}]}, {"speakerId": "S2", "sentences": [{"start": 1929, "end": 1934, "text": "So to be clear, we are not taking orders that are being diluted from where we are."}, {"start": 1934, "end": 1937, "text": "We are rather taking orders that are accretive from where we are."}, {"start": 1937, "end": 1940, "text": "But the gap is narrowing, right?"}]}, {"speakerId": "S8", "sentences": [{"start": 1942, "end": 1942, "text": "Okay."}, {"start": 1942, "end": 1943, "text": "That's clear."}, {"start": 1944, "end": 1946, "text": "Then, secondly, on the margin drivers."}, {"start": 1946, "end": 1950, "text": "So, it seems clear that pricing was a big driver."}, {"start": 1950, "end": 1958, "text": "But you also mentioned strategy execution, which I kind of understand is related to all the efficiency improvements on the industrial side."}, {"start": 1958, "end": 1968, "text": "So, do you have a number for what were the other drivers besides pricing in Q3?"}, {"start": 1968, "end": 1973, "text": "And how much do you still have left from all the actions that you are targeting to do?"}]}, {"speakerId": "S2", "sentences": [{"start": 1974, "end": 1975, "text": "Yeah."}, {"start": 1975, "end": 1986, "text": "In Q3, following Q3 2022, we discussed the optimization program that was launched, focusing on the industrial side."}, {"start": 1986, "end": 1990, "text": "Industrial equipment and also the service side, to some extent."}, {"start": 1990, "end": 1994, "text": "The main benefits are within the industrial equipment side."}, {"start": 1994, "end": 2003, "text": "And here we said by the end of 2025, we will have 40 to 50 million EBITDA improvement in a running 12 month perspective."}, {"start": 2003, "end": 2009, "text": "And we said that that will come with one-time costs of 40 to €50 million as well."}, {"start": 2010, "end": 2018, "text": "And here we had in the first year, 2022, we had 1.5 million, roughly positive effect in 2023."}, {"start": 2018, "end": 2021, "text": "That figure was €11 million."}, {"start": 2021, "end": 2026, "text": "And we are now forecasting for this year an additional €11 million."}, {"start": 2026, "end": 2029, "text": "And consider that this is now the industrial equipment side."}, {"start": 2029, "end": 2031, "text": "So this is not the full package."}, {"start": 2031, "end": 2038, "text": "There are also a couple of million within industrial services, but this is just the optimization program."}, {"start": 2038, "end": 2045, "text": "Then we have a lot of other strategic initiatives that we are implementing, which are not included in this initiative."}, {"start": 2045, "end": 2056, "text": "For example, everything we do with imports when it comes to product management excellence, when it comes to quality, when it comes to lead times, efficiency, and logistics, etc."}, {"start": 2056, "end": 2056, "text": "."}, {"start": 2056, "end": 2061, "text": "So there are lots of other initiatives, and that's important.<br /><br />"}, {"start": 2061, "end": 2064, "text": "Maybe to mention, it's not only this program that we are doing.<br /><br />"}]}, {"speakerId": "S3", "sentences": [{"start": 2065, "end": 2077, "text": "And if the question was whether in the third quarter we particularly received a lot of benefit as a result of the optimization program in industrial equipment in comparison to other quarters?"}, {"start": 2077, "end": 2079, "text": "So, that is not actually the case?"}, {"start": 2079, "end": 2088, "text": "So the third quarter benefit from that, in a year-on-year manner, was probably a little bit less than what the average would be for '24."}, {"start": 2088, "end": 2094, "text": "So that was not a bigger explaining factor than in any other quarter."}, {"start": 2094, "end": 2099, "text": "Let's put it this way: perhaps it's a marginally smaller one due to varying timings."}, {"start": 2099, "end": 2107, "text": "But the bottom line is, like Anders said, this €11 million, we still believe that we will be able to see for the full 24."}]}, {"speakerId": "S8", "sentences": [{"start": 2109, "end": 2110, "text": "Okay."}, {"start": 2110, "end": 2111, "text": "Thank you."}, {"start": 2111, "end": 2117, "text": "Um, then, thirdly, to the demand discussion."}, {"start": 2117, "end": 2127, "text": "You mention a challenging environment and reference PMIs, yet you report still being able to secure good orders."}, {"start": 2127, "end": 2130, "text": "Why do you think this is the case?"}, {"start": 2130, "end": 2142, "text": "You indicated that you might be gaining some market share, but what are the overall drivers? Which segments are supporting your strong order intake in this environment?"}, {"start": 2142, "end": 2145, "text": "And why do you think this is so good for you?"}]}, {"speakerId": "S2", "sentences": [{"start": 2146, "end": 2149, "text": "Yeah, that is an excellent question."}, {"start": 2149, "end": 2159, "text": "Um, I think there are a lot of initiatives that we have taken to improve our competitiveness, improve our lead times to customers, etc."}, {"start": 2159, "end": 2162, "text": "And that, of course, becomes more attractive to customers."}, {"start": 2162, "end": 2167, "text": "So that is sort of how we manage to take some market share."}, {"start": 2167, "end": 2170, "text": "I think there are other demand drivers that work in our favor."}, {"start": 2171, "end": 2173, "text": "It's digitalization and automation."}, {"start": 2173, "end": 2180, "text": "We are the leaders within this field, I would say, both in the industrial and ports sectors."}, {"start": 2180, "end": 2185, "text": "Other things that might work in our favor to some extent are reshoring."}, {"start": 2186, "end": 2197, "text": "When you move a factory, you are not bringing old cranes with you; instead, you are investing in new facilities and new cranes."}, {"start": 2197, "end": 2203, "text": "And you are also then creating a demand for port equipment from within new shipping lanes."}, {"start": 2203, "end": 2206, "text": "So that's sort of above GDP growth."}, {"start": 2206, "end": 2212, "text": "So I think there are quite a lot of these underlying demand drivers that work in our favor."}, {"start": 2212, "end": 2222, "text": "Plus, we can also see that the one market that has remained very strong is the North American market, where we have a relatively high market share."}, {"start": 2222, "end": 2227, "text": "So that is, of course, also something that has benefited us to some extent."}]}, {"speakerId": "S8", "sentences": [{"start": 2229, "end": 2230, "text": "Okay."}, {"start": 2230, "end": 2231, "text": "Thank you."}]}, {"speakerId": "S1", "sentences": [{"start": 2231, "end": 2232, "text": "Thank you."}, {"start": 2232, "end": 2234, "text": "Let's now take the next question, please."}]}, {"speakerId": "S4", "sentences": [{"start": 2238, "end": 2242, "text": "The next question comes from Mikhail from Doppl."}, {"start": 2242, "end": 2243, "text": "Please go ahead."}]}, {"speakerId": "S8", "sentences": [{"start": 2248, "end": 2249, "text": "Thank you."}, {"start": 2250, "end": 2251, "text": "A couple of questions."}, {"start": 2251, "end": 2254, "text": "So firstly, on the working capital."}, {"start": 2254, "end": 2258, "text": "So you mentioned, and we can obviously see in the numbers, that there was a bit of a release."}]}, {"speakerId": "S6", "sentences": [{"start": 2258, "end": 2259, "text": "Release."}]}, {"speakerId": "S3", "sentences": [{"start": 2259, "end": 2261, "text": "There in the third quarter."}]}, {"speakerId": "S7", "sentences": [{"start": 2261, "end": 2264, "text": "Quarter driven by inventories, which obviously is good."}, {"start": 2264, "end": 2268, "text": "How do you think about that going into the fourth quarter?"}, {"start": 2268, "end": 2272, "text": "Should we assume some further release there?"}, {"start": 2272, "end": 2277, "text": "And also, looking into 2025, what are your thoughts around that?"}]}, {"speakerId": "S3", "sentences": [{"start": 2278, "end": 2292, "text": "We typically do not provide this kind of quarterly forecast for net working capital because it is merely a measurement of one balance sheet day, in this case, at the end of the year."}, {"start": 2292, "end": 2308, "text": "What we can of course note is that currently, with this 9.6% of rolling 12-month sales, we are nicely within our target territory, which is to be able to be below 12% of rolling 12-month sales."}, {"start": 2309, "end": 2315, "text": "And of course, we want to continuously improve the situation and the terms of the net working capital."}, {"start": 2315, "end": 2327, "text": "But I think that this, being below 12% on an over-the-cycle basis, continues to be a good target for us, so we are aiming to stay below that."}, {"start": 2327, "end": 2331, "text": "And of course, the lower we can be on a continuous basis, the better it is."}, {"start": 2331, "end": 2334, "text": "This time I think you are correct in your comment."}, {"start": 2334, "end": 2341, "text": "This was not primarily driven by advanced payments as it usually is, so the big shifts come from advanced payments."}, {"start": 2341, "end": 2345, "text": "In this case, it was more from the inventories, which is actually even better."}]}, {"speakerId": "S7", "sentences": [{"start": 2348, "end": 2348, "text": "Right."}, {"start": 2348, "end": 2350, "text": "Okay, now that makes sense."}, {"start": 2351, "end": 2357, "text": "And then a question on scale, coming back to the earlier question about the lift trucks."}, {"start": 2358, "end": 2365, "text": "I'm just wondering if you could provide a bit more detail on what you see there, perhaps some comments."}, {"start": 2365, "end": 2373, "text": "You know, roughly speaking, how big of a share of your totality are the trucks that are currently moving at the distributors?"}, {"start": 2373, "end": 2381, "text": "Where are the distributor inventories now compared to normal levels, and when can we assume that to normalize?"}, {"start": 2381, "end": 2384, "text": "Any additional color there would be appreciated."}]}, {"speakerId": "S2", "sentences": [{"start": 2387, "end": 2397, "text": "What we can say is that the business is back to normalized lead times, which is roughly one quarter."}, {"start": 2397, "end": 2403, "text": "Maybe we have two quarters still on some of our products, so our own operations have normalized."}, {"start": 2403, "end": 2407, "text": "We can also see that our distributors' inventories are decreasing."}, {"start": 2407, "end": 2416, "text": "And we are not going into where those are and how much those are, but it's going down to a much more normalized level."}, {"start": 2416, "end": 2424, "text": "But also given the weakening macro indicators and quicker lead times."}, {"start": 2424, "end": 2431, "text": "And even some products are stock items nowadays, which they weren't 18 months ago."}, {"start": 2431, "end": 2439, "text": "So then ordering for floor plans, distributors try to hold back because they don't need to."}, {"start": 2439, "end": 2441, "text": "They can get equipment quicker."}, {"start": 2441, "end": 2447, "text": "So I would say it's much more normalized in the whole chain now than it was."}, {"start": 2447, "end": 2459, "text": "That doesn't mean that we believe that we will experience a large upswing in the next couple of months, or even in the following quarters, but we do believe that it has definitely stabilized."}, {"start": 2459, "end": 2466, "text": "And we also think that this is shown in our year-on-year and sequential order intake figures."}, {"start": 2466, "end": 2468, "text": "So we are quite confident with that."}, {"start": 2469, "end": 2477, "text": "And then regarding the size of the business, we are not disclosing the size of the different business units."}]}, {"speakerId": "S7", "sentences": [{"start": 2479, "end": 2480, "text": "Okay."}, {"start": 2480, "end": 2481, "text": "No, that's fair."}, {"start": 2481, "end": 2490, "text": "And then a final one, I think you mentioned that there was a big order booked in the Port Solutions order intake in the quarter.<br /><br />"}, {"start": 2490, "end": 2493, "text": "If you could just repeat that."}, {"start": 2493, "end": 2495, "text": "What it was, what the size was."}, {"start": 2495, "end": 2496, "text": "I kind of missed it."}, {"start": 2496, "end": 2499, "text": "That, and also as a follow-up to that question."}, {"start": 2500, "end": 2507, "text": "I think you have previously mentioned seeing better activity in the pipeline for this larger project."}, {"start": 2507, "end": 2512, "text": "Do you see opportunities to book some more of these into Q4 as well?"}, {"start": 2512, "end": 2517, "text": "Or how does the backlog or the pipeline look like?"}]}, {"speakerId": "S2", "sentences": [{"start": 2518, "end": 2519, "text": "Yeah."}, {"start": 2519, "end": 2524, "text": "So if we start with the order, it was an order for automated guided vehicles."}, {"start": 2525, "end": 2529, "text": "This is one of our automated products."}, {"start": 2529, "end": 2532, "text": "Then, concerning imports, which we aim to increase the share of."}, {"start": 2532, "end": 2534, "text": "So very positive."}, {"start": 2535, "end": 2540, "text": "And like Teo said, we categorize large orders sort of 70, 80 million plus."}, {"start": 2540, "end": 2543, "text": "And this qualifies in that range."}, {"start": 2543, "end": 2551, "text": "We can also see that the other products in ports are doing quite well."}, {"start": 2551, "end": 2560, "text": "As Theo mentioned, year on year, Mobile Harbor Cranes are up, Straddle Carriers are up, and services are up."}, {"start": 2560, "end": 2562, "text": "So other products are also doing well."}, {"start": 2562, "end": 2564, "text": "Lift trucks are flat."}, {"start": 2564, "end": 2573, "text": "So where we see that we had a little bit lower, was on other projects with imports that materialized into order intake in the third quarter."}, {"start": 2573, "end": 2582, "text": "But as I said, we have a very strong sales funnel with imports, and several of these projects are under discussion."}, {"start": 2582, "end": 2595, "text": "But as I mentioned, it's very difficult to forecast when those projects will materialize into decision-making at the customer's end."}, {"start": 2595, "end": 2603, "text": "The situation in the sales funnel is strong compared to one year ago, for example."}, {"start": 2603, "end": 2606, "text": "So, the business is doing well."}, {"start": 2606, "end": 2611, "text": "And you can see that in the global container throughput index, which is up 8% year on year."}, {"start": 2611, "end": 2616, "text": "So it's a well-performing business segment."}]}, {"speakerId": "S8", "sentences": [{"start": 2617, "end": 2618, "text": "Okay."}]}, {"speakerId": "S7", "sentences": [{"start": 2618, "end": 2619, "text": "That's clear."}, {"start": 2619, "end": 2619, "text": "Thank you very much."}]}, {"speakerId": "S2", "sentences": [{"start": 2619, "end": 2620, "text": "Thank you."}]}, {"speakerId": "S1", "sentences": [{"start": 2620, "end": 2621, "text": "Thank you."}, {"start": 2621, "end": 2621, "text": "Thank you, Mikhail."}, {"start": 2622, "end": 2625, "text": "Let's now take a couple of questions from the chat here."}, {"start": 2625, "end": 2626, "text": "Here in between."}, {"start": 2626, "end": 2630, "text": "So the first one is related to our financial guidance."}, {"start": 2631, "end": 2639, "text": "In 2022, your guidance was that sales would stay the same or grow, and the sales grew by 5%."}, {"start": 2639, "end": 2645, "text": "So is the correct interpretation that your sales will grow over 5% because you announced a positive profit?"}, {"start": 2645, "end": 2646, "text": "Warning."}]}, {"speakerId": "S2", "sentences": [{"start": 2649, "end": 2650, "text": "Good question."}, {"start": 2650, "end": 2651, "text": "Volunteers."}]}, {"speakerId": "S3", "sentences": [{"start": 2651, "end": 2657, "text": "You know, we are not specifying the percentage as such."}, {"start": 2658, "end": 2661, "text": "And of course, we have our internal guidelines on how we are doing this.<br /><br />"}, {"start": 2661, "end": 2665, "text": "Unfortunately, we are not specifying these externally."}, {"start": 2665, "end": 2674, "text": "There is no specific individual percentage that I can provide as a threshold for improvement or, let's say, to remain flat."}]}, {"speakerId": "S1", "sentences": [{"start": 2676, "end": 2682, "text": "And then the next question would be related to the ship-to-shore crane production in the US."}, {"start": 2682, "end": 2689, "text": "So could you update us on the progress of setting up SDS production in the US?"}]}, {"speakerId": "S2", "sentences": [{"start": 2690, "end": 2690, "text": "Yes."}, {"start": 2690, "end": 2700, "text": "We have internally and recently manufactured large port cranes in the US."}, {"start": 2701, "end": 2703, "text": "We haven't manufactured ship-to-shore cranes, though."}, {"start": 2703, "end": 2716, "text": "And now it was announced, I think in the third quarter, that we are setting up this network of partners to be able to build ship-to-shore cranes within the US."}, {"start": 2716, "end": 2718, "text": "So we are continuing on that."}, {"start": 2718, "end": 2728, "text": "We haven't built any yet and we haven't received any orders yet for these BABA qualified cranes, which will then be built in the US."}, {"start": 2728, "end": 2743, "text": "Because one should understand that even if we set this up, it's much more expensive to build a ship-to-shore crane in the US than in other parts of the world, where labor and steel are much cheaper, so we don't have any orders yet."}, {"start": 2743, "end": 2751, "text": "There are projects where we discuss this with customers, but it has not come to any decision making when it comes to funding, etc."}, {"start": 2752, "end": 2763, "text": "With ship to shore cranes, but we are continuing to enable us to be able to qualify, or ensure that our customers qualify for BABA funding as needed in the future."}, {"start": 2763, "end": 2778, "text": "And it's our duty, I think, to adapt to demands in different parts of the world so that we can enable doing business with our customers there, and we are continuing to progress on setting up that network."}]}, {"speakerId": "S1", "sentences": [{"start": 2779, "end": 2780, "text": "Thank you."}, {"start": 2780, "end": 2783, "text": "I think that we can now continue to take the questions from the line, please.<br /><br />"}, {"start": 2783, "end": 2787, "text": "And as we start to run out of time, bit by bit."}, {"start": 2787, "end": 2793, "text": "So, I kindly ask you to restrict your questions to only two, please."}, {"start": 2793, "end": 2795, "text": "So let's open the line again, please."}]}, {"speakerId": "S4", "sentences": [{"start": 2797, "end": 2801, "text": "The next question comes from Tommy Railo from NTB."}, {"start": 2802, "end": 2803, "text": "Please go ahead."}]}, {"speakerId": "S7", "sentences": [{"start": 2809, "end": 2811, "text": "Hi, it's Tommy from Danby."}, {"start": 2811, "end": 2814, "text": "A follow-up to the ports order discussion."}, {"start": 2815, "end": 2824, "text": "If the third quarter included large amounts, let's say 80 million, you were actually not too far off from the trough."}, {"start": 2824, "end": 2830, "text": "Third quarter and also the first quarter 2024 order levels."}, {"start": 2830, "end": 2837, "text": "And you mentioned that decision-making is getting closer in connection with the second quarter numbers."}, {"start": 2838, "end": 2845, "text": "Can you repeat the commentary indicating that decision-making is getting closer?"}, {"start": 2845, "end": 2847, "text": "Or was this the only one that you had in mind."}]}, {"speakerId": "S2", "sentences": [{"start": 2849, "end": 2859, "text": "So like I mentioned, I think a lot of our products actually had a positive order intake in the third quarter."}, {"start": 2860, "end": 2866, "text": "We mentioned Mobile Harbor Cranes, Straddle Carriers, and automated guided vehicles."}, {"start": 2866, "end": 2869, "text": "Even software had positive order intakes year-on-year."}, {"start": 2869, "end": 2883, "text": "So where we were lacking order intake was on the larger project cranes or larger port cranes like RTGs, RMGs, ASCs, and STS."}, {"start": 2883, "end": 2886, "text": "So we didn't get any of those."}, {"start": 2886, "end": 2895, "text": "We had some projects, but not as many projects materialized in the third quarter as we might have hoped or planned."}, {"start": 2895, "end": 2905, "text": "However, the underlying performance of the more day-to-day business, the bread and butter business, is performing very well.<br /><br />"}, {"start": 2905, "end": 2910, "text": "Then these projects materialize as per the customers' processes."}, {"start": 2910, "end": 2918, "text": "So it's very difficult to judge one quarter when it comes to any port order intake."}, {"start": 2918, "end": 2924, "text": "And that's what we have previously stated as well, because these projects greatly impact whether they materialize or not."}, {"start": 2925, "end": 2937, "text": "And then, when we talk about the sales funnel, like I said, we have several projects that we are in close communication with customers about."}, {"start": 2937, "end": 2945, "text": "But when those will materialize into actual decision-making and then a potential order intake is very difficult to say."}, {"start": 2945, "end": 2958, "text": "So what we say now is that we don't see any material difference in the demand within the next couple of months for us, so that's what we say."}]}, {"speakerId": "S1", "sentences": [{"start": 2960, "end": 2965, "text": "Maybe one comment to add here is that the ports business is primarily project-based."}, {"start": 2965, "end": 2971, "text": "Even if we look at Q3 last year, we booked projects then too."}, {"start": 2971, "end": 2981, "text": "So, they are of different sizes, but one can't really, I mean, it's the normal nature of the business that sometimes you have larger projects, and sometimes you have only small ones but a lot of them."}, {"start": 2981, "end": 2981, "text": "So."}, {"start": 2981, "end": 2984, "text": "So that's the nature and dynamics of the business."}]}, {"speakerId": "S7", "sentences": [{"start": 2988, "end": 2996, "text": "Uh, service annual agreement base showed a 4.7% growth on a comparable currency basis."}, {"start": 2996, "end": 3001, "text": "Uh, can you discuss whether that was mainly driven by a price war?"}, {"start": 3001, "end": 3007, "text": "Was the actual base growing as well?"}]}, {"speakerId": "S2", "sentences": [{"start": 3009, "end": 3012, "text": "No, there's also volume growth in that."}, {"start": 3012, "end": 3022, "text": "The service agreement within the industrial side had both price growth and volume growth."}, {"start": 3022, "end": 3023, "text": "Of course."}, {"start": 3023, "end": 3024, "text": "When you see it."}, {"start": 3024, "end": 3024, "text": "Thank you."}]}, {"speakerId": "S1", "sentences": [{"start": 3026, "end": 3027, "text": "Okay."}, {"start": 3027, "end": 3029, "text": "So let's now take the next question from the line, please."}]}, {"speakerId": "S4", "sentences": [{"start": 3035, "end": 3038, "text": "The next question comes from Tom Skogman from Carnegie."}, {"start": 3039, "end": 3040, "text": "Please go ahead."}]}, {"speakerId": "S7", "sentences": [{"start": 3042, "end": 3042, "text": "Yes."}, {"start": 3042, "end": 3044, "text": "Hi, Kiira."}, {"start": 3044, "end": 3044, "text": "Uh."}]}, {"speakerId": "S2", "sentences": [{"start": 3045, "end": 3048, "text": "During the Capital Markets Day, you mentioned that you."}]}, {"speakerId": "S7", "sentences": [{"start": 3048, "end": 3050, "text": "Don't believe it will."}]}, {"speakerId": "S2", "sentences": [{"start": 3050, "end": 3051, "text": "Be sustainable to have."}]}, {"speakerId": "S7", "sentences": [{"start": 3051, "end": 3052, "text": "A margin."}]}, {"speakerId": "S8", "sentences": [{"start": 3052, "end": 3053, "text": "Above."}]}, {"speakerId": "S2", "sentences": [{"start": 3053, "end": 3054, "text": "15%."}]}, {"speakerId": "S8", "sentences": [{"start": 3054, "end": 3055, "text": "But you were pretty young to Konecranes Abp."}]}, {"speakerId": "S2", "sentences": [{"start": 3055, "end": 3057, "text": "But you were pretty new to Konecranes Abp."}]}, {"speakerId": "S8", "sentences": [{"start": 3057, "end": 3057, "text": "And."}]}, {"speakerId": "S2", "sentences": [{"start": 3058, "end": 3059, "text": "Performance has."}]}, {"speakerId": "S8", "sentences": [{"start": 3059, "end": 3060, "text": "Performance has been impressive."}]}, {"speakerId": "S2", "sentences": [{"start": 3060, "end": 3065, "text": "So I'm not trying to ask for new financial targets, but just this kind of."}]}, {"speakerId": "S8", "sentences": [{"start": 3065, "end": 3067, "text": "General considerations."}, {"start": 3067, "end": 3072, "text": "I mean, what kind of margins are attainable in these different businesses where you operate?"}]}, {"speakerId": "S1", "sentences": [{"start": 3073, "end": 3077, "text": "Tom, I hope you have now saved the day for the London Capital Markets Day.<br /><br />"}, {"start": 3077, "end": 3080, "text": "I think we will take this discussion there then.<br /><br />"}, {"start": 3080, "end": 3084, "text": "But maybe if the gentleman wants to give a quick comment now."}]}, {"speakerId": "S2", "sentences": [{"start": 3084, "end": 3095, "text": "Yeah, I think what we said in the CMD is that our first target is to achieve this by the latest in 2027, with the ambition to do it much quicker."}, {"start": 3095, "end": 3100, "text": "And so, hopefully, we are on a good path to be able to complete that."}, {"start": 3100, "end": 3108, "text": "And then, of course, we would evaluate and see if we should come back with updated targets."}, {"start": 3108, "end": 3115, "text": "And one of those occasions would of course be at the CMD next year to discuss that further."}]}, {"speakerId": "S7", "sentences": [{"start": 3116, "end": 3117, "text": "You said."}]}, {"speakerId": "S8", "sentences": [{"start": 3117, "end": 3120, "text": "You said that you don't believe it would be sustainable to have higher margins."}]}, {"speakerId": "S2", "sentences": [{"start": 3120, "end": 3121, "text": "Margins."}]}, {"speakerId": "S8", "sentences": [{"start": 3121, "end": 3123, "text": "What was the reason for that comment then?"}]}, {"speakerId": "S2", "sentences": [{"start": 3123, "end": 3125, "text": "No, I said it like this."}, {"start": 3125, "end": 3132, "text": "I said, if we are above the target, it would probably not be sustainable over the cycle."}, {"start": 3132, "end": 3139, "text": "And if we are below 12%, we need to take measures to make sure that we are within the range again."}, {"start": 3139, "end": 3143, "text": "So it was a comment indicating that it would be sustainable over the cycle."}]}, {"speakerId": "S8", "sentences": [{"start": 3145, "end": 3145, "text": "Okay."}, {"start": 3145, "end": 3145, "text": "Thank you."}, {"start": 3145, "end": 3146, "text": "And then."}]}, {"speakerId": "S7", "sentences": [{"start": 3147, "end": 3147, "text": "Can."}]}, {"speakerId": "S8", "sentences": [{"start": 3147, "end": 3162, "text": "Can you help us understand the situation with the unions in the US regarding port automation and the potential impact on your orders, given that you have postponed some discussions with unions to January?"}, {"start": 3162, "end": 3168, "text": ", and has that already impacted your orders, given that customers are not allowed to automate as they hoped?"}]}, {"speakerId": "S2", "sentences": [{"start": 3169, "end": 3169, "text": "Yeah."}, {"start": 3169, "end": 3179, "text": "So first, I think the strike, which lasted three days, had a very limited effect on our business."}, {"start": 3179, "end": 3187, "text": "But of course, many of our port customers in the US are waiting for this agreement to be finalized."}, {"start": 3187, "end": 3190, "text": "And I think it is planned for the 15th of January."}, {"start": 3190, "end": 3190, "text": "Right."}, {"start": 3191, "end": 3197, "text": "So after that, they will know more about how the future will look."}, {"start": 3197, "end": 3198, "text": "Within the next couple of years."}, {"start": 3198, "end": 3203, "text": "But of course, the trend going forward will be to continue automating."}, {"start": 3204, "end": 3219, "text": "The only question is in what areas the union is specifically holding onto mobile transportation, or whether it involves the larger port cranes as well."}, {"start": 3219, "end": 3219, "text": "?"}, {"start": 3219, "end": 3229, "text": "So I think those discussions will hopefully be cleared out before the 15th of January between the unions and the employers."}, {"start": 3229, "end": 3236, "text": "Going towards digitalization and automation over time is a given."}, {"start": 3236, "end": 3238, "text": "That will happen everywhere, basically."}]}, {"speakerId": "S8", "sentences": [{"start": 3240, "end": 3244, "text": "At least this round did not result in postponed orders for you."}]}, {"speakerId": "S2", "sentences": [{"start": 3245, "end": 3250, "text": "I don't think it postpones orders in any significant manner."}, {"start": 3250, "end": 3253, "text": "There might then be delays."}, {"start": 3253, "end": 3257, "text": "Would it be one quarter for decision-making until everything is cleared?"}, {"start": 3257, "end": 3262, "text": "But in general, there is not a big impact due to postponements."}, {"start": 3262, "end": 3263, "text": "I wouldn't say that."}]}, {"speakerId": "S1", "sentences": [{"start": 3264, "end": 3265, "text": "Thank you, Tom."}, {"start": 3265, "end": 3265, "text": "Okay."}, {"start": 3265, "end": 3266, "text": "Thank you."}, {"start": 3266, "end": 3269, "text": "Let's now take the last question from the line, please."}]}, {"speakerId": "S4", "sentences": [{"start": 3275, "end": 3278, "text": "The next question comes from Erkki Vessela from India."}, {"start": 3279, "end": 3280, "text": "Please go ahead."}]}, {"speakerId": "S9", "sentences": [{"start": 3283, "end": 3283, "text": "Hi."}, {"start": 3283, "end": 3288, "text": "Kiira Fröberg from India was talking about the salaries."}, {"start": 3288, "end": 3292, "text": "Where do you stand in terms of salary negotiations in the most important regions?"}, {"start": 3292, "end": 3296, "text": "I mean, what should we be modeling in as wage inflation in 2025?"}, {"start": 3297, "end": 3302, "text": "It looks to have been close to 7% in the last 12 months if my calculations are in the ballpark."}, {"start": 3302, "end": 3310, "text": "Additionally, how does the sales per person versus cost per person delta look going forward?"}]}, {"speakerId": "S10", "sentences": [{"start": 3313, "end": 3314, "text": "When we take a."}]}, {"speakerId": "S3", "sentences": [{"start": 3314, "end": 3319, "text": "Look at the current situation and, let's say, year to date 2024, for example."}, {"start": 3319, "end": 3325, "text": "In terms of wage and salary inflation, we are currently around 5%."}, {"start": 3325, "end": 3330, "text": "And this level is not materially different from what it was a year ago."}, {"start": 3330, "end": 3335, "text": "So actually, the wage and salary inflation has continued at this, say, 4 to 5% level."}, {"start": 3335, "end": 3338, "text": "And now we are probably closer to 5% on a global level."}, {"start": 3338, "end": 3344, "text": "The inflation rates are going down."}, {"start": 3344, "end": 3349, "text": "Negotiations are either starting or already ongoing."}, {"start": 3349, "end": 3367, "text": "And as you probably know, there are all kinds of different approaches in different countries regarding this one, but I guess it would be fair to assume that when we look at next year as a whole, we might be a little bit on the lower level as a result of the lower inflation."}, {"start": 3367, "end": 3370, "text": "But that, of course, is something that."}]}, {"speakerId": "S10", "sentences": [{"start": 3370, "end": 3371, "text": "Time will show."}]}, {"speakerId": "S3", "sentences": [{"start": 3371, "end": 3371, "text": "Show."}, {"start": 3371, "end": 3382, "text": "Then over time, if the next question is about the percentage we are using in our annual plan for next year, we would not necessarily want to delve into such detailed specifics."}]}, {"speakerId": "S9", "sentences": [{"start": 3383, "end": 3390, "text": "But if you say a little bit lower, so something between 3 and 4% for 2025 would be kind of."}]}, {"speakerId": "S3", "sentences": [{"start": 3390, "end": 3398, "text": "Let's say it might be wiser to wait until we know the final outcome of the negotiations."}, {"start": 3398, "end": 3404, "text": "In many countries, of course, these are happening towards the very end of the year or then early next year."}]}, {"speakerId": "S9", "sentences": [{"start": 3406, "end": 3406, "text": "Okay."}, {"start": 3406, "end": 3407, "text": "Thank you so much."}]}, {"speakerId": "S1", "sentences": [{"start": 3408, "end": 3409, "text": "Thank you.<br /><br />"}, {"start": 3409, "end": 3411, "text": "Hey, I think that we are now starting to run out of time."}, {"start": 3411, "end": 3416, "text": "So, let's conclude our Q3 earnings conference."}, {"start": 3416, "end": 3424, "text": "I thank you all for your active participation and wish you, of course, a nice Friday and a great weekend."}, {"start": 3424, "end": 3425, "text": "Thank you."}]}, {"speakerId": "S2", "sentences": [{"start": 3426, "end": 3427, "text": "Thank you, thank you."}]}, {"speakerId": "S8", "sentences": [{"start": 3427, "end": 3427, "text": "Bye bye."}]}], "speakers": [{"speakerId": "S1", "name": "Kiira Fröberg"}, {"speakerId": "S2", "name": "Anders Svensson"}, {"speakerId": "S3", "name": "Teo Ottola"}, {"speakerId": "S4", "name": "Operator"}, {"speakerId": "S5", "name": "Unknown 1"}, {"speakerId": "S6", "name": "Antti Kanninen"}, {"speakerId": "S7", "name": "Unknown 2"}, {"speakerId": "S8", "name": "Unknown 3"}, {"speakerId": "S9", "name": "Unknown 4"}, {"speakerId": "S10", "name": "Unknown 5"}], "id": "671b68311bd8613ce80382f7", "createdAt": 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