Boreo (Helsinki:BOREO) Q1 2025 Earnings Call

0:00 Good morning and welcome to Boreos Q125 trading update. My name is Kari and together with our CFO Jesse we will discuss in the next 30 to 45 minutes the events of Q125 and outlook going forward. um agenda is as quite as normal as usual i will discuss first the highlights a bit of longer term trends of of of the company yes we'll then dive dive deeper into uh business performance uh some of further financials um after that then we will recap or finish off with a couple of points on last year in the company. As normal, please use the Q&A function if you want to ask any questions and we will then address those at the end of the session.

0:59 Q1 highlights, the start of the year has been very close to and in line with our own expectations. We are pleased with the fact that now two consecutive quarters we've been able to record organic growth during during the first quarter 4% organic sales growth and a strong gross margin of 32.2% both then contributing to the profitability uplift we saw. So result Q1 quarter on quarter improving from 0.6 million euro last year now to 1.3 million euro.

1:46 um uh looking at uh the the markets and developments during the first quarter um we saw an increase and improvement in our order books um so compared with the end of 24 our order books crew providing a decent outlook now for for q2 as we all know there is uncertainty in the world in with regards to geopolitics and trade discussions, tariffs. The uncertainty there for sure is for the rest of the year, but so far the impacts of that or the signals, direct signals to our operations have been limited.

2:31 With regards to our order book, it's also good to note that now in Q2, our Swedish Bootsmeister Business PM Nordic has also recorded and managed to finalize a bunch of sizable orders for concrete mounting pumps for this year and the next year. So even though the construction sector continues to be in a tough situation overall, our Swedish Bootsmeister master business shows strong performance and strong outlook going forward. We are an acquisitive firm. Latest acquisitions, the last acquisition we've completed in mid 23.

3:17 Now we were happy and pleased to announce during the quarter one acquisition of Spets Electroly a welding technology distributor in estonia on the last day of the quarter and then on the first day of q2 a bit more sizable acquisition uh from our long-standing long-standing partner rs group acquiring the Elfa Distrilec sales activities in Finland and the Baltics. So we do expect the special electronic acquisition to close on the second quarter of this year and then the Elfa Distrilec acquisition in the third quarter of the year. Looking at where we are, we are still not where we think that the portfolio and the group overall can be in terms of results, but as said, happy to see that we've bottomed in our profit generation and expect, I'm seeing as a result of the organic sales growth primarily, but now going forward expect to expect to also be able to deliver quite decent results going forward.

4:37 With regards to our strategic targets, now you see too much red on the slide and hopefully in the coming quarters and years to come, we are moving and trending more closer to the targets we've set. With regards to our leverage, now you see a bit of a peak or an upward tick in our leverage mainly as a result of the payback of our existing or old hybrid bond raised in 24, so roughly 4 million euro and in addition to that hybrid bond interest and senior debt interest payments in Q1. Looking at a bit more in detail the performance.

5:26 Now you can see from the left hand side on the slide that the sales trend has changed. So now we last year we landed at 134 million euro. Now we on a rolling 12 month basis are at 135 million euro. primarily driven by the positive development of our electronics business area. So as we would typically see in a sort of economic cycles like this, the electronics businesses of ours do react first as opposed to our technical trade businesses. So electronics has already been performing quite strongly. The second half of 24 and now recorded a good quarter for the first quarter of 2025 as well. With regards to our technical trade businesses, now sort of bottomed in terms of our sales in the last couple of quarters going forward, expect an uptick on that side as well, then contributing overall to the development of group figures.

6:45 Looking at our gross margins and profits, first of all, I'm pleased to see that if you look at the last three to four years, we've been able to improve the quality of our revenues, meaning improving the gross margin profile quite significantly. 21-25% of gross margin. Now we are looking at somewhat above 30% gross margins. This is a result of course of acquisitions we've completed during the last years. Quite a lot of organic or quite a lot of development actions in the existing portfolio as well. So stop and accelerate decisions we've done in many of our companies.

7:32 Going forward, we do expect that the cross-margin profile somewhat sort of dilutes due to the fact that there will be sizable machine deliveries that will come through in the coming quarters, but definitely we do expect to remain on a much higher level compared to where we were, say, three, four years ago. The profitability improvement, again driven by the electronics business area, the sales growth compared to last year, the gross margin improvement of roughly 3% compared to last year's first quarter and then the cost actions implemented in 2024. Those are the sort of impacting factors behind the improvement now seen in the result of roughly 130% compared to the first quarter of 2024.

8:30 Cash flow, we communicated in our Q4 report that we some build up of working capital. And this happened not quite as much as we expected, group increased by roughly 1 million euro resulting in a cash conversion, operating cash conversion of 22 for the quarter. Now going forward we expect in the beginning of Q2 some build up of working cap to happen but as we're operating in these levels the roughly the 25 million euro level plus minus a few million euro is a is a reasonable number to look at.

9:24 We do expect some sales growth to happen and expect that we're able to improve the efficiency of working capital in relative terms going forward. So working capital overall is managed way better compared to a couple of years back in the company. Returns are on the rise again. Main contributor looking at our return on trade working capital metric. The electronics business area return on trade working gap steadily now upwards for a couple of quarters thanks to the significant uplift in operational EBIT. We've seen now two quarters in a row. so roughly an improvement of 1 million euro in bowling 12-month numbers. So electronics business area currently operates at a very good 57% return on trade working gap considering our targets for our companies being in the mid to long-term at around 50%.

10:32 The same goes with our technical trade business area, somewhat of an improvement now in the recent history, but there we have work to do and a work made primarily with the objective to improve profitability and through that then also to see an uptick in those return metrics. Finally, before handing over to Jesse for further review, overall, if we look at where we stand, as I said in the beginning, there is a way to go to where we think that the group can be considering the potential of our existing businesses. So there is a significant rebound potential and an earnings improvement potential once the market conditions improve overall we're happy with the fact that the company functions very well on looking at the couple on the long term on a long-term basis the foundation we've created the strong foundation for our decentralized operating model the solid returns with we've achieved so far for the acquisitions and the money deployed to acquisitions during the last years.

11:51 Those sort of give us conviction that we are on the right path. And then I think a strong and a big thank you goes to our organization on the short-term execution, so basically as we launched a year ago the back to growth plan which I will discuss a bit more in detail this has enabled us to manage in tough times rather well with regards to our profitability cash flow generation has been strong and now during the first quarter very happy to see that three projects the sale of the Tallinn real estate the acquisition of SpetsElectrodi and then the acquisition of operations from Ares came through. So basically we have reached majority of the targets we have set for the company in early 2024.

12:46 So the order books which I noted in the beginning that they have improved compared to the year end They of course provide us with the comfort level that we continue to operate in a decent way in the short run. Many of our companies do have a positive outlook going forward. As you all know, we don't have a crystal ball in our hands and what happens then in the second half of the quarter is a bit more uncertain. But as said, so far the signals from the portfolio companies We today are rather limited in terms of uncertainty in the world. With that said, I hand over to Jesse for further Q1 review and then I finish off with the back to lifespan topics.

13:38 Thank you. So, having a look at the quarterly figures, as Kari mentioned, Q1 saw growth in both sales and profits. This was our second consecutive sales growth quarter. keeping in mind that Q1 is typically a slower season for us. In terms of profitability, we managed to increase operational EBIT by 128% to 1.3 million euros. This was supported by increased or improved gross margins compared to last year, as well as cost actions taken during 2024. Having a look at the business areas on a closer level, electronics continued with a strong performance. They grew 10% on a quarter to quarter basis compared to last year with their operational EBIT for the quarter doubling to 1 million euros and the business area continuing their strong trend of improving rolling 12 month operational EBIT as well.

14:51 Due to this, the return on trade working capital also increased to 57%, which was also supported by successful working capital management during the quarter and the end of last year as well. Operationally, key factors behind the performance, we could lift up an excellent quarter by SSN. They have continued strong demand through their largest customer, having an investment program going. Milkon had strong sales exceeding last year's quarter. Milkon also successfully grew their order book as the defense industry demand continues. why Finland performed in line with expectations and had their profitability supported by cost measures taken in 2024 as well.

15:46 Then on the flip side, the Baltic countries, our Baltic companies were still impacted by the challenging operating environment. in the countries, but all in all, looking at electronics, the quarter was very positive and we see good signals from across the companies with the Baltics being a challenging exception at the moment in terms of operating environment. Moving on to technical trade, the business area managed a decent operating EBIT for the quarter reaching 900,000 euros, which was roughly 41% increase to last year's Q1. This was done in a challenging market environment where sales remained flat compared to last year's Q1 and profitability was improved through work done on the gross margins and then cost savings as well, which were implemented during last year.

16:50 In terms of return on trade working capital, the business area reached a slight increase from the end of the year, up to 25%, but on a rolling basis, EBIT levels and trade working capital returns are lagging from the rolling 12-month figures a year ago. Operationally, highlights for the quarter, Putschmeister both in Finland and Sweden had a solid quarter. And then, as Kari discussed in the earlier section, the Swedish Putschmeister business received sizable orders now in April, which will strengthen the order books considerably in Q2. On the other hand, F&B fell a bit short of expectations in Q1.

17:35 The company had some challenges related to production, but there we see a stable demand continuing and order books supporting the rest of the year. Machinery, similarly some delivery delays in their largest unit on the motor side, which impacted profitability, but otherwise a positive start to the year for the other machinery business units and outlook remains decent for machinery as a whole going forward. In terms of positive signals that we see in the companies, we have a lot of good things going on. Filterit had a strong start to the year. Both performing strongly in Q1, but then also growing order books significantly and receiving positive messages from the market.

18:25 JMATIC, solid quarter and significantly improved outlook from last year. ASKP performing up to expectations and also securing new routes at the end of Q1. which will lead to going forward for ASKP. So technical trade, a bit more mixed than electronics, but all in all going in a positive direction. But here we see a lot of work to be done to still improve profitability and reach more of the historical levels Then jumping over to our debt facilities and loan maturity structure.

19:14 To start off recapping a bit what Kari mentioned as well, in Q1 we redeemed our old remaining hybrid of roughly 4 million euros and then we had our first interest payment on the hybrid bond which was issued last year. Then we also announced two acquisitions, which will be mentioned more in detail soon after these slides. But one signed in end of Q1, one at the beginning of April. Both will close later this year, so in Q2 and Q3. This will or our plan to be financed through our acquisition loan facility. This is still not visible in the graphs you have on the page.

20:03 So this is showing end of Q1 figures. So at the end of Q1, we had a total facilities available to us of 69 million euros, of which we had 53.8 million euros in use. and on the maturity schedule for these we have 2.5 million euros of upcoming loan repayments in 2025 and 5 million in 2026 and then the remaining utilized facilities are maturing in 2027 in combination with our hybrid bond which has a reset date in March 2027. So at the moment we are comfortable with the debt maturity schedule and facilities which we have and then on top of this we have at the end of Q1 liquidity in terms of short-term facilities and cash of roughly 14.4 million euros which we are also comfortable with at the moment but we of course are keeping a close eye on both cash flows and order books going forward and any changes in the operating environment.

21:17 but all in all things looking stable and we feel good with the facilities. Then handing back over to Kari. Okay, thank you. Just a couple of words, finally, of what we've been basically working with the last year and then finishing off with some words on the two acquisitions. So basically on this slide with the headline, how to return back to growth, this is something we basically an operational short-term plan we put in place in early 2024.

22:03 And this plan overall is comprised of, of course, performance-related metrics, so primarily last year, as you've seen, reduction of fixed cost to adjust the cost level to the activity levels of 2024. Then secondly, a release of working capital, making sure the financial standing of the firm remains decent. We did close to meet our targets last year on these two fronts. Then also in the portfolio, we worked a lot for the long run as an example within in our largest business machinery we took a decision to spin off the business and break it to two with the sort of my mindset of smaller is more beautiful and better breaking the company to two parts making sure the sort of decentralized mindset, the local decision mindset goes through in those two companies, also making sure the strategy execution becomes more efficient and both of the firms I believe are on a good track now after six months of operation.

23:32 as independent companies to become better in the future. Similarly with, for example, our YEE electronic component trading business in Estonia, the closure of our B2C business. selling of the real estate, focusing on industrial B2B distribution. We have already seen positive impacts and do expect that in the long run this is the right thing to do. and so and in addition to that now we've said in the last year the quarters even though the financial standing is not over the firm it's not where we would ideally like it to be that we maintain the flexibility to do acquisitions in case basically two things Two things, two criteria are met. Number one, they take the firm overall into the right direction with the and the organic growth prospects that the new companies provide and then secondly not jeopardizing the financial standing of the firm and both of the acquisitions made I think you know meet these two criteria and that's why we took a decision to enter into these acquisitions So two good deals we hope to have made and believe we have made are

25:06 important steps for us as a firm to not only to show organic growth, but also growth through acquisition. Then, as we've discussed here now during the last 30 minutes, there are, even though we do see that generally still the demand environment in our portfolio um is not or where it where where it uh sort of uh in a normal situation would be there are some positive signs in milcon in our defense industry business filter it as i just mentioned puts myster business within construction space all also the same thing, and then Delphin Technologies as an example, a life sciences business in Kuopio.

25:52 So quite a good share of our companies do see a more positive short-term and of course mid- and long-term future ahead of them, and we do expect that these companies development of the group. And then finally, as we said, market conditions, Finnish economy still not performing too well. The forecast for this year have been now on a country level taken downwards. However, we do think that once the situation normalizes or becomes somewhat better, there's a big rebound potential in our early as well.

26:43 So continuing to be confident on the long-term trajectory of the firm, things will not happen overnight, but quarter by quarter, year by year, I think we're moving and trending in the right direction. Two final slides. First of all, the acquisition of the Alfa Distrolex sales activities in Finland and the Baltics. The company we acquired 15 million euro or the businesses we acquired in roughly with the 50 million euro sales, a bit more than a million euro EBIT contribution we expect from this acquisition from Q3 this year onwards.

27:30 I think it's an important transaction from a couple of point of view, a couple of viewpoints to us. Number one, our long-standing partner Ares Group from the UK is placing their trust on continuing to work with us and develop the four markets in a distributing partner model. So 30 years of joint cooperation continues and gets bigger following this acquisition. So very pleased of that and the fact that we're becoming also more important for RS and the markets become more sizable. We do expect that this is a sort of a partnership model which enables us to create a growth in the markets in the future.

28:20 Also very important internally the transaction from the point of view that basically we are breaking up the former YE business into two parts in four different countries at the same time. So as I sort of discussed earlier with the machinery breakup completed in 24 it sort of follows the same thinking. We take the existing artist business from YE, bring it to a new structure together with the acquired companies and the fact that the YE, existing YE businesses, component trading businesses become smaller, we do think they become stronger, more focused, more efficient in their sort of business plan and execution and provides opportunities for that business also or for those for businesses in four different countries as well.

29:18 So internally quite a big exercise creating new ERPs for the new business, establishing new for or new companies, bringing teams together and I believe we're creating for the YER continue to grow in the future and provide opportunities for our people as well. So I look forward to then sort of providing updates on how this venture starts to develop in the coming and the first months then after from operations and seeing how successfully we run the business in a new structure.

30:04 And then finally, also an important transaction, also building on a bit of a partnership, on a partnership viewpoint as well. So we announced to have signed the transaction with the entrepreneur of SpetsElektrodi AS, Mr. Indre Kranne in Estonia. SpetsElektrodi is a distributor of welding technology in the market. We acquired in 2002 in Finland the distributor of Fronius, an Austrian technology leader in the welding space.

30:49 And similarly to Fronius, SpetsElektro is thrown is in the Estonian market. So a good business we know in collaboration transaction done with our existing supplier business, a fact that provides a certainty for going forward and showcases that the trusted partners of ours and the supplier side are willing to continue and expanding their relationship with us. So I think something we are very pleased with and investing in this space overall. So a steady good business, roughly 4 million euro sales, long-standing successful history in Estonia in the strong market position backed up by a catalog of excellent suppliers supplying the company. So this transaction we hope to sign in the next or close in the next couple of days and then you will see this flow through our figures in Q2 2025 onwards.

32:09 With that said, we finish off the presentation and go into Q&A. There are some questions here which have been presented. I think you will not see them, but we will go through them. First of all, a couple of questions related to the construction sector and our Swedish businesses. So first of all, can you talk about the drivers of working capital? What is the impact uh a good question i mean um as i think you will remember from uh from the history uh the puts master business even though we're dealing with uh with big machines and sizable single orders uh with one quite a lot high monetary value we've been the the the business been decided in a way that for me rather light.

33:14 So we do not expect, even though the volumes and sales numbers are expected to go up, we do expect some build up for working capital as well. but not very material. There might be some swings on the short run, but overall, given that sort of the time those machines in our books is rather limited and we have arrangements with our suppliers then and the customers, which make it from a cashflow point of view quite favorable, I think we manage with those rather well. The second question goes, what is behind F&B, so our timber truck mounting business in Sweden? What is behind the production issues and when do you expect these to be solved? Do you want to just answer to that?

34:10 Yes, yes. I think Q1 is mainly due to, I mean, it's in combination with the end of 2024, which was very strong for the company. so they put a lot of resources for deliveries which were at the end of the year and this led to a lot of overtime with the production employees who then needed to take some of their overtimes as holidays in Q1 and then there was some delivery changes which coincided with this so we had a bit of a bottleneck in the production This was also combined with the company currently recruiting a new constructor for planning and designing the structures.

34:59 So they have a resource in place, but the timing of deliveries has led to a bit of a bottleneck during Q1. This is not a long-term issue, so this has been solved. End of Q1 was already looking better, so the problem was more on January, February. We see the problem being solved going forward. Yes, and then we continue then with a couple of questions on the Putzmeister business. I try and take them at the same time. There's a first question. Can you talk about the development in the construction related businesses excluding PM Nordic and what kind of volume trends are you seeing there? So basically this talk about companies directly exposed to constructions So that's PM Nordic, that's Tornokonen in Finland, HM Nordic in Estonia and Motti Kolmio and machinery construction in the Finnish market.

36:00 The outlook for the putschmeister business in Finland and Estonia remains quite modest. We do see some uptick. We had already a good start in the year in Finland or significantly better for and also quite a lot of interest and sort of inquiries and expectations from our customers that if and when they win some additional jobs on their side this can then materials quite quickly into new deliveries for us as well but not a big sort of Not something that has really quickly now turned totally different, so PM Nordic situation is way better compared to the Finnish and Estonian part of it. In Finland overall, if you look at our machinery construction business for example, the outlook remains rather moderate.

37:09 Of course it's seasonality as well now going into spring, interesting to see what happens, but nothing dramatic in terms of kind of a shift in paradigm there. From what the Colmio, that business is supported, I think from the sales side and sales mix and customer and customer side a bit more, it's more stable, more renovation, construction side and so forth. So rather, rather stable there as well. But but as you would, as you surely, surely know from other companies and and the market, the construction business in Finland, is not really booming yet. No, we expect that to happen in the next couple of months either. There was also some additional questions. I take these all Putsmeister questions at the same time. You received significant new order in the Swedish Putsmeister business.

37:58 Roughly how big this is and when do you expect to deliver it? How much of the bigger earlier deliveries were delivered in Q1? So we first of all we delivered a couple so a handful of machines now already in Q1 from the earlier big sizeable order we already won a year ago. We continue to deliver those in the coming quarters. The new orders, as we said, you will see that from communication from Kudsma from social media and their websites as well. We sold to one customer 11 machines. We also launched in the world's largest construction fair in Bauma the fully electric pump on an electric electric chassis as well with one of our key customers, Sverok, in Sweden.

38:51 In addition to that, we sold some machines at the fair as well. So those are sizable. I mean, when we talk about machines worth of, call it half a million euro plus minus. So you can do the math there on how sizable it is. It of course is so that with these deliveries, the cross-margin profile is different as opposed to looking at our group numbers overall. So cross margins are way higher when we do aftermarket service and spare part sales and so forth. But for sales, it will provide us support going into this year. And we do expect some of the new orders also to be delivered this year, but partially then in 2016 as well.

39:44 I think let me discard some of these questions so that we get this done. I think there were a few order book questions. Yes, there's one sort of on Outlook. So one question goes, can you comment the magnitude of growth talking about mid or high single digit levels. In Q1, we were talking about roughly, I would say, high single digit levels. And that's the answer to that. And then there was another question that we showed in the growth bridge in the presentation.

40:30 So one of the last slides that improving market conditions was only the first step. Do you think that you can remain at organic growth path even if the economy in general wouldn't improve? Yes, we do. I mean, if the market conditions remain as they are at the moment, we do expect sales to grow because of the reason that the order book is there. As said before, H2 is more uncertain, but we have some solid fixed order book in our businesses. For example, PM Nordic, for example milcon for example filter it into second half as well then continuing still on sort of general market commentary have you seen change in operating if the environment after trade war escalation in the beginning of q2 As we commented in the webcast, the signals are still quite limited.

41:41 There are some signals in few of our businesses we've heard a commentary from our key people in the businesses saying that some hesitancy around investments we have seen communications from our suppliers on actions that are sort of referring to that preparatory actions are being taken in case the tariffs materialize but given that sort of the situation on hold for some time. At least we haven't seen a sort of a dramatic change now during the month of April.

42:29 So that's how I would comment that. There was another question also on tariffs. There's a question in Finnish. what are the impacts of possible tariffs into the operations of DELFIN technologies. So first of all DELFIN's sales to the US market is around about call it 20% varying depending on the year. to the US market. Secondly, majority of those sales are for the scientific part of the business or cosmetics mainly. So not as much on the medical side.

43:21 We are currently, as we've communicated, we are in the process of renewing our global distribution network, working in a number of countries at the moment. in looking at new alternatives, a way to go to market, including potential new partners. So especially for the US market, we are currently evaluating different options, including, for example, establishment of own subsidiaries and operations in the country to mitigate the potential impacts of possible increased tariffs going forward. So far we haven't seen pretty much any impact out of those, but in the plans and currently as we speak, we are looking at ways and of course monitoring the situation, but looking at ways to mitigate any potential impacts out of those on DELFIN.

44:29 Still some additional questions. Have you seen one question on why international AS? I believe this is for Estonian business. So have you seen all the top line impact from rationalizing why international business already now or do you expect more going forward? Yes, we have seen everything already to date. And I would remind that this is not something of quite material nature. on the on the profit and loss statement side the impact was more on the balance sheet side so we we've been able to take working capital down and then also the sale of the real estate were more material than the profit and loss statement impacts Then continuing, you had been, during the past one to two years, focusing on profitability improvement more than acquisitions.

45:35 the current balance sheet structure. So basically I can repeat what I already said during the webcast. So we've communicated consistently during the last quarters, I think last year, that in case we find transactions meeting two criteria, one, a new company into right direction and number two being able to acquire businesses in arranging financing so that we don't take make the financial standing worse. We have been sort of consistent on that, that we might take those actions as well.

46:27 And now of course two acquisitions and referring to what I said in the sort of partnership aspects to both of these acquisitions as well. We know these businesses, we know we are in these businesses already today. makes us confident that we knew what we were getting into and I believe we found also a way to structure purchase price payments and so forth providing cushion and buffers for the group's financial standing as well. some additional questions do we expect any synergies from the recently announced acquisitions how much and when not commenting on any numbers what I would say in general in both of those acquisitions these are not cost driven business cases in YERS we're combining two businesses to create the platform for growth we are investing in a new newly a fully new digital setup which we expect to enable us to be more efficient, provide a better service for our customers and through that increase and

47:58 grow in the future. Now I would not call them as much of synergies, it's basically something we're creating a totally new firm, putting two companies and good businesses together and out of that I think we get a good platform going forward. With regard to special electrode, there are opportunities between the two countries, Finland and Estonia. There are some, for example, new suppliers in Estonia, which we potentially can take advantage of in the Finnish market. Vice versa, for example, in Finland, not only There are suppliers with whom we potentially in the longer run could work in the Estonian market.

48:51 So those might be sources for creating growth in the future, both in the Finnish and in the Estonian market. And then I think importantly, you know, on the strategic side of things, we have people now who are looking after similar companies in two countries, sharing best practices among those, you know, working together toward our largest suppliers. I think those are sources of improvement and making the companies overall stronger. I would not, however, call them or we haven't done the transaction on the back of expecting significant synergies but this is long-term work that needs to be first done and then we see what the potential positive impacts in the long run can be.

49:49 Still three questions. There's some defense Defense industry related question. So what is the general opportunity, or this is not really defense, but what is the general opportunity for Pro News and SpetsElektro regarding upcoming US icebreaker orders if materialized? It's a good question. I specifically what these potentially icebreaker orders from the US would mean. do not have an answer. I would answer it this way that shipyards are an important and overall the welding industry is of course important for both Pronius and SpetsElectrodi.

50:35 So anything, any sizable investments taken in these countries in shipyards, similarly in the defense space, for example, provide of course opportunities for the two companies, keeping in mind that we represent the clear global technology leader in these two markets and have solutions and products available which serve exactly these purposes. So I think a general opportunity that we see but what it specifically is This I cannot comment further at this stage.

51:22 A second question related to defence cluster opportunities. So the question goes, do you see an opportunity building a defence cluster on SSN Milkon and J-Matic? This is something we don't have specifically with these companies at the moment in play. However, given that we see in many of our businesses potential in defense industry related customers, we are collaborating on between the between the companies and for example as I said and Milkon have worked together on customer projects or Milkon and some of the other group companies as well to provide a sort of a larger package and a bigger solution as part to our to Milkon's customers through the collaboration so it opens up opportunities but but I would not call it at this stage at least as a defense cluster as such, but opportunities within the portfolio and between the portfolio companies.

52:45 Then finally, can we elaborate more on the potential of Delphi's business globally in mid-long term going forward? Well, at this stage, I think we've now owned the company for one and a half years or close to two years. Quite a lot has happened to date. We have a lot We still work with the product platform renewal which was started I think in 23 or 2 if I'm not mistaken.

53:31 Last year was a heavy investment year for that product platform project. Now it still continues this year and we are entering toward the end of the year then into regulatory approval processes as well on the medical side. So FDA updates and an MDR in Europe as well. So that's one of the key things happening in addition to organizational buildup. The renewal of the global distribution network is also very important initiative. which have been taken to date. So we have already renewed and introduced, I think, three new distributors in the Chinese market.

54:19 As I mentioned before, we're working with the US and some of the other key markets. We have renewed the brand in Q1, or I think maybe it was in On the side of Q2, the company also came up with a new brand identity and more sort of a spot on presentation of how the company positions itself within scientific and medical businesses. We have a lot of good potential sizable ongoing potential sales opportunities, which may also materialize in the short run.

55:04 I think we're getting more and more convinced that the company has potential not only on the scientific side, where the majority of the revenue comes from, but also on the medical side. However, it's maybe a bit too early still to comment on what the big opportunities will be. happy of the way that we're now working with the team to materialize those opportunities but we will revisit those once we then have something more to hopefully tell some examples of larger scale collaborations or sales opportunities firm is moving in the right direction it has great potential for the future and is operating on a sustainable basis comparing the history and then growing sales as well so all good on that front.

56:18 I think with that said, the presentation was a bit shorter this time. The Q&A was a bit more extensive. But thank you. Thanks a lot for the participation and posting good questions. So yeah, I think with this said, we say thank you and look forward If anything was not clear, please reach out and we'll try and answer the best way we can. So wish you all a good spring and coming summer and happy Labor Day.