Investor AB (publ) (OTCPK:IVSXF) Q4 2022 Earnings Conference Call January 20, 2023 4:00 AM ET
Company Participants
Viveka Hirdman-Ryrberg – Head of Corporate Communication and Sustainability
Johan Forssell – CEO
Helena Saxon – CFO
Conference Call Participants
Joachim Gunell – DNB Markets
David Johansson – Nordea
Oskar Lindstrom – Danske Bank
Derek Laliberte – ABG
Andreas Lundberg – SEB
Viveka Hirdman-Ryrberg
Welcome to Investor’s Q4 and Annual Accounts Presentation. Today, as usual, we have our CFO, Johan Forssell — CEO, Johan Forssell; and our CFO, Helena Saxon to go through the results. After Johan’s and Helena’s presentations, we will have a Q&A session. Both over the phone, you can post your questions or you can write your questions over the web and we will address the questions.
And by that, Johan, please go ahead.
Johan Forssell
Thank you, Viveka, and warm welcome everybody, to this presentation of our fourth quarterly report. So let me see. There we go. Well, as we all know, this was a tough quarter for the global — or the year was very tough for the global economy. We had, as we all know, sharply rising inflation, interest rate, energy prices. There were significant supply disturbances during the year, but most of all, of course, the terrible war in Ukraine. In this environment, I do believe that Investor and our companies had a very resilient performance.
If we look on 2022, in summary, our net asset value and total share, the return outperformed the stock market in Sweden. And we had an overall good operational performance in the companies. At Investor, we had a strong cash flow generation, and that meant that our financial position that was strong when we entered the year strengthened further and that, in turn, made it possible for the Board to propose a dividend increase of 10%, which is in line with our dividend policy to have a steadily rising dividend to our shareholders.
If we then dig into the figures a bit during ’22, our net asset value was down 10%, and our TSR was down 15%, and that can then be compared with the stock market being down 23% during the year. Same figures for the fourth quarter, the net asset value was up 7%, TSR was up 16% compared to the stock market being up 11%.
Moving then over to Listed Companies. And you can see here that the total return continued to be very strong, up 12% in the fourth quarter, just ahead of the stock market being up 11%. More importantly, I think if you look on ’22 — full year ’22, there was a significant outperformance in the Listed Companies being down only 5% compared to the stock market being down 23%. And Helena will later on come back to the reasons for that.
If we look on the focus during this year, of course, there has been a high focus to handle the very volatile market environment that the companies have seen. It has very much been about handling the disturbances in the supply chain, but also, of course, high work with price management to offset the cost increases that we have seen in many places during ’22.
But there has also been a number of important strategic initiatives taking place within portfolio management. I think ABB is a good example that the spin-off of Accelleron during the year, and actually this morning released that they are now also divesting the power conversion business for about SEK5 billion. Working with the portfolio within the companies is a very important part of creating long-term value.
Many other companies are spending a lot of money on R&D and actually accelerating those investments. I think one good example here is the strong development we have seen within AstraZeneca’s oncology franchise. And then many companies are also making complementary acquisitions to put a stronger foothold across different segments and regions. I think two good examples during last year was Atlas Copco and Epiroc that really strengthened the position within a number of important segments and technologies, I should say.
And then finally, of course, there are many initiatives going on in the companies to improve the climate footprint, both in their own operations but also to bring forward energy-efficient environmental-friendly products and services to the customers.
Moving then over to Patricia Industries. For the full year, total return was minus 2%. We saw good underlying growth with an organic sales growth of 9% during the year and a profit growth of 20%. Also within the companies — within Patricia Industries, of course, there has been a high focus on handling the volatility in the market with the supply chains and the price management that I talked about when I talked about the Listed Companies.
There has been a number of important strategic investments. You know that these companies compared to the Listed Companies, they are smaller. And that means that we are spending significant efforts and money to really build these companies, invest more in R&D and development, building out the sales organizations, building strong footprint to really continue the long-term journey of growing these companies.
There was also important add-on acquisitions made by a number of the companies during the year. For example, Laborie, Advanced Instruments, Piab and Permobil also made good acquisitions during the year. And also here, of course, there is a high focus on improving the climate footprint.
Moving down to the fourth quarter. You can see that the organic sales growth was strong, up 11% and the profit grew 34%. And I think this is interesting. That was achieved despite the weak margin in Molnlycke during the quarter. So the weak margin in Molnlycke was this quarter compensated by a very good development of the rest of the portfolio, which gives us strength, I think, to the Patricia portfolio.
If you look on the total return being down 4%, given the fact that the stock market was up 11% in the quarter, and we had a good profit growth, of course, that might look a little bit strange. So let me try to give a brief explanation for that number. You know that when we present our estimated market values, the purpose of that is basically saying that if our companies were — should have been on the stock market, roughly, what would have been the value of the companies if we look on the multiples in the public market and just put those on our company’s earnings. That’s basically the basics of it.
The mechanics to do that is that in this particular quarter, as an example, we take the average market cap of the peers during the fourth quarter, we add the net debt at the end of December to get an enterprise value. And then we put that enterprise value in relation to last 12 months EBITDA and then we get the multiples for the companies. And of course, the multiple is dependent on both the share price performance of the peers, earnings and the net debt development. And we used the median multiples of the peer groups and normally have quite broad peer groups. So that’s the mechanic.
In this particular quarter, we had a very pronounced V-shape of the stock market. As you can see on the graph, from September 30 to December 31, the Swedish stock market was up 11%. But if you look on the weighted average market cap in the fourth quarter compared to the average market cap in the third quarter, it was more or less unchanged. If we do the same for the peer group of Molnlycke, the development from September 30 to December 31 is plus 10%, while the weighted average 4Q versus 3Q is actually down somewhat. So that is an explanation. All else equal, this will, of course, mean that we will have higher multiples expansion in the first quarter. So it can, of course, be timing between the quarters. But the basic is the same. We take the market — how the market values public companies and we put it on our earnings. And the reason why we see this, call it, a little bit strange this quarter is just because of the V-shape during these two quarters.
So with that explanation, let me then move over to what is much more important, the operational performance in the companies. Here, you can see on the blue bars, the quarterly profit within Patricia and we reached SEK3.3 billion in profit in the fourth quarter, which is the second best after the last quarter. And on a rolling 12-month basis, we reached SEK12.3 billion during the year.
Here is a short summary of the development of the different companies. As you can see, both BraunAbility and Permobil had a very strong development during the quarter. And the reason for that is that both companies saw strong demand, but also the fact that these two companies have had significant supply chain challenges during the year. And that, especially in the beginning of the year, and that is now — has now eased up. So they have also been able to deliver goods out of — to the customers. And that, in turn, has led to good operating leverage. So you see good growth and good margin expansion in these two companies.
Molnlycke, I will come back to. Laborie, good development, organic growth of 9% and a good margin expansion. Atlas Antibodies, organic growth of 9%. Here, the margin was down, but there is a good development in this company. This is, as you know, a small company and we are investing heavily behind this company to put the right platform for long-term growth.
Piab had an organic growth of 7%. And here, the margin was down due to strategic projects that are going on in the company. Sarnova had an organic growth of 6% and a good margin expansion. And then Advanced Instruments had a tougher quarter. And the main reason for that is that in the quarter, the sales of instruments to the biopharma sector was down, and we have very good gross margins on these products.
So let me then go over to Molnlycke. If we start on the top line, it continues to be a very strong development, as you can see, with an organic growth of 9%, mainly driven by Wound Care and Gloves. On the other hand, the margin was weak in the quarter. And to be fair, the margin should not be at the level where we were in the fourth quarter.
There are three main reasons for the weak margin: Number one being customer care reorganization, mainly in Europe; secondly, disturbances in the U.S. Wound Care manufacturing plant; and thirdly, the new factory in Malaysia within Gloves. So let me say — expand a little bit on these three areas. The customer care, basically, what the company has done is that they have had a — call it, a central customer care organization in Belgium. And to be more agile, they have pushed out these service people out in the sales organization in Europe, and that has led to extra cost during the quarter. So that is one reason.
The second one is the production disturbances in the Wound Care plant in Maine in the U.S. As a reminder, Wound Care have two major plants in the world, one in [indiscernible] in Finland and one in the U.S. And the disturbances is related to supply issues, but even more perhaps due to staff shortages, and staff shortages is actually a big problem generally in the U.S. today. After the pandemic, not all workers have come back to work.
And to give you some information of what has happened, I can say that the staffing shortage has gradually improved during the quarter. So the situation we are now is clearly better than it was in the fourth quarter, but there are still challenging remaining. So that is the short summary. And of course, the management is putting all efforts now to normalize the situation in the plant.
Moving then finally to the third factor, and that’s related to new plant in Malaysia, producing gloves. And here, we are in a ramp-up phase with the new factory. So the utilization in the fourth quarter was low. But here, we can see when we look forward that the utilization will gradually improve in the coming quarters. So those are the three main explanations for the weak margin in the quarter. But as you all know, disregarding this quarter, it’s a good cash generation in the company was able to distribute EUR300 million to Patricia during the quarter.
If we then look forward, I think we have an excellent portfolio, and I’m very pleased to see that the rest of the companies were able to cover up for the weak margin in Molnlycke in this particular quarter. These companies have very good growth opportunities due to the industries and the positions they have. So one of the key priorities going forward is clearly now moving into ’23 to make sure that we achieve a good organic growth. That’s number one. The second priority for this year, of course, is to come back to higher margins in Molnlycke.
Moving to EQT. The total return was weak during the year, as you can see, being down 35%, driven by the weak share price development of EQT AB on the stock market being down actually more than 50%. On the other hand, we had a record cash flow during the year. As you can see, more than SEK6 billion, which can be compared to an average of about SEK2 billion to SEK3 billion over this period. In the quarter, the performance or the TSR was up slightly in EQT.
So summarizing then. I think that we are well prepared, both for challenges and opportunities. If we look forward now, it looks like — if we look on leading indicators that we are entering a tougher period. On the other hand, we can also see that most macro economists believe that inflation will come back during the latter part of this year or the second half of this year. And of course, if this would ease a little bit on the central banks, that could, of course, support consumers. We also know that China has opened up, and we also see that the gas prices in Europe has come down significantly. Let’s see how sustainable that is. But there are, of course, a potential that this could change going forward.
Irregardless how the market will develop, I think we are ready. So let’s see if it will become more of a mild downturn or a tougher one. But I think we are ready. We have a good cash position, good financials, good cash flow at Investor and our companies are really well prepared with plans should it be tough out that.
So to summarize, what are our priorities for this year? We will continue to stay here and now, manage the current market environment, and that is a top priority for us and, of course, all our companies. But we will also continue to make sure that the companies invest in areas which are important to drive continued good organic growth long term.
So all continuous plan contains two parts. If it gets tough, when should we cut And the second one, where should we not cut. Where should we continue to invest because it’s too important to in long term. And we will use our financial strength to capture opportunities. And I do believe — continue to believe that there is an advantage of being able to act both in the public and the private setting here.
So with that, I will hand over to Helena.
Helena Saxon
Thank you, Johan. Let’s go into the financials. The adjusted net asset value ended the year at SEK673 billion, and the average annual growth with dividend added back was 14% for the last five years, and that should be compared to SIXRX spend.
Looking at the total return by business area. The 7% in the quarter that Johan talked about was built up of a — so somewhat mixed picture with excellent development in the Listed Companies of 12%; Patricia, down 2%; and EQT around 2%. Looking at the full year is minus 10%. We can see that the Listed Companies and Patricia’s return was negative 5% and 2%, respectively, while investments in EQT, the return was minus 35%.
Looking more carefully at Listed Companies, 70% of total adjusted assets or SEK475 billion. We can see that the return here was also a mixed picture. The massive outperformance of minus 5% compared to SIXRX, minus 23%, was built up of strong absolute return in our health care companies and Saab. And we also had significant outperformance in some of our larger holdings, ABB, SEB and NASDAQ.
Going over to Patricia Industries, some 20% of the assets or SEK138 billion. We can see that the estimated market value was down compared to the end of Q3. And here, two companies stand out, Permobil on the positive side and Molnlycke on the negative side. And this graph also shows significant distributions in the quarter.
Looking at the major drivers of estimated market value in the quarter, we can see that Molnlycke’s estimated market value declined by SEK8.5 billion in the quarter, and this was due to lower multiples and distribution. Three, Scandinavia was down SEK1.6 billion, also due to lower multiples and distribution related to the divestment of the passive network infrastructure. And this is the last distribution from that exit.
Advanced Instruments, estimated market was — market value was down due to lower multiples. And here also, FX impacted negatively. We see the same development in Laborie, lower multiples and negative impact from currency, but here, higher earnings impacted positively. So we had a slight mitigation there. Permobil had a positive development. So estimated market value of Permobil increased SEK2.6 billion, and this was due to higher earnings, actually a doubling of earnings in the quarter. And this, of course, increased the value even though multiples contracted in the quarter.
Our financial position remains strong and leveraged at 1.5% at the end of the quarter. We have no debt maturities until 2029. And looking at this graph, we have added a year to the summary of cash flow generation, and we can see that all business areas contribute to the SEK145 billion generated — accumulated over the period. And this has allowed, of course, for investments in both Listed Companies, Patricia. It’s also allowed for net debt reduction and distribution to our shareholders.
And talking about distribution, this morning, it was announced that our Board of Directors proposed a dividend of SEK4.4 per share to be paid in two installments during 2023, and this represents a 10% increase compared to the dividend paid last year. And then I always end with this slide showing the total shareholder return, and we can see that the Investor share was resilient in very difficult year, but has also outperformed the stock market, both in the long term and the short term.
So with this summary of our performance, I’d like to conclude the presentation and hand over to you, Viveka.
Viveka Hirdman-Ryrberg
Thank you. By that, thank you, Johan, and thank you, Helena. We will now start our Q&A session. And we will start off with the questions over the phone, and we have our facilitator, Sabrina, who will lead and take your questions over the phone. So I hand over to you, Sabrina.
Question-and-Answer Session
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Joachim Gunell of DNB Markets. Please go ahead.
Joachim Gunell
Thank you and good day. So three questions from me. Starting off with the fact that corporate governance advisor, ISS, were out in their, call it, proposed quality changes here saying that, yes, unequal voting rights perhaps isn’t the way to go. So as an active owner, what scenarios do you see play out here? And how would it — this basically impact Investor’s owner model?
Johan Forssell
Okay. If I start with that, first of all, I must say that I think it’s a very strange thing that they came out with saying that, that should be one of the decision points for approving the [indiscernible] and also whether they get sort of [indiscernible]
Helena Saxon
Liability.
Johan Forssell
Discharge of liability. Thank you. Because that’s actually not the ownership structure and the ownership of A and B share is not the question for the Board. It’s an ownership question.
Secondly, I think it’s important to remember that there are a number of countries around the world that have different voting’s. And thirdly, I would say, I personally believe that it has served Sweden well and Swedish companies well over a number of years. We have had strong long-term owners that have really been behind the companies with the combination of, on the one hand, being tough, of course, on the quarterly reduction and all that, but also willing to invest during long term. So that is my view.
Joachim Gunell
Understood. And secondly, given the ongoing, call it, structure action in ABB, can you just comment here on how Accelleron fits your investment criteria going forward? Yes, basically, how that ties into your list of core investments?
Johan Forssell
Thank you. Our view is that we will and we are evaluating the ownership in Accelleron, and we will do what we believe is best for our shareholders.
Joachim Gunell
Very clear. And yes, I mean, just coming back to the margin development in Molnlycke. Can you say anything about, call it, the longevity of this, call it, extra cost impact or what you call it, underlying adjusted profitability would have been without this?
Johan Forssell
What I can say is that when it comes to the long — how long it will stay, so to speak, clearly, the utilization in the gloves factory will improve going forward, and it will improve already in the first quarter, and it will gradually improve. That, we see in the plans. And of course, unless there would be a dramatic change in the market demand, but that is what we see that we will see that coming through.
And when it comes to the situation in the plant in Maine for Wound Care, what I can say is that the situation right now is better than in the fourth quarter, but it is not yet resolved. There are still some challenges, but the staffing shortage in the plant is clearly less now than it was during the fourth quarter.
And then when it comes to the reorganization in Europe with the customer care, the majority of that was taken in the first quarter. A little bit will continue in the first quarter, but then it will be down. And all three, I should say, all three factors have a material impact on the margin in the quarter.
Joachim Gunell
Thank you.
Operator
The next question is from David Johansson of Nordea. Please go ahead.
David Johansson
Yes. I think one question from me. That’s related to the demand situation in the — mostly in the health care vertical in Patricia [indiscernible] remained strong in the quarter? What can you tell us about the underlying demand situation going into three? Some companies in the sector have commented on rising stocking levels at hospitals. Is this something that could become a factor for changing demand trend going forward? Thank you.
Johan Forssell
Sorry, if I missed it. Was the question specifically to our medtech companies?
David Johansson
Yes. Yes. Yes. Maybe Molnlycke, in particular.
Johan Forssell
Yes. It’s very good question when it comes to the inventory situation, because if you talk more broadly and not about our medtech companies, it’s clearly the case if you look on the global economy, that during the period when we have had this significant supply challenges, a number of distributors and customer centers have built up inventory. So of course, if you then get a more moderated demand situation, that can have an effect until you clean out the inventories.
When we look on our companies within Patricia, within the medtech areas, of course, it varies between regions. It varies between the companies. But I would say that, yes, there might be some areas where you have excess inventory that can affect the quarter or so. But in other areas, it’s more lean, so it differs between the companies.
David Johansson
Thank you. Very clear. That’s all from me. Thank you.
Operator
The next question is from Oskar Lindstrom of Danske Bank. Please go ahead.
Oskar Lindstrom
Yes. Good morning. Three sets of questions for me. The first one on Molnlycke. You mentioned that one of your key priorities will be recovering your margins here in 2023. I mean apart from the sort of special costs that you incurred here in the fourth quarter, and it sounds like it also slightly in the first quarter, what are the actions that you see will drive a recovery of margins? And to what level do you seek to recover those margins? Or what’s the plan? And also here on Molnlycke, are there any kind of structural changes to this industry post COVID that might make it different to or might make profitability and growth different to what they were before? So that’s my first question.
And the second one is on strategy. You talked earlier about the interest in acquiring a new unlisted asset, and I think it popped up as one of your priorities for 2023 as well. What is the outlook for this in terms of sort of attractive assets that are available, valuation levels? Any new thinking on this. So those are the two. Thanks you.
Johan Forssell
Okay. Thank you for all those questions. When it comes to the margin development, I think I was quite explicit how it affected the fourth quarter. And as you know, we never give guidance for the coming quarter, but let me give you a couple of comments.
First of all, even though there was a lot of extra cost in the quarter and as I said, one should be fair. The margin should not be at this level as it was in the fourth quarter. If we look forward though, first of all, one should, of course, acknowledge that first quarter normally is somewhat seasonally weaker. What will drive margins going forward? Of course, high focus on continuing organic growth and fixing the plant in Maine will be important. And then given the plans that are in place, it will gradually come through also on Gloves with improved utilization. So that is what we see.
When it comes to more structural questions, I think that it’s always a battle out there. But I think that if you relate it to the COVID situation, one structural change is, of course, that the competition within [indiscernible] within ORS business has increased. And that is a fact. But as you know, that is also a low-margin business. So one of the key priorities for Molnlycke is to focus the ORS business on the areas where you can have a really competitive advantage and build better margins going forward, areas such as, for example, the trays business.
When it comes to new assets, your third question, we continue to look for opportunities. The key priority for us is to grow our companies organically because coming back to your margin question, that is, of course, essential. That, in combination with good price management. Secondly, continue to do add-on acquisitions in our strong platforms we have. In addition to that, we are also open for new platforms, companies should we find a sizable acquisition within our priority segments. We are not looking for adding a small one. But if we can find a quite sizable company, that could also be interesting. So that is how we see it.
Oskar Lindstrom
Thank you. And what do you think about valuations and the availability of the sort of new platform companies?
Johan Forssell
I think the key question for us would be to find the right assets. That is where we are spending our time. Hopefully, the pricing levels are — have become a little bit better than it was during the really good hay days out there.
Oskar Lindstrom
All right. Thank you.
Operator
The next question is from Derek Laliberte of ABG. Please go ahead.
Derek Laliberte
Yes. Thank you and good morning. I’d like to follow up one more time on Molnlycke. You very explicitly explained the situations around these one-off elements. But I was wondering if you could also comment on sort of the underlying cost pressure here, if whether that’s actually eased because in the Q3, you mentioned rising or elevated raw material costs as well as logistical costs, but how this is compared to earlier? Thank you.
Johan Forssell
I think it’s quite complicated because it’s different products in different regions, but more generally on — when it comes to the logistics cost, they have eased from the peaks previously.
Derek Laliberte
Okay. Great. And also in terms of the potential to doing increased prices here. I mean, we’ve seen some other peers in the sector who are actually having a positive selling price environment. How do you view the opportunity for Molnlycke here?
Johan Forssell
I can only say that price management is a top priority for management in the company. And that is, of course, something that management needs to handle for each business area for which region depending on what they believe — create most value. But it’s top on the agenda. Especially, I would say, on the ORS business, there Molnlycke is clearly focusing on improving prices to get profitability up.
Derek Laliberte
Okay. Thanks very much.
Johan Forssell
Thank you.
Operator
[Operator Instructions] The next question is from Andreas Lundberg of SEB. Please go ahead.
Andreas Lundberg
Yes. Thank you. Back a little bit of pricing in the Patricia companies, solely around the 10% organic growth you have now for a few quarters. How much is price? And how much will you say is volumes? Thank you.
Johan Forssell
We don’t say how much is price. I can only say that the price — how much is the volume component and how much is the price component differs quite a lot between the different companies.
Andreas Lundberg
Can you give an average ballpark figure?
Johan Forssell
I mean it is a material figure on average that is a positive price effect. But I would say that, in total, for the total Patricia Industries, the volume component is the bigger of them.
Andreas Lundberg
Okay. Thank you so much.
Johan Forssell
Thank you.
Operator
Viveka, there are no more questions registered from the phone at this time.
Viveka Hirdman-Ryrberg
Okay. Thank you, Sabrina. We have some questions over the web. I will start with the first one that came in from Samarth who asks if you — sort of a big picture question. If you see demand recovery to pan out in 2023, especially compared to what we saw in the second half of 2022. Clearly, some of the strong growth we saw within Patricia Industries also reflected a lower base. So in that context, any commentary that you can provide on demand and margin outlook within your private investments would be very helpful.
Johan Forssell
Okay. Thank you. When it comes to the demand for ’23. I think that in general, we see that, of course, that there are a number of challenges in the global macro economy as I said before. But we also see potential for easing going later or going into the year, later stage. But let’s see how that plays out.
I think it’s very difficult to be general here, because the companies are in different situations, different customer groups, different situations. So I would not even dare to go into and try to generalize that question.
When it comes to Patricia and the growth and the base levels and so forth, of course, having an organic growth of 10% is a very strong number. We will push organic growth, as you know. That’s the top priority to really grow long-term value for this company. And I do believe that the companies have excellent positions because they have strong market positions in attractive niches with growing end customers. But of course, 10% is a very high growth figure long term, given the fact that the global economy might grow something like 3%, 4%. But we will, of course, try to grow as high organic growth as possible. That’s the plan.
Viveka Hirdman-Ryrberg
Then we have a question from [Michael Gilkens] (ph), maybe this is for Helena. Can you give a rough percentage estimate of the impact of the multiple change after year-end on the Patricia Industries’ valuation?
Helena Saxon
After year-end?
Viveka Hirdman-Ryrberg
Yes.
Helena Saxon
Well, we’ll talk about that in the Q report. But yes, as Johan said, there is a factor when we use averages. But we have no idea where the quarter ends.
Viveka Hirdman-Ryrberg
Yes. And we have a second question from Samarth Agrawal. It may related to the comment on higher financial flexibility. Your leverage levels are conservative, end of the target range. Is it intentional given the current markets? Or is this also a reflection of muted deal activity generally? If latter, should we reasonably expect the investments by Investor to increase in 2023? You have commented on a similar question before.
Johan Forssell
I think it’s a relevant question. I would do twist it around that last year we invested some SEK3 billion – SEK2 billion, SEK 2.5 billion, we invested in Patricia to grow them through acquisitions, and we invested in Atlas Copco in the third quarter. And now we also announced a dividend increase of 10%, which is a good dividend increase. Our plan is to — we have — we are fortunate. We generate strong cash flow generation, and we will use that to invest and continue our dividend policy of giving a steadily rising dividend.
The size depends on what opportunities that arise. Last year, it was — you might say, on the lower level, but that’s very attractive acquisitions we made. If there would be larger acquisitions coming up this year, of course, the figures could be much larger, but it depends on where we see attractive opportunities rather than the figures that we have a strong financial position so we are ready to act if we see — if we find good opportunities.
Viveka Hirdman-Ryrberg
Okay. Then we have a fourth and last question from [Mark Arrowsmith] (ph). Could you give a bit more color on what was driving staff shortages at the U.S. Wound Care plant of Molnlycke? Is this COVID or just a function of a very tight labor market?
Johan Forssell
It’s a great question, and I can only say what I see, not only in this particular plant in Molnlycke. I can say generally that there is a challenge in the U.S. with getting the staff to many manufacturing plants. And the — it could, of course, be a number of reasons for that. I think one of the reasons is that, after the pandemic some people choose not to come back to the labor force. And it is a tight market. But I cannot say how it will play out. I can say that what I see is that actually it is a tight labor market in the U.S. at the moment.
Viveka Hirdman-Ryrberg
Okay, we don’t have any more questions over the web, and Sabrina has there been any more questions over the phone?
Operator
No, we do not have more questions.
Viveka Hirdman-Ryrberg
Okay. With that, we would like to thank you for joining us today for our Q4 report and annual accounts presentation and we will be back with our Q1 in April. So until then, bye for now.
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