Asker Healthcare Group (Stockholm:ASKER) Q1 2026 Earnings Call

0:01 Hi everyone, this is Johan Falk and welcome to the Q1 report. As we said on the headline here, strong start of the year. That's how we feel. So we have a good Q1 behind us now. The growth of the adjusted EBITDA was 21% and we all know that 4% headwind could have taken us to 25% in total. if it wasn't for the FX effect, but 21% we're proud of as well, of course. Of that, 8% was organic, very importantly. If we look at the margin, 9.8% coming closer to the 10% short to medium targets, a 70 basis points increase.

0:49 So that's also a signal of having good efficiency and purchasing power in the group that we're using in the right way. If we just look on the highlight side here, we have a net sales of 4.5 billion this quarter, up with 13% out of 5% organic top line growth, which is faster than the market. Adjusted EBITDA of 442 million, up with 21%, as I mentioned, and 8% organic. So a bit faster bottom line growth than top line growth, which we like. showing the efficiency and scale that we now can see of the groups. We have an adjusted EBITDA margin strengthened with 70 basis points up to 9.8.

1:36 You might remember that we had 10% in Q4, but that is our strongest quarter of the year. So we have a steady uptick towards the 10%, which we're on the journey Robust cash flow this quarter, thanks to the strong earnings growth and also from the new acquisitions. Two acquisitions signed during the quarter, so that's also good to see that we are continuing our high pace of M&As with our own cash flow. But staying steady with a leverage below 2.5 as we have communicated before. Looking on the rolling 12-month basis, one year back from now, we have delivered on our most important financial targets. I promised you to deliver adjusted EBITDA over 15% per year, which we had for many years, and now it's 18% for the last 12 months. Our overall K, EBITDA, our networking capital, very important efficiency measure for our operations.

2:46 So 68%, something we're proud of keeping on the high level. I mentioned the adjusted EBITDA margin 9.7 on the rolling 12 month basis. Hopefully we'll break through the ceiling of 10% on the yearly basis as well in not too long of a future. 2.15 is the net debt over EBITDA, the leveraged May ratio. Tom will come back to that a little bit later in the report. But the overall message is that we're keeping that steady as we now are welcoming and acquiring companies on our cash flow. The board has proposed a dividend payout of 39 öre per share, which is in line with the 30% target of our and Net Profit Offer Tax.

3:39 I've been here many years, as many of you know, 14, I think it is. And we have been fortunate to deliver quarter by quarter growth, organic as well as M&A. And this is another quarter which we add to the series. The yellow line here is representing the 15% growth. And I'm happy to stay above that, which we have no reason to believe we can't do going forward. Now into some details with Tom. Great. Thanks, Johan. I will add some numbers just to support the messages that Johan has given there. Overall, the group financial performance, very solid in the quarter and pleasing for us to see good organic growth across the group. And I think one of the things that is most satisfying is that this growth is genuinely broad-based across the regions, across the companies, across the countries, coming both from well-established businesses within the group, but also the recent M&As driving both growth and margin improvement. We look at some of the numbers.

4:40 Johan mentioned them already. Net sales in Q1 up 13%. 5% of that organic, with the FX headwind that we have been struggling a bit with in recent quarters. Adjusted EBITDA up 21% in Q1, 8% of that organic, and also with the FX headwind affecting the EBITDA side of things as well. But margin up to 9.8%, as Johan mentioned, continuing to move in the right direction. If we go one level further down and look in a little bit more detail at the business areas, starting with business area north, Performing well, good organic growth across the region. Important to note that the large defence and preparedness sales that we have talked about during 2025 are now out of the comps.

5:25 So it's good to see a clean quarter that shows how this region is doing without those comps confusing the picture. And we see adjusted EBITDA growth of 5%, 4% of that organic and net sales growth of 7%, organic growth also at 7%. in the quarter. A brief mention of the new distribution center that we've talked about also in the past down in the southwest of Sweden. Progressing nicely, we're starting to do some tests in the facility which have delivered good results. And as a reminder, we will be ramping up that activity through the course of this year. There will be some additional double manning costs and some additional inventory coming in towards the end of 2026 and 2027.

6:10 We will be fully operational in the early part of 27 and the full P&L benefits coming through in the second half of 2027. Business Area West, strong growth in the region and pleasing to see that we are really getting some benefits from some of the scale effects in the region. So we see adjusted EBITDA growing 32%, of which 15% of that was organic. and we see net sales growing 12% with organic growth contributing 5% to the net sales. Quite a large negative FX effect in region West. And the margin, as I mentioned before, moving nicely in the right direction up to 9.5% in the quarter. and in a way to repeat the message that we have for the group as a whole and all of the other regions, good organic growth, both from the established businesses and the acquired units as well. With a particular note in Region West that we see some really strong performance from our home care operations there that continue to find additional growth opportunities, but actually really starting to see some nice scale benefits from those operations, which is good to see.

7:25 Turning to the third business area, central, also strong sales and EBITDA growth across the region, net sales up 26%, 13% organic and adjusted EBITDA up 47% in the quarter, organic growth contributing on the net sales side 3%. And again, I feel I repeat the message, but really a broad based contribution to the growth across the companies, across the countries within the region. And as we've talked about before, we continue to focus on margin enhancing activities in the region just to look at the range, look at the portfolio, take out some of the less attractive products and segments from the range here. Turning now briefly to R over RK, EBITDA over Networking Capital.

8:13 We talked about this many times. I always talk about it. It's a key internal metric for us making sure that we're really focusing hard on our capital efficiency and capital utilization. And as we've also talked about many times before, important source of the cash that we use to fund the M&A engine. So good to see that that's still performing well across the group in the quarter. Going further through the financial statements, a few words about cash and a little bit more detail than perhaps we've provided in the past. The overall picture, really good, solid, robust cash flows. We have very good visibility because of that stability about future outflows and hence that feeds into good visibility around our M&A planning as well.

8:59 I'll say a few more words about that in a second. Cash flow from operating activities, 419 million sec in the quarter. naturally driven by the strong top and bottom line that I've talked about on the previous pages, but also the continued work we do around around working capital efficiency and squeezing cash out there. I perhaps should just note that the 109 million that we saw in Q1 2025 was an abnormally low figure. We had lots of costs, if you remember, associated with the IPO and whatever. So although cash flow is good and it's solid and we're happy with 419, perhaps the growth is a little bit flattered by the low figure we had in the comparable period. CapEx, a brief mention, I mentioned the distribution center in Yorkshire a few pages ago. We have approximately 100 million sec remaining to be paid out for that business over the next nine to 12 months.

9:52 But as we've said, the business is, the development of that DC is progressing nicely. to look a bit to the cash flows coming in the future particularly in Q2 we've had a few questions around this I've discussed this with analysts and investors so just to be super transparent on this we do have a relatively large earn out cash outflow coming in Q2 450 million sec approximately so those as a reminder are for deals that were done M&A deals that were done back in 2022 to some extent 2023 those businesses have developed well they have reached the end of their earn out period at the end of 2025 and then we pay the earn outs after we've got the annual reports signed off and audited for those businesses which is why we have the big cash outflow in Q2 450 million as I say We have the dividend, 149 million, our first dividend, which will flow out during May.

10:51 I think the thing that I want to emphasize is that these regular, or non, excuse me, non-regular cash outflows that we see coming up in Q2 are well modeled, they're well understood, they're fully built into our thinking, our leverage planning, our debt planning, and of course, that then leads into our capacity to do M&As. And perhaps I also add a further note, when you look forward to the earnouts in 2027, i.e. for deals that we did in 2023 and to some extent 2024, whose earnout period comes to an end at the end of 2026, we expect that cash out amount to be around 130 million SEC. I think it's interesting just to contrast that with the relatively larger amount that we're going to be paying out now in Q2 2026.

11:41 And I think that's an indication, not that those businesses have performed less well, but more that we have evolved our earn-out model as we have gone forward through the development of our second engine, our M&A engine. And then one final page for me, just taking the cash flow and the leverage discussion one step further, we have a stable leverage well below our target of 2.5, giving us good capacity for those continued acquisitions, that key fundamental second engine that's a part of our business. A few numbers on this page, so I tried to take them steadily so we don't get confused. The net debt to EBITDA according to our current definition and our current 2.5x target comes in at 2.15 during the quarter.

12:29 but for the two deals that we've completed in the Court of Van Heer and GHC, actually we haven't yet fully paid out all of the cash for those acquisitions. The reason for that is we're actually waiting for the final annual reports, the audited annual reports. We like to receive that before we complete all of the cash outflow. But clearly those are part of those deals. Those are cash amounts that are associated with completed deals. So to be completely open and transparent and clear, we've added those back. And when that amount is added back, you see that actually 2.25 is the leverage in the quarter. And I think that's the more relevant figure to look at. And you can see on the right-hand side of this picture, the chart, our leverage is extremely stable. We manage it in a good way and we're conscious to keep it at that stable level.

13:24 I had one further footnote, again, simply because I've discussed this so much with analysts and investors. There is an alternative way of looking at the leverage ratio. And actually this way is equivalent to our bank leverage definition, covenant definition. And that would be to include all of the earn outs and outstanding payments for the next 12 months in the debt side of the calculation. but at the same time to also include the 12 month pro forma EBITDA from acquisitions that we've done, which I also think is very reasonable. You know, these are businesses that are part of the ASCA group now that generating that cash generating capacity is part of the group. So it's only reasonable to include that as well.

14:09 And if you were to use this alternative leverage calculation, you would come to a figure of 2.36. Just to reinforce again, that is not our current definition, but it's another way of looking at it. And I think what it does when you see that is it just reinforces the point that the strong and stable cash flows that this business generate enable us to manage leverage, have good insight and deliver on our M&A agenda going forwards. With that, I pass back to you all.

14:39 Thank you, Tom. And good bridge to M&A. We use our strong cash flow to welcome new companies to the group. As I mentioned many times before, we're improving the pipeline and being a market leader in Europe now in medical supplies, device and equipment across 19 countries, we're seen as the natural leader. we see that family businesses, entrepreneurial led businesses want to join the group because they see that they will perform even better and they are among friends and helping the healthcare improve in Europe. So if anything, every quarter that I've presented this, we have a stronger and stronger pipeline and we can cherry pick the best ones out of it. Last year it was around 15 deals we've done and we had a pipeline of close to 90 with deals we could have done. So that gives an indication of how we work with this. And this quarter is no exception.

15:39 We have welcomed GHC MPF and also Banhek Medical adding some 650 million in annual sales. We also done the acquisition of RMS Medicals that was signed in Q1 and was completed in 1st of April. I think all of these deals now and going forward will contribute positively to our EBITDA margin. So if anything, we are cherry picking the ones that are above 10% EBITDA margin to start with. We have also on top of the scale and positive synergy effect, we also have a positive mix effect helping us to improve the margin. If we do a deep dive, as I usually do, into one of the acquisitions to give you a flavor of how we help the healthcare nurses, doctors and patients across Europe, we have GHC-MPF, which is two interlinked medical supplies companies within the home care segment where we are strong, and this time it was in Germany. So we're helping them within continence and urology products.

16:48 strong and attractive niche. They're adding roughly 300 million in revenue and they are a team of 140 employees with expertise in these fields which really supports the home care patient in Germany and that's also had a positive EBITDA margin effect. All right, coming in to summarize this quarter, as you can hear, we're happy and proud of having a good start of 26. Being on this fantastic journey of consolidating the MedTech market in Europe, helping the healthcare system to improve. We have seen that we are continuing growing faster than the market. This quarter was 5% top line.

17:36 We're getting the scale effects out of our operations. So 8% adjusted EBITDA growth on bottom line. And acquisitions are coming in and will hopefully do so during the following year and the year after with a strong cash flow, good pipeline and a very good team centrally as well as locally helping us find the best entrepreneur. So I think that will pretty much summarize the quarter and our visibility is good as you know, medical supplies, device and equipment, regardless of the tough times around the world, we are in constant need of these products.

18:21 Even if the financial climate is tough and the war is going on, we need these to take care of our loved ones. And that's what we see. Also the type of customer relationship we have with long customer contracts, we have good visibility. And for that reason, we feel that we have a good progress today, but also good visibility for the rest of the year, both in M&A and organic growth. Thank you very much. I think we go from here to Q&A. Hi, good morning everyone. First, I wanted to discuss the North organic growth a bit more. Is it possible to sort of split out the different parts of North?

19:23 Specifically, if we can talk a bit about OneMed, how's that doing? And then I also wanted to discuss the distribution rights of the orthopaedic contract that you bought in the Baltics. Is it possible that somehow Q1 weighted and if so how meaningful is that to the reported organic growth we're seeing this Q1?

19:48 I'll just start and hand over to you Tom more specifically. I think in general we have a very broad base of growth in all regions starting with the whole group across the 19 countries so it's not that we have a concentrated growth and profit from some areas and that goes for the region north as well and specifically for OneMed where we've been working for many many years and we see that the trust from our customers in Sweden it's 290 municipalities 20 regions and roughly 100 private companies well spread across those and we have a strong tender team winning tenders and contracts and that can go a little bit up and down. But in general, if you look back 10 years, that has been an increase in trust from customers and increase in growth.

20:41 One that is stronger than ever, I would say, in the underlying business. Maybe you want to add something, Tom? No, I support that. I think the growth, as we've said through the presentation, is genuinely broad-based. It's broad-based in North, it's broad-based across the regions. Eric, just to take your specific question about the distribution rights in Benelux. It's small numbers. We're talking low tens of millions of SEC of revenue and very low single-digit millions of SEC in EBITDA contribution. Okay, but is it just possible to frame if say one med was near the 7% or if there's other parts say something in Norway that stood out with say double digits instead?

21:34 No, I think as Johan said, I think we are going to be a bit reluctant to go into individual companies or individual countries in too much detail. But no is the simple answer to your question that there is no spike in any individual company or any individual company or any individual product. The growth is genuinely broad based across the region and across the company. Okay, good to hear. Then I just wanted to ask a bit on the acquisition margins. I tried to do some math on Van Heek and the GHC contributions that you had now in this quarter. And to me, that sort of implies that those companies had 18% EBITDA margins now in Q1. You obviously haven't disclosed the underlying margins for it, but would you say that 18% is some sort of normalized level or is that contribution going to fall for the full year?

22:28 Got it. I think Yeah, that 18% sounds a little bit punchy, I would say. We are, you know, for commercial reasons, we don't want to be too specific on the margins of the deals that we buy, but you can read a little bit into the way we communicate the margins. So when we say it's margin accretive, we mean it's a little bit above the kind of 10% average of the group. If we start talking about very accretive, then you could perhaps guess that we're above 15% margin. And these deals are accretive rather than very accretive, I would say. okay got it got it then I remember normally that there tends to be more pricing adjustments in Q1 compared to the other quarters in the year I guess that's primarily for North and OneMed but I was just wanted to ask now if what sort of pricing tailwinds you expect to see now for 26 if you've had some say adjustment outcomes now in Q1 and also how you would compare that to what you're expecting to see for input cost increases now that there seems to be a bit higher overall cost inflation going on.

23:47 Yeah, I'm sorry, this seems like we're answering the same thing on the other question, but given the extreme broad base we have in In our 60 companies, 19 countries, 2,000 suppliers and thousands and thousands of products and also customers, I would say it's like a white noise. It's a little bit of everything across the year. So there is no specific spike. Then if you go down to a specific country, to a specific contract, of course, you can see such trends. But I think the message for Asker as a whole is, I usually give an example. It's like a floating bit of cork on the water. When it goes up and down, we kind of follow it in a good way.

24:32 If anything is problematic and disturbing, when the picture is disturbed with a pandemic or with something, we usually come out on the positive side, being a little bit quicker to act, being a little bit more forward leaning. So when the world is changing, we usually have a slight positive effect, but that should not be taking into any dramatic picture. And now when we have the hormones situation, we haven't so far seen any problems with this. Of course, our product is so broadly based and some of them are oil based, so we are keeping a close eye to it. We have been very quick this time as well to secure supply, making sure that we have a good logistic way so we don't get disturbed.

25:18 but so far we haven't seen it and also the on the price side we see if anything you know it could be a slight uptick but then you should see it as a normal normal business okay so nothing has really changed on the volume to price mix where we expect to see for say organic growth this year compared to previous years essentially what you're saying yes okay perfect thank you very much I'll jump back into thank you The next question comes from Jakob Lemke from SEB. Please go ahead.

25:56 Yes, hi and good morning. My first question is on the West home care business. I'm wondering, I mean, if you're securing new clients here now, should we then assume that you have secured sort of more recurring revenues and that we should expect this sort of higher data growth to remain here for a few quarters? And just to be super clear, Jakob, I guess when you say clients, you mean patients, patients in their home rather than, because actually the funding system in home care in the Netherlands is primarily driven by the big insurance companies. So we're talking about patient numbers, or did I misinterpret your question?

26:37 Yeah, I meant patients. Yeah, yeah. So I think, you know, when you see double digit growth in North, there is... in West. I think if I was building a model, I wouldn't build in plus 15% growth in West in perpetuity. I think that would be a little bit on the ambitious side, but it is fair to say that we are doing well in West. We are growing that business organically. And as I mentioned, the scale benefits that we got. We had a little bit of discussion around this in Q4 because we've had a bit of a warehouse reorganization, for example, in West and finding those benefits. We have had for a long time in the group a large business called Bossman that has continuously and consistently done extremely well. We bought another large business called Medereva three or four years ago, and that's nearly really running at full steam now as well.

27:35 So the combination of those, the scale that we're getting from those and the and the extremely good relationships we have with patients and the insurance companies means that there's no reason not to believe that we will continue to deliver good results from West. But I'm certainly not going to sit here and tell you that you should model 15% organic growth in West going forward. That I think would be a little bit extreme.

28:02 Yeah, that sounds fair. Then on North, I'm wondering what's the reason that the organic growth is higher for top line than on EBITDA so that you don't get scaled? Yeah, I can take that one. I think this one is much more driven by normal fluctuations, if I can put it that way. I certainly wouldn't read too much into that in the 0.3% drop in margin quarter on quarter. The actual amount of money involved to swing the margin by that amount is relatively small. And as Johan and I are kind of keen to emphasize, you really should look at these things on a rolling 12-month basis. And what we see is that North is a region that delivers above 13% consistently.

28:50 We're super happy with that. But there is no one factor that means that there is a mathematical, technical, small margin drop in the numerical figures presented for North this quarter. It merely is just the normal fluctuations within the business.

29:09 Okay and then a question on the seasonality in North. Is it fair to assume that Q2 normally is a bit stronger than Q1? Correct, yeah. We typically see in North that Q2 is a strong quarter. Sometimes it's affected a little bit where Easter falls, whether that falls in Q1 or Q2, but typically Q2 is a stronger quarter in North. There's a little bit of preparation pre-summer that goes on in many of the countries in North. And then Q3 tends to be a weaker quarter in North. Yeah.

29:45 And then finally just how we should read your comments about I guess the leverage and cash outflow in Q2 does that mean that we should expect maybe a bit more of a quiet period now for M&A and then sort of getting back to full throttle in the second half or do you think that you can close anything here also more short term? Yeah, I can take that from with a slightly longer term perspective. Maybe, Jakob, we've set to grow EBITDA by 15%, as we've said. We hope and anticipate that organically we will deliver 5%, 6%, 7%, 8%. And then on top of that, we've said we want to add 10% to 12% EBITDA on an annual basis from M&A to enable to reach that 15% and above.

30:34 We are very confident that we will be able to add M&A that adds 10% to 12% of our EBITDA through the whole of 2026. You know, as a little side note, you can do a bit of a back of the envelope calculation yourself. The deals that we've already done get us close to 50% if you include RMS, 40% if you just look at Van Hayek and GHC. So in terms of our trajectory, the amount of M&A we want to do, the pace at which we want to do it, we are absolutely on track. Whether that means there will be 10 deals in June or not, in some ways, you know, we are confident that we will get their full year. So so, you know, we have a good pipeline, we have plenty of deals lined up, depending on on, you know, more local technical circumstances, depending on exactly when they will be signed.

31:23 But the overall perspective is the pipeline is good, we're proceeding according to plan, we're adding M&A as we want to, and we have very good visibility because of the stability of the cash flows.

31:35 Okay, sounds fair. Maybe just a short final one if you can give an update on the Christine Hardam acquisition.

31:42 Yes, I can do that. I mean, we have a very good relationship with the owner of Hardam. That's actually not a private player this time. It's more of a big American company where we have a good collaboration in many aspects. When it comes to the specific case Hardam, it's an authority going through an authority process which takes a lot of time and usually we don't have these long long periods so right now we have not we have not closed it and we'll see where that will will end up if anything we have such a long pipeline so there will be if hard would not happen we have five in taking that position right away because today our limit is the cash flow we have. We have a long lineup of company that wants to come in.

32:32 It is an exceptionally long authority process which we usually don't have. It's not closed and we will see what happens and we will inform you as soon as we have the information.

32:47 When do you expect to get a decision?

32:51 We cannot say that but hopefully in the near future. It's been dragging on for longer than we have expected. I mean, we've done close to 70 deals. This is an outlier from that. So this is not usually how it plays out. So hopefully within the near future, I would say we know how to do it and we have a good dialogue with the owner to kind of manage the process.

33:16 Okay, understood. That's all from me. Thank you.

33:18 Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Albin Nordmark from SB1 Markets. Please go ahead.

33:35 Yes, thanks. Albin here. So, start off with the gross margin. Quite solid here up for the BIPs year-over-year. Can you split that between the product customer mix, input cost dynamics, FX or operating leverage, and also what should we expect here going forward? at the normal level, so to say? Gosh, that's an easy question you throw out there. I think I go back a little bit to what Johan and I have said. The mix in the organisation is now so broad, you know, 19 countries, 60 companies, everything from large, expensive pieces of medical equipment to everyday consumables and supplies.

34:20 So it's almost meaningless to try and break it down at the group level. Okay, but what if we try with only FX then? How much is FX driven? How much is FX driven? I think typically we are buying and selling products in local currencies. So we source them in the local currency and then sell them in the local currency. The minus 4% FX impact that you see at a group level is driven by the translation effects, the weakness of the euro versus the SEC. I just I would just say I've been in terms of in terms of gross margin you know gross margins are dependent on the business model so typically we have the larger more equipment pieces of equipment have slightly higher gross margins, but also bigger costs lower down the P&L. Our more consumables products have lower gross margins, but less costs lower down the P&L. So there is a big mix impact on that, especially if you look back over five or six years of how this group has changed and developed.

35:33 But I would also say that as we become bigger and stronger, we are able to use that to have more robust conversations with our OEMs, we're not going to get squeezed down the line. So I think for us, predicting exactly how gross margins develop is not sort of super helpful in terms of how we look going forward. It depends a little bit on how the mix of the group develops with the companies.

36:02 No input prices in, no inputs in US dollars then? No, I think a little bit as Johan mentioned, we tend to move as the market moves. So we do not get squeezed in the middle of this chain. We're never going to be in a situation where an OEM increases the price by 10% and we're not able to pass that through to our customer. What will happen is we will hold back that price increase versus the OEM and in some cases pass it through to the customer. The position that we're in now, the strength that we have, the relationships that we have mean that we are not going to be the victim of that squeeze if that were to occur.

36:42 All right, that's clear. And then earn out, you mentioned 130 million in 2007,450 in Q2 total, you have above 1 billion. So do you have any more in H2 here in 2016? No, sorry, perhaps I should have been clear about that. So there are future earnouts that will be paid in 2028 and 2029, which make up the total. So there's, you know, there's around 200 million per year in 28 and 29. But there are no other earnout payments that will be made beyond the 450 million in 2026. and as I say, the total forecast of earn out payments for full year 2027 at the moment stands at around 130 million sec. Sorry, I should have made that clear as I went through it earlier.

37:28 That's clear now at least, thanks. And Dan mentioning the scale of benefits both in the report and then now in the call. So how should we think here, especially in the West End? So how much is utilises and how is it possible to quantify benefits of scale ahead in 2026? I would again, I would take a sort of a broader perspective on it. If you go back five or six years, the group has grown its margin from sort of 6.5% to the 9.5% we have today. So we have consistently added around half a percentage point of margin on an annual basis.

38:13 And that half a percentage point of margin has come very, very roughly, half from the M&As that we've done, the mix enrichment that we get from the M&As that we've done, and the other half a percentage point of, the other, sorry, quarter of a percentage point, if you can put it that way, has come from organic, operating efficiencies. And of course, that will vary a little bit over time, depending on exactly what activities we do. We will get larger increases in margin, where there is more headroom in west and central, probably the margin will increase less rapidly in north. But big picture over time, I see no reason why we will not continue to improve margins at the rate that we have done historically.

38:59 Okay, thanks. That's clear as well. And then one last on the tax rate. It's quite lumpy. Now 23 down from 29, but still up quarter to quarter. So how should we think about the tax rate? Yes, lumpy is the word with I think last year with with IPO and changes of financing structure and many things going on to confuse the picture a little bit. We are a low 20s tax business. That is what we are fundamentally at our operating core. And over time, paid tax and P&L tax should normalize and come together at the same rate. So if I was building a model going forwards, I would put in 22, 23% as P&L tax and paid tax.

39:49 So I think what you see in Q1, the 23% is the more normal, clean rate of tax. The historical lumpiness has had all sorts of strange things into it. But going forward, we are a, yeah, 22, 23% tax business. We are not doing aggressive tax planning. We are not doing complicated things with our structures to try and avoid paying taxes. So that's what I put into the model.

40:16 Okay, great. Thanks. All for me. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

40:27 Alright, so we're coming to an end. Thank you very much for listening in and see you next quarter.