Joseph Zhou: Hello, good morning everyone. And thank you for taking my questions. I have two. I’ll go one at a time. So firstly, just to understand, in the second half, you mentioned stabilization, but it just seems to the quarterly phasing of it. Are we expecting to see still some contraction in Q3 before improving year-on-year in Q4? That’s my first question.
Lars Sandstrom: I think I understand your question. But as you know, we have large project deliveries coming in. And if they end up in a quarter or the next quarter, it’s always very difficult to exactly pinpoint that. So we will — that’s why we keep to explaining the second half of the year only.
Joseph Zhou: Okay. Thank you. And then my second question is just on the free cash flow. And this quarter, there is quite a meaningful boost from contract liabilities of SEK 6.5 billion. And I understand most of that typically is customer advances. And — can you just give us some more color on why is that — do you have that kind of increase? Because that can be explained or by the IPR payments just by looking at the magnitude looking going forward as well.
Lars Sandstrom: Yes. I think impacting the working capital is, as I mentioned, we have a reduction in inventories supporting. We also have a significant lower paying out on the incentives this year compared to last year. And then, of course, the whole contract ramp-up that we had last year. So those are, I’d say, the three big components impacting working capital year-over-year.
Joseph Zhou: Yes. Sorry, I get the inventory going down, but contract liabilities is a separate thing. Is that specific item? It’s been building up again, I have been following like three or four quarters declines. I just wonder what is driving that?
Lars Sandstrom: I think you have — let me get back on the details, and I’m happy to do that. But the main fee impacts are what I said, it’s inventories, it is the lower incentive payouts and then the whole contract rollout that we had last year. So those are the main items. But I think we are happy to reach out to you to give more insights into the different parts.
Joseph Zhou: That’ll be great. Thank you. Super helpful. Thanks.
Daniel Morris: Thanks, Joe. Moving to the next question. Next question is coming from Sebastien Sztabowicz at Kepler Cheuvreux. Sebastien, your line is now open.
Sebastien Sztabowicz: Yes, hello and thanks for taking my question. On Vonage, the business is now down by 5% year-on-year in Q1, and the group is trending well behind your and our initial expectations. Are you taking any specific actions to support sales in the coming quarters? And coming back to this, I would say, activities in some countries that you are reducing. What are the reasons behind that exactly? What is happening in those countries with Vonage? Thank you.
Lars Sandstrom: Yes. As you saw and as you mentioned there, Vonage is down. And as we mentioned, it is a loss of contract that we had last year in Q4. And also that we look at the different markets where it makes commercial sense to invest. And in some markets, we have said that we reduced our activities there and focus on more of the growth areas where we see there is a better opportunity. And I think there, it is really we are focusing on the long-term investments here to drive this part of the industry.
Borje Ekholm: Yes. As I said, Sebastien, it’s in reality, our focus is on driving the global network platform for network APIs. That’s where we are tremendously focused. We’re trying to, of course, manage the current business as prudently as possible, but it’s really the focus on executing the strategic rationale behind the acquisition. That’s our key focus. And that’s where we allocate most of the time. And that’s where we are starting to get the traction. We had DT in the end of last year, followed by Verizon, AT&T, KDDI and AWS now in the first quarter. We’re trying to shape that ecosystem. That’s really where the criticality is.
Sebastien Sztabowicz: We see good commercial traction. But when do you expect more sizable revenue to be recognized on network CPI? Is it one-year horizon or more three to five year horizon for Network KPIs?
Borje Ekholm: I think the reality here is it’s going to be the next one to two years when this market will be shaped. That’s really where our focus is. Then I think we’ll see a longer-term growth as applications start to develop and use cases start to develop. But to get this first traction, it’s about creating that market. That’s why it’s so important, of course to get operators in, but it’s equally important to get application developers, digital native starting to use what’s available. And we see actually an interest now from developers, from the hyperscalers about how do we shape this market, how do we create the applications of the future. It’s really up to us now to deliver on that. And that’s really where our focus is.
Sebastien Sztabowicz: Okay, thank you.
Daniel Morris: Thanks, Sebastien. So just turning to the next question. The next question will come from Erik Rojestal from SEB. Erik, please go ahead.
Erik Lindholm-Rojestal: Yes, thank you and good morning everyone. So you announced some further cost measures here with a headcount reduction of 1,200 in Sweden. I mean is it possible to quantify what sort of impact you expect to see from this? And when do you expect it to start contributing? Thank you.
Lars Sandstrom: All right. Thanks, Erik. As we said, we — in the outlook here, we see restructuring costs for the full-year of SEK 3 billion to SEK 4 billion. And how do we — normally, we are in the negotiations now in Sweden, and we are looking into more countries as we also have mentioned, and that it always takes a bit of time before it comes through depending on the market and what activities we do. So we will not see too much of that impact until the end of the year. I would expect as it looks now. But depending on how we are progressing, and we will update you continuously on this in the coming quarter as well to give you more insights on this topic.
