Good day, and thank you for standing by. Welcome to the NKT first quarter report 2023 conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Line Fandrup, Chief Financial Officer. Please go ahead. Thank you very much. Welcome everybody to this quarterly call for NKT financial results. Please note the first forward-looking statements about the rest of presentation. Today in the room we have Jens Due Olsen, the Chair of NKT. We have Claes Westerlind, our newly announced CEO, and we further have Michael Nass, Head of Investor Relations. I would like to hand over the first slide already now to Jens Due Olsen on Photonics. Thank you, Line, and good morning, everyone. I would just like to take you through the divestment process of NKT Photonics before we focus on the leadership change in our cable business. As you are all aware, our Photonics transaction was prohibited by the Danish authorities under the Danish Investment Screening Act. Normally, approvals are granted within 90 business days, and this prohibition came out of the clear blue sky after more than a nine-month process. We have not received any other reason than that it is for so-called national security reasons, and that we will not receive any other explanation. Also, we cannot appeal, and we cannot really get any insights into the merits for the prohibition as it is grounded in national security. As to the contract in an SPA and in this SPA, governmental approvals recycle the continuing entity, i.e. Hamamatsu. Without disclosing our contract, what you will typically also find are various guarantees, warranties, reps of the buyer, and sometimes also the ability to do carve-outs, and also what would happen in case of non-approvals. We cannot engage in a dialogue with the authorities as it is the obligation for the buyer to sort this out. We still have a contract, and we do expect Hamamatsu to live up to this. All right. I would like to flip the attention to NKT and first of all the leadership change. First and foremost, Alex has resigned for personal reasons and as they are personal, I cannot go into this. What I can say is that it is not any disagreement on strategy. It's not misalignment on commercial operational issues. As you have seen, the company, the financials are also doing very well. We had a strong Q1. Line will come back to this in a second. We did an upgrade for the rest of the year. We just won two significant contracts Friday. This also triggered the decision to invest in additional capacity. All of this is of course aligned both with Alex, but also with the new team. Rest assured that we do have a team securing our big contracts, and Claes, whom I will introduce in a second, and Michael Jord, our CCO, are key in these customer engagements. Also, I wanna say there are no keyman clauses in any of our business relationships, including these major contracts. We do take succession planning seriously, sometimes you wonder if you do too much, but this time it was worth the while. This is why we could quickly promote Claes and also fill the gaps left behind Claes, following this promotion. As to Claes has been running our biggest activity because Cologne plans, including the expansions done over the past years. Besides this, he's also an excellent team leader. He built strong organizations and has the ability to move between detail and strategy. Claes has had a lot of impact on NKT. We are proud and grateful that Claes has decided to take this opportunity. With that, I would like to hand it over to Line again. Or Claes, actually, if you wanna say something more about yourself. Yeah. Yeah. Thank you for the kind word, Jens. Good morning, everybody. As Jens said, I'm Claes Westerlind. As of then yesterday, I will have the privilege to now lead NKT going forward, following Alex leaving the company. I have had the pleasure to be with NKT since 2017. I came over from ABB at the time. Basically for the entirety of my career, now around 15 years, I've spent it in the large project business, starting on the HVDC converter side inside ABB. Later on in ABB cables. Then since 2017 in the HV Solutions Karlskrona business line and plant, focusing on commercial aspects, operational aspects, in particular around the sales of very large projects. Ultimately for me, it is a tremendous privilege to have been asked by the board to take over as CEO. I come with a fair amount of experience from the Solutions side, recognizing also looking forward to learning a lot more about the Application side and other aspects of NKT. I think with those words, I will hand it over to Line. Thank you, Claes. Turning back into to the key messages of the first quarter, it's been a strong quarter for NKT. We grew 34% organically compared to the same time last year, and it's driven out of all of our three business lines. Operationally, EBITDA reached a record high, a quarterly level of EUR 57 million. This is primarily due to the Solutions and Application business. Our high voltage order backlog took a significant step upwards. We closed out 2022 on a level of EUR 4.7 billion, and now closing out Q1 on a EUR 7 billion note. A testimony to the significant awards out there and NKT's position in the markets. Financial performance in the first quarter led also to an update of our outlook for the year. We are now expecting a revenue of EUR 1.8 billion-1.9 billion and a corresponding operational EBITDA between EUR 200 million-230 million. On Friday, and together with the project awards announced, we also announced that we will invest additional in our high voltage production capabilities in Karlskrona to support delivering on our backlog and to continue to take our share in the market and keep our positioning. We are considering also additional installation capabilities, and we'll come back later on this. Not to forget the mentioning of Claes as new CEO of the company, keeping focus on the existing strategy execution and the growth ahead of us. Turning over to the business highlights of the quarter on the first slide here, the combines for all the business lines. The improvements in the business is primarily driven out of Solutions and Applications, both revenue-wise and operational EBITDA-wise. Revenues and operational EBITDA increase in Solutions driven by execution of awards and also the expansions over the last couple of years and more to come later this year. In Applications, we have seen a strong recovery of passing on increasing input costs to our customers, meaning also an improved growth on our revenue and an improved EBITDA. On our service and accessories, we saw not any repair jobs in Q1, meaning a more steady development in the business line, underlying growth in especially accessories and also picking up on our earnings level. Moving on to each of the business lines, Solutions Q1 is a revenue of EUR 215 million, up by EUR 65, EUR 64 million compared to last year. It's an impressive 47% growth. The operational EBITDA is up by almost EUR 11 million from EUR 25 million last year to EUR 35 million this year. Margin-wise, the profitability, the operational EBITDA is on par between the quarter, same quarter last year. On the operational execution, we are seeing several projects in production and varying stages of project execution. We are seeing the Champlain Hudson in our Karlskrona factory. We're continuing to see our Dogger Bank projects, and we're also seeing both the SuedLink and SuedOstLink in production. Actually, we had the arrival of the first cable drums to the storage area in Germany for the German corridor was also during the last quarter, so a very important milestone for the company. Overall, the execution of our projects has been satisfactory. Turning into the Applications, where it's really an impressive growth of the quarter. Here at the same time, the business line had grown 32% compared to 2021, and this year, we can report a growth of 25% on top of that. It's been a very strong quarter for the business line, and this is a very strong operational EBITDA of EUR 18 million, and this corresponds to 11% operational EBITDA margins for the quarter. Primarily, we're seeing the revenue being driven by our ability to prices towards our customers and thereby offset the high inflationary pressure. We've also seen the volumes relatively stable in totality, but underlying we see an improved momentum in the medium voltage within Germany and Sweden, whereas the construction sentiment and thereby also the momentum around our building wire segment is at a lower level. We have recovered some on our building wire segment compared to the second half of 2022. We do still see a low traction there across Europe. Turning into our services and accessories business, a revenue of EUR 48 million, slightly up last year. Also an operational EBITDA of EUR 3.9 million, almost on par in absolute terms of last year, a little bit up. As said, we did not have any repair jobs in our service business, but our accessories business on a higher revenue number and associated operational EBITDA. We do see that our accessories business, especially within the medium voltage and high voltage sections, will continue to reflect also the favorable market development that we've seen in our Solutions business. With this, I will turn back to Claes on a bit of insight on our Solutions business and the markets out there. Thank you, Line. If we start from the very general perspective and looking to the development from 2010 to 2050, and the expectancy for how the distribution between different generation sources will develop on the annual energy generation, then on the screen here depicting basically two important factors for NKT. One is a very heavy tilt towards renewables, for example, offshore wind, but also solar, which are two important segments for us. The other one is also a change in the generation pattern in society, where both generations is moving from physical locations to another physical location, but of course also is displaced against the demand which is consuming the electricity. This development, of course, is what presents a very good opportunity for NKT as a whole, seeing that we have a portfolio both addressing the large transmission cables, but then also cables in the LV and MV segment connected to generation and also distribution. This is a very positive sentiment for NKT in general, and it's also what we are starting to see now for the last, I would say, two... With that, if we go into the next slide, there are a couple of notations here. To start with our order awards, looking at from 2020 to 2022. We have a number of different around between 10 and 15 active large projects. I think what is particularly good to see with the last three years is the fact that we have also entered some new markets, taking Athens to Crete as an example, taking us into the Med High Voltage segment. Lastly, last year, where we also entered back into the U.S. and Canada with a very large transmission project Champlain Hudson Power Express. Takeaway for me from that table is and also new customers that we are able to penetrate. We also have a lot of repetitive customers, which I think is a testament to our ability to execute, which is also fundamental for our forward journey. If we turn to the upper right depiction of the market size. When I came into the cable business in 2014, the market size annually for the segment that we are aiming for was around EUR 2 billion-EUR 3 billion annually. That's depicted here under 2016 to 2019. What we see both now and also next year is something vastly different, up to EUR 8 billion. Saying that it was EUR 2 billion, the whole market in a couple of years ago should be put against our collected order intake so far this year, which stands at around EUR 5 billion. It's impressive numbers, what we all hoped to see a couple of years ago is now really happening. You can see on the lower right as well that we are not only protecting our market share, but also showing our ability to gain market share as we go here. If those orders was not enough, I mentioned the order intake so far this year. You can see here three different examples of projects which we have been successful with recently. The Biscay Gulf interconnector was announced on Friday. This is a connector between France and Spain, where the customers are REE and RTE. NKT as a company, we are active with these customers in the high voltage segment and the project segment, this is a new entry for us to be able to gain the trust of a new customer also in a new market within the HVDC segment, which is an important aspect for us. If we view the mid example of the Hornsea 3 projects, they say that all good things comes in three. That goes also for wind farms. In this example, Hornsea 3, which is a DC project in the U.K., where NKT has been part of supplying also Hornsea 1 and 2. This is a good example of a repeating customers that again put their trust into this company for helping them to provide the grid connections. Last but not least, to finalize off with the biggest order ever for NKT as a company. Until somebody will tell me differently, also one of the absolute biggest in the history of the cable business, the IJmuiden Ver project, or actually three projects, with our customer, TenneT, that was awarded during Q1. It equates to EUR 2 billion and is the world's first 525 kV DC cable project which has been awarded ever. It's good to see also here that technical progress is also an important part of this company. We are a technical company first and foremost, and here we prove in launching the 525 kV cables some years ago. Now, this is also anchoring into a commercial project and contract. As if this was not enough, we finalize with the final page also showing you the award of the frame agreements which were announced last week on Friday. Again, we are in the Netherlands with the customer, TenneT, where both Netherlands and also Germany, together with other countries around the North Sea, have agreed to install at least 120 GW of offshore wind by 2030. TenneT's 2 GW program utilizing 525 kV XLPE technology is a major part of that ambition. This is, as I mentioned on the previous slide, one of the biggest projects, part of also or together with the [BorWin5] that the world has seen from a cable perspective. It's also a new sentiment in the industry, where we are moving from single contracts into framework setups. Our customers are aiming to secure cable capacity on a longer term base for several reasons, both for the delivery time to be able to conduct the green transition, but also in order to allow the cable manufacturers such as ourselves, have a better visibility and planability in our factories and our operations. Which is extremely beneficial, having been a plant manager myself from an operational perspective, but also gives better financial stability for us as a company. This very framework here is running from running until 2028 and also possibly with an extension until 2031. In the framework agreement as such, from the beginning, the customer, they are committing to three different projects with specific route lengths, as you can see depicted here. The combined value of these projects is around EUR 1.5 billion, and there will come some installation scope on top of this. That's not to say that that's where it's gonna end. The customer has also a right to call off further projects in under a bilateral agreement with ourselves. This is merely a frame and a starting point for what this may mean for NKT. All these nice orders, warrant for a little bit of a historic perspective and also what we're doing going forward now. We have disclosed this, to a certain extent on Friday. You can see here how the Karlskrona factory has sustained continuous investments and improvements from the years 2010 up until today. Right now we are in the phase of completing, the investment products that we announced in conjunction with the corridor projects, where we increased the XLPE, capacity in Karlskrona, combined also with a capability increase to handle very heavy drums. That will be completed this year and fully operational during next year. Then as of Friday, we announced also, an ambition to expand the operations even further with the most prominent part of that being the third tower. Of course, for a third tower to be able to be operational, there will come machine lines also before and after that. I think as Line pointed to in the beginning, this will also be followed by a close consideration of installation assets and also capabilities. This is a huge project for us in NKT and also for Karlskrona as a site. Having a little bit of experience myself around that, I think there is no better place than Karlskrona to do this kind of expansion. What is the most critical or one of the most critical aspects for us is the competence. The competence to manage the risks that it means to deliver these projects, the competence it requires to make these investments successful on time, on budget, with safety and on quality. That capability we do have in Karlskrona, and we have just exercised that during the last investments to be completed this year. I very much look forward to the third tower and the high tower, but even more so, it will be a very important part for us to be able to grow the Solution side of NKT even further. With those words, I will hand it back to Line. Thank you, Claes. Let's turn into the financial highlights and the first slide here covering the income statement. Repeating the messaging on the 35% organic growth driven by all business lines. A strong operational EBITDA of EUR 57 million and a 13.5% margin compared to 12% at the same year time last year. This panning into also a positive net result at EUR 30 million compared to EUR 11 million last year. Last, going back to also Claes' statement here about competencies and people. We are continuously growing the company to actually take on this growth. Over the last year, we have added around 280 people. The primary part of that to support our Solutions business and then the footprint changes within our Applications. Turning to the balance sheet highlight on the next slide, you'll see that compared to the end working capital in 2022 of EUR -303, we have increased compared to that. This is primarily due to a shift of milestone payments in Solutions. That's the major part. Also note our ROCE level coming up from especially the Q1 in 2022 to 8% in this quarter. Improved earnings is the primary driver of this. The net interest bearing debt is increasing compared to end of 2022. This is due to our ongoing investment program and also the net working capital shift that you see. Leaving us at a leverage level of 0.3 x EBITDA, well below our targeted range. Turning to the cash flow highlights. As just mentioning, cash flow from operating activities is negative. A strong EBITDA is counterbalanced by a net working capital change, and our cash flow from investing activities at a EUR 31 million, lower than last year, but very much also ahead of us is the expansion on Karlskrona for rest of year, where you will see also our CapEx picking up momentum. Free cash flow at EUR -98 million due to this. Turning to the next slide, repeating the financial outlook of the year that we updated back in April. Revenue of EUR 1.8 billion-EUR 1.9 billion and EBITDA of EUR 200 million-EUR 230 million. All of this is, of course, based on assumptions, here under the satisfactory execution of our high voltage projects. Actually an award of a high voltage project would, that could have financial impact in 2023. Satisfactory offshore power cable repair work activity. That we would see limited impact due to any kind of uncertain global macroeconomic environment, supply chain challenges or geopolitical unrest. We have the key messages of the quarter. The organic growth and a very strong EBITDA, primarily driven out of Solutions and Applications, but all business line contributing positively here. A very strong order win during the last months, enabling an record high order backlog closing out Q1 at EUR 10 billion and even more project awards following Q1. The upgrade of the financial outlook for the full year back in April, and the commitment to invest further in our Karlskrona production side with further high voltage capabilities and also considering installation capacities. The appointment of Claes Westerlind as our new CEO. With this, we are ready to turn over into Q&A. Operator, we are ready to Q&A. Yes. Thank you. As a reminder, participants, if you wish to ask a question, please press star one one on your telephone keypad and your name will be announced. To withdraw your question, please press star one one again. Please stand by, we will compile the Q&A roster. This will take a few moments. Now we're going to take our first question. The question comes through line of Daniela Costa from Goldman Sachs. Your line is open. Please ask your question. Hi. Good morning, everyone, and nice to meet Claes. I have three questions, if possible. The first one relates to if you can elaborate on given sort of the delay in the Photonics situation, if that has any implication on how you think about the sizing and the timing of the equity raise, how shall we think about the two things in aggregate? Second thing, have got a lot of recent orders. Can you perhaps comment in terms of the margin on those orders versus what you have on the backlog and what you have today in P&L? The whole industry has had a lot of orders, so color on that trajectory would be great. My final question relates to Applications. I guess, given how big the Solutions business is getting, can you talk through sort of why is Applications core for you? What synergies do you get from that? Why doesn't it derail you from the focus on Solutions? That would be my questions. Thank you so much. Thank you, Daniela. Thank you, Daniela. Maybe I can take the first one. Jens here. If you think about, I mean, on one hand, we have a need to strengthen our balance sheet and also fund future aspirations, i.e., the plant factory expansion and installation capacity expansion that Claes and Line talked about a second ago. If we build a new factory in Karlskrona, or as we build a new factory in Karlskrona, the cash outlay for that is not going to happen now. It's going to happen, say, over the course of one, two, three, and even four years. If we raise money now in the equity market, that should drive down, of course, our leverage, and then that leverage will gradually increase as we actually have the cash outlay for the factory expansion. Combining this, you know, without giving, you know, long future projections, combining our earnings and working capital requirements on one side and then the cash outlay for the factory expansion on the other side, you will kind of reach a situation where you can see that leverage is not peaking right now, but leverage will peak when we have the big cash flow. This factory expansion. After this long intro, you know, what I want to say is that, yes, the plan was to get EUR 200 million approximately for the Photonics transaction. You know, we don't really need that money now. We need it in two, three years. Okay. Following up on the question two in terms of the, of the recent order wins and the margin on those. Do you want to comment, Claes? Yeah. I can give it a shot. If we go back to my slide where we looked at the market volumes there, I think it is clear that the volumes on the market have increased quite a bit, if not quadrupled now in the recent years. Of course, seeing it coming from a situation where many of the cable suppliers were not utilized to 100% to now these suppliers having a good utilization. By that, our expectation has always been that the margins would increase and allow for a more sound pricing. That is also what has happened. I would conclude that we are satisfactory with the margins that we see for the moment, on the recent order intakes. I'll close out the third question on the Applications. Our Application business is doing very well also in this quarter. I think if you, if you go back just a year or one and a half year, one of the things we did back then announcing was removing, let's say, the low voltage part of our high voltage product from Cologne to one of our Applications out in Vildbjerg. That's kind of one of the underlying mechanism of what we are able to optimize as a company when having these kind of opportunities with different factories. Also we do have shared suppliers between the different business line, enabling both, for example, within the metals, the aluminum and the copper supply in combination. The customer base, to a certain extent also has, some of the same, which also enables our approach to our customers to benefit of both, offering, segments from the Solutions business as well as the Applications business. All in all, we think that the Application business is a good complement to, the growth in NKT. Perfect. Thank you very much. Thank you. Now we're going to proceed to our next question. Just give us a moment. The next question comes through line of Akash Gupta from J.P. Morgan. Your line is open. Please ask your question. Yes. Hi, good morning, everybody, and thanks for your time. I have three as well, and I'll ask one at a time. The first question I have is for Claes. Thanks for the presentation and the slide number 14. The question I have is that when I look at this chart where you show that orders for industry rising from EUR 2 billion- EUR 5 billion and now EUR 8 billion, can you also walk us through what is your best assumption on the supply, so that we know that, okay, if the supply is like EUR 3 billion or EUR 4 billion or EUR 5 billion, then how much capacity addition for the entire industry might be required to reach to EUR 8 billion figures? That's question number one. Okay. Sorry. You want me to answer directly? I think it's a very good question, Akash, and I have my own perception of it, but I'm not sure I actually should or can disclose it at this point here. I think what we have seen recently from the expansions that have been announced, also including the one that we announced on Friday, we think that these are the correct decisions by the industry as such, and that the market will respond well to that. There will be no oversaturation with supply capacity looking at the EUR 8 billion a year with what has been announced lately. Projecting what will happen going forward, I can only speculate, and I'm sure you the same. I'm unable to comment that further. Thank you. The second one I have is that you have announced, you are going to build a new tower. You haven't said whether that would be for one line or two line. Maybe if you can tell us, with this tower, are you investing in two lines simultaneously or one at a time? Then can you also tell us how much CapEx would you need only for this tower and the lines that you have announced so far and phasing of that CapEx? I've been personally involved in the, in the planning of this, which has been going on for a while, as you can see. Nobody is more eager actually to tell you all of those, the answer to all of those questions. I think what we have said as a company is that we will come back before the end of May to disclose further information around this investment, which will include some rough estimates also on the figures around it. I think it's all very relevant questions, but you will have to allow us to come back on that, Akash. Thank you. Final one is on Applications margin. I mean, you had a very strong performance in the quarter, exceeding expectations there. I'm wondering how shall we think about sustainability of these low double-digit margins, which you haven't had sustainable track record of making. Clearly on medium voltage, there is a much favorable demand supply situation than low voltage, where we have risk of slowdown in construction market. Any comment on sustainability of Application margins and what have you baked in for the rest of the year for this segment? Thank you. Yeah, thank you, Akash. I think you are doing the reflections that we are also, right? That the strong quarter, absolutely good coverage and good, well-done job by the Application business. It is so that the visibility on this business is also shorter than the solution. Guesstimating about how everything would develop, including the construction sentiment as you talk to and the pickup on the medium voltage is also early days still. We don't expect this to be necessarily, we don't guide on quarters and we don't guide on business line, just to say that, right? We don't commit at this point to this being a level that Applications could maintain. We appreciate, let's say, the quarter behind us. Line, can I just add that, you know, the strong quarter is not only market-driven, it is also the result of a very operationally savvy team. I think we have good operational KPIs from the Applications team, but also very good market management. I think in a business that is not dependent on long-term contracts, but more exposed to shorter term fluctuations, as Line talked about, these are two critical areas to have in an Applications team, and they are basically demonstrating they can do both. Thank you. Thank you. Now we're going to take our next question. Please stand by. The next question comes through the line of Kristian Tornøe Johansen from SEB. Your line is open. Please ask your question. Yes, thank you. I would just like to start by following up on your comments in an early answer, Jens. You said that you don't need the money from Photonics now, but in two to three years. Can you confirm this means you will not need to raise the equity you need by the EUR 200 million you're missing from the Photonics establishment? Yeah. I think what I'm saying is that this will not increase the current equity ticket by EUR 200 million. Having said this, of course, this is also a question of how the banks look on us as a risk. We also do need to strengthen our balance sheet given the size of the projects we have right now. Although, you know, we are managing this technology very, very well, we just need a little more resilience also on the balance sheet until the earnings start coming in from the big projects we have actually started to engage with. On one hand, we need money to reduce our leverage to an acceptable level. We need money so that the banks believe that we have more resilience as a company. If I look at the cash inflow and the cash outflow, whether we have the EUR 200 million now or the EUR 200 million two to three years from now does not really matter. Okay. That's quite clear. Does this also mean that the current mandate you have to issue up to 50% new shares is still sufficient to the need you're looking into? Absolutely. We have asked for a 50% mandate for a good reason, and we will come back on the actual sizing of this. You know, when we got the mandate, it was to be able to plan for the future. Great. Understood. Then just my final question on the growth in Photonics, sorry, in Applications. This 25% organic growth. Can you tell us how much of that is price? To a large extent it's price driven. We see more or less flat volumes, I would say, to mix on the line. It's primarily prices. Price Is there any reason these prices shouldn't stick in coming quarters? In terms of revenue, it depends very much. Our segments are priced differently, so depending on the developments around the building wire, and the medium voltage and even that in between, you will see some changes in the revenue development. Understood. Thank you. Thank you. Now we're going to take our next question. The next question comes through the line of Casper Blom from Danske Bank. Your line is open. Please ask your question. Thanks a lot. First of all, welcome, Claes, and congratulations on your appointment. I have a couple of questions also. The first one goes to Jens. You mentioned that you expect Hamamatsu to live up to the contract that you have made with them. Let's assume that they are not allowed to take over Photonics. What would that then mean, living up to that contract? Is that you would have some sort of compensation from them? Is there a walk away clause that would be triggered from that? That would be great to hear some flavor on that to the extent possible. Secondly, on your framework agreement with TenneT, it would be great if you can shed a bit of light on the terms in such framework agreements. How do these differ from regular contracts? How firm is it? How certain are you that this will be, you know, triggered in 2025? When you will actually do the production and book the P&L impact? How certain are you about the design of the projects, et cetera, et cetera, et cetera? How can you safeguard yourself about that uncertainty? Finally, TenneT is now becoming a very big part of your business, and a very dominant client for you. How do you safeguard yourself against having that many eggs in one basket? Thank you. Thank you very much. Perhaps I should just start with the Photonics question. What we have disclosed is that we have, of course, a buyer, and we have a very good contract. We are in a discussion with the buyer on how exactly they're going to honor that contract, and we really need to keep that in-house for the time being because we are in negotiations. We do know they are trying to find solutions. Again, this is a dialogue between them and the authorities, and we are not part to those discussions. For now, I would just like to say that we reiterate that we have an agreement, we have a strong contract, and that we need to sort this out between us before we can disclose further. Um- Yeah, and on your second and third question, I will provide some comments, so then Line can also complement. Around the framework contracts, there I also need to be a little bit careful on how much I say. I think what you're coming to is very true. I think what is unusual here is that we are writing a contract in 2023, and we will basically book these orders in a couple of years' times, into the company in 2025 for the three mentioned projects. Of course, with that comes an awareness from our side and potentially a worry from your side in the market. What about input costs and changes over these years, and how does that impact? Of course, how firm are the prices? We have been fully aware about that. Our customers do recognize that. Apart from the normal adjustment mechanisms like metals and plastics and things like that, which we have in all contracts until they're booked, and we don't take the risk for it, we have made sure that we feel satisfied with the risk exposure that we have in the coming years. You will note the comment on the slide that there is some volume of that contract which will come on top. That is volume which is connected to things which is not possible to firm up and establish today, such as burial operations of the cable, et cetera. Obviously also, if designs and other things change for changes in conditions which are outside NKT's control, then that is also a discussion we would then have with our customer. So I hope that was at least shedding some light on how we are dealing with that. Thirdly, you mentioning TenneT becoming a very big part of NKT. I would like to say that that is true to a certain extent. They have been a big customer for us, and they will continue to be so, now even bigger from a volume perspective. We also have to keep in mind that NKT is growing, and our capacity is by no means exhausted for the next 10 years. That also means we will be able to take in more orders to balance that. I would also raise a counterargument. What I mentioned before about competence aspects and risk management, what we are very wary about is, of course, that we need to be able to lead, engineer, and execute our projects at the highest safety, quality, cost, time perspective. Us focusing then on fewer customers rather than more individual smaller contracts is a big benefit us for us. That's not to say that we will only proceed with only one customer. I don't know, Line, if you wanna make any comments to that comment. Yeah. I think I just wanna add also that we are also safeguarding the spot market in general. One thing is the frame agreements and what kind of load that can give in our factories. Now another part is also caretaking that we can bid continuously in the spot market on the projects that may come to support our customers in a broad sense. Okay. Thank you very much. Thank you. Now we're going to take our next question. The next question comes from line of Claus Almer from Nordea. Your line is open, please ask your question. Thank you. Yeah, also some questions from my side, and do one by one. I'll start out with some questions for you, Jens. I know you have touched upon the departure of Alex. Just to avoid any rumors and speculations, can you confirm that departure has absolutely nothing to do with NKT business or projects being signed, you know, in the widest aspect, and therefore there's nothing that will show up in the P&L at a later point? That will be the first question. Yeah. Thank you. If you're interested in the subject, I understand it. I can absolutely confirm that Alex' departure has nothing to do with business or projects being signed. I think the only thing that will show up from Alex' departure will be his, you know, his normal severance payments in connection with him resigning. This is all that will be made. That is good. Good, good to hear. The second question also for you, Jens, that's the Photonics. When do you expect or hope that we will hear some more about, you know, the future ownership of that business? I honestly cannot reveal this because we do have an agreement with Hamamatsu and we need to sort out what they're going to do. With, you know, because of that, we have an intensive dialogue with Hamamatsu, and they have a dialogue, I assume, with authorities. We need to sort that out before we can say anything else. Sure. You keep saying this, it was also included in the initial announcement that you are well protected by the contract. Does that well protected also include a, you know, timing clause? Yeah. Maybe being more generic than specific, you know, and it's not to sort of lecture you on, you know this better than I, but, you know, when we do have a contract, there's typically the contracts run for a while. It's the obligation, again, of the buyer to get the necessary authority approvals. Sometimes you can extend in good faith, but there's typically also a drop dead date in the contract. Now, during the phase until the drop dead date, the buyer has an obligation typically to get the approvals and to take some actions to potentially g et the approvals. Then of course, in a contract you can have representations and warranties and guarantees, and they extend all the drop dead date of the particular contract. It's a combination of all these things that made us say that we have a very good contractual agreement with Hamamatsu. Having said all this, you know, what we focus on right now are all the commercial aspects of it and the contractuals of course will have to be solved. Sure. When is this stop date? That we are not disclosing. I thought so. Okay. It was worth trying. My last question goes to you, Claes, and also from my side, you know, congratulations with the job. It's probably a difficult question to give a short answer to, but I will try anyway. As a CEO, do you see a need to change the strategy or do any other large adjustments or changes to the business? It's a good question. Taking the perspective that I've been part of the group leadership team, and I've also had the privilege to have a position to the board in the last three years and also been an integral part of the strategy, I think my short answer is no on that. I stand just as I did as a GLT member. I now as a CEO stand fully by the strategy which has been laid out and is also robustly supported by the board looking to my left here. Also over and beyond that, like having the business, I follow the principle that of course we need to fix what's broken, but also leave be what's working. There are a lot of things in NKT and I think numbers, and our development is a testament to that is working very well. There are things where we can become better, and that's of course for me together with the GLT under the surveillance by the board to address now in the coming months and hopefully years in office. Now you open up for that discussion, so I have to ask, so you say there's areas where you can get better. Where is that? I think this is for me now to get into a little bit and spend my first days and weeks in trying to understand that. I think we can get better in the many different places, you know, satisfactory numbers, but also looking behind those, can the numbers get even better? I think it's also in Solutions customer that I know very well and is operating in a very nice way, you know, can get even better. Same thing goes for Cologne. Same thing goes for, of course, parts of Applications and other aspects as well. I will have to wait and see and make my considerations a little bit. Fair enough. That was all for me. Thanks. Thanks. Thank you. Now we're going to take our next question. The question comes from line of Akash Gupta from J.P. Morgan. Your line is open. Please ask your question. Yes. Hi. Thanks for the follow-ups. I have two small ones. The first one was that in Q4 results, you mentioned that addressable market in 2023, 2024 is estimated to be at least EUR 8 billion per year. I mean, so far if you look at order awards and only the form ones and taking this framework agreement out, I think we already got more than EUR 5 billion in industry orders, where you are also involved in some of those. Can you talk about how does the pipeline looks on large orders in the next six to nine months? Are there more framework agreement orders on horizon? The second follow-up I have is that, do you see any impact of inflation on your Solutions margin? Thank you. Yeah. I can give it a first go and Line you can complement. We don't comment typically on individual projects or frame agreements. As you could see in the numbers on the slide I presented there, the sharp rise in volumes, I think supports also the indications and I think the general information on the market that there are more customers looking at this in a similar way that TenneT does. Then as far as exact time horizon goes, I'm unable to give that. If you look at input costs and the rise of the cost which we have seen also last year and also continue to see this year to a certain extent, yes. That we see also in the Solution projects. We work actively, you know, on two aspects of that. Of course, both to the extent we can, we can retain compensation from our customers, we do that. Of course, also we are actively working with lowering or looking at different suppliers, looking at, hedging of our electricity contracts, and also utilizing risk and contingency reserves which have been put in place in the first place to cater for what is now coming to a certain extent. I think the only thing I would add here actually is maybe the interesting fact on some of these frame agreements, because they have a certain dynamic, and as you recall earlier discussions about the wintertime where some of more of these frame agreements actually surfaced. We realized that the industry was also structurally changing here. Just this week, we had a discussion with one of the larger European utility companies about a tender they expected to run over the next window for also a frame agreement. Actually, they're preponing that even to this summer, and looking into a larger portfolio of cable projects that they want to establish with the different suppliers in the market. It is a very dynamic market we are seeing out there. When we talk about the projected market awards in any kind of numbers, these dynamics are not reflected obviously to the full extent. Depending on when they will be awarded, that can change the view, our view on that also. Yeah. Thank you. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Now we're going to take our next question. The next question comes from line of Kristian Tornøe Johansen from SEB. Your line is open. Please ask your question. Thank you for taking my follow-up here. Just to follow up on your answer here, Line, how many framework agreements do you expect to be awarded here in 2023, besides with the TenneT one also? Expect to be award. That always is a dangerous path, right? Tendering out there, I think Claes will even be better to answer that. There are several ongoing, and over the summer and the fall that we've seen, without being more specific. Yeah. I would concur. Yeah. Just to the margin in Solutions in Q1, obviously it was sort of on prior year and year, Q1 last year was also by far the strongest one. A decent step up versus the second half margin. Can you talk about whether there was any project completions in Q1? 'Cause that's typically where we see the margin spikes, or what is driving the improvement quarter-on-quarter on the margin Solutions. I think on a general level, as you know and see also in the numbers historically, it does differ in terms of which projects are under execution, which part of the phase is the project in. As you know, right now we have many larger projects also on the phone. I wouldn't say any extraordinary events. Good execution was satisfied with our Q1 numbers. Yeah. Well, I would concur to that and add just that, of course, if we look at individual projects, as Line says, depending on which is in production for the moment and which is during and undergoing heavy installation activities for the moment, that in itself generates a different level of profitability quarter on quarter. It's not the financial answer, but of course from an operational perspective it's difficult to measure Solutions quarter by quarter because we are not that, short cycle, so to speak. On top of that, also a lot of our work is connected into risk management and dealing with physical risks that we are, facing in the projects. When we get past that, when the risks mature, then on top of the pure margin of the project, then hopefully by good management, we will have additional profitability. That will also swing a lot quarter. Of course, it's connected to the actual physical time plan and the operation in a single project. Can I just add a final comment? That, yeah, sure. I mean, as you know that we talked about the supply demand imbalance here in the past, and our customers are trying to secure capacity also for the future. This is why we see these big frame orders. It's also to allow us for long-term planning, as Claes said before, so we can actually make the necessary investment. This just to say that, you know, as our order book is growing at the moment, the incoming orders have a more attractive financial profile than the orders we actually are executing on. As time goes by, and provided we can execute, our margins will go up. Not, maybe not necessarily sequentially quarter by quarter, but on average they will. Understood. Given that you, as you mentioned at the beginning, I think it was Line, that you are executing on a few long-term contracts, is there any expected then mix changes or maybe phrased in a different way, this level we're seeing on the market in Q1, is there any reason why that should not continue in the coming quarters? I think it depends very much on what we execute, and I think exactly what Jens alluded to here. We are still executing on awards that we actually had award back in 2020 and even a little one before that. The more we transition into projects that we will award, let's say, over the last 12 months, the margin will improve. We need to close out some of the old ones. All right. Not necessarily the clear answer, but, I'll take what I can get. Thank you. Thank you. There are no further questions at this time, and I would like now to hand the conference over to our speakers, Line Fandrup and Claes Westerlind, for any closing remarks. I will thank you for the good questions today. Yeah, have a nice day out there. Yeah. Likewise from me. Pleasure to be part of this call, and looking to get to know you even further. Thank you, everyone. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.