Good morning, and welcome to Nilfisk's earnings conference call for the third quarter of 2023. My name is Elisabeth Klintholm, and I'm the Head of Investor Relations and Group Communication here at Nilfisk. And with me on the call today, I have Nilfisk's CEO, René Svendsen-Tune, and our CFO, Reinhard Mayer. This morning, we will start out with René giving an update on the numbers and the key drivers for the quarter, followed by a Business Plan 2026 update. Then Reinhard will give a more detailed run-through of our financial performance in the quarter, and he will finish off with a few words on the narrowing of our outlook for 2023. We really appreciate that you take the time to listen in on the call this morning, and we'll do a presentation for around 30 minutes, and then, as usual, we really look forward to taking your questions at the end. Moving on to slide 2 for the usual practicalities. Before we begin today's presentation, please note that this presentation, including remarks from management, may contain forward-looking statements that should not be relied upon as predictions of actual results. For more details, I refer to this slide and to the disclaimer in the Q3 2023 report. With this, I pass the word over to you, René. Thank you, Elisabeth, and good morning to every one of you. So thank you for joining us on this, earnings call today. I will start out with some high-level comments on the key highlights, for third quarter of 2023 and a short business plan twenty twenty-six update. So please go to slide 5. Nilfisk's Q3 results for 2023 were in line with our plans. We saw satisfactory progress across many of our financial KPIs, but let's start from the top with the revenue development. Total revenue came to EUR 247.8 million, compared to EUR 263 million in the third quarter of last year. This represents a reported growth of -5.8%. Most of the decline in revenue was driven by foreign exchange headwinds, resulting in organic growth of -0.7%. Our services and consumer businesses contributed with growth, while revenue from professional and specialty declined. Looking at the regions, we saw negative organic growth in EMEA and Americas, where market slowdown led to soft customer demand, while APAC contributed with positive organic growth. In the quarter, the ongoing easing of supply constraints continued, particularly in Americas. We do note that the order book remained elevated, primarily within the industrial range in Americas, which is produced at our Brooklyn Park site. The margin recovery that we have seen over the last five quarters continued, resulting in gross margin of 41.2%. EBITDA before special items increased to EUR 31.2 million, and the EBITDA margin before special items rose to 12.6%. And finally, free cash flow improved significantly in the quarter. And overall, the Q3 results were broadly in line with our expectations. So let's move to slide 6 for an update on Business Plan 2026. Back in August, when I joined, Nilfisk as the interim CEO, I spoke to you about our unchanged commitment to the Business Plan 2026. Just for good measure, I reconfirm this today. We remain fully focused on our work with implementing and realizing the Business Plan 2026. Our work with the business plan is embedded in our daily life across Nilfisk. It stretches from markets and functions, from leadership to customer-facing employees. We are almost two years into the implementation phase. This means that we are operationalizing our plans as part of the day-to-day cadence. As with any implementation, this results in ongoing adjustments to the plan from the continued feedback loops we have. I'll highlight a few areas where our Q3 progress deserves a bit more attention. First, we continue our work with the large-scale US market. This quarter, our comparison figures from last year were strong, partly driven by COVID-19 subsidies aiding commercial demand. While order intake held up this quarter nicely, customer willingness to close deals were still below our expectations, and which, given the strong comparison, Americas saw negative organic growth. Our strategic priority of developing services as a business continued its growth momentum and reached 30% of total revenue in the quarter. This is up from 28% in Q3 of last year. We also continued to make small progress with our contract attachment rate, which increased to 11.8% for the first 9 months of 2023, up from 9.3% for the same period in 2022. On the product side, our product launches in the second half of 2023 are worth highlighting. In Q3, we launched the SC351 lithium-ion for our commercial customers. This is a walk-behind designed to wash and dry floors in one pass, and the machine is powered by onboard lithium batteries. In Q4, we have already launched two new products, the SC650 for the commercial business and our new cordless Nilfisk S1 for the consumer business. So finally, let me follow up on the progress within building the regions and with our structural efficiency improvements. As a part of our focus to build a more customer-focused operating model, we have established three regions: Americas, EMEA, and APAC. We now also have clear leadership in place for both our EMEA region and APAC region, as we had it, earlier for the Americas region. On October 1, Christopher Riau was appointed General Manager for EMEA region. Christopher was previously Head of Sales for Europe South, and since March of this year, he served as a Co-Head of Commercial EMEA. Also, on October 1, our COO, Petros Kapalos, was appointed General Manager for APAC. Petros will also continue in his role as COO. Finally, in the second quarter of 2023, we initiated several structural adjustments. Most of these initiatives were concluded in the second quarter and third quarter of this year, and the rest are planned for now in Q4 of 2023. A good part of the results is already visible in our overhead cost development, and Reinhard will come back to this in more detail. And with that, Reinhard, over to you to run through all the finances. Please go to slide 7. Thank you, René, and good morning also from my side. Our revenue growth... Let's move to slide 7. Our revenue growth of EUR 247.8 million was EUR 15.2 million lower than in Q3 2022, leading to a negative revenue growth of 5.8%. Adjusting for currency effects, organic growth was a decline of 0.7%. Revenue was supported by organic growth in service and by solid organic growth in the consumer business, which we will detail in a minute. Professional declined organically 1.9%, of which the branded part declined just 0.4%. Floor care performed well, while we saw a stronger decline in our high-pressure washer product segment. Private Label declined 20.8% organically, as sentiment for this business remained soft in the quarter. Service revenue benefited from the initiatives laid out in Business Plan 2026, including positive effects from pricing and from growing revenue in field service. The PAC business declined compared with Q3 2022. Last year, Q3 benefited from the increased shipments of parts after the tornado event at the end of March 2022 in our U.S. distribution center. The specialty business declined 12.2% organically due to lower demand from the industry segment in both EMEA and Americas. This was partly offset by pricing actions. Revenue from the consumer business was strong, with 6.6% organic growth as customer demand continued to pick up. As in the first half of 2023, continued price management benefited revenue across the business. We note that we finished Q3 2023 with an Order Book that remains elevated, but at a lower level than in Q3 2022. Moving on to Slide 9 for commentary on revenue by region. Looking into the three regions, demand was soft in EMEA and Americas, while APAC continued to grow. In EMEA, revenue declined 0.5% organically in the quarter. Demand remained somewhat soft and impacted revenue for the region. Price management supported the revenue development, resulting in flattish growth in most markets. UK and Denmark saw growth, while Italy and Benelux declined. In total, EMEA delivered a revenue of EUR 134.3 million. In Americas, revenue came to EUR 93.5 million in the quarter, which corresponds to negative organic growth of 1.7%. Revenue was supported by price management and from increased shipments from our Brooklyn Park production facility in U.S. Revenue was negatively impacted by the softer demand in North America. Tough comparisons from a stronger prior year quarter that saw 15.7% organic growth, which had been positively impacted by a large one-off order from a retail customer in the U.S. last year. LATAM performed well, driven by solid demand, leading to higher invoiced volume. This was further supported by pricing actions. Finally, APAC delivered revenue of EUR 20 million or 2.3% organic growth. This is an increase over a very strong prior year quarter, where we saw 14.1% organic growth. Revenue was supported by strong demand in Australia and New Zealand and by growth in China after the COVID-19 lockdowns were lifted. Turning to page 10, where we look at the gross margin development. The gross margin continued to improve and reached 41.2%, showing progress over the last five quarters. The gross margin benefited from price management, lower freight costs for overseas shipments, and product mix effects. Cost inflation, including on raw materials and lower volumes, negatively impacted the gross margin. Let's look at the three buckets of moving parts impacting the gross margin. Compared with Q3 2022, pricing and mix effects benefited the gross margin with 4.7 percentage points. In addition, tailwinds from lower freight and distribution costs benefited the gross margin with 1.5 percentage points. Headwinds from lower volume and price increases on raw materials impacted the gross margin negatively with 4.1 percentage points. Summing up, the gross margin increased year-on-year by 2.1 percentage points. Moving now to slide 11 and some comments on the overhead cost. In Q3 2023, overhead costs came to EUR 86.5 million, a decrease of EUR 2.6 million from Q3 2022. We also saw a decrease in overhead costs from Q2 2023 of EUR 2.2 million, following the implementation of our structural efficiency improvements, which are expected to be completed in Q4 this year. However, as a result of lower revenue, the overhead cost ratio increased from 33.9% in prior year to 34.9% in this quarter. Let's have a deeper look into the evolution of our major spend categories. Sales and distribution costs decreased by EUR 2.4 million from Q3 2022, driven by implementation of the structural efficiency improvements. Administration costs rose EUR 0.5 million from Q3 2022, impacted by cost inflation and the change in CEO. R&D spend increased slightly by EUR 0.2 million from Q3 2022, and stood at 3.3% of revenue in Q3 2023, an increase from 3% in prior year quarter. The increase was driven by investments in modular platforms and software development. The stronger focus towards developing new sustainable products is increasing the level of capitalization of the R&D spend. As a result, total R&D cost decreased by EUR 1.9 million compared with Q3 2022. For a more detailed overview of the dynamics, we provide a split in overhead increases into four categories. Two categories saw increases. The largest part of the increase stems from the increased merit, which is the annual salary adjustments and general inflationary pressures. Other operating expenses was a negative compared with Q3 2022, as last year was positively impacted by income from government grants. Costs towards last mile freight and distribution expenses decreased in the quarter. Finally, cost savings resulting from our structural efficiency improvements benefited overhead costs. EBITDA before special items amounted to EUR 31.2 million in Q3 2023, compared to EUR 29.2 million in Q3 2022. The EBITDA margin before special items increased to 12.6%, compared to 11.1% in the same quarter last year. Price management, in combination with lower freight and distribution costs, benefited EBITDA margin, offsetting the margin pressure from increased cost on raw materials and from declining volumes. Despite the decline in overhead costs, the overhead ratio negatively impacted EBITDA margin. We expect to see our overhead cost declining into the fourth quarter of 2023, as the structural efficiency measures continue to take effect. Moving on to the positive development in cash flow in Q3 on slide 13. Free cash flow improved significantly in the quarter and amounted to an inflow of EUR 29.8 million. This was an increase of EUR 12.1 million compared to Q3 2022. Let's look at the key drivers of this development. The inflow increase of EUR 12.1 million was positively impacted by the non-recourse factoring program that we initiated in autumn 2022. Factoring reached EUR 25.6 million at the end of Q3 2023. Cash flow from working capital was also positively affected by our lower inventory levels. Higher net outflow from financial items and tax impacted the cash flow negatively. As a result, cash flow from operating activities for Q3 2023 improved by EUR 11.2 million, with a net inflow of EUR 36 million compared to a net inflow of EUR 24.8 million in Q3 2022. Cash flow from investing activities for Q3 2023 was a net outflow of EUR 6.2 million compared to an outflow of EUR 7.1 million in Q3 2022. CapEx negatively impacted the cash outflow by EUR 0.9 million. So, in a challenging environment, we managed to achieve a very strong free cash flow of EUR 29.8 million. Total net interest-bearing debt declined by EUR 94 million compared to end of Q3 2022, and came to EUR 271.1 million. The gearing was reduced to 2x, compared to 2.7x in the same period last year. Next page, please. This concludes the financial section. Let's move on to slide 15 for the outlook for 2023. With one quarter left of 2023, we narrow our outlook for the full year 2023. We have factored in that the current macroeconomic uncertainty will continue for the remainder of 2023. This is expected to have a negative impact on our volumes. Consequently, our outlook for organic revenue growth have been adjusted to be around 0%. Previously, we expected organic growth between -2% to +2%. The EBITDA margin before special items is expected around 13%. Before, we expected the EBITDA margin before special items between 12%-14%. With this, we have concluded our presentation. We are ready now to take your questions. Thank you. Operator, over to you. Ladies and gentlemen, at this time, we begin the question and answer session. Anyone who has a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selection. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. First question comes from Mads from Carnegie. Please go ahead. Yes, thank you for taking my questions. I have two. First, in the guidance. So, I see that your implicit guide for negative organic growth in the fourth quarter, I calculate -1.7% organic growth for this quarter. Can you talk more about the expected development between the EMEA, Americas, and APAC? That would be my first question. The other one is on the adjusted EBITDA margin for quarter four. I calculate an implicit guidance margin guidance of 14.4% in the quarter. Can you just remind me on the seasonality between the quarters on a margin level, and also what will be driving the margin in the quarter? That'll be my two first questions on the guidance. Thank you. Thank you, Mads, for your questions. Basically, I mean, our guidance, as we say, around 0%. Theoretically, you are right, that we, when we land exactly on, let's say, a momentum of zero, this would entail a negative decline of 1.7%. We cannot really rule this out, and it's part of the possibilities, but there's also, let's say, optionalities that we are doing better. So as the uncertainty in the markets is still there, we have landed our guidance right in the middle of our previous guidance. When we look to Americas, and I think that is also what we mentioned here, there, on one side, we have also faced, let's say, a negative momentum in the market and especially in the demand for the commercial floor care area, which has impacted the Q3. But we have also seen, and that's, so to say, the other side of the, let's say, perspective, a flattening out of a negative momentum in Europe. And we see clearly, let's say, some signs of positive development in some key markets, while others still have a little bit of a negative development. How this exactly plays out, difficult to say, but what I would call a stabilization in Europe, is facing more or less, let's say, a declining situation on the demand side for commercial floor care in the United States and in the Americas. APAC, I think we need to expect a continuum of growth in the numbers we originally have reported, in this year. To your question around EBITDA margin, I would agree that we see an increase of EBITDA margins in Q4 to come, and that's why we guide in the middle of our guidance range. What is driving that? There are two elements to it. Clearly, we have a momentum on gross profit margin increase. We have five quarters of consecutive increase behind us. We expect the margin increase to continue, firstly. Secondly, we expect, and that's what we also just mentioned, to have a continuous focus on cost and effect from our structural efficiency improvements supporting the margin development in Q4. I hope this answers your questions. It was a very clear answer, Reinhard. Thank you so much. Then I have a question on special items, because I was a bit surprised about the low amount of special items in the quarter. Is that the run rate for quarter four as well, or can you put some comments around that? ... Yeah, and I think, let's say one of it is, well, it is a little bit of a lower run rate, but we are not yet fully concluded. We gave you in the early part of the year a guidance EUR 10 million-EUR 12 million. So, let's say expect that we get into that area, but maybe at the lower end of it. All right, then my final question is on your headquarters costs, which came up in the quarter. Is that the run rate for the coming quarter, or do you expect it to trend down in the fourth quarter? No, the headquarters cost was also impacted, as we said, part of the admin cost is the one-off cost in association with the CEO change, which is an operational cost and not a special item. Okay, thank you. The next question comes from Claus Almer from Nordea. Please go ahead. Thank you. We also have a few questions from my side. The first question goes to the volume development. Could you please give some more color to how volume has trended in the three regions? That will be the first one. Claus, thank you for the question. Well, let's say, covering that by the regions. I would say, the... In the quarter, the biggest volume decline we saw in the Americas, which also led, so to say, to a large decline in organic terms, driven by the softer development in the commercial floor care, where we also saw last year in Q3, a rather large order, let's say, coming towards us from one of the retail chains. And that we had reported last year, and this we could not repeat this year, as actually overall, the market sentiment is somewhat muted in that area. So Europe, we saw, let's say, the volume decline clearly diminishing, and that's the positive sign. Still, I mean, we had a negative volume decline, so that is in the middle piece between Americas and APAC. And APAC overall, so also small volume decline, but is more or less flattish to last year. Okay. That makes sense. Maybe you could look at, if you look at Americas and EMEA, when do you think volumes will be stabilizing? Especially EMEA, are we now getting to a low level, where it should be able to just stay a flattish volume? EMEA, as I said, we have clear signs that things are improving. Can I, so to say, by that already give, so to say, a green light to the Q4 and the next quarters? Difficult to say at the moment, but we see overall in a number of key markets for us, that demand comes back to previous levels, which is positive. But still there are some markets, and I spoke to that during my presentation, are still, so to say, seeing muted markets. And one can also say there is, in the industrial segment, still, let's say, a lower demand overall in the market, predominantly in Europe. Okay. And then on pricing in Q4, do we still see a positive pricing impact? Yes. We still see a good pricing impact. I mean, the overall price situation, as we also alluded in the gross profit margin bridge, is one of the key drivers also for us to increase, and that is expected to continue for the outgoing quarter. Okay, so just to be sure, Reinhard, so in Q4 versus Q4 last year, there will be a positive pricing impact. Should we expect 3% or 5%, or what, what's the magnitude of that? Claus, as you know, from our previous calls, we will not be precise on guiding there because we don't guide on price effects, but you can assume that we still have a good momentum on pricing similar to the previous quarters. Okay, and then just the final question regarding the backlog. Yeah, in the report you just stated there was a positive impact on the backlog. We've asked this question before. Could we get some color to what is the impact or maybe even more important, what is the possible impact going forward if backlog are going to normalize? I mean, we spoke about the backlog and our, let's say, order book in prior years. This predominantly resides in our U.S. market for large industrial equipment, which comes out of our Brooklyn Park factory. We do see here, let's say, our output increase, but not at the same pace as we see actually our commercial floor care slowing down demand, which is supported by other factories around, let's say, our Nilfisk supply chain footprint. So here we continue to see, we have still a nice order book, which is elevated to prior years. But we have also seen, so to say, that we have been reducing some of the order book for the large industrial equipments, and that will continue also into 2024. And that's my answer to your question. So we are not guiding precisely what the momentum will be, but there will be tailwind on this segment. How this plays out with the headwind from some market momentum in the United States, I don't really know. Okay. Maybe just try, when you look at your outlook for Q4, should we expect a meaningful positive impact from reduction in the backlog in Americas? I mean, we expect the continuum of output increase, and we spoke many quarters now about this. This is a steady, progress, but it's not leapfrogging, progress, hence we see expected, let's say, volume growth in the large industrial. This goes, of course, against a potential, risk of, a market weakening, on the commercial floor care side, and how these two factors exactly tie out, difficult to judge at this moment, because uncertainty is still high. And when you hear about the market sentiment, this is very much, similar to all the players in, the American markets. Yeah, I totally agree. Okay. Thank you so much for your, for your answers. The next question comes from Kristian Tornøe from SEB. Please go ahead. Yes, thank you. Also, a couple questions from me. I will continue around orders and order book, and just second Claus here saying that it would be such so much easier discussion if you put some numbers on this, like, like your peers. But, anyhow, just firstly, a clarification to what you said in the beginning, because I think you mentioned that orders were strong, but customers are hesitant to sign, which to me is a bit opposite indication. So maybe just clarify what exactly you meant by that statement. René, yeah, I think it was me. I think what we tried to say is that the order intake is still relatively solid, but given the comparison of last year, of course, it's not enough to drive the growth that we're looking for. Okay. So order intake in Q3, sort of compared to Q2 and Q1, is that at a similar level or is it trending over down? I think if you look at the whole, it's probably trending a little bit, flat to down, but if you look at the impact versus sort of the comparison, it's actually pretty good. Okay. I think I understand then. And then just second question on the Americas. So you mentioned this tough comparison due to a large one-off order last year. I think first of all, it's a bit interesting that last year you didn't mention this one-off giving you a boost, but just for clarity, how much revenue impact was this one-off order last year? Well, we have basically informed about the larger one-off deal in 2022 in our annual report, but not specifically in the Q3 report. That's true, but in the annual report. But we have not been specific on the number last year, so we cannot be specific in this quarter either, because here we have, let's say, somewhat, let's say, non-disclosure agreements in place with our client. But it's a large retail customer, which we specified as well in the annual report, but we cannot disclose, let's say, volume details. But it was a significant order, which basically we collected in Q2 2022, and invoiced during Q3, and partly also in Q4, helping and supporting this very strong 15.4% growth in Americas last year. Okay, so there is a bit of headwind in Q4 as well from this? Yes. Understood. My last question on pricing, so have you communicated further price increases as of the beginning of next year already to your clients? And, if so, how much are you in call? René, I think for competitive reasons, I don't think we are at a point where we can give you the number. And I guess for as a whole, we'll see what the market tells us before we have further moves. All right. That, that's fair enough. But can you then, I mean, at least just confirm whether you have announced price increases at this stage or not? I mean, at this point of time, you mean exactly now, whether there are price increases, new price increases in the market? There's not. But don't you typically sort of flag price increases as of January first around this time of year? We do. And you haven't done so yet, is that what you're saying, or did I misunderstand? What I'm saying is that we have not flagged in the market or in the market, there is not a new price increase as we speak. Understood. Thank you. That was helpful. ...As a reminder, anyone who wishes to ask a question may press star followed by one at this time. The next question comes from Casper Blom from Danske Bank. Please go ahead. Thanks a lot, couple from my side as well, obviously. The first one goes to your service business and the profitability here. I know that you post an EBITDA margin within service of 22% in the quarter, down rather significantly, both sequentially from Q2 and compared to Q3 last year. I had been hoping that service would show some stability in the profitability. Can you explain what drives down the EBITDA margin within service, please? Casper, yeah, I take this question. Basically, there are two elements. First of all, compared to prior year, you might remember that Q3 we had a catch-up effect of a lot of PAC material out of the tornado event, which basically wiped out supply in the Americas for quite a while. We caught up in Q3, but that gave a higher share of PAC revenue into this quarter then, which comes typically with a significantly higher gross profit margin. So there was an uplift there. And then the, on the other side, and we spoke about that also in different calls and investor meetings. A lot of our PAC business is realized when we make an initial shipment with a commercial floor care machine. As the volumes of these commercial floor care machines are declined at the moment in Q3, there's also a declining impact, or an impact on our PAC business. So it's a mix. Overall, the service continued to grow, but mainly on the field service, and not so much, and actually showing a volume decline on the PAC side, driven by a volume decline from the machine side. So it's a mix effect and a comp effect to very high PAC share in last year out of the tornado event, getting a recap, and rebound there. Okay, understood. Then you, I mean, you just mentioned the tornado effect yourself. Can you give an indication or update on when do you expect that the U.S. distribution setup will be, you know, as it should be, as you would like it to be? Thank you, Casper. Well, the distribution center set up as we have today are still so today in our Springdale location with two activities. We are concluding, let's say, our plans on the new setup during Q4. I think that is what we also spoke about. The decision is not yet taken, hence we cannot really speak about when and what we are going to do, but we have plans really to consolidate to one distribution center. Is that taking effect for 2024? I cannot say at the moment because the decision is not taken. So please bear with us a bit on this point, but we are working intensely on this question. Okay, thank you. My final question goes to your cash flow. Strong indeed, as you, as you also mentioned in your presentation. I know that there is some tailwind from working capital effects. Is there anything, how could you say, extraordinary in this, or should we expect that you can continue to delever in Q4? You should expect that we continue to deleverage in Q4. That's very clear. Thank you. Welcome, Casper. We do have a follow-up question from Claus Almer from Nordea. Please go ahead. Yeah, thank you. Yeah, and I know you don't guide yet for 2024, obviously, but maybe you could give some color to inflation next year. Should we be concerned that so far you have not introduced any price increases? But I guess we're still living in an inflation world, so how do you see this play out? I don't have a strong perspective on that would give any sort of direction on the next year's guidance or the inflationary impact. What I try to say is that, is at this point of time, not a new price increase in the market, for competitive reasons, I mean, whether we can drive that in next year, we have to see when we come a bit closer. But right now, to your point on the inflationary pressures as such, I think we have a machine that is covered for input cost changes that we have seen so far in both directions, basically. Right. But normally, as I, as I recall, the many years I've covered Nilfisk, you know, every year there is a this price increase, and then sometimes it doesn't happen, but that's at least how you start out. And it sounds like, yeah, at this point, you haven't done it, which probably also goes for your competitors. Is that because you think, you know, the market can't, you know, absorb higher prices given the volume declines? Or more, what are you thinking? And I know it's a bit delicate on, on a conference call, but what are you thinking about the pricing environment in these days? I don't think I have a lot of comments to that, Ira. This is a competitive matter, of course, has been, but you can say the rationale for price increases has been stronger for a while. So right now, I think it's a competitive matter, and I don't have a lot to add to what we already said. That's all. I think that's all for me. There are no further questions at this time, and I hand back to René Svendsen-Tune, CEO. Thank you all for your questions, and, if there's any follow-up, you know, the names and the telephone numbers here, so you're, of course, very welcome to reach out to Elisabeth, during the day and the days to come here. So, and then we will be back, all of us, for the annual report on February 15, next year. So thank you all. Have a nice day. I'll speak to you soon.