Ladies and gentlemen, thank you for standing by and welcome to the TCM Group interim Q4 2020 report. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star and one on your telephone. If you wish to cancel your request, please press the hash key. I must advise you the conference is being recorded today on Wednesday the 24th of February 2021. I will now hand the conference over to your first speaker today, Torben Paulin. Please go ahead. Thank you very much. Good morning, ladies and gentlemen, and welcome to the presentation of the full year results for 2020 for TCM Group. The presentation today will be conducted by myself, Chief Executive Officer Torben Paulin, and with me, I have our Chief Financial Officer, Mogens Elbrønd Pedersen. We will go through the business update and the financial results, after which we will hand over to the operator for the Q&A session. Let us start the presentation and turn to page two for the business update. Overall, the Danish kitchen market has been resilient despite the COVID-19 situation and the related macroeconomic uncertainty. The Norwegian market has, during 2020, been more unstable. We ended the year with a record high revenue of DKK 1,000,000,025, up 1.8% compared to last year. The number of the branded Svane and Tvis stores at the end of Q4 was 69 compared to 68 at the end of Q4 last year. Furthermore, during Q4, we have opened a Nettoline store in Skive in Denmark, which increased the number of branded Nettoline stores in Denmark to 21. The total number of branded stores is therefore 90 at the end of Q4. We will continue to expand our store network, and there's some good news to share regarding future store openings. In Svane, we have signed an agreement with a franchisee or with a dealer to open a new store in Oslo during 2021. This is an important milestone for the Svane journey in Norway. From 5th of January 2021, we have sold our Svane store in Copenhagen to one of our existing franchisees, and we expect that this will support the future growth journey for Svane in the Copenhagen area. In Tvis, we will open a new store in Roskilde in Denmark during Q3. In Nettoline, we will open new branded stores during Q1 in Køge and in Fjerritslev. Furthermore, a new multi-brand dealer store will open in Tønsberg in Norway. We continue our efforts within product innovation and bringing new products to the market. In Q4, the new product launch was the Momento line in Tvis Køkkener. The kitchen line is a soft laminated front, which is the new trend within kitchens in the Scandinavian kitchen market, and it also included a new design-protected grip, the pocket grip. Please turn to page three. During 2020, TCM Group continued to generate considerable positive cash flow, building on an already strong financial position from previous years. As a consequence of this, and in light of the capital structure goal set out by the board of directors, the board of directors will be recommending to the Annual General Meeting the following measures. Number one, an ordinary dividend of DKK 5.5 per share, totaling DKK 55 million, which corresponds to 54% of net profit and in line with our dividend policy. Number two, an extraordinary dividend of DKK 7.5 per share, totaling DKK 75 million. The extraordinary dividend should be seen in light of the fact that due to the emerging COVID-19 pandemic last year, no dividend was distributed during 2020. Therefore, this is a catch-up plus interest. Number three, the implementation of a share buyback program of in total up to DKK 150 million. If the annual general meeting follows the recommendation from the board of directors, these measures will move TCM Group towards a capital structure in line with the long-term guidelines set out by the board of directors. Please turn to page four. Revenue in the fourth quarter grew by 0.5%, an increase from DKK 262 million in Q4 last year to DKK 263 million this year. Adjusted EBIT was DKK 36 million, compared to DKK 43 million in Q4 last year. EBIT was DKK 33 million, compared to DKK 39 million in Q4 last year. Net working capital ratio was -11.4%, compared to -10.8% last year, and cash conversion was 86%. I will now hand over to our Chief Financial Officer, Mogens Elbrønd Pedersen, to go through the financial highlights. Please go on, Mogens. Thank you. Thank you, Torben. Turn to next page. Turn to page five. The revenue growth in the Danish market in the fourth quarter was an increase of 0.9%. The growth in Denmark was primarily driven by Nettoline and our e-commerce platform, kitchn.dk, and this was partly offset by decline in B2C sales through our branded stores. Revenue to other countries, which is primarily Norway, declined by 4%. Although revenue was lower than last year, the trade is coming back to a more normal level, and the decline is lower than the previous quarters. Year-to-date revenue was up 1.8% and thereby a new all-time high record. Please turn to page six. The gross margin in Q4 was 26.8% compared to 28.9% in Q4 last year. The decline in gross margin was a combination of a change in sales mix, the decline in B2C sales being the important factor here, costs, you can say it's contributions to the new product launches to the exhibition models in the stores. In Q4, that was related to the Momento kitchen line in Tvis and also the S12 RAW Limited Edition, the kitchen line in Svane. Furthermore, additional costs related to a replacement of our main automated board cutting and stacking solution had a significant impact on the cost of goods sold in the fourth quarter. Q4 also included costs related to COVID-19 precautions of DKK 3 million. These costs are considered non-recurring by nature, since the impact from these costs has risen to a material level, we present these costs as non-recurring costs. Costs related to COVID-19 precaution in previous quarters, so DKK 1 million in Q3 and DKK 1 million in Q2, have been included in non-recurring items retrospectively. Operating expenses in Q4 was DKK 2 million up on last year, this increase was primarily driven by higher marketing spend and related to the new product launches, as well as increased activity within our e-commerce platform. Please turn to page seven. Net working capital end of Q4 was -DKK 117 million compared to -DKK 109 million last year. Net working capital was favorably impacted by the extended credit on VAT and payroll tax as part of the stimulus packages at the end of December 2020. This impact was DKK 15 million. This is the primary driver for the increase in other payables. Our inventory levels remains higher than last year, this is due to building up a buffer stock to ensure high delivery assurance. The net working capital ratio was -11.4% compared to -10.8% last year. Net debt was at the end of Q4 at deposit of DKK 43 million compared to a debt of DKK 52 million at the end of Q4 last year. Leverage was -0.2 compared to 0.3 end of Q4 last year. This strong financial position is what enables us to propose the ordinary dividend, the extraordinary dividend, and the implementation of a share buyback program to the AGM. Please turn to page eight. The free cash flow in the fourth quarter was DKK 30 million compared to DKK 45 million in Q4 last year. The development was primarily affected by higher investments. We had DKK 17 million in CapEx in Q4 compared to DKK 6 million in Q4 last year. The CapEx ratio was 3% compared to 1.5% last year. Furthermore, cash flow from the change in net working capital was negatively impacted in the quarter by DKK 8 million, a reverse effect from the rolling back of these extended credit from the stimulus packages. The DKK 15 million end of 2020 will have a reverse impact on cash flow in 2021. Cash conversion ratio was 86% compared to 100% last year. Please turn to page nine. For the financial outlook for 2021, we predict a revenue in the range of DKK 1.04 billion -DKK 1.1 billion. This corresponds to an organic growth on the continuing business. This means excluding the divestment of the Svane store in Copenhagen, the organic growth rate is corresponding to 4%-10%. We predict an EBIT in the range DKK 145 million -DKK 160 million. Thank you, Mogens. 2020 was an unprecedented year for TCM Group. The results that TCM Group has achieved in 2020 would not have been possible without the dedication, determination, and flexibility of our employees. The employees in the franchise and dealer-operated stores, bringing TCM Group and our brands through challenging years. This concludes our presentation, and we will now hand over to Tracy, our operator, for the Q&A session. Tracy, will you please open up for Q&A? Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Should you wish to cancel the request, please press the hash key. Your first question comes from the line of Lars Topholm of Carnegie. Please go ahead and ask your question. Yes. Hello, gentlemen. A couple of questions from me. One goes on the sales discounts, I remember from the Q3 conference call that you said sales campaigns would no longer apply. I just wonder if you can put some comments on it. I assume it's related to COVID-19, please comment on that. A second question on your capital structure. When you send out up to DKK 280 million to shareholders, is this because you have given up on your M&A strategy? How should I see that? I wonder why you are proposing a share buyback because you can say in the fortunate situation, you have a good handful of large shareholders. Wouldn't buying back stock worth DKK 150 million basically mean you completely spoil the free flow of the stock, and that would mean people can actually not invest or de-invest if they should feel like doing that. I wonder if you thought about stock liquidity when deciding to go ahead with a share buyback. Thank you. Thank you, Lars. Yeah, let me start with the sales campaigns that we were running when COVID-19, the breakout last spring. You have a good memory. It's absolutely correct that they were offered during the spring and with orders for delivery to the end of August, which means that we had the last impact in our financials in Q3 last year. Good memory, and that is also still correct. The question. Didn't you have a margin dilution from sales campaigns related to the launch of new product lines in Q4? Yeah, that is not sales campaigns to end consumers like the supporting campaigns back in the spring. What we mean with the support for the new product launches here in Q4 is what we do to motivate our dealers to buy and display the new lines in their stores, we do some marketing activities to tell the end consumer that there are new products in town. It's two different instruments. What you have done in Q4 this year related to new product launches, is that different from what you normally do when you launch new products? No, it's the same as we normally do, but I think what is special this year is that it is the second product launch in the same year, and it's out of the normal rhythm that we have it in Q4. Momento in Tvis is new that we have this introduction in Tvis as well. Historically, it has primarily been in the Svane chain. You can say we have one extra in Svane, and we have a new one in Tvis, so both of them is extra compared to history. Understood. Thanks for clarifying that. The second question about the payout to shareholders, if that means that we are giving up on our M&A strategy. I think the answer is no. We are definitely not giving up on that M&A strategy. Seeing in the light that we need also a selling part to make M&A, and as there is no materialized dialogues for the time being, then we believe that when this is coming up at a later stage, then either we have generated new cash for this, otherwise we will also be able to finance it in other ways. The answer is no. It's still on our list and in our strategy, but there is no actual dialogues going on right now. Yeah. The third question was the liquidity of our share when we start this buyback program. We don't believe so that it will limit it. Of course, you are right, and it has also been discussed in the board of directors to which extent we can do it without hurting the liquidity. We think in this size here, it is doable. It's 75 days of normal trading- Yeah. Extreme compared to what we've seen from other companies. It might not materialize because there are also limitations how we can conduct such a buyback program. Yeah. So far, it's also a suggestion. A recommendation. Yeah. Understood. Thanks for answering my questions. Thank you. Your next question comes from the line of Benjamin Silverstone of ABG. Please go ahead and ask your question. Thank you very much. Hi, Torben and Mogens. Congratulations on the report, and I hope you're both well. I have a few questions if I may. The first is in regard to your capital structure. As we just heard before, you are implementing this share buyback and the extraordinary dividend. Could you perhaps give us some nuances as to why not potentially increase investments into your own communications or potential M&A, going that way instead? The same question is regarding your 2021 guidance. You mentioned that the guidance is based on continued business in execution. It's excluding the divestment of the Svane store in Copenhagen. If I read correctly, this store was divested on January 5th, so which impact will that have on your guidance? Furthermore, the guidance also states that it is based on your continued strategic focus on the Norwegian market and also increasing the online sales. I was wondering then, at this point, if you can share with us how much your online sales are and how they are growing? Thank you. Okay. Thank you, Benjamin. Let me start with the guidance for 2021. You can say the most significant impact from the divestment of the Svane store in Copenhagen is top-line related, and that is included in this organic growth rate. You can say the impact is roughly 2.5 Percentage point in the 2020 base. The guidance for the top line is a 4%-10% revenue growth rate. The impact on earnings is, you can say, more limited. There was a profit in the store last year, but there is also a profit from the divestment, and that is, you can say, balancing that part out. It's going forward, it is our expectation that the new owner will actually be able to lift the volume, the trade in the store, and thereby the profit that we have historically had in the store will be replaced by a profit on higher purchase on the factory. That is, you can say, the overall expectation from our side. To your question, why not invest in our own facility or M&A? M&A is still absolutely on our list, but we need also somebody that are ready and willingly to sell. Therefore, I would say there's no dialogues that are that far at the moment. We could, of course, also invest in our own facility, and we are increasing investments in our production at the moment, and there's a kind of a limit. There is a certain number of investments that we can cope with at one time as we are also continuing production and delivery of kitchens. We think that that is balanced out in the right way and right level, and then there's still cash available for distribution to shareholders. It is a balanced view and approach to those different options. You ask also how our online business is developing and what kind of a share it is. We normally don't publish what shares they have, but it is not a secret that the online business had a fantastic 2020. A part of that is probably the trend in DIY and online sales and COVID-19, people sitting at home and searching around stores being closed. It is also that we are getting a better and better grip on how to act online, compared to earlier. We have also been spending more money in staffing up and marketing activities, et cetera. It is still a very small part of our business, but I think it is about being double the size now as it is a year ago. At least the increase rate is nice. It's satisfying. Very satisfying. Thank you, Torben Thank you. Your next question comes from the line of Sindre Sørbye of Arctic Asset Management. Please go ahead and ask your question. Yes. Hi, gentlemen. Thanks for taking my questions. Actually, three topics I wonder if you can answer. First, can you give us a little guidance or expectations regarding the expected mix between B2C and B2B in 2021 compared to 2020? Secondly, price increases, are those implemented and do you expect them to more than compensate for raw material price increases? Thirdly, on the raw material side, is it so that there are still problems with shortages and supply chains and especially as a particle boards, and is that likely to affect the operations into 2021? Secondly, to also just to elaborate a little on development in raw material prices. Thank you, Sindre. I will answer the first part, and then Torben can take over for some of the others. The expected mix is somewhat similar to 2020. Maybe a slight overhand to B2B going forward, but somewhat similar. On the price increase, the price increase has been implemented mid December, so that is 100% implemented. For the time being, we expected to be able to cover price increases in raw material. We have so far not experienced any price increases, but we follow the trend, and the trend is definitely increasing prices, which you can also follow in the international press that all building materials are expected to increase. So far we have not seen it, and we try to balance our purchase between different suppliers and thereby also having as much negotiations power as possible in that situation. You're also absolutely right that this supply chain is under pressure and delivery times are getting longer and longer, and delivery is more and more unstable. Of course, that also speaks for price increases that if you want your material, then you have to pay for it. Far, we can luckily say that our customers has not been hit by supply challenges, but it is not to say that we are not experiencing it. We are helped from buffer stock from several suppliers on the products. So far we have been able to mitigate and keeping the customers without any impact on this. The only area where the customers experience it is the white goods. All white goods suppliers have been delivering terrible in the second half of 2020. It is, for the time being, not better. They send out official letters to us and our dealers, and they don't promise that this is a problem that is over in the first half of 2021. It is a general problem. It is industry problem. Of course, it's also a part of those extra costs that we are having right now that Normally we deliver the kitchen and the white goods at one delivery, for the time being, we are moving deliveries backwards and forwards and deliver we two or three or four times before the order with white goods is complete. It has cost for us, for our stores and their assembling teams and of course, also the negative impact for the end consumers. Industry problem, not only TCM. Okay. Thank you. Thank you. Your next question comes from the line of Poul Jensen of Danske Bank. Please go ahead and ask your question. Yes. Thank you. I have a few questions. First, on the guidance for 2021, can you put in some of the assumptions that you have for the high and the low end, especially on how the project market and the Corona is expected to impact the revenue? I'm also thinking about now we are getting close to having offline stores being closed for nearly two months, how that is impacting. Is it possible to sign orders now or are people waiting until that they can come in, seeing the products before doing final ordering? Secondly, the EBIT guidance, just a clarification, is that the Adjusted EBIT or is the reported EBIT including eventual COVID-19 costs? A more fundamental one. If I look at the revenues back in 2018, DKK 900 million, now you guide high end DKK 1.1 billion. That's DKK 200 million additional revenue. You only have an additional DKK 20 million on the EBIT line. Where is the money disappearing into the system? Is it lower gross margins? Is it product mix or whatever is happening? Of the DKK 180 million disappearing as you only have a contribution margin of 10% on the additional revenues seen over three years. Thank you. Yes. Thank you, Poul. You can say the assumptions behind the guidance is that right now, of course, uncertainty is higher than normal due to the lockdown in Denmark, and therefore we also have a bit wider range than normal at this time of the year. You can say the impact from the lockdown is that we can serve B2B customers but not B2C customers. All B2C customers are served online or by visits with the customer. That means that we are able to operate, we're also able to get orders in, but we also have a lot of customers waiting to touch and feel the products physically in the store. Therefore, hopefully, we will be able to reopen in a short while. What is going to happen then is, of course, a very good question. Whether there is a catchup effect from this waiting to touch and feel and then sign the order or whether there will be a loss of momentum because of a lower number of customers coming into the market. That is the high and low end of our guidance, depending on what is the outcome when everything comes back to normal trading conditions. Regarding the EBIT, that is adjusted, but also from the expectation that these COVID-19 precautions will also be terminated at some stage during the spring. Regarding the development over the years, you're right that we have had a higher revenue growth than growth in earnings, and that is primarily mix related. B2B and B2C, but also third party revenue development in this period. If we go a bit further back, we had a period when third-party revenue was dropping, so we're losing out especially white good sales, and then that has come back, and that has a diluting effect. That is a big part of the explanation to the lower margin effect from the growth. Okay, just a short follow-up. Can you comment on the project market right now, how you see that you guide that there will be more B2B this year than last year? Do you see weakness in the project market? Is it growth, or is it because you are more cautious on the B2C? Just on the price increase in December, how much was it? Yeah, the price increase was on par with our normal roughly 3% in average. The mix within B2B is that right now we see that the project sales is maybe not in growth terms, but it's normal terms. What we see is that, for instance, the large house builders, which is another category within our B2B, is the B2B segment with the highest growth rates. Okay. Thank you. Thank you. We have our next question from Lars Topholm of Carnegie. Please go ahead and ask your question. Yes, just one additional question on my side. I wonder if you can comment a little bit on the plans for Norway in 2021 and maybe if you can reveal which milestones we should look at if we want to conclude whether your Norwegian strategy is a success or the opposite. What should we expect there for 2021? Thanks. Yes. You could say that the strategy for the Norwegian market is unchanged. We strongly believe that the potential in the Norwegian market is somewhat similar to our share in turnover in Denmark. We have to prove this, and the first very important milestone to notice is that we have now signed a contract with a new dealer in the Oslo area. With having 10 stores in Norway and not having one in the central biggest market, which is Oslo, is of course a huge white spot. Getting that dealer on board and also industry experienced dealer is, of course, an important milestone for us. The second step in that milestone is for him to find a suitable location. He and we are together looking for that at the moment. That will be the next step to look for, is that we get that location signed and the opening of that store. In addition to this, we are still looking for more new dealers. We are both advertising and having professional help for searching. That will be the next thing to look for, is that we sign new agreements with new dealers. Parallel to that, we will of course work with our existing dealers and their sales activities and sales performance in their stores and marketing of the Svane brand in Norway. For now, the Svane brand is not at all known in Norway, and it cannot be compared to the brand awareness and status we have in the Danish market. That is something we have over the time together with our dealers to build up exactly as it has been done in Denmark. Our ambition is to do it a little bit faster than in Denmark. It's fair to say we should assume Norway will grow nicely in 2021? It all depends on how fast we can sign with the right dealers and how fast they can find right locations. I have to also to say, as much as I want this to happen and happen fast, I'm still also want it to be quality. As I have mentioned earlier, after my first trip to Svane Norway, there was some locations, some stores, some franchisees or dealers that might not live up to that level that we are having in Denmark. I think we need to build on some quality dealers and some quality locations. Therefore, we will also need to have a little ice in our stomach and wait for the right locations. We have both a professional search company for dealers and a professional search company for locations, working for us from around now. You should expect something to happen. How much and how fast, it all depends. That's fair enough. You mentioned previously that you will begin to look at the B2B market in Norway. Is it something you have already implemented or is that something for the future? There is a couple of the existing stores that have had some success, also in that segment. We do what we can also to motivate them and support them with those activities. We also work to implement with the other dealers. It's something we are working on, but we cannot say that we are a big step ahead compared to last year, but we are working on it. Our country manager in Norway that has now been there for 10 months, also has a background from the kitchen industry, also in the B2B segment. I'm sure he's also a good support to our stores. Fantastic. Thank you very much. I have no more question. Thank you. Your final question comes from Benjamin Silverstone of ABG. Please go ahead and ask your question. Thank you. A quick follow-up from me as well. This is regarding your CapEx for next year and beyond. We know that you are focusing on maximizing production, which you mentioned before. I think the report states that you require around 2%-3% CapEx in 2021. Just to be clear, would these 2% and 3% CapEx entail your entire required CapEx for a year? How should we think about CapEx for 2021 and beyond? Furthermore to this, we know that your current production capacity is around the DKK 1.2 billion-DKK 1.3 billion. With these new investments, how do you see this capacity changing for the next couple of years? Thank you. Yeah. You're right that the 2%-3% range is a good indication on where we see it going, both for 2021, but also the coming years after that. The estimated max capacity of the current facilities is something that we are working on expanding, you can say, especially with these investments. Adding more to it, how much we can, you can say, utilize and other measures than investments that we can put in place that we are also working with is not a, you can say, final figure. We are working hard to expand the overall productions to a higher level than what we stated previously. Thank you, Torben. Thank you. Just to remind you, if you do wish to ask a question, it's star and one. That's star and one on your telephone. No further questions coming through on the line, sir. Okay. Thank you everybody for joining us today and listening in, and thank you for all your questions. Have a nice day. Thank you. That does conclude our conference for today. Thank you all for participating. You may all disconnect. Speakers, please stay on the line.