Good day. Thank you for standing by. Welcome to the TCM Group Interim Q1 2022 Report Conference Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Torben Paulin. Please go ahead, sir. Thank you. Good morning, ladies and gentlemen, and welcome to the presentation of the Q1 results for TCM Group. Presenters today are our CFO, Mogens Elbrønd Pedersen, and myself, CEO, Torben Paulin. We will comment on the business and the financial results, after which we will hand over to the operator for the Q&A sessions. Let us start the presentation and turn to page two for the business update. In Q1, we saw a solid demand on order intake. Underlying like-for-like growth in our core business, excluding third-party revenue was 7%, compared to a strong Q1 result last year, which grew 13% compared to the year before. This was offset by a decline in low margin revenue from the sale of third-party products impacted by unstable supply of especially white goods. The 7% growth was primarily driven by sales price increases. Volume growth was curtailed by the unstable supply chain, including a restricted flow of raw materials and components, which limited our overall production capacity in the quarter. On a more positive note, by the end of the quarter, we have managed to secure sufficient supply of components and bring the supply chain situation back to a more normal level. Having said that, the Russian invasion of Ukraine brings further uncertainty to the market situation. The impact for TCM Group from the lack of supply from Ukraine and Russia to the European market has primarily been through a further pressure on raw material prices and higher energy and transportation costs. We have already communicated a further sales price increase as a response to the new price increases on raw material. Regarding availability of critical components, we have so far been able to avoid significant impact on our supply chain from that situation. During Q1, a new Nettoline store has opened in Næstved. Furthermore, new Svane Køkkenet stores will open during Q2 and Q3 in Fredrikstad, Arendal, and Oslo in Norway. In addition, a new Svane Køkkenet store in Copenhagen in Glostrup, and a new HTH Køkken store in Slagelse will open. Please turn to page three. Some financial highlights for the quarter. Reported revenue was DKK 281 million, which was on par with Q1 last year. Adjusted EBIT was DKK 26 million compared to DKK 33 million Q1 last year. Mogens will elaborate on the underlying drivers of this development. Adjusted EBIT margin was 9.3% compared to 11.7% Q1 last year. Net working capital ratio was -3.4% compared to -6.6% last year. Cash conversion was 60.5%. I will now hand over to Mogens to go through the financial highlights. Thank you, Torben. Please turn to page four. The underlying revenue growth in the Danish market in our core business was plus 7%. The growth was driven by our DIY segment, Nettoline, and by Svane Køkkenet. The growth was offset by a decline in revenue from third-party products, meaning white goods. Revenue to other countries increased by 12.4%, driven by sales to the Norwegian market. This constitutes both organic growth and growth from new stores within Svane. Please turn to page five. Gross margin decreased from 23.5% to 21.3% in Q1. The technical impact from the merger of the e-commerce activities, in kitchn.dk and Celebert, had a negative impact on gross margin of 1.0 percentage point in the quarter. We have mitigated the price increases on raw materials through sales price increases. There is a diluting margin impact from this in the quarter. Furthermore, increased energy and logistics costs had a negative impact in the quarter. This was partly offset by change in sales mix, where we grew revenue in our core business while sale of third-party products with a structurally lower margin fell. Operating expenses increased by DKK 0.8 million. The increase was primarily due to higher sales and marketing expenses, offset by a decline in costs as a result of the merger of the e-commerce activities mentioned before. In the quarter, the supply chain disruptions led to additional non-recurring costs of DKK 5.4 million. The supply chain situation at the end of the quarter was back to our normal level, and therefore, we expect limited impact from supply chain disruptions going forward. Q1 last year included non-recurring costs of DKK 3.8 million and a gain of DKK 2.5 million from the divestment of an owned operating store. Adjusted EBIT ended at DKK 26 million compared to a strong Q1 last year of DKK 33 million. Please turn to page six. Net working capital at the end of Q1 was DKK -38 million compared to DKK -69 million last year. Our inventory levels remain significantly higher than last year, which was due to increased raw material prices and the result of a decision to establish a buffer of raw materials to ensure high delivery assurance. Compared to Q1 last year, other payables were significantly lower, which was primarily due to two things, the holiday allowance systems being changed, and our obligation has been transferred to a government fund, impacting net working capital compared to last year with DKK 19 million. Furthermore, net working capital last year was favorably impacted by the extended credits from the stimulus packages by DKK 5 million. Net working capital ratio was -3.4% compared to last year of -6.6%. Net debt was DKK 278 in Q1 compared to DKK -14 at the end of Q1 last year. Compared to last year, net debt is impacted by the substantial payouts through both ordinary and extraordinary dividends, in total DKK 130 million, and the share buyback program of DKK 150 million, which is now fully exercised. Following the AGM, the TCM Group share capital has been reduced by 8.6% of the shares through annulment of the majority of the company's treasury shares. Please turn to page seven. Free cash flow was DKK -33 million in Q1 compared to DKK -25 million in Q1 last year. The change in cash flow was primarily impacted by lower operating profit compared to Q1 last year. CapEx ratio was 1.9% compared to 2.8% last year, and cash conversion ratio measured over 12 months was 61%. Please turn to page eight regarding the financial outlook. We reiterate our financial outlook, which is a revenue in the range DKK 1.15 billion-DKK 1.225 billion and adjusted EBIT in the range DKK 140 million-DKK 170 million. Thank you, Mogens. Uncertainty is higher than normal. We are balancing a situation where demand and order intake currently is solid, and at the same time, the Russian invasion of Ukraine, increased inflation, and higher interest rates lead to high uncertainty on the future consumer demand. In the short term, the order pipeline the coming three to six months is solid, providing some visibility and assurance of the short-term consumer demand. We are constantly monitoring the development in the customer behavior and demand, and we have prepared a number of initiatives which will be put into action if necessary. A very substantial part of our cost base consists of variable costs, and therefore we have a very flexible setup and can quickly adjust our cost base according to demand and thereby protect our margin and profitability. This concludes our presentation, and we will now hand over to the operator for the Q&A session. Thank you. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound hash key. Once again, star and one if you would like to ask a question. Your first question today comes from Benjamin Silverstone from ABG Sundal Collier. Please go ahead. Your line is open. Thank you very much. Thank you, Torben and Mogens, for the presentation. My first question is in regards to this uncertainty that you mentioned going into after the summer. Could you just elaborate a little bit on which initiatives you are looking at or have available to mitigate a potential drop in demand? The second question is related to the price increases we are seeing. The new price increase you just announced, is that expected to cover the cost increases you expected this year, or should we expect more price increase to come? The last question is related to Norway. You are seeing a very nice growth here this quarter, and you do have a strong pipeline of new stores opening in Norway as well. Could you just give us a bit of an indication of how you see your order backlog in Norway versus Denmark, and if you are having any sort of new obstacles to open new stores given the volatile macro environment? Thank you very much. Thank you, Benjamin. Let us just start with question one. Correct, we see this higher uncertainty after the summer holiday. When we say a huge part of our costs are variable, we mean the blue collar. We are working quite manually in our made-to-order kitchen production, and thereby when demand is decreasing. Then we can, with a relatively short notice, also reduce our manning in our production. That is the primary cost driver that we can adjust accordingly. Secondly, of course we have all the usual possibilities in the general cost base to do some savings there. Second question, the price increase that we have announced with effect for 1st of June, it was announced end of April or end of March, and at that time it was covering the price increases we were seeing for this year. The question is what kind of new price increases for raw material we will be seeing from now on, and that is really hard to say in this uncertain environment that we are working in. At the time that we announced it was covering the raw material price increases that we saw. Will we see more price increases? It all depends. I think the best answer we can give is that if we are seeing further price increases, then we will also react to them, the same way as we have been doing this year and last year. Norway growth, correct, three new stores are coming up. One of them is already opened last week, and two to come. We still are having search process also with external consultants to look for new dealers in Svane in Norway. We have also some candidates that we are in a dialogue with, but it's certainly not becoming easier with the uncertainty in the European macroeconomic. I think it is too early to say if we will be able to open up even more stores this year than the three that is already in progress now. Thank you very much, Torben. When we have a new agreement with a new dealer, then the second challenge is to find the right location. We also know from experience that that can take a while. I'm not too optimistic on more Svane store openings in Norway this year. That is duly noted. Thank you. Just a quick follow-up in terms of the backlog. Yeah Difference between the backlog in Denmark versus Norway? No. They are ordering into the same delivery time and the same capacity, as order intake has been solid both in Norway and Denmark, then the backlog will also be quite similar. Of course, smaller for Norway as the turnover in Norway is significantly lower than in Denmark. Thank you very much. Thank you. Your next question comes from the line of Ulrik Bak from SEB. Yes, good morning, Torben and Mogens, and thank you for taking my questions. I will take them one by one. The first one is about your guidance. Implicitly, you guide for 13% adjusted EBIT growth in 2022 versus 2021. Now in Q1, you delivered -21%, suggesting a more back-end loaded year. Q2 last year was quite strong, both in terms of growth and in terms of margin. Given the headwinds we're seeing this year, I don't assume that you will be able to generate a similar margin this year. Can you maybe just talk us through your thinking about the trajectory of this adjusted EBIT development for this year? It seems to be very back-end loaded. Yeah, compared to last year, you're absolutely right. We compared two strong quarters last year, Q1 and Q2, and two softer quarters, Q3 and Q4. In that respect, you're right that compared to last year, it will be more back-end loaded. We have also been in a process with price increases along the way, and they will also impact later in the year, thereby supporting our business more in the second half of the year than in the first half of the year. Okay. That makes sense. In terms of these price increases, the latest ones you announced at the end of March, I don't know if you managed to touch upon it before, but compared to when you announced these price increases at the end of March, have input prices, energy, transportation costs, have they increased further than what you saw back then? Is it still enough, the announcement you came back with back then to cover those extra costs? Right now, it's still covered by the sales price increase, as we have also taken into account the expected possible cost price increases. On our own energy costs, we have fixed agreements. That means that they are secured for one year, so they will not be impacted by the situation with the Russian invasion. Thereby we would be able to pass on sales price increases to cover for that next year. Okay. Please remind me, when will we see the full effect of the price increases coming into effect 1st of June? Like the previous price increases, you will see them coming in gradually, meaning that you will see initial impact from during Q3 and increasingly from that on. Full impact from 1st of January. You can say more or less the same as the previous ones, where the 1st of September is having a full impact from Q2. It's coming gradually. First step is to, you can say, neutralize the cost impact, and then we reestablish the margin when it's fully implemented. Understood. A question about your revenue growth. What is the split between volume and price? I think I saw you stated that most of it is from price, but what was the volume growth in Q1? Very limited. There is, of course, the technical impact from the kitchen part. It's limited volume growth in Q1. In Q1, we have been a bit limited in our production capacity due to the supply chain situation with drawers. They have, so to speak, set the standards for our capacity rather than our normal business model where it was primarily a question of manning up to increase capacity. It hasn't made sense for us to do that since we were limited on the supply of drawers. It has been a limitation the first part of the year, but as Torben mentioned previously, it's now back to normal, and it's not going to be a constraint from now on. Okay. In terms of your order pipeline, you state that it's quite strong. What is the mix between volume and price in the order pipeline? The order book is higher than the price increase. There's definitely also some volume. There is another factor also maybe influencing it. As we are announcing those price increases, then the stores and the customers tend to order faster or sooner. There might also be a timing issue in this. Even taking price increases and this trend to maybe order faster, away, there's still significant volume growth. Okay. Just so I understand you correctly. The stores, they order kitchens before they've sold them? Normally when you as a customer have signed the contract in the store, then the store still takes some time to work with the order. If they know that there's no limits for capacity, then they will order with us when they get to it, when they have time for it, or when they need to do it because delivery is coming up. In a situation with several price increases and limited supply, then they tend to order maybe a week or two before that they normally do. A part of this order book might be coming from them ordering sooner than normal. They work a little bit more disciplined to make sure that they get the order on time and at the old prices. Okay, understood. Thank you so much. That's all for me. Thank you. As a reminder, if you'd like to ask a question, please press star and one on your telephone keypad. Your next question comes from the line of Poul Jessen from Danske Bank. Please go ahead. Yes. Thank you for taking the questions. First question is just to recap on the pricing. You raised prices by 7.5% September last year, and then I think it was 5% April 1st this year. How much is it then by June? 7.5%. Again? Yeah. If you take the guidance for the remainder of the year where the increase will be guide 5%-14% growth, how much of that will then be the price drive? You can say compared the last one, impacting the last quarters is constituting maybe two percentage points of revenue. Yeah, if you include the hike you had in September last year, which will have an impact actually from start of this year. If you compare last nine months, last year, with last nine months this year, where you have an increase in the revenue guidance of 5%-14%. How much of those 5%-14% will then be price growth? It's a combination. It is, of course, a significant impact from the price increases, but there is also volume growth in the guidance. I think we stated last quarter that the organic growth in the guidance was 5%-12% and it corresponded to a volume growth of 0%-7%. Okay. On the margin, it's a little like the question before. You had 9% margin in the first quarter and 13%-15% for the last nine months, implicitly in the guidance. We should assume that you're getting some white goods back. Is that the mix or is it the price increases that will take your margins up? A combination in that sense. Compared to, you can say previous levels, we have an expectation that third-party revenue will not constitute the same amount as historically, since the supply chain situation for white appliances is still unstable. This leads, for example, to customers ordering white appliances elsewhere than through the stores or through the normal suppliers. It will remain low for the remainder of the year? It is volatile, but overall, yes, we expect to have a lower share of third-party revenue. Okay. Do you have an estimate on the production that you will take over there, how much that will be a part of the revenue this year? So far it's quite limited, so how much will that add for the next nine months? In the first two quarters it's limited and then we expect to see an increase. It's not necessarily going to be fully in the levels that we expected initially. It takes longer than we expected to get the full insourcing of it. Okay, fine. Special items, you said that we should expect limited impact going forward. Does that mean that special items for the remainder of the year will tend to zero from Q2 onwards? Yes, that's the expectation. Yes. Okay. That's all from me. Thank you. Thank you. As a reminder, if you'd like to ask a question, please press star and one on your telephone keypad now. There are currently no further questions. Sir, I will hand the call back to you for comments. Thank you to all of you for listening today, and thank you for your questions. Thank you for your time. Have a nice day. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.