Good day, and thank you for standing by. Welcome to the TCM Group Interim Q1 2024 Report Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to slowly press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, Torben Paulin. Please go ahead. Thank you very much. Good morning, ladies and gentlemen, and welcome to the presentation of the Q1 results for TCM Group. Presenters today are our CFO, Thomas Hjannung, 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 session. Let us start the presentation and turn to Page two for the business update. Sales in the first quarter developed in line with our expectations, with improved order intake from the B2C market in Denmark, whereas B2B sales, as expected, contracted primarily within project sales and house builders. Revenue increased by 11% in the quarter due to the inclusion of AUBO, however, with an organic decline of 12%. On a like-for-like basis, order intake in Denmark was up 3% compared to Q1 last year, with B2C order intake growing by more than 10%. The improvement in gross margin compared to last year, Q1, was driven by the changed sales mix and inclusion of AUBO. Despite the challenging market conditions, three new branded stores opened in the first quarter, two in the AUBO chain and one in Nettoline, and at the end of the quarter, we had 112 branded stores in Denmark and Norway. Please turn to Page 3. TCM has built a strong foothold in B2B in recent years in line with our strategy. B2B sales offers long-term customer relationships and longer sales pipeline stability and visibility, however, at a lower average sales prices and lower margins. B2B consists of four pillars: project sales, house builders, trade customers, and social housing. Especially project sales and house builders are macro cyclical by nature, hence we currently face a significant decline in demand. That is why we focus on regaining share in B2C, and the efforts have so far paid off with a 10% increase in order intake in Denmark in the first quarter of 2024. These efforts will support gross margins over time. However, in the short term, B2B gross margins can be diluted by the fact that low-margin project revenue still represents a larger share of the B2B revenue. Please turn to Page 4. Norway has for many years been a focus market for TCM, and with the strategic acquisition of AUBO in July 2023, we further strengthened our foothold. AUBO has a strong presence in Norway, with 55 shop-in-shops through long-term cooperation with Optimera. In total, we now have 89 shops presenting TCM brands in Norway. The Norwegian market is severely hit by the economic downturn, with high interest rates, weakening currency, and high inflation, and especially the B2B market is standing still. Historically, Optimera, being the leading supplier of building material in Norway, has a high share of B2B sales. That is why we, together with our partners, focusing on gaining market share in the B2C segment, especially within renovations, while we continue to build relationships in the B2B market so that we are well prepared once the market recovers. Please turn to Page 5. Some financial headlines for the quarter. Reported revenue was DKK 293 million, corresponding to a revenue increase year-on-year of 11% in our core business on an absolute basis. Adjusted EBIT was DKK 16 million, compared to DKK 13 million in Q1 last year. Adjusted EBIT margin was 5.4%, compared to 4.9% in Q1 last year. Thomas will elaborate on the underlying drivers of this development. Net working capital ratio was - 0.8%, compared to - 1.4% last year. Cash conversion was 69.2%. I will now hand over to Thomas to go through the financial highlights. Thank you. Thank you, Torben. Please turn to Page 6. In Q1, reported revenue increased by 11% year-over-year, however, with an organic decline of 12.3%. Revenue in AUBO Production amounted to DKK 61 million in the first quarter. Revenue in Norway in Q1 2024 was up by 135% due to the inclusion of AUBO, which has a strong presence in Norway. As expected, the B2B share of revenue decreased in the quarter due to a slowdown in sales to house builders and larger projects. Please turn to Page 7. Gross margin increased from 18.9% in Q1 last year to 20.7% in Q1 2024. The improvement in gross margin was driven by changed sales mix, where B2C sales generally carries higher margins and a positive impact from the inclusion of AUBO. As you might recall, AUBO, due to its distribution model, has a higher gross margin compared to other TCM brands. Input costs, such as costs for raw materials and components, generally remained stable in the quarter. Adjusted EBIT ended at DKK 16 million, compared to DKK 13 million in Q1 last year, with EBIT margin lifted from 4.9% to 5.4%, reflecting the higher gross margin and good cost control in spite of falling sales, demonstrating the flexibility of our business model. Please turn to Page 8. Net working capital end of Q1 was -DKK 9 million, compared to -DKK 16 million last year, equal to -0.8% of revenue, compared to -1.4% last year, where the deviation is explained by the inclusion of AUBO, which, due to the operating model, carries a higher net working capital than the rest of the TCM brands. During the quarter, inventories were further reduced by DKK 5 million compared to the previous quarter, as a result of reduced buffer stocks and improvement, improved procurement processes. Net debt was DKK 347 million end of Q1, compared to DKK 315 million end of Q1 last year. The leverage ratio increased from 2.95x last year, Q1, to 3.73x as a result of the AUBO acquisition. However, the group continues to remain compliant with the covenants agreed in the financing agreements. Please turn to Page 9. The free cash flow in Q1 was DKK 13 million, compared to -DKK 36 million in Q1 last year. This was due to higher operating profit and the improvement in the change in net working capital of DKK 29 million. CapEx spending was on par with last year, with a CapEx ratio of 1%, with the investments going into digitalization and factory modernization. Our cash conversion ratio, measured over 12 months, was 69%. I will now hand over to Torben for a review of the financial outlook for 2024. Please turn to Page 10. Based on the results for Q1, we reconfirm our guidance for the full year, a net revenue in the range of DKK 1 billion-DKK 1.15 billion, and an adjusted EBIT in the range of DKK 55 million-DKK 85 million. Obviously, if the positive trends we have begun to see emerging in Q1 persist, the chance of us reaching a result towards the top half of the guidance, both with regard to revenue and EBIT growth. But as for now, many uncertainties still prevail. I 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 slowly press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please slowly press star one and one again. Once again, please slowly press star one and one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. Once again, please press slowly star one and one on your telephone and wait for your name to be announced. Thank you. We are now going to proceed with our first question. The question comes from the line of Poul Jensen from Danske Bank. Please ask your question. Your line is opened. Thank you, and good morning to both of you. Our question is, you now put more focus on the B2C market in both Denmark and Norway. Could you remind us of what's the current split in Denmark, for instance, on the B2C and B2B market? Yeah, we are close to be back on normal split, 60/40, 60 being B2B, where we in a long period have seen more B2B, and been a lot higher than that. Okay. And, can you then, o r what's your impression? Why do you see the, the pickup in the B2C market right now, where the housing market is not having a clear direction right now? Is it people who are deciding to stay where they are, and then they renovate instead? Is it people who bought houses or, or flats in late December who is renovating after having moved into their new houses? Or what's the dynamics here? We don't have a detailed information on it, but when we know that the number of houses sold has been very low and has been increased significantly from November last year through December, and also I think the number of houses sold in January was up 40% on last year, and 30% in February, and 20% in March. So I guess there is that there is a higher number of houses sold than last year. And we know that every time a house is being sold, it will give budget for renovation and including in that, also kitchens. So that is definitely a part of it. Guess also that there are customers that didn't manage to get their kitchen renewed during the COVID-19, either because delivery times were long, or it was difficult to find installation teams, craftsmen, so they are then doing it now. And then maybe the third reason is that even we haven't seen rate cuts in interest rates, then maybe just that people understand that that increase in interest rates are not going to increase further, and they have got their salary increases, then they feel safe to buy now. So it's probably a mix of the three elements. Okay. And when you talk about order intake increasing 10% in, in B2C Denmark, is that, because you had a very, very low base last year, or is it, actually improving the levels over a longer period? Yeah, it is definitely coming from a low base last year. But there is good traffic into the stores, and we have also reported that those design weekends in the beginning of the year was well visited. So, it is increasing traffic. When you look back in history, has there been any kind of impact of Easter, when it moves from one quarter to another, so the numbers could be impacted by Easter again this year? No, no, in April, that is not the main factor. And I think also it was only two days that was moved. The third day was still in April, so it's not an Easter thing. Maybe it's even more weather conditions, that we have had a very, very long and wet and cold winter. So, and then we jumped over spring and went directly to summer here a couple of weeks ago. Okay. And then, a financial question: You reduced the personnel by 20 people from end of December to end of March. That's 4% down. In what lines are that impacting? Is it the production capacity, or is it also in the overhead? And have these, this reduction already been visible in the Q1 numbers? That is mainly on the production labor. Of course, there's also some of the people that we terminated the contract with in November last year that were still working, you know, during the end of December and into the first quarter, but the main variance is on production labor. Have we seen the impact on the first quarter? Yeah, yeah. Okay, so we should not expect a spillover in the second quarter as well? No. No, no. Okay. Thank you. Thank you. We are now going to proceed with our next question. The questions come from [Zalana Vurwigpack] from SEB. Please ask your question. The line is opened. Yes, thank you for taking my questions. A couple of ones here. I'll take them one by one. First one on the order intake, perhaps phrased in a different way. Has it increased on a sequential basis, versus the end of Q4, through the end of Q1? Can you share, you know, the, the increase, or if there has been any increase since then? Yes, there was. Um. There was an increase, also, compared to Q4. I don't have the number right in front of me right now, but there was an increase also compared to Q4. There should also be a seasonality. Is order intake in December low, and high in January? So that follows the seasonality. Understood. And then a question to your guidance. It's still a quite wide range, and I acknowledge there is a lot of uncertainty related to your end markets, but can you perhaps guide us a bit in terms of if you're trending towards the upper or the lower end of the guidance range based on the Q1 number? Yeah, if, as we say, if this development continues like in Q1, then we are trending to the upper half of the range. And the reason that we cannot count on that yet is that we know that especially in the B2B and the project sales the number of new build started and permits given has been low for a long, long period. So sooner or later, there is a risk that some of those projects in the pipeline will dry out. And then the question is: when will the house builders pick up again? And how fast will that happen, and can we manage to get that slightly in 2024 figures? And how strong is this B2C improvement? I still think there is a little risk that some of the end consumer, they already today counted in the interest rate cut, and thereby when the rate cut actually will happen, then the impact will be slower because it has been taken in advance. But if I'm wrong and it will give a new increase, then again, that will point in the upper half of our range. So that is the elements and the uncertainty. Okay. But if you, w hen you say that if things continue as you have seen in Q1, do you mean that the B2C demand should be unchanged, or that the improvement that you've seen in Q4 and Q1 should continue? Yeah. Well, yes, to both. I think, it will not do it on itself. It needs to be the development that continues. Understood. But again, it's still, even if you say the upper half of the range, there's still a wide, wide range. So it is actually also then the mix in B2B, right? If project sales keep on a high level, we will probably reach the upper half of the range on revenue. But then due to the low margins on project sales, then that will not follow. So we need both the volume and the right mix to come in the upper half on both top and bottom line. Okay. And then in terms of your B2B sales, what does the lower end of your guidance assume in terms of this B2B sales level? Because it seems as if there is a likelihood that it could be lower versus what you realized in Q1. Yeah. That it, that it. How it dries up. Yeah. Okay, so, b ut is that in percentage terms versus Q1? Is that down 50%, or is it more, or is it less versus Q1? It is, less than 50%. Then during your opening remarks, you talked about your gross margin, that it might be diluted throughout the year due to a higher share of low-margin project sales. Can you just expand a bit on that? What? Yeah. You know, we have in B2B, we have the four segments: the house builder, the trade customers, the social housing, and then the project sales. And they are not equal in volume, and they are also different in margin. So the mix among the four pillars will define the total margin. We know that the house builders haven't sold many houses since beginning of 2022. We did deliver throughout 2022, and then in the second half of 2023, the order book was empty. And they are selling houses, but not at all near to what it was before. Even that they report that there is increasing interest, visitors to their show houses, request for catalogs, et cetera, it will take a while until they actually have a house sold, and they start building, and we should deliver the, the kitchen. So, we don't expect a pickup in house builders this year. Some of the social housing, they, they have been waiting for a period. Maybe they will, they, they will start investing more money for renovation now. We haven't, we haven't seen that to a last large extent yet. And then, and then you have the trade customers that is maybe linked to the, also to the private sale, because it's renovation for private people that that could potentially pick up, and then it is timing of when project sales is buying out. So each of those four segments has its own dynamic, and that is why we believe that our strategy to have a healthy mix of both private and business to business, and a healthy mix within the four segments in B2B is giving us the most stable foundation for our revenue. Okay, but just to understand your opening remark about the diluted gross margin across the year, that was only assigned to the B2B segment? Because. Yeah. TCM Group as B2C makes up a larger share. Gross margin should all else be right. If you have 60% B2B, and if the four segments was equally split with 15% each, then project sales being one of those four segments with 15% revenue, and then with a significantly lower margin than the three other segments. So when this segment is growing from 15% to 30% of the B2B, then that in total will bring you a lower margin. Yes, clear. Thank you. But then just a question on the status of the market and the discounts that we've been seeing in the market from both you, but also all your competitors have been out, you know, quite extensively advertising the high discounts during Q1. What's the status of these discount campaigns generally in the market and for TCM specifically? Is it still the same amount you're heading into Q2 as it has been in Q1? Yeah, it is. And you need to remember that all those discounts are done by the stores, and then they are only to a certain extent supported from our side. And a lot of those campaigns that has been happening in Q1 and also Q2 is also very much supported by third-party suppliers. Okay, um. The white goods suppliers, they are not only hit in Denmark or Scandinavia, but they are also hard hit throughout Europe, and thereby they are quite supportive those days. Understood. Then a question to your cost trajectory. The Q1 level that we saw, obviously, there's been some FTE reductions, but there's also some marketing timing in Q1. So if we look at the Q1 fixed cost level, should that decline because of seasonality with marketing, not as prominently in Q2 and Q3? Or how should we think about that cost level over the coming quarters? I would say that you should probably expect a more or less stable cost level. Given that we have included AUBO in our numbers now, they have a really different marketing structure and marketing terms they are supporting their partners with. It's more stable now from quarter to quarter, the total SG&A cost base. Okay. And then my final question on CapEx, it's only DKK 7 million in Q1, which is on the low side if I compare it to previous quarters. What should we look for for 2024 as a whole, as a percent of revenue, perhaps, or and also for future years? Yeah. I mean, for the time being, we will still be in the range of 1%-1.5% of revenue for this year. We have not previously communicated on the longer-term projections, but so I'll leave that open for now. That's very clear. But. Thank you so much. But we do not see any significant change, right. Okay. We are now going to proceed with our next question. The question comes from the line of Sindre Sørbye from Arctic Asset Management. Please ask your question. Yes, good morning, Torben and Thomas. I think most of my questions have already been answered, but a couple of remaining questions here. First, last year it was a topic that you had to do some write-downs on customer receivables due to a few of your franchises not faring too well. It's, a nd also given that the customer receivables are up this quarter, but should we consider the risk of your franchises failing as a thing of the past? Yeah, I mean, we've not seen any need for an increase in our provisions for trade receivables in Q1. I think the situation has somewhat stabilized compared to what we saw last year. Of course, they also benefit from the uptick in consumer sales, where they typically get, you know, cash in advance, down payments when the orders are placed. So that is very significant and helps their cash position and liquidity very much so. So we've not seen a worsening at all of our trade receivables in the quarter, and we feel quite confident with the level of provisions that we have now. As to the movement of the DKK 13 million you refer to, that is more seasonal revenue. You have to keep in mind that up to the end of the year, every year, you know, we shut down the factory. So we invoice and with the customers in the last two weeks before the end of the year. And that means with the payment terms that they have, they generally pay off a large part of the debt to us towards the end of the year. And then we now go into a more normal level, right? Build up towards the end of, during the Q1, we build up trade receivables. So that's just normal seasonality. Okay. Okay, thank you. And, and, and you pointed to the fact that working capital was higher when it related to the acquisition of buying or in the AUBO business. So I mean, looking at history, at least before 2021, you trended up, let's say, around 8% or so of working capital to sales. So, following the AUBO acquisition, what should we expect as a kind of, let's say, average going forward in a normalized climate? I would say around the level that we're seeing now. Of course, we are pursuing various ways to improve the working capital, as you see, with a strong focus on reducing inventories, for example. But I would say in the level that we are now somewhere between -1% to -2%, in the shorter term, at least. Okay, and that's kind of annual, 'cause it's quite seasonal, but that's kind of a, let's say. Yeah. Average for the year would be -1% to -2%. Yeah. Okay, excellent. On the raw materials side, I guess you have been seeing a slight benefit, but is that flattening out now, or? Yes, it is. There are, you know, the reductions that we did see after all in the last quarter, especially of last year, seems to have sort of flattened out, as you say, in Q1. So, we do not sort of expect significant reductions here in the short term. Okay. Good. Good. Finally, on, on, I think I alluded to, alluded to, to the impact of the Easter before, but just to understand, I think there was, there were four or five less working days in. That means sales days in, in, in, first quarter this year as compared to last year. And then, shouldn't that, shouldn't that have a, let's say, negative impact on, on sales and especially order intake, if you compare with last year? No, I think we, you know, there was two days less due to Easter, but then there was one more day in February because this is, you know, we had 29 days in February. So for the quarter as a whole, we're talking plus, minus one or two days in terms of retail opening days, right? So it's limited the impact after all. Okay, okay. Finally, from my side, the promotional activity, you said that even though there is quite a lot of campaigning, you're not supporting that with a strong amount or a high amount of money. But would you say that the orders you're now taking, looking at your order book, the margins in that order book, it should be satisfactory margins? Well, I think the orders having the order book reflects our normal usual margins. As Torben also stated, we're not so, we're not supporting more or less than we used to do in terms of discounts on the B2B sale, B2C sales. Okay, okay. Yes, I think that was everything from my side here. So thank you. Mm-hmm. Thank you. As a final reminder, if anyone has any question, please kindly press slowly star one and one on your telephone and wait for your name to be announced. Please press star one and one slowly on your telephone and wait for your name to be announced. Thank you. We have no further questions registered at this time. I will now hand back to you for closing remarks. Thank you very much. Thank you, to all of you for listening in and for the questions today. Have a nice day. Thank you. Bye-bye.