Welcome to Duell's Financial Report webcast for the full year of September 2021, August 2022. We will also cover the Q4 in this webcast. Jarkko Ämmälä, CEO, Riitta Niemelä, CFO, will present the result. You have the possibility to send the questions through the chat, and we will take the Q&A session in the end. Jarkko, stage is yours. Thank you, Pellervo, and welcome from my side also. First of all, yes, we have an excellent year in this market situation. Here is few highlights, how we did it and where we are today. First of all, we operate now in around 15 countries in Europe. We are extremely strong position of course in Nordics, where we've been in long time already, but now we enter in the mid-Europe and the South Europe also. Turnover-wise, we end up in EUR 124 million turnover. Net sales growth is more than 60%. Of course, we did few M&As like, as you know, and we see later on. EBITDA level is at 7% this fiscal year. Few key figures. We have around 500 brands now in the portfolio, 220 employees and more than 8,000 active dealers. Dealers network is growing fast now when we enter into Europe. Few warehouses around Europe and so on. Here is just to remind something, what's Duell really doing then. First of all, we operate every different segment on the motorsport or powersport, and also now the bicycle is the new strong what we believe it on the future. But all in all, we are very different than any other company that we operate every different category, ATV to bicycle, off-road, on-road, but also snowmobile, because we founded in Nordic. For us, this is normal to being in the snowmobile business also, and water sport, marine business also. Really unique. Every different category. Inside of the all different categories, we also have all different items. If you needed something personal equipment in those units, we have it from helmet to boots and all protectors. Of course, the main business, two-thirds roughly are the technical and spare parts. All spare parts to tires and chain, brake parts and et cetera. All those different categories, all different items. The sales channel is, we cover every different sales channel, especially on the countries where we more stable and being the market leader position. This is a lot of value for the brand owners that we cover all different sales channels with big retailers. They have some products in the product line, but of course, specialty shops, all repair spare workshops, they change the tires or they change the oil, and also the manufacturer side, especially in the Nordics, if they manufacture on the boat or some parts on the ATVs or so on. We are strong in the e-commerce side, and that's the important part of the strategy point also. Later on, we talk more about our strategy. We are supporting strongly in the e-commerce sales. Now, when we enter into Europe, we get it also the big European retailers in that segment. That's a big part of the total business, and growing. Let's look a little bit on the more details then how is it the Q4, first of all. We have a strong growth in Q4. Of course, in our growing strategy, whereas Europe is the big part of the growing strategy and important part in this growing strategy in Q4 is strong market in the Europe in that timing. That's why we're growing in the Europe really strongly in Q4. Also, our organic growth was strong, almost 20% organic growth in this quarter. We growing also in the Nordics in this quarter. Q4 was strong quarter for us. There's still a good customer demand in this quarter. We progress strongly in the integration of the M&As what we've done in the last 18 months. Integration planning, we did some M&A also in the end of Q3. The process in integration going as planned. EBITDA increase also, it's almost +30% in this quarter. Of course, there is a pressure of the inflation increasing cost, not only on our own cost, but also the products cost and transport. Everybody knows that there's a lot of pressure on what is difficult to get everything moving on the day-to-day on the prices and the margin. We have the pressure on the Q4 gross margin, of course. Customer demand, like it. We can see it's strong in the Q4, but we can see that there is, let's say, a difficult market situation overall. It's not a surprise. It's also in our industry, but overall, we can see that customer demand starts to decrease slightly in. We're already inside of the Q4. That's why it's extremely important already here to say that our strategy key cornerstones that we need to do expansion of the new market. We need to get stronger market shares on the market where we are not strong yet, like for example in Europe, many countries. At the same time to be the partner in the more on the online sales channel, so in the European online sales channel. The European bigger e-commerce companies where we want and they want, so we getting a stronger position, and that's what we started already a year ago, and it works well. Also the brand portfolio development. We need, and we're looking for to make our portfolio stronger and stronger. Also in own brands, own private label house brands, but also the overall in. We needed a lot of brand portfolio to widen. Because different countries is different brands, let's say, most important. Same brands what is most important in Finland is maybe not so important in Spain. That's why we need a strong brand portfolio, and that's going like we want. Here I pass the lead on to Riitta. She's going through a little bit highlights of the numbers. Please go ahead. Thank you, Jarkko. Also, welcome from my side, this financial result webcast. Duell's revenue amounted to EUR 124 million. The net sales growth was 61.5%, which was mainly due to the acquisition we had made in financial year 2021 and 2022. In addition, Duell reached 15.7% organic growth despite the challenges caused by an uncertain market. The sales growth derived from growth in all markets where Duell operates. The growth in Nordics was 20%, and the growth in Europe was even 253%, where Duell continued to improve its market position. Duell's Adjusted EBITDA was EUR 8.7 million, having an increase of 8.5% compared to the previous year. This growth was driven by higher sales volumes. Adjusted EBITDA margin was 7%, which decreased by 3.5% compared to previous year. The Adjusted EBITDA margin was impacted by higher logistics costs related to the deliveries and also increased personnel and other operating expenses supporting Duell's organic and inorganic growth. The difference between adjusted and reported figures are explained by items affecting comparability. Items affecting comparability included EUR 2.1 million of fees and expenses related to the listing of Duell Corporation done in November 2021. The capital expenditures was a bit higher compared to previous year, and this is mainly due to investment made to our new e-commerce platform, which will be implemented in 2023. Duell's net working capital was EUR 57.7 million with an increase of EUR 24 million compared to previous year. The increase was due to acquisitions made in financial year in 2022, and also additionally due to higher inventory levels in general. Duell did make a strategic decision to increase inventory levels due to supply chain challenges we faced in 2021 and to ensure the availability of our products to our dealers. However, the delivery delays and deliveries received after the peak seasons left us with the higher inventory levels. Therefore, one of our key focus areas for 2022, in the end of 2022 financial year and now when going forward, is to decrease our net working capital by lowering the inventory levels in order to improve our financial position. We also prioritize the cost structure optimization in all our operations. As we have made four acquisitions within last 18 months, the integration measures and achieving synergy benefits within our group company is our key focus areas now. Duell's net debt in 2022 was EUR 44.6 million, an increase of EUR 6 million compared to previous year. The high net debt level is due to financing of our acquired companies and having currently the excess inventory value. Regarding the seasonality in Duell business, when comparing the quarterly net sales figures to previous year, the strong growth is visible in quarter four, which derives from the growth in European markets. The share of sales will be stronger in quarter three and quarter four as Duell implements its growth strategy with geographical expansion. Adjusted EBITDA margin, as you can see, follows the same trend as in previous year, but in lower level. The cost level was increased as mentioned, but for financial year 2023, Duell has started a global cost-saving program in order to eliminate overlaps, making operations more efficient, and achieving synergy benefits within the group companies to improve its profitability. Duell cost base is overall scalable, and we have a great opportunity to produce significant EBITDAs with higher volumes when going forward. Jarkko, you can continue. Thanks, Riitta. Let's look a little bit at the market, let's say, status right now. Of course, everybody knows that we have been in the COVID-19 pandemic. It's still continuing in the Far East, so there's still some issue with the supply chain, especially in the Far East factories. But it's getting much better now. So that's why we can drop our inventory so the supply chain works better. This is a really important point to our strategy with lower inventory. We don't want the risk to sales, but now this works, so it's gonna help us to go to lower inventory in the future. Of course, the war in Ukraine continues. That's mainly inflation, which impacts customer confidence right now. The market visibility is of course very difficult to see how the market looks in March or April next spring. That's kind of an easier situation somehow also because a year ago this time we didn't see anything like this and now we know where we operate. Anyway, all in all, those together, we expect that this will continue, and its impact of course on this 2023 year where we're going. There is turbulence in the market still that year in the next coming months. What is our main focus in 2023? Of course, we continue our European growth strategy. What is... It works well and we keep going this one. This is of course a key element of the turnover-wise, the revenue growing. That's the key in the European market. The second one, priority of course, we can now optimize the inventory levels because the supply chain works better and so on. The third part is like cost-saving program that Riitta already explained a little bit, and that's what we need. We have overlaps in all M&As that we did in the last less than two years and so we can save on costs here and there. Okay. Our outlook in short term, now this coming year. Like I say, the market looks different. It's very difficult to understand where is the market being in next summer. Inflation is strongly now and overall economic is a bigger question mark in the next coming months. Of course, we are confident that our growing strategy, especially on the market where our market shares is not so strong. In Europe, many countries, we have still small market shares and we growing really fast and we are very confident that this continue in 2023. All those different market different market situation, especially in our market shares in different countries, when we put it all together and make all estimate, we are very confident that we continue our sales net sales growth. We grew also organically, but also inorganically. We gonna do it in some cases probably in the future, but also we did it in the last 12 months, what is not all the revenue is not on the official numbers yet. So like latest M&A we did in the end of May. So, unofficially that 2024 is not full year numbers including. Also all programs cost saving, but also the pricing, the margin-wise, we jump off the new year and there is a price increase here and there to cover our margin. We are confident that EBITDA is grow both on the euros but also on the percent-wise. We are very confident. Summary 2023, we're looking for the net sales growing and EBITDA growing. Medium-term targets. We slightly change in the medium-term target. We are still confident that net sales end of 2025 is between EUR 200 million and EUR 300 million. That's not a change. We growing organically and inorganically. Top line stay same, but only slight change is the how big is the organically change in the year by year. Profitability, we don't change anything in medium-term target is at least 13%. Leverage level, we want to be operating in between two and three. Of course, right now is higher because we did it for M&A case in last 18 months. Here is a reminder of our strategic cornerstones. First of all, what we want to be. We want to be the best partner of the dealers and brand owners in Europe. It's important, the both ways. Of course we are market leader position in Nordics. We want to make this stronger and stronger. We have three cornerstones in this strategy. First, geographical expansion. It means we enter totally new market or we expand the portfolio in the market where we operate already now. That's a key element, and that gives us the confidence to continue this growing strategy. Second one, partner of the online sales. Like already told, that we have a new e-commerce platform, what is a big step in helping and supporting the, especially the online customers. That's a key element of our growing strategy also in support of the online sales. Third one, I don't say the most important, but at the end of the day, we selling the products. So the brand portfolio is extremely important that we have the right brand portfolio in each different market. Also at the same time, our own brands, that helps of course exclusivity in the fact that we have more in the own brands, but also it's normally better margin-wise. So we development on the inside of the brand portfolio in more on the own brands. That's three key element in strategy point to be in success on the also on the future. Here is just a kind of reminder in the last 18 months, we did four M&A cases. There is different market area and different portfolio. Let's say different reason why we did it. The latest one is PowerFactory, what we did it in May this year, and that's Finland and Sweden. This is the key element why we are extremely interested to do it and find close this deal was the bicycle position. We want to enter this bicycle, especially on the e-bikes is coming in a lot of synergy of the let's say off-road motorcycle dealer-wise and the brand. There's a lot of same brands and so on. There's a lot of synergy in the bicycle and the motorcycle in the future. Yes, the [TMV], roughly more than a year ago, deal in Benelux, TMV, specialized in the off-road market. We got a really strong off-road knowledge, some extremely important brands and a strong position, especially in the Benelux, but also rest of Europe. IGM, which is the first one we did 18 months ago, we got some important brands but also like a wide dealer network where we can get it, say, cross-selling started. This is an important part of our European growth strategy. Just wanna say here, kind of remind that this M&A is one important tool in our toolbox in this growing strategy also. Here is our presentation and I guess now we have Q&A if we have some questions. Yes. We have a few questions here. Firstly, there is a need for a comment. What caused kind of the profitability decline from Q3 to Q4? Yeah. I can take- Okay - first few comments regarding that. Just a second. I'll fetch the correct slide. Yeah. As we can see that there was decline in Adjusted EBITDA margin, and this is purely impacted by the decrease in gross margin. It comes from the product mix that we sell in quarter four compared to quarter three, and also that in the end of quarter four, we have the sales of pre-orders that are sold a bit lower margin. The other operating expenses and overall the fixed expenses were in same level in quarter three and quarter four. Jarkko, would you like to add? Yeah. Inflation also in some price increase. We have some kind of contract. Sometimes we can't change the pricing overnight. We have a step how often we can increase the price if our price is increasing. The transport cost was extremely high in this period. The products was arriving in container. If they're arriving in, let's say, June, July, early August is extremely high transport cost. What is now dropping dramatically after that, last two months is dropping almost 50% of the container transport cost to products in from factories. That period was extremely high. That's one reason also. There's a few reasons where we have pressure on the margin, especially on those quarters. Okay. Thank you. What about as we stated that the decline started again at the end of August. Has this same trend continued, and what is the magnitude of this decline? Do you want to comment on that? You mean in the, what we doing right now in the Q1? Right now, yes. Okay. Yes, the market is, of course it's. Let's say it's more on the top line that turnover-wise the market demand is slightly less than especially compared to a year ago. I don't say it's much. It's not really going so much worse from August to October, but last year's Q1, let's say everything was normal. That's the big difference right now this Q1 is when you compare last year's Q1, when everything was kind of normal. There's no war. There's no inflation. So the market demand is very different from last year's Q1 and now. It's not much worse compared to the summer. Let's say our Q3 or right now is not much difference. Of course, the margin-wise, we make quite big price increase because of the price inflation here and there. Margin-wise, we may be not so much in, let's say, trouble right now. You know, our fiscal start from September, so basically everything is new year and we start from new price position or new products line and everything like that. Of course, it's good to just understand the Q1, compare our seasonality, what is now. You can see the left side figures also. Big part of the growth coming on the Europe market, of course, and Europe market is kind of off-season right now. Okay. Thanks. I think this is pretty much related to the previous topic. How do you see the pre-orders going now for the spring? What is kind of the confidence of the dealers currently? Yeah. It's very good point and questions. We have in this pre-sales program quite big program twice a year. First, we do the winter pre-sales program between February and April, and what we invoice here now to, let's say, start of the August and to end of October more or less. Right now we are doing and done with the pre-sales program in the spring. Especially on the clothing side, it's important with new graphics and new models. The pre-sales program is important and it gives us some visibility on the next six months. It's going good. It's actually I was maybe some point even more worried how it works out. Why it's going well, it's of course our so strong position on the market and the brand portfolio. I would say we have the best brand portfolio overall in this segment, like clothing segment. So the dealers are, they needed us of course and like we needed them, so it's win-win. Dealer situation in the inventory levels or those kind of confidence of the dealers, how is the confidence in the spring? Yes, there are the biggest dealers who's planning 2022 maybe higher growth in slightly higher inventory. In big pictures, there's no really big issue on the inventory level. The confidence what's coming on the 2023, I would say the dealers see it very similar than how we see it. Of course there's a lot of question marks and change quickly, positive side or negative side. All in all, everybody need to make their own plan and own budget and stick with us and going forward. We are quite positive and quite confident on the spring, how it looks. The main driver are of course many European countries where we can grow even if the market is negative. Okay, thank you. About the guidance or the sales guidance. How confident we are about them? Can you open a bit the sales guidance and the reasoning behind? Yeah. In short, guidance probably this 2023. Yes, we are of course already done our fiscal first September is already. We have some months already in the pocket. We have an order book on the spring and we have a let's say market analysis quite good in different countries, different sales mix and so on. Yes, we are confident today that guidance what we come out that in we growing sales side we growing organic sales. We growing of course, I have to remember this M&As what we done in the middle of the season, so they not in the August numbers yet. We growing, let's say total revenue is growing of course, because there's also some part is coming in the numbers what is not including yet in the August officially. And the EBITDA-wise, this cost saving program and also we have scalable business model. When we grow in those European countries, especially in the European countries, we have in the let's say many places fixed sales cost. Then we just growing on the turnover and it start to getting better EBITDA. Same on the, let's say, marketing cost or something. We have. Of course we having high cost on the 2022 especially in those European countries sales because the turnover is still not there. There's so much more potential. It's not black and white, but we can go to same cost, sales cost in growing much more turnover, so EBITDA is getting better. We are confident. Yeah, very good. Then about the, let's say, the net debt and the net working capital. What are the measures to reduce the net working capital in 2023 and what do we expect to be kind of the level at the end of the 2023? Of course, we don't publish the exact numbers where what we're looking for end up. But yes, we have, let's say, mainly inventory. We have an overstocking situation, or let's say too big inventory. Also the strategic reason, but also the supply chain issue reason. This end of 2022 still. Now when the supply chain is working much better than the past, we are confident to make this strategic decision that we can drop off the inventory. It's quite big numbers what we're looking for, what's let's say end of August 2023. It's not impact of course day one because we have a lot of seasonal products, a lot of summer products that we can't drop in now and the other way. Yes, it's big difference that we're looking for and we are very confident the program. We have a good program around that. It's lot of elements that. It is start from strategy decision that we can drop it, that because we're not risking on the sales. It started from there and then we have all point what, how to do it. We are confident that it's looks totally different in end of August 2023 than now. Okay, good. About the, if we just discuss about the growth, so how do you see the possibility for potential acquisitions as the, let's say, the market conditions are pretty challenging and also the interest rates may kind of rise further? How do you see it? Yes, of course it's let's say we're working around those all the time. I would say I'm disappointed if we don't do anything in 2023. Of course we are interested in the market change. There's coming more, let's say, more companies on the market somehow. But for whatever reasons, the market is moving this direction that the big ones coming bigger and the medium size or the small, let's say in many cases more trouble maybe, let's use this word. So there's also the market change slightly behind that. Do we see that on the valuation? Not so much yet, but that's also the one element what is changed now, this market situation. Of course our balance sheet and the inventory is extremely high and it's not so, let's say, easy to do it right now. Yes, we are working those, but there's need to be clearly to same like it's been now last two years. It's need to be strategic side important for us, and then the valuation need to be right. Those elements is extremely important to both been. There's a lot of opportunities on the market because the market change. Of course we can say if it guarantee anything that we do it or don't do it, but we working this also. It's part of our growing strategy. Okay. One question regarding the prices. How do you see the price development for the products will go further compared to, let's say, last year? Yes. The product prices, let's say it's three elements where the product price is coming from. First of all is the factory price or what is the product price. Second one is currencies, and third one is transport cost. Yes, many price increases coming on the product price. If you're looking for the last 12 months, not so much on the price increase of the products, but it's a lot of the currencies, U.S. dollars or so on, you see the difference, and also the transport cost. Like, last 12 months, it's extremely high containers six months ago, but they dropping now dramatically in last two months. The transport cost is way lower now. Yes, currencies. I'm not sitting here as if I know where the currencies are in six months, but like, the change is probably not so much like in the last six months. The price of the products, many increase the price of the products and they want, they need it, inflation or whatever reason, but the material start to coming down many ways. We estimate and believe that if the market demand coming much lower, there's also some brands or some factories are under pressure to keep volumes up. It can be turned around also in the after six months that some product lines or brands, the price can coming even down. Because of also already on the transport cost is coming down a lot. It's a big difference of course one container, how many items, how cheap items and so on. What is the valuation in total container? Some products like the transport is a big element of the product's price. Okay. We have one about the financing question. The difference is getting much bigger between trade payables and trade receivables. What is the trend going forward since kind of the gap has been increasing? Regarding the trade receivables, we always have, on top of the daily sales, the pre-order sales, where we have longer payment terms. There naturally, part of our net working capital is to cover also better terms in our accounts receivable and in accounts payable. Okay, thank you. I think we have still the last question and it could be kind of covering the market. How do you see the market to develop in our target markets? Will it decline due to these kind of uncertain markets or will it grow? Yeah. We estimate and looking at that is the market coming slightly down. Top line total market, especially on the volume side. Of course, price increases help to cover that how much is the market coming down. We estimate that the market in almost every country is coming slightly down. It's a matter of the. For us is like what is our market position. It's a big difference if our market shares is extremely high, then it's more difficult for us if the market coming down compared to the market where we growing really fast growing and the market share is still small, so we can continue this growing. We estimate the market slightly down, total market, but not big difference in the. It's never been in the, let's say, 12 months period really big difference of the industry where we operate. Even motorcycle sales or snowmobile or bicycle, it can be bigger difference, but at the end of the day, we operate in the aftermarket spare parts or accessories or protectors and so on. It's never really big difference. The whole European market is still, like, EUR 6 billion in this industry, only in the motorcycle where we operate. Then plus that in the bicycle market and next water sport and snowmobile. Of course, the overall market situation is a big driver, but it's not so big driver for us in the European countries where we have small market shares. It's bigger impact of the market where is a total, where we are strong. All in all, we estimate a slightly dropping and quite a lot even actually in some, let's say, division or some category on the volume. At the same time, the price increase covers part of that. Okay. Thank you. I think we could close the webcast, and would like to thank for the attendance and the active questions, and also on behalf of Jarkko and Riitta. We will come back with the Q1 result early January and with that we can then have a further discussion. Thank you for the attendance. Thanks for everyone. Thank you. Goodbye.