Good morning and welcome to Duell's webcast regarding the acquisition of U.K.-based Tran-Am. We have today a presentation which will be presented by CEO Jarkko Ämmälä. My name is Pellervo Hämäläinen from Investor Relations. During the presentations, you have opportunity to send the questions via the chat and at the end of this presentation, we will have the Q&A session. The stage is yours, Jarkko. All right. We announcement now the acquiring Tran-Am. Tran-Am company from U.K., what is a U.K.-based distributor and wholesaler, premium clothing and accessories, especially in the motorcycle sector. Main focus are clothing business from helmets to boots and all apparel. This acquisition is part of the Duell's growing strategy. What part of the strategy is of course, growing in the geographical expansion and also the brand portfolios. Purchase price in this deal is little bit under GBP 12 million and we plan it to finalize the purchase prices with the combination new equity and also the Duell cash reserves. Let's quickly background of the Duell, what we are. Leading Nordics European powersport aftermarket distributor. Last year, our fiscal year end of August, we did net sales EUR 124 million, growing fast. A few key facts. We have now in portfolio around 500 brands, 8,500 active dealers. Of course, Nordics, where we've been long time, we have a lot of dealers, but Europe is still growing also the dealer network. 220 employees. Of course our growing strategy, like you say, the part of our in this M&As is one tools on the box, if I call it this way. Here is a few examples. Last four deals before this ones, what we did it. We did it in the Netherlands, where we did a deal with the France, and also on the Finland with the bicycle sectors. Here where we operate. Basically we operate all different powersport accessories from motorbikes to marine sectors, bicycle, ATVs, snowmobile, also off-road, on-road, all those categories, and then all different items, all those categories. We have all technical spare parts, and then we have also the personal equipments. 1/3 of the revenue coming today personal equipment and 2/3 of the technical side. This is what we. There's a lot of value on the brand owners. Of course for us is, we cover all sales channels. We cover big, or the small local e-commerce, but the big in the European level e-commerce sector, that's roughly 25% of the total turnover. We cover also every single different workshops to retailers or specialty shops and also the manufacturer size. We cover all sales channel. That's our strategy. Let's go back to a little bit detail with this Tran-Am deal. It's a leading motorcycle clothing distributor in U.K. Very strong brand portfolios, a few most important and really high-end brands of those categories. Company background. Tran-Am founded 1976. Is a U.K.-based like we know now. Mainly focus of the premium clothing and accessories. Motorcycle category is 90% of the sales. There's also the small part of the business of the ski and then the pets and the snowboard sporting side. Over 400 dealers, including the biggest U.K. retail chains and shops. That's important. The U.K. sales channel is slightly different than what we use in the many other countries. Office and warehouse is New Milton, U.K., South U.K., and company is currently 28 employees. It's owned by Lloyd family. It's family founded company, the background. A few brands is same what we have it on the portfolio. We have a like a good strong synergies also the brand portfolio, but also there's some new brands what is important and interesting for us maybe on the other countries. Here is also financial side, is attractive in the financial side. It's really profitable company. It's growing company. There's also the special fiscal year early on the year. U.K. maybe all know the COVID impact was very heavy on the 2020 and 2021. That's can see it here, but it's extremely profitable company being all the time. Now when the... It's growing, it's performing really well also this 2023 is performing better than 2022. Key figures is very good. Impact for us, the financial side is, of course we get it in more or less EUR 12 million turnover increasing. That's important, but more important is EUR 2 million EBITDA. It's really profitable EBITDA. Also the cash flow is positive. Same EUR 2 million increase of the cash flow for us. We also defined, quickly on the synergies to say, cost saving of the site. That's, all in all, this finances profile is very interesting for us. Also this is of course, let's say the most important things for us is a strategic, for Duell. We know the U.K. is a Brexit, so that makes also the difference on the market to working in the U.K. We already working in the U.K. in the short teams and looking for the market and doing something. We get the understanding last two years in the U.K. market. We want to e-entry U.K. is one of the biggest in the market in Europe. Germany, France, U.K., Italy is four biggest market in Europe. We want to entry those U.K. market strongly now. Now we catch this deal, we catch the most important chains and the shops, the dealer network. There's also very interesting cross-selling synergy support those, when we having the strong sales network. We have a lot of Duell own brands, but also the future probably some new brands, what we have in the portfolios, we can get it in the entry in the U.K. Also of like say this Brexit, this makes more difficult if you not really operate inside of the U.K. in the own warehouse. Then you can shipping from direct from factories to U.K. and cost saving. Also the, it's much faster, better service level of the dealer. That brings, very important for us to this, why we looking for the good companies in the U.K. Then, financial side, of course, this strong balance sheet, net, positive net cash position, high profitable is makes the Duell financial position stronger. Here is in the structure on the deal. Key terms of the equity value. It's really attractive valuation. Like I say, it's performing better than last official year, what is almost year ago. Then purchase price we pay in 2 x basically. Now around 60% when we closing now this deal. End of, around 40% is the plan to pay in end of the year. We find how we financing this is planned to financial this combination new equity and then also the Duell cash reserves. Timeline here, we hope we can closing this transaction inside of the March. Now we turn in this week already on the March. We hope we can close this pretty soon. Like final payment is take place of the end of the year. Future we plan to merge those operation, what we have it in already locally in the U.K., of course together with then Tran-Am operation. Then, financial outlook, what we have it in already out in this 2023 and medium term. This is no any impact of the, of those. We don't change any our outlook. We are still confident our outlook in the short term and also the medium term. Then again, this is just part of the, our growing strategy. What we've done now in last few years. There is a kind of vision to being in the best partner of the dealers and the brand owners, across of the Europe. Strengthening our leading position in Nordics. This is the vision what we want to be. How we do it is in the key cornerstones. Expansion of the geographical market, like this is A typical example. We entry in the U.K. in doing small things in the last years and understand the market and market dynamic and everything. Then decide that we want to go faster, we need to do it M&As. Then we can also the future build a stronger portfolio in there. Also the second part is the same in the strategy is to be in the partner on the online sales. Third one is the brand portfolio development. That means that we need to have it the best possibility portfolio in each different market. How this fitting our vision and our strategy in this Tran-Am acquisition is fitting perfect that we're getting stronger partner with the brand owners. There's some same brands what we have it already on the Nordics or some other market. Also the brand dealers, we're getting stronger suppliers or more important suppliers. Of course this geographical expansion, like I say, brand portfolio is getting stronger. That's improving our financial position. Like I said before, it's really attractive and strong financial company, so it makes our financial position stronger. Thanks. Okay. I guess that's the one. We probably focus on the few questions. Yes, we have here a few questions. One question is related to the exclusive brand deals. Do we have some, let's say, exclusive brands for Tran-Am in U.K., and how big part of the sales are the exclusive brands? Yeah. Very good point. There's few brands. There's not so wide brand portfolio overall, so I would say there's three key brands what is the bring the more than 50% of the revenue, and all those three key brands are exclusive in U.K. Mainly the business model in the U.K. is it is in exclusive of at least those high-end brands, and especially those clothing sectors. What is normally in the many other countries also, the clothing sectors is more on the exclusive agreements. Main of the business is coming few brands and some of are the same what we have it already on the Nordics or some other countries, but they are in the exclusive. Okay. Good. We have a question related to the transaction. Will the transaction price be paid cash only or also with Duell shares? Cash only. We planning now to raise the equity and take the cash. Basically, it's cash only, but we going to use of the equity to raise the cash. We refer to actually the Friday's publishment when we came out with the new financial package. What is your our target for pro forma Net Debt/EBITDA level following this acquisition? Yeah, we don't public detail it in the Net Debt level after this one because it's still open to this equity raise of course. If a comment of the new financial package, it's more or less better for us, if put it this way. We need to get the new financial package what we agreed to meet of this situation what we are today. Of course, of course on the listed companies but also that we do this M&As basically in the cash and that's why it's more detailed on the covenants and those category what's working better for us now compared with the historical financial package. The size of the package is more similar, but it's just better package for us now from here to also to go into future. Yeah. The other question was related also to the equity. What kind of size we can kind of think about to raise? Yeah, of course, we don't know exactly yet, but we have in the proof to this 20% from what maximum 20% what we can do. That's we, let's say, sort out and see in the when we really do it. There's no exactly amount what we gonna do it. Sure there's some planning, but it's not nothing confirmed of course. About the ownership of Tran-Am. Will the 100% ownership be transferred to Duell already in March or later? Yes ... When the final plan? Yeah. Yes. This is good detail. We buy they, let's say in the March when we close this, we buy 100% of the company, of the shares. Okay. Then about the inventory. How the inventory has been developed here kind of recently, if we look backwards as well? Yeah, it's not really moving a lot. Of course, there's especially those fiscal year, they have a end of March. It can be different years in this. It's kind of just beginning of the season. All in all there's if call it swing of the inventory in the month by month is not so much difference. They working, they can work in the more stable inventory level in the past and also the plan on the future. It's not moving, so it's no big high and low. The difference is much smaller than compare with like how we work. But it's yeah. I don't. Hard to say is it, high or low or normal level, but end of the day it's not not moving so much. It's of course exactly the one date of the fiscal year, it can be slightly different year by year, but not it's pretty typical in this industry. Okay. The question related to the brands. Does Tran-Am has or have also the kind of own home brands in addition to the third-party brands? Yeah. They basically don't have the own brands at all. This is of course very, very attractive and important for us to bring our first our main own brands of those portfolio on those sales channel, like we know. We have it already in the market on the Halvarssons, Lindstrands clothing brands, what is one of the most important own brands, especially in this market. We integrate those in quickly in this portfolios. We are already on the market. It this way more in that we bring it more on the own brands of those portfolios. They focus on the third party brands in... They don't have a strategy in the before that they want to bring their own brands. About the Lloyd family. Can you open a bit what was kind of the reason or motivation to sell their operations to Duell? Of course the Lloyd family, the founder, he's age 75 and he's head of the board. He's not on the daily operative business anymore in few years. And his son, Pete Lloyd, he's run the business and he's of course for us to keep person and most important that he continue run this U.K. operation here. This is the part of the deal and of course important for us. Why they want to do it now? It's good questions what we try learn and understand in these last couple of months. We work in these deals pretty long time to find the all detail it and of course our find out in the financial things and everything. This is also the typical example what we did it on the past that this company is not on the market. It's not on the sales side on the market. It's more when we analyze here in, let's say 10-20 companies in U.K., this is one of the key companies what came on the list. We know the company because we have the same brands and portfolio. We met of the people also in the back in days on the some distributor meetings with the some brands meetings. We have the background we heard a lot of good on the suppliers or the brand owners that they're doing excellent job of the few brands in here, this market. All in all, it's again, it started that we was in the proactive and we contact and then we start to looking for if this is opportunity for them and end of the day we find a solution and now we are here and I'm extremely proud in our team and happy that we can go forward in this one. Very good. About the question about the dealers or customers of Tran-Am. How split those are? Is it kind of the customer base, there are 400 dealers, but...? Yeah Does the sales come mainly from a small part of the dealers? Yes. This is especially in this clothing sector or the helmets to jacket or the boots and this is U.K. market is a little bit different than any other market on the Europe. There's a few big chains, they are extremely strong. They are like three, four big chains. They each chains is maybe 30 shops or 60 shops. Those chains are extremely important. It is if you calculate this 400, there's also this chains what is 30 shops and et cetera, et cetera. But it's a slightly bigger part, this coming in this four, five chain getting in the big part of the sales, but not only on. There's nobody's like half of the sales examples or something like that. Of course, it's a big market. There's a lot of people. There's a lot of smaller and medium-sized dealers also who are extremely important. Especially in this portfolios, some high-end helmet brands, you can't have it the 400 dealers example. If you have 150, you cover more or less all countries. That's the normal. It's more on the link of the portfolio also. It's not like a black or white that is it how much in the sales coming in this and that. It's matter of the portfolio also. I would say slightly bigger percent of the coming those main chain. It's also that this big chains is model is like you can be in the all shops or you can be only on the part of the shop. That's the, let's say our. What we struggle on the, when we try to be in direct in the last years or last two years when we operate here with the own clothing brands, it's extremely difficult to enter those shops that you can enter in the all shops. That's the one of the key things is this deal that because the Tran-Am is everywhere, so those big shops, so chain, so we can enter in there now better. Very good. What makes Tran-Ams so profitable? Is it kind of, if you compare to some competitors? What makes them do the good profit? Yeah. Of course, first of all, those focus on basically only exclusive brands. That makes one things. It's slightly you have a more, let's say, pricing power, or you can get it in the margin. There's no direct competitor. Like it is on the tires or some technical parts. Second one, of course, this after Brexit, this is even more, let's say island. Before in the five, 10 years ago, it's a lot of companies from Europe to make the business direct on to U.K. Now it makes much more complicated and also it's more expensive in import of the items to dealers. Then third one, of course, they really carefully looking for the cost to run the company. That's there's a portfolio. The brands is there's roughly 20 brands only. That's makes also sometimes is, you can make it in the less people to compare of the turnover. I would say all three elements where is it coming. First of all, exclusive high-end brands were also the important brands what the market want. The margin is okay. Second one, also the margin okay because there's less on the, let's say competition and also the from Europe, but also the exclusive. Third one to being really tight with the cost of the all the time. Now when it's getting better and better profitable is, it's getting more of the sales volumes also. That's important also to... That is looks now, that they, performing really well with the higher, volumes. That's why that's, it's profitable. We believe it is profitable on future also. Good. Now that we have announced this acquisition, are there plans to make further acquisitions in the future? If yes, how do we are planning to finance those? Yes, of course we plan to do it in the future more. Like I say, even it's been tough at the moment, our balance sheet, we still continue and we have a good program going on that we can take a lot of money out of the balance sheet on the future, already inside of this fiscal year, what we're doing before August. Also the continue this progress positive side on the balance sheet. That's giving us on the a little bit freedom on the future. I don't say. Hard to say like when we can do it on the next ones. Is it end of the year or is it 2024? Hard to say. Of course we working those. Now when its market is tough, it's more maybe little bit more options on the market. Also the being slightly more attractive on the price sizing, the company side. Of course, the financial is one of the key part to do it then. That's why there's not so much happen right now on the market. We want to be an active also in the future. Okay. Is one option also to issue new shares in the market? I say last year already, that is one option and now we're planning to do it that on the first time. We analyze on the different options all the time. What if we find a company like that, we can going forward. We have a list of the company all the time what we're looking for and discussing and if it's really fitting our strategy and the price is correct, we need to find the financial. There's always some elements, but again, I would say the main things is for us to financial in the future is of course we take money out of the balance sheet and net working capital. We are very confident that we can take the money out of there. Of course it's matter also the size of the company, what can do it on the future or what is option to do it. Small companies is easier to doing on the financial side, they have normally the same work or a lot of work to integration and it's not maybe bring so much. I would say this is ideal size for us to do it also in the future, the size of the company. It's like, say, EUR 10 million-EUR 15 million turnover and around EUR 2 million, like this case is extremely strong EBITDA. Anyway, that size is ideal for us in the future also. We have one question about the, let's say, medium term, profitability. As we have published that our target is to reach the 13% EBITDA level in mid long term. What are the ways to improve the profitability and how we are planning to do it? Yes, we have a clear roadmap, basically how we're going. Of course the things change of the, of the, of the year by year like this, extremely different work where we operate right now because of the war and inflation and et cetera, like everybody knows. In long run, medium terms, we are confident when we bring the own brands more higher level of the own brands of the total sales and this is scalable business also. When we, when we getting back of the growing organic growth, especially in the organic growth, bringing the more profitable. And of course, cost saving program and everything is working this clear target what we have it in the medium and long term. We are confident today that we go in there. Of course, I would say there's bumpy on the road right now, but in the medium terms we are confident where we go. Very good. I think that we have gone through the, these questions and then hopefully you have received the answers to these. After this webcast, we are ready for further questions. You can either contact me, well, you can send the questions via me, Pellervo Hämäläinen, from Investor Relations. We will come back with the answers and hope that this presentation gave you the overview of this transaction and how we are going to move forward with this transaction and the financing as well. Thank you very much for attending the meeting and we will come back with the second quarter announcement in early April. Yes. Thank you everyone.