Welcome to Glaston Corporation Quarter Four and Full Year 2022 Results Broadcast. My name is Pia Posio. I lead our Communication, Marketing, and Investor Relations at Glaston. Today I have with me our CEO, Anders Dahlblom, and CFO, Päivi Lindqvist. We will be hearing about strong profit and cash flow in the final quarter, and in addition to that, we will have a glimpse into highlights and key figures, strategy and sustainability development, our financial development, and finally, we conclude with the outlook for 2023. You can share your questions throughout the session. We have reserved time for those in the end after the outlook. Without further ado, Anders, would you guide us through the highlights and key figures and then into the strategy? Thank you, Pia, welcome on behalf of myself as well. I'm happily to share our Q4 highlights for 2022, and it was a very good performance in the quarter. The profit was good and a very strong cash flow as well. If we look at the Q4 numbers as such, our top line net sales growth was 14%, amounting to EUR 59.8 million. Our service had a super strong growth of 20% in the fourth quarter. Our result, EBITDA, was high, amounting to EUR 4.2 million, and that was a growth of 21% compared to the fourth quarter in 2021. As well, our EBITDA percentage improved from 6.6% in Q4 2021 to 7% into Q4 2022. The only softer number compared to previous year were the new orders. New orders amounted to EUR 51.7 million, which was a decline of 12.5% compared to Q4 2021. Other highlights, the strategy execution. I'm very happy to see what we have been able to do when it comes to our strategy execution. That has clearly become part of our day-to-day work. Also the sustainability progress, we were at a 57% decrease in our own CO2 emissions from the year 2020. Super good performance and just the beginning of our sustainability journey. Also, a good thing we have is the taxonomy-related aligned top line. We have 43%, which is a significant part of our business that are taxonomy-aligned. Also on the capital return, we are proposing EUR 0.04 per share, which is an increase from EUR 0.03 the year before. In all in all, a strong profit and good cash flow and really a good Q4 for us. We look at the figures from the full year perspective. I'm very happy about the full year as well. I think this was clearly an evidence of strategy in action with a lot of great successes. We look at the new orders, the order intake, an increase of 70%. That's a significant number. At the same time, the top line improved 17%. The service business close to 15%, and our EBITDA improved 23%, and also the margin improved from 6.1% to 6.4%. Looking into 2023, our order backlog amounted to EUR 138.3 million. This is a significant improvement of 46% from the year before. We have a very good starting point when we enter into the year 2023, which is a good position to be in. I would like to share some views of the market environment in the fourth quarter. As a general, the activity in our business continued on a good level in the fourth quarter, despite the building activities being somewhat suppressed in Europe. We can see new buildings decreasing. Also in the US, we see activities somewhat coming down. At the same time, the renovation building, which is for us relevant business from a sustainability perspective, is clearly improving. That is a good posit for us. We also see some decision-making that takes slightly longer time than we have seen previously, especially in the EMEA area. China was a big challenge in the fourth quarter. I will come back to details on that. At the same time, Americas was our strongest region, and still remains our strongest region. Good activities, good achievements there, good growth. From the supply chain perspective, supply chain situation continued pretty much on the similar level as we have seen throughout 2020. Many raw materials easing up, also price easing up. At the same time, the critical automation and electronic components, they are still rather challenging to manage. We then look at the EMEA new orders decreased by 21%, but the full year increased with 16%, so a good growth in EMEA for the full year. Insulating Glass, the strongest region, was EMEA throughout the full year and also in the fourth quarter. The Heat Treatment demand continued well. We saw growth in the fourth quarter in the Heat Treatment business. Automotive, which is a small business in Europe, has been on a very low level also during Q4. The positive thing with the service business, we saw good growth in the service business in the fourth quarter. The activities for the upgrade orders was slightly lower in the fourth quarter still. If we look at the Americas was the strongest. As I said, super good growth. Q4 new orders increased by 32%, a strong number. Full year improvement in the new orders in Americas was the same number actually, 32% as well. If we look at the businesses there, the biggest growth we saw in Americas was with the heat treatment business. Actually, super strong growth in all the quarters, also in Q4. The automotive market there remains pretty good, especially product for recreational vehicles and heavy vehicles, were on a, on a good level in Q4. The service business there, we saw strong growth, and the upgrade projects improved somewhat from the third quarter, still being on a rather low-ish level. Moving into to Asia, so APAC. As said China was difficult in the fourth quarter. New orders for in China clearly decreased. Full year also, China new business came down with north of 20%. Still we see for the IG business, for the high-end demands in China remains actually strong, it was strong in the fourth quarter. The heat treatment business for new business was pretty soft. The automotive activities were on a very good level throughout the fourth quarter. In the rest of the APAC region, the new business for machines was rather flattish, but the service level and the service activities actually increased quite significantly. Let me move further to our strategy part here. I wanted to share a couple of words on the strategy execution since I personally am very pleased with the 2022 achievements. It's very clear that the growth of 70% in new orders and top-line growth will not come without investments, and we have made a lot of good investment when it comes to the digital future. As we can see also, the capital expenditures for that has increased from 3.8% of net sales to 4.3% of our net sales. We are improving and investing into new products. We saw a good solar deal that we enter into a EUR 5 million deal in 2022. We have a lot of things ongoing when it comes to more automated solutions for our products in both the Heat Treatment in Automotive and also in our IG business, so investing on the technologies there. Also on service, we have products that we are investing into new things that will help us to increase the service business more than the market increase. We also did great cross-sellings. One big deal in Europe of north of EUR 30 million was achieved in 2022. This is a great evidence that our strategy is working. We are able to enter into deals that we were not able to do with the old Glaston. The new Glaston clearly strategy is in working in our favor. One big thing for the automotive business is that we are moving or entering into standard pre-processing equipment production in our Chinese factory in Tianjin. This has been a successful project so far, and now we are actually up and running there with assembling, producing, standard equipment in the automotive business also in China in 2023. This is really strategically a big difference for us and we expect good outcomes continuing there. If you then look at achievements that we have for previous year compared to our strategy that we launched in 2021, this is good evidence that we have a lot of green arrows and great achievements. If we look at the first, our financial targets, we have three financial targets, which is the top-line growth, where we clearly want to exceed the addressable equipment market growth. In the past two years, we have on average grown 12%, so this is clearly an evidence that we are on the right track. We are making progress with our strategy. If we look at the profitability, our EBITDA, our target is to exceed a 10% EBITDA. We have made progress from the starting point of 4.6% margin, reaching continuous improvement up to now 6.4%, so that's a improvement still a great bit to reach the strategy, we are very much on the planned level here. The third one, which is the return on capital employed, our target we set to be at a level of 16%, and here we have made great success of exceeding 10%. One big achievement that contributes to that on top of the top line growth and EBITDA is our working capital. We have made actually very good improvement in the working capital, and that helps also the return on the capital employed. Very good development and exactly we are on the right track achieving the strategy. If we look at our non-financial targets that we have strategically set up, which are four of them, the Net Promoter Score, we wanna make sure that we do great and our customer experience is good and super. The first time we were able now to measure this globally, we have a figure which is north of 50, so 53. This is a good achievement for us. We wanna continue, we wanna gain more experience globally to understand that this is really continuously and this is something that we can live up to also in the future projects. Then we have our safety part. Lost time accidents amounted to 6. We have now LTIFR number of 3.9. Obviously the target to have 0 lost time accidents. This culture is continuing, and I would say culture-wise, we have done a lot. We have seen good developments in actually all our main locations. This is a journey that will continue going forward. The first time we measured also our employee engagement rate, we targeted a level to be above 75, and the first outcome was a number of 70. I think this is on a level that is classified as good. Also we received good a lot of initiatives that we wanna take with us now going forward to develop the engagement and increase the level to above 75. The final one is our emissions, our CO2 emissions in our own operations. We had made a target to decrease them by 50% by 2025, and this is something where I'm super happy that this target we were able to achieve already now in the year 2022. This obviously takes us to the fact that it's only the beginning of our journey. We will now work with working on setting new emission targets, which will cover the upstream and the downstream value chain. It means that we will update our targets regarding the Scope one and two, but the big one there is the Scope three, where we will work and set targets during this year. Some highlights from the sustainability journey. We have been doing actually a lot there. It's strategic and an important item for us, one of them being the safety. This is something we work continuously and heavily with. Glaston the first emission reduction targets was achieved, as said. We have been reducing our or improving our energy efficiency in our own operations. This came mainly from the Finnish operations and the German operations, 2022. We also will continue to invest in own renewable electricity. We will see here we have close to 400 solar panels installed in our factory in Switzerland. This is a great way to reduce our own CO2s. Also said about the engagement index that we are working with, engage people who want and will execute our strategy. All in all, before wishing Päivi Lindqvist on the stage here, I wanna thank everybody for a good Q4 and a great achievement for the whole 2022. Thereby, I will hand over to Päivi on the financials. Thank you, Anders, and very happy to be here today and go through the numbers for the fourth quarter and the full year of 2022. As usual, let's start with the order intake. Like said, the fourth quarter orders were slightly soft, 13% lower than the year before. This was after the record high third quarter. Probably one reason for kind of a slightly declining orders in the final quarter. If we look at the full year number and the growth, the 17% of course in this rather kind of uncertain environment is a good achievement for the order intake. Very well in line and even a bit higher than we were expecting for the year as a whole when we started it. If we look at the product areas, we can see that our heat treatment and insulating glass technologies, the machine side there, were growing strongly. Insulating glass, even at over 40% in 2022. In the automotive and display technologies, we did see some decline. The market over there seems to be quite volatile still, there's a lot of customers quite hesitant to make the final decisions. If we look at the service, we achieved 7% growth in orders in service. This is taken down somewhat by the quite low order intake that we had in upgrades in the second half of last year. The upgrades order intake improved slightly in the fourth quarter, still it was clearly lower than the year before. If we look at the other service areas, spare parts and field service, there we have very good growth numbers, over 10%. That is then supporting the growth in the services area. If we move to net sales, as you can see in the chart, we had a bit soft third quarter, mainly because of the component issues, and now we were able to catch up very nicely in the final quarter and approach EUR 60 million in net sales, which is clearly highest quarter if we look at this kind of time since the Bystronic acquisition in the spring of 2019, and 14% growth for the final quarter. For the full year, net sales reached EUR 213 and half million, 17% growth. By product area, in net sales, all our machine areas were growing. Actually the highest Automotive & Display Technologies, which then had kind of orders in the backlog, which were kind of successfully delivered and projects progressed during the year. In Heat Treatment Technologies, we also had 16% growth and in Insulating Glass Technologies, 9% growth last year. Services, for the full year had 14% growth. And this also was slightly kind of impacted by already by the lower of upgrades order intake that the upgrade net sales for last year was almost flat. Most of the growth actually came from spare parts and field service. If we look at the regions and how they have been performed last year, all of them contributed strongly to the growth. EMEA is clearly our biggest region with 53% share of net sales last year and 17% growth. Americas had a somewhat lower growth, 10% last year and a bit less than 30%. Americas at the moment, and especially now in the fourth quarter was clearly growing kind of at faster pace than EMEA. It has kind of taken a little bit of the role of the growth driver as well as APAC. There we had quite strong growth in full year and also in the last quarter. Now if we look at the share of China's share of total net sales last year was 12%, it was a bit higher than the previous year, even though the order intake in China declined last year. There were quite a lot of deliveries from Europe to China and those progressed well and contributed to net sales. Moving to profitability. Like said, a very strong profit in the final quarter, EUR 4.2 million, 21% higher than previous year. The first time now we reached 7% level in the EBITDA margin. For the full year, EUR 13.6 million of EBITDA, 6.4% margin somewhat up from the previous year's level. What contributed to this kind of strong profit in the Q4? Volume of course, is one explanation clearly, also the services growth was strong. Services share of net sales increased, the margin in services increased. There's also positive mix impact within services as the upgrades net sales kind of did not contribute that much to the growth, but rather the higher margin spare parts actually increased its share. That is one reason for the good margin in the quarter. Moving on to our reporting segments. Heat Treatment is clearly the segment where we saw very nice progress both in volumes and margins during the year. In the Q4, orders increased 8%. Net sales recovered back to this kind of a more normalized level after the weak third quarter. It was kind of a bit lower than the year before, but a clear re-recovery from the third quarter. Also here we see very well this impact of the high share of spares and field service that then kind of boosted the share of services and also the margin within services. In the full year, we had healthy demand, healthy growth in orders throughout the year with 7% increase. In profitability, we also saw a clear progress and there we have again volume and then margin improvement actually both in the machines and services that have enabled this profitability pickup for the full year from 4.5% to 6.1% in EBITDA margin. We have to here note that now, especially in heat treatment, this upgrade business is quite sizable part of the business, and as that order intake has been lower in the second half of last year, it will have some impact now in the first half as those orders are not contributing to net sales that much. Moving on to insulating glass. I think this has been a business that usually kind of surprises very positively at the end of the year, and this happened again. If we look at the orders, those were then on the other hand a little bit lower than kind of previous year. In third quarter, there was record high kind of orders and one exceptionally big order. Now in the final quarter of last year, the order intake went down 23%, and this is mainly in EMEA, where we saw some kind of a softness and also some timing issues with the order intake. On the P&L side, very excellent, very good project execution at the end of the year, and lot of kind of received acceptances and successful project deliveries, which then meant that net sales increased and also the profitability was above a 10% margin level as it was also kind of last year in the final quarter. In the full year, on the other hand, the orders here are very good, 33% increase. Net sales 10% higher. EBITDA margin a little bit below the previous year, because the fixed cost didn't compensate for the kind of additional gross margin that we got from the volume. Our last segment, Automotive & Display Technologies. Here we saw, like said, weak order intake, especially now only in the machine areas. Customers hesitant making decisions, those taking time. On the other hand, services had extremely good performance and over 50% increase. Services kind of performing well in this area as well. If we look at net sales, we have quite opposite situation, extremely high net sales growth in machines, almost 90%. Service is also very high percentage, kind of net sales increase 30%. Profitability was lower, and this is quite a lot because of mix. With this high machines net sales growth, it means that the share of machines, the lower margin business, is increasing, and that impacts the margin quite a lot. There also we have some regional impact of having more lower margin Asian projects in the mix. In the final year, orders slightly behind previous year. Very high machines growth. Also services performing well. For the same reason as in the final quarter, the mix impact, driving down the profitability slightly in the full year. Okay, let's move forward. A very good operating cash flow in the quarter, EUR 8.7 million. This is of course, quite a bit, coming from the strong profit, but also working capital performance was good. Customer payments coming in for the deliveries and from the acceptances, also inventories, going down, because of the big amount of deliveries and acceptances. Then, um, if we look at gearing, um, now we uh, ended up below 20%, uh, at 2019, and this is now also the, the lowest level that we've had, uh, since the kind of big, uh, acquisition was made in 2019 when we obviously had a big increase in, in the debt levels. And that brings, um, me to the, uh, capital return. So the board is proposing, uh, four cents capital return, which is over fifty percent payout, um, but, um, a kind of consistent, um, increase, uh, now, uh, for the third year, um, since, uh, 2020. And then finally, my bit on the sustainability topics. Want little bit, kind of explain more about the taxonomy, which is the kind of EU's classification system for kind of identifying green businesses that are supporting EU's climate change and other environmental targets. We have kind of identified two different businesses within Glaston who are enabling climate change mitigation according to the taxonomy, and which are also meeting these technical screening criteria that now first time for 2022 have to be applied so that you can say that your businesses are taxonomy-aligned. There is certain kind of quite strict technical criteria that have to be met. For Glaston there are two businesses that meet this criteria, and the first one is Insulating Glass Technologies and related services, which then is the technology that enables energy saving in buildings. The second one is different types of glass processing technologies that are meant for processing glass for photovoltaic modules, which then obviously is enabling the production of renewable electricity. These two businesses last year had a share of 43% of the total. I think this is probably the kind of end of my part in the presentation, and then we can move forward to Anders. Thank you, Päivi. As you could see from the previous slides that we have made great progress in all our businesses, which is super good. The sustainability part, we have made a lot of work in the past year there, and we see a very good journey for us where we can play an impact and make an impact going forward. I think if we look at the 2023, so this year, the year has started, we see that the markets are somewhat insecure when we look what we see out there. I think what we see currently, the starting point is we have a 46% higher order backlog is a very good starting point for us. We have a lot of agreed deals that we will be producing and assembling this year. That's a very good position. If we look at the in the, in the North America or Americas, currently it looks as the strongest region where we are seeing a good amount of deals being done in the beginning of this year. Also Europe, we actually have good activities ongoing. As I said, the decision-making seems to be somewhat slower in Europe at this time of the year, given all the things ongoing. We see quite active activities there, so that's a positive thing right now as we speak. If we look at the region in APAC and China, as said on China was a super difficult market in the fourth quarter. We had declining our business in the fourth quarter. This year, there are changes in the market. The market is opening up for traveling and so forth, which should have a positive impact on the economy. The global economy or the economy in China is forecast to grow this year. We have quite good activities, especially on the high-ends we see we have great possibilities to gain deals. We are forecasting and targeting a growth in China this year as well. Given that so, we have the starting point a strong order book, which means that we are expecting our top line to grow this year compared to 2022, which amounted to EUR 213 and a half million. We are also continuing the strategy execution. 2023 will be another year of strategy and actions with some modification. We are very much on the right track, as you could see from in all our businesses. We will continue to target continued growth in the business and as well continued profitability improvement. Thereby we expect both top line and result to improve this year. I think that was the last slide before we then are ready to jump into the questions part. Thank you all. Thank you at this point. Yes, indeed, questions. Please do share them through the chat function as we go along. Starting with order intake, which level do you see being more representative for the current expectations for 2023, the 2022 order intake or the 2021 order intake? Well, as I said, in the 2023 expectations, we are targeting continued growth, so our target is to grow the business continuously. It's worth remembering that in EMEA we had a super strong growth and one very big deal in 2022, so that's one thing that will be difficult to beat, at least at this point of time. In the U.S., we are for sure targeting growth. Also in APAC, including China, we are targeting growth. Europe has been on a very high level in 2022, so I don't see big expectations that we will be overrunning that in 2023. All in all, we are targeting strong numbers. Working capital point of view, can you describe in a bit more detail your work on the working capital? What sort of measures you have taken to show such improvement? Well, of course, you know, we have, we did have a working capital project in 2019 and 2020, which then built the base of how we manage working capital. I think there are a couple of things that are very important for that. I think the main issue is the payment terms for our project business that we manage, I would say, very diligently. That means that in our business, as long as the order intake is growing, the working capital should be performing really well, and that we kind of in a way keep our standards in the payment terms. In addition, of course, we also have to work on the inventories, which has been a little bit challenging in the past couple of years because of the component situation, and we have intentionally increased some of the inventories. We have to keep a very good eye on that, you know, they are not excessively increasing. Then, as well, of course, the accounts receivables and accounts payables where we do follow them very closely, especially the accounts receivables part. That is the responsibility of all the business heads that there isn't any kind of overdues, or if there are reasons for those overdues, that we solve them as quickly as possible. Thank you. Let's move into regions. Have you been able to win market share in Americas, or has the market growth been stronger in 2022? I would say U.S. was a strong market in 2022, the market grew a lot. What we saw especially in the heat treatment business, we have been able to gain market shares. The biggest growth we gained last year came from the heat treatment business. In heat treatment business, yes. What comes to the other businesses, we have not been gaining that much market share. In terms of China, pretty much the same question: How has the market presence expanded in 2022 as the strategy entails? What we saw in 2022, what comes to new businesses in China, that decreased. Our new business decreased by more than 20% in 2022. And I said about China expectations for this year, the market, we expect the market to pick up to start growing after a challenging. Especially Q4 was very quiet there also after opening up for traveling and meetings, et cetera. We are targeting to grow this year also in China, and of course the market is quite unsecure, and it's a difficult really number to pick up there. There are also good elements and reasons why we could see growth this year in China. Staying in China, despite the question is not directly mentioning that, we have a question about the key solar lines that we got an order from in September. Could you remind us about the current status of these lines? Have you already started the deliveries? The solar line, I assume we talk about the EUR 5 million deal that we received in the latter part of 2022. We started the production of those lines in China in November last year. Currently we are in full production of all those lines. We are not yet there, so we are in the middle of the project, and we expect to have the deliveries done somewhat later than mid this year. It's too early to say, but so far we are doing well there. Despite getting feedback from this particular one, but how's the initial customer feedback? What opportunities you see in this growing segment in the future after this order? Well, solar, as we have said in the strategy, is one of our area where we want to grow. We feel we have ingredients, and we have a good reason and knowledge technology to be in the business. This is the first one. We wanna make sure we can deliver this with good feedback and good quality. For sure we wanna continue to build on the solar business, whether they are in China or elsewhere, in the U.S. or somewhere else. We believe that the solar, it's a wide range, whether it's architectural solar, whether it's some other kind of solar. There are many different options on that, and we want to be part of the solar business. Thank you. A couple of questions related to supply chain. How is the component situation at the moment in terms of pricing and availability? As we can see from our fourth quarter figures, in Q3 we had challenges to get out our deliveries on time because of the component shortage and availability. This situation for the critical components, which are mainly electrical components, automated pro components, the situation is continuing very challenging there. We have learned to work with this, and we have developed our internal processes, I would say, significantly. Our way of coping with that is much better than it was half a year ago. The situation is still remaining challenging for certain components, and that will likely continue in the first quarter, likely continuing into the second quarter as well. As said, we have learned to cope with it, and I think we don't expect big hiccups unless the situation would change dramatically towards the worst, which we are not currently seeing. How would you describe the dynamics of your own pricing and component pricing, in Q4 2022 and then going forward? Our own pricing strategy is to make sure that we can again good margins and retain good margins. I think if we look at our figures, what we saw for the full year and in Q4, we have been able to get healthy prices in the current environment, and that we want to continue. It's very important for a sustainable profitability and growth of the company. Couple of questions related, situation today already. How is the upgrades demand looking in Q1 current trading, and where are you expecting... when are you expecting normalizations? Referring back to earlier discussion. The upgrade business is somewhat twofold when we look at the different businesses. We were growing last year in upgrade business in the IG business throughout the year, and that we see and expect to continue. The upgrade business started with that just a couple of years ago in the IG business, so the level is significantly lower than in our heat treatment and also in Automotive. In the Automotive business, we saw a challenge, especially in the third quarter last year when it comes to new business. That was partly market related and also the very high amount of new orders that we had, especially in the third quarter. The situation improved somewhat in the fourth quarter, it was still low-ish. We have on top of that also strengthened and changed our organization, how we reach out to potential customers regarding upgrades both in U.S. and in Europe. We expect an improvement there in this year. Finally, seems like we are reaching the end of the question session. How has your order intake developed so far in 2023, and how's your current tendering activity? As I said already when talking about 2023, at the start of the year has been with good activities and good speed. It's too early to say any numbers, but so far, the markets are somewhat unsecure. I think there are variations between the regions. Currently what we see, business orders, closing deals are taking place. So far this year has started pretty well. Thank you. Thank you both, Anders. Thank you, Päivi. Thanks everybody for taking the time and listening in and sharing good questions. This concludes our full year 2022 final results session. We look forward to seeing you again end of April. Thank you, everybody, for joining. Thank you. Thank you.