Welcome to Glaston Corporation Quarter One 2024 Results Audiocast. Today, we will discuss net sales and comparable EBITA improving and markets remaining challenging. My name is Pia Posio. I'm your investor relations contact here at Glaston, and today I have with me our Interim CEO, Antti Kaunonen, and CFO, Päivi Lindqvist, who will then cover Q1 highlights, market review, financial development, and outlook for this year with you. You can share your questions throughout the session. We have reserved time for those towards the end, and let's hope you have plenty to discuss with us. But with this, Antti, would you take over and start with the highlights for Q1? Of course, it's a pleasure to be here. Thank you, Pia. If I think about the starting point, so I will say what I said last time: so we in Glaston had a good quarter, even when the market did not help us. Like Pia already said, the net sales and comparable EBITA improved, the markets remained challenging. The key point that I want to start, like I start all my presentations, is the safety first. I'm very happy to tell you that we did not have any lost time injuries in quarter one. We did have one in April, but this is very good improvement from our point of view. People talk about the market environment also, but I would really like to say that we had a very good first quarter. The architectural glass markets continued to slow down, but based on the pipeline, what we have in the sales force, so we feel that it will be recovering in the future. Then, the good demand for Pre-processing Technologies in China continued. This has been very much driven by electric cars. I was last week in China, and I saw so many new electric cars that I couldn't even count them. Unbelievable development. Then, the order intake was down 18% year-on-year, mainly due to the lower orders in Tempering and Pre-processing Technologies. Net sales were up 9% – percentages, and then if I think about where we were getting the business, so it was the insulated glass and the MDS business area, and this MDS is standing for Mobility, Display & Solar. Then, about the EBITA, extremely happy with the development year-on-year, and, and then I'm also very happy that we have now appointed a new CEO, and I hope that Toni is able to join us in the... in, in August, latest in September. So everything said, so, so we had a good first quarter. Then, coming to the markets also, in the appendix, you can find a lot of these early indicators, what we are following to understand better what is happening in the, in the market. The best short-term indicator what we have is the sales funnels, what we have in the, in the sales force, and then we keep them updated, and we follow them very closely, what has happened. Like I said about the market environment, so, so markets remained challenging, let's put it that way. We have quite many orders that we have agreed everything else, but what we are missing is the signature from the customer side and then the first payment. It seems to take a longer time to make the final signature to be able to go forward with the project. If I think about the market environment from the region point of view, so really, most active area this quarter was clearly APAC. So Asia. And then, if I think about from the end customer point of view, so the Architecture in general, so there was a slowdown. But what was positive development is the high-end Insulating Glass Technologies that were strong, especially in China. Then, if I think about the automotive or the mobility markets also, they continued to be slow in Europe, Middle East, Africa, and Americas, but again, so, so very active in China, and this is really driven by the electric vehicles and the related growth, and we got 7 Pre-processing orders from China. Then, for the Services, I would like to say that steady like always. So we sell a lot of these spare parts, and, and they are needed when, when the customers operate their operations. Then, about our strategy. So I started last time that our strategy is good, and it is supported by mega trends. Nothing has changed from that point of view. We did make some fine-tuning that we published in quarter one, and this is now the reason that what... why we want to emphasize our strategy again, just as a reminder. So first, we talk about this 3-5 years, so the medium term, to achieve our targets. But please understand that we haven't really made any major changes to our targets, because our targets and our strategy is good, like I have said already once. Then, for the sales, so we expect annual average growth to exceed the addressable equipment markets growth. Then, for the ROCE, so to be over 16%, it's happy that we needed to update that to be a higher target. Then EBITA, no changes, 10%. Then, no major changes for the Must-Win project and Cornerstones initiatives. Like I said, we have a good strategy; it's about the execution. Then I would like to say that sustainability is extremely important for us. We put a lot of effort now to get to the Scope 3. So Scope 1 and 2, we have had already earlier, and then there, of course, we have to do a lot of reporting this year, but this seems to be the name of the game for the sustainability this year. Very important part of the sustainability is the safety, and like I said, so we didn't have any lost time accidents in quarter one, and then our numbers are now getting much more better what they used to be. But the key point is that even if we have zero accidents, we are not yet safe. So we had the Safety Week last week, and the key message of the Safety Week, and we emphasized the safety in all our operations and also at our own time, was the fact that Safety Week is every week. So that's pretty much ended my short part, and then I would like to go to the financial development, then Päivi, please, the floor is yours. Thank you, Antti. Let's start with the new order intake, and like Antti mentioned already, this was at a rather low level, EUR 46.6 million in the first quarter and down by 18% compared to the first quarter of last year. Main reason being the slow market, especially in the architectural area, and to some extent, also the timing of certain expected orders. If we look at the product area split, we can see that especially the architectural Tempering and Laminating Technologies was an area that took a big hit, with 69% decline compared to previous year, and this is really where the kind of slow market is having the biggest impact. Seems that there is quite a lot of kind of capacity in the market, in this area. Insulating Glass Technologies, on the other hand, was very stable. There we did see a decline in the EMEA region, but this was compensated by a clear increase in China, where the high-end TPS technology is gaining traction. Also, the Americas region was growing here, where we then, on the other hand, see that the energy efficiency investments have started to clearly impact our customers' kind of investment willingness. Then, if we look at the Mobility, Display & Solar Technologies, 29% decline. This is an area where in the Pre-processing in China, we had a very big growth, but it was not enough to compensate for the decline in other regions. In the comparison period, we had a rather big order from the Americas, and this kind of didn't repeat. Rather, the Americas and EMEA regions were very quiet in this business. Services, 2% growth in orders. The Upgrades, Field Services, about 6%-7% growth, and the spares business, in total was flat in the orders. Then, if we move to net sales, we had close to EUR 56 million net sales in the first quarter, 9% growth, and this was mainly kind of driven by the Mobility, Display and Solar Technologies, where we had a very strong growth. If we go more into the details, Tempering, Laminating Technologies, over 30% decline, reflecting the low order intake in the second half of last year already. Insulating Glass Technologies, 35% growth. In Germany, the operations are at full capacity, and the project execution has also been very good, now contributing to these nice growth figures. And then the MDS, Mobility, Display & Solar Technologies, with, with a very strong growth, although from a low levels. Hundred and thirty-one percent growth in both product, kind of subareas here. So Pre-processing and the Heat Treatment equipment, both with very strong growth rates and supported by the strong, order intake growth, late last year. And then the services, they're close to flat. The Upgrades net sales was clearly lower based on the low Q3 orders in, last year, and spares business flat, like I mentioned earlier. Then, if we move to region split of the net sales, EMEA, in the past quarters, typically, has had over 50% share, now a little bit below, at 49%, still 8% growth. Americas, flat. I would say that the growth figures of these two regions is more reflecting the product mix now in Q1. As the tempering technologies, net sales declined clearly, IG increased clearly, we do have a clearly stronger position in tempering in the Americas, and the IG is then more dominated by Europe. So this is impacting the regional growth figures here. APAC, share increased and, 34% growth in the first quarter. If we look at net sales, China's share increased from 6% to 12%. But in the order intake, the share increased even more dramatically. The comparison period was weak, and now we have a very strong orders in China. The share increased from 4% to 29%, for China orders. Yes, that was net sales, and then if we move to profitability, in the first quarter, comparable EBITA was EUR 3.6 million, 18% higher than the first quarter last year, and also the EBITA margin improved from 5.8% to 6.4%. It was obviously a notch down from the last quarter of last year, but better than the comparison period. And I will go into the details of this and what drives the profitability in the segment information. That is then following next. First, the architecture business area. Like said, here, we clearly see the impact of the markets being in a slowdown mode. Machine orders altogether were down 28%, and it is really coming from the tempering, laminating technologies, like discussed. Whereas then the IG is in a better position, and orders increased in China and Americas. Services orders increased also by 5% here, driven by a nice, really nice growth in upgrade orders. Services net sales was flat. The IG technologies growth in total compensated for the decline in tempering and laminating technologies. So the total be a flat development, but quite big differences in the equipment areas. So IG, strong growth compensating for the decline in tempering and laminating technologies. EBITA margin improved slightly to 7.9% from 7.7 in the comparison period, and the driver here is the margin improvement both in machines and services. Then, if we take the other segment, mobility, display, and solar, here we also have this decline in the order intake and China orders in the Pre-processing area were growing strongly. Otherwise, the markets were quiet. And the comparison had a big order, like I mentioned already. Net sales increased 57%. The comparison figure was low, and we are still not, you know, very at very high levels here. Obviously, the outside China, the volume is rather thin. In the machines area, good development in net sales in both product areas. Also, services net sales was up, supported by Field Services and spares. Profitability improved. The comparison period was clearly loss-making, almost 4% negative EBITA margin, and now we were slightly above the zero level. Slight profitability improvement there, and this is mainly coming from the higher volumes in the machines area. The margins of the China-delivered machines have clearly improved. Not yet there where we would like them to be, but compared to the comparison period, there is a big difference here. But what was then driving the total margin down was the services share, which declined strongly, quite naturally, when the machines area had this strong growth. And then finally, cash flow. Operating cash flow, clearly negative, EUR 7.5 million in the first quarter. Negative cash flow for us is very typical in the first quarter. Well, the seasonality goes so that the fourth quarter has usually very strong positive cash flow, and then the first quarter, a strong negative. This now, of course, in this quarter, was then even deepened by the fact that the order intake declined from the previous quarter so strongly, and the advance payments from the customers de- ... were smaller. Balance sheet reflected this negative operating cash flow and gearing increased to 28%, and this is also somewhat higher than the Q1 last year, when this seasonality was not kind of, I would say, typical for us. The first quarter cash flow was close to zero. That, I guess, is my part, and I would like to ask Antti then to continue with the outlook. Yes, with pleasure. The key message what we have here is that our outlook remains unchanged, unchanged. The reason I'm thinking is really so that our sales force finally supporting the orders. It's a question about the timing, and that's, that's the key point. I guess that we are ready for the questions and answers. Yes. It seems to be the situation like that. Like I said, feel free to use the chat function to share your questions, and we will start discussing about those. Shall we start with the first one about the China and that development? I think we could start with China, because that's the recent visit, and the China Glass also took place. So can you share a bit more color on where the high-end IG demand seems to continue? Why it seems to continue improving in China? Is there secure new customer relationships? And on the other hand, how is the competitive situation in China with IG nowadays? So I really had the pleasure to visit China Glass last week and to meet with many customers. We had 270 customers in the banquet, and that was absolutely fantastic level of energy what we had there. Anyway, to the first question, so why the high-end IG is developing? It's very clear, it's the energy savings, nothing spectacular. So everywhere, it's the same mega trend that is pushing the insulating glass forward. Then the next question was really so that have you secured new customer relationships? Yes, in these 270 customers, we had quite a few of these new ones, and I needed to come visit all of those. Then about the company situation with IG in China, totally different change from that point of view, that in the trade show I was able to find, I think, six different kind of local suppliers coming with very local solutions to the IG market. So a lot of things are happening there, and it really shows that we are doing the right thing when we push the insulated glass forward. I hope that answered at least part of the questions. I trust so. Let's stay with insulating glass still for a moment. Is your positive commentary on the sales pipeline related to the IG? Is it related more to that or some other product area? So is there a difference between the business lines? Of course, there's always also ups and downs, different kind of product lines. And then, of course, it's clear that we communicate also very clearly that the insulating glass is extremely important. There are a lot of activities. But then the Pre-processing, there's also a lot of activities what we are having today. So I would say that these, these are the highlights. Or maybe would you like to add something more? Oh, sorry. Yeah. Okay, let's go forward. Let's stay with the business lines. So machine orders at tempering and laminating were record low in Q1. You indicated that there were some timing issues. How meaningful were these? How meaningful? Loaded question. Yeah. Meaningful, yes. I would say that there were several normal-sized kind of orders that we, in other circumstances, could have kind of been able to include in the first quarter, but the customers were not, in a way, hurry to get them closed in March. But no, still, I would say the market softness has a bigger impact here as well. Following on that one, how big an impact did pricing have in orders, or was the order decline the same, both monetary and volume terms? If I may take that, so we enter project business, so it's always difficult to define that what is the price level of, of the project delivery, because they seem to be always... although having the products there in the base, different. From that point of view, so, so we have the targets for our, our pricing, and we have kept that. From that point of view, I would say that, that no big surprises or no big, big influence. We want to keep the high product prices or project prices, so let's make it very clear. Thank you. So combining the two, so we now just discussed insulating glass as well as tempering, laminating, equaling our architectural offering. So what makes you think that architectural market will gain momentum later in 2024? Where will this happen, and what kind of early indicators do you have of this? Well, if you think about the early indicators, so you can go to the appendix, and you can look at those indicators, what we use. But the best indicator what I use is really the sales force. And this, my statements are based on that, so a lot of customer activity is taking place in that. Is the Europe in the lowest what it is? I hope it is. It goes up. North America, although there is a lot of ups and downs, so the level is still very high. And now if you think about the APAC and the development in China, so it's very promising also from the IG point of view. So I guess that's the best answer that I can give to that. Let's follow up on the regions, and this is perhaps something we will not disclose, but is there any indication that you could share that how much was EMEA order intake down year-on-year in the first quarter? So discussing on the regional changes. Yes, I think we can comment that it was down roughly 40% in the first quarter compared to last year. But at the same time, so please understand that we are in the project business, so the timing is very critical. So you can have a lot of differences between the quarters based on how the timing just took place. Thank you. Seems like we don't have much left, so let's move to CapEx. CapEx, which was clearly lower now in Q1 versus a year ago. Is this a sufficient run rate for the rest of the year, being at level EUR 0.7 million? I wouldn't use that as a run rate for the whole year. It's the first quarter, we didn't have any kind of fixed asset investments just because, you know, timing reasons, and also on the capitalized R&D side, the project timing just was like that, that there wasn't too much of capitalized R&D. So I would expect the figure to be clearly higher in the coming quarters. Thank you. Seems like we don't have new ones, so before we wrap up, Antti, any final remarks? Yes, we do have. China. We have a slight delay with the broadcast and our discussion here. China share orders, 29%. Is your China exposure becoming a risk for political or other reasons? I don't consider that yet to be a risk. Of course, we serve the customers where the customers are, and now it's just the timing again, that a lot of things are happening in China, and very much those activities are based on the electric cars and what is the development there. I would also say that 29% in one quarter doesn't mean that this is a trend, that it just kind of happened in the first quarter, that China had a very strong performance, and then the other regions did not have strong performance. But I would expect this to get more balanced in kind of when we go forward. Thank you. And of course, in the previous broadcast, we also discussed this geopolitical situation as part of the megatrend discussion, if you wish to revisit that. Antti, any, any final remarks? Well, I'm excited about the future. Our strategy is good. It's about the execution. It's the execution game that we have. The customers are there. Our brand is extremely strong. Customers appreciate that very high. It's just getting the orders, executing, and then remembering how important the service part is to us. So we are not able to get to that 10% EBITA without growing the services. Yes. Thank you. Thank you, Antti. Thank you, Päivi. As a reminder, half-year financial reports are taking place early part of August, and then we still have the October for the first nine months. Some references were to the appendix slides here. So, in the end of the presentation, there are some indicators related to different market areas on the architectural and also from the mobility and solar side, and also some highlights for the orders for, for the first quarter. But with that, I would like to thank you all for taking the time to join us, and we look forward to seeing you again in August. Thank you. Thank you. Thank you.