Hello, everybody, and welcome to Lamor's half year financial report webcast. My name is Johanna Grönroos, and our plan is to walk through our release, which we published at 9:00 today. Together with me, I have our CEO, Mika Pirneskoski, and CFO, Timo Koponen. Our agenda is quite familiar to all of you who have been having a look at this webcast earlier as well. Mika will start with the operational highlights. Timo will go a bit more into details with the financials, then we will shortly recap where we are with the strategy implementation. Closing the webcast, of course, with the most important part, questions and answers. Happy to take your questions already during our presentation. Welcome, everybody. All right. We highlighted in the release as well that our large projects contributed to good results in Q2. What would you like to raise here? Which are the projects we are talking about when we talk about this contribution? Okay. This is once again pretty familiar to our frequent visitors in this webcast, mainly the projects in Kuwait, where we have two large-scale remediation projects. The port waste management technology project in Bangladesh, that was published approximately a year ago. The enhancement of environmental preparedness capabilities in the Kingdom of Saudi Arabia, which is now in maintenance phase. Timo will share some of the good news about finally getting the invoices paid in time, and the project finally being on the positive side. As discussed in our strategy webcast, we see quite a lot of potential in the Kingdom. The expansion plans have been made. There has been some delays in the time schedule, which is to be expected in that particular market, but we still remain quite positive about our possibilities there in the future. Finally, the chemical plastic recycling facility that we are building in Porvoo-Kilpilahti is obviously a very exciting prospect for us, and then also see a great deal of potential in terms of that business. Good. We'll come back to most of these, except for Saudi Arabia later on. Let's talk a bit more about those a bit later. Then the highlights about revenue and profitability. The revenue increased significantly compared to the previous quarter. When we have a look at the H1 figures, we still are a bit behind the previous year's figures. Any comments on that? Yeah, I mean, I think we tried to communicate as clear as possible that the start of the year will be slower than the previous year. Nothing unexpected there in Q1 results as already indicated some three months ago. Q2 was strong as expected, and especially in terms of profitability, we are quite happy with the level of profit margin or the adjusted EBIT margin that we were able to generate. Of course, you can still see that if you annualize that figure, you get somewhere around the upper boundary of our guidance. I mean, we are still not at our long-term profitability target, but that's mostly due to the fact that we've invested quite heavily in growing our organizational capabilities to be able to take on such large-scale projects. If we look at the H1 as a whole and then compare it to 2022, I mean, some of our investors might remember that there were two large-scale environmental response incidents there in South America during the first six months of 2022. If you exclude that revenue, I mean, you could say that we've significantly grown over the first six months of the year as well in terms of our base business. Overall, quite happy with the performance in H1 this year, but still, some good things to be done, over the second half. Excellent. We will move on to the Kuwaiti projects. Before Mika will go into details where we are currently with the project, we would actually like to show a video where our project manager, Manel Fernandez, is telling about the project, how it's going, and what is actually ongoing there currently. Let's have a look at the video. Hello, everyone. My name is Manel Fernandez. I am the deputy director of the JV Kharafi Lamor. Today, we would like to show you the bioremediation process we are implementing in our NKETR Zone 1 project. From the time the contaminated soil arrives at the treatment center, until the remediation process is finished and the RTC is achieved. As you will see, this treatment center has been designed mimicking a factory with a continuous process and with different areas and activities. Please join me on this tour through our treatment center. I hope you enjoy it. Our first station is the weighbridge at the entrance, where the data of origin of the soil excavated is collected and recorded using a barcode system. After the weighbridge, the soil is stockpiled in the designated areas based on TPH brand, haulage distances, and excavation depth. In order for the soil to be ready for the bioremediation processes, it is necessary to be prepared. The first stage of this preparation is the screening and crushing to ensure that the size particle of the soil to be treated is less than 20 mm. The second stage is the addition of solid amendments directly to the dump trucks. The quantities and type of amendments have been predetermined, taking into account the capacity of the dump trucks used for this activity, and also the initial TPH of the soil transported. After solid amendments have been added, it is time to lay down the soils in the biopads in batches of 9,000 tons. Each batch is composed of seven biopiles of 150 meters long, five meter wide, and two meter high. Once the soil is in the pile, baseline sample is taken, and we are ready to start the treatment. The treatment will last between four and six months, and the main activities to be carried out during this time are the tilling and irrigation of the piles. For this, we are using the windrow turner, which allows us to till the soil very efficiently and irrigate it with water and other liquid amendments, such as surfactant, bacterial inoculum, or urea when necessary. Monitoring is also a key aspect of this period, as it will give us the necessary information on the progress of the bioremediation. Information needed to take the decisions that will lead us to reach the Remediation Target on schedule. Finally, once the RTC is achieved, the soil will be removed from the pads to make room for the new batches and sent to designated areas for the treated soil. All right, it was really interesting to see how it looks like in Kuwait in our treatment areas. At least to me, it looks amazing. It looks in real life amazing as well. Starting with what we are really doing there, repeating it once more, what are the activities we are doing there? I mean, I think the sort of, headline of the video says it all, we are restoring the Kuwaiti treasure, so cleaning up the final aftermath of the Gulf War in 1991. What's happened up until today, I mean, it is an amazing achievement from our team. I mean, we started with UXO work, so mapping out any unexploded ordnance there in the treatment areas. After that, we really did the site soil characterization, meaning that we did the analysis of all the contamination in the area, tried to estimate the volume of soil to be treated, and then after that, started the transportation to the treatment center. That can also be seen in the video. Then in the treatment center, we do two types of remediation activities. One is the bioremediation or biological cleanup that was shown in the video, and then the other one is mechanical cleaning, for which we have a soil washing unit in both of the treatment centers. That's basically it, and once it's cleaned, then it's being returned to the original areas. About the current status, where we are, how much we have treated, tonnages, currently? The numbers are so large that it's hard to even imagine. I mean, we've now transported almost 2 million tons of contaminated soil, soils in the treatment areas, a bit more in the north and a bit less in the south, so a bit above 1 million in the north and a bit less than 1 million in the south. That really tells the huge size of the project there. In terms of remediation activities, I mean, we've already been able to achieve an RTC, the Remediation Target Criteria, for approximately half a million ton of soil. 25% of all the soil that's been transported has already been cleaned up. Even though Manel says that it's gonna take four to six months to complete the cycle, I mean, we've been a bit more successful in the beginning. We had some help from the environment. It wasn't as hot in the early days of the treatment cycle as it typically is in Kuwait during that time of the year. Now, it's gonna be interesting to see how our technology performs during the summer month when the temperature can reach up to 50%, and that might cause some issues with the bacteria. What is the key for being successful in a project like this? Why can't we tell the story now, where we are? I think Manel put it quite nicely in his speech that, I mean, what we've tried to do is to create a factory-like setup. I mean, having a really well-designed process to treat the soil, so it is a continuous process from the moment it's been excavated, and each part of the process has been designed in mind of the remediation activity. For example, when you do excavation on site, there could be the crusty oil layer, which is mostly asphaltene, very heavy hydrocarbons, which is impossible to bioremediate, so you need to be quite careful in removing that layer before you take it to crushing and screening. You are creating a lot of contamination that can't be applied or can't be remediated with the bioprocess, for example. Again, I mean, having different levels of contamination in separate biopiles, of course, means that for the less contaminated soil, the treatment process is faster, which means that we'll be able to use more of the capacity of the treatment center in a shorter period of time, if, for example, we had the average contamination a bit higher, mixing the soils of different contamination levels. Manel was presenting the project there, the project director. Any other comments about the team and how it has been created? Yeah, I mean, amazing. Like I said, an amazing performance from the team. It's not the culturally, for example, not the easiest environment for us Finns or Western Europeans. I mean, cultural differences are huge. Having a local partner, having to sort of, try to get two teams from different backgrounds working seamlessly together. I mean, our partner's expertise is in civil construction, heavy machinery work, and then our expertise is then again on environmental solutions. Getting everything in line and really getting the team to work towards the same goal, which is to achieve the best possible remediation results. Amazing performance from the members of our team, the Lamor team there in Kuwait, but also from the team members of our JV partner. Exactly. We've been talking about the other possibilities in Kuwait. Any updates on those? I mean, like we already highlighted in the release, that unfortunately we weren't chosen to be the main contractor for the Schedule II. The price competition was really tight, discussions after the tender award shows that some of the contractors entered with no intention of making money in the project, just to keep them relevant in this particular market in Kuwait. Having said that, I mean, we see quite a lot of potential us working in the second phase. If we, for example, look at the other remediation technology, the soil washing part, we are in a leading position on that front. We've made the investments in the capacity there in Kuwait, and then we expect those two pieces of equipment having also future business regardless of whether we are the main contractor or not. Again, if we look at our bioremediation performance at the moment, then, and the efficiency from both commercial and technical perspective, I mean, we strongly do believe that this is not the end of it, and there could be a very good possibility to work also in the second phase. All right. Let's move on to the plastics initiative. Facility progressing as planned, as we told in the release, working together with Resiclo. What are the highlights for that project? I mean- Of course, not contributing revenue yet. What are the things we're doing currently? Yeah, and I think what we're missing there is the release that we gave out in May. We were able to secure the funding, the capital loan from the Finnish Climate Fund. We have the full funding now in place for the project. It took a little bit longer than expected to close the funding to the structure of the joint venture. I mean, finally, it's been achieved, we are really able to increase the speed of progress there. We received building permit for our site, we are about to commence construction activities there on the site. We estimate commissioning around mid 2024. Commissioning means that there will be the first drops of oil coming out of the facility. As a result of this sort of closing round of funding, I mean, we also increased our participation in the project to 70%, from the 55% that it was earlier. All in all, a very positive development also on that project. What we see, both from the feedstock perspective and looking at the value chain as a whole, there seems to be a lot of a positive tailwind in terms of the feedstock available. I mean, a lot of companies are realizing that incineration really is not an alternative for increasing the recycling rate of waste plastic. Then again, on the other end, the offtake, very strong demand, very strong interest for the end product. Overall, the business case looks super strong. Good. There is a strategic plan for us, relating to chemical recycling of plastics. Maybe repeating that and highlighting what is the plan right there? I mean, for the ton capacity here in Finland, we communicated earlier that we strongly believe in distributed liquefaction infrastructure. That is still something that is on top of our mind, meaning that we would probably have two facilities here in Finland. Now doing a bit more analysis on the CapEx per ton produced, it could be that each unit should be a little bit larger than previously anticipated, but that's something that we'll figure out in the years to come. I mean, this facility here in Finland is supposed to act as the blueprint for our global expansion. Our target is to have a portfolio of 200,000 tons by 2030. One of our strategic goals also is to have a project portfolio of 100,000 tons by the end of 2026. Those are the big, big numbers. Definitely a super interesting business opportunity and one of the things that I like the most about our business. One more question before we move on. Why did we end up in doing plastics recycling? That's not a short answer. You need to make it short. Yeah. The way we started looking at this is from the environmental hazard perspective. I mean, looking at the waste plastic in the water bodies globally and the increased significance of that. We've been manufacturing oil spill response equipment, oil collection equipment for the past 40 years. The technology is rather similar, from our initial idea of combating the pollution in the rivers and in the oceans, I mean, it came increasingly obvious that it is not a business opportunity as a standalone principle, but you need to combine it with land-based collection and liquefaction of existing waste plastic. That has people in a new direction. We strongly still believe that it is of great importance to have the water bodies cleaned as well. From a business perspective, we do believe that this route is the only sustainable one. Still mission is let's clean the world. Yes. Fully linked to that as well. Shortly about the Bangladesh project, we had visitors in Porvoo a couple of weeks ago, having a look at where we stand with the equipment. Any updates about that? Yeah, I mean, project moving forward as planned. I mean, there was a delegation of high government officials from Bangladesh here a couple of weeks ago. They came to do the inspection mostly for the spill recovery equipment, but they also visited the shipyards producing the vessels. All in all, a very nice visit and a long-awaited visit. The project is moving forward as expected, and hopefully it will create some more business for us there in Bangladesh. All right. Good. Thank you for the operations update. We move on to the financial update, going a bit more into details about where we are from the financial perspective. Mika already touched upon the revenue and EBIT, adjusted EBIT. We'll come back to that a bit later. Maybe one of the questions relating to earnings per share, it looks completely different if we compare it with the previous year figure. Why is that? What is the reason behind? Obviously, we have had. If starting with the quarter, we have extremely strong quarter behind us, as Mika said, and also that is taking us year to date on a very high, good level in terms of the EPS when, for example, comparing it to last year, same period. A couple of reasons, of course, when we look at what's remaining below the EBIT line, financial costs, we haven't had the kind of a similar kind of impacts on the forex change items this year. Also the. Some of the tax planning issues we have been concluding, end of last year are now affecting to that. Excellent. We will go into details with the orders received, but I guess, we should highlight it here as well. The amount of orders received is quite modest, both in Q2 and in H1. Any comments about that? Yeah, as we have disclosed that already in Q1, and now repeated, the kind of a base business order flow goes pretty decently. The issue is now that we haven't got any large service orders in this period. Similarly, any big technology orders haven't hit this period. As we have referred, the sales pipeline is very good-looking. That, of course, remains to be the main focus for the remainder of the year. Good. One more question about the employee amounts. We see fluctuation there, when we have a look at these figures as well. What is increasing the amount of employees, now during this quarter and the first half of the year? This year there's a single answer, and that's the Kuwaiti projects, which are now reaching the full capacity or full production. We have prepared the also the our resources to be matched with the full setup. Good. About the revenue development and the profitability development, adjusted EBIT now for Q2, 11%, lagging behind if we have a look at the first half year, EBIT%. Any specific comments on top of what Mika already mentioned? No, yeah, as it has been said, it was a very nice bounce back. Nothing that would have surprised us, because when looking at our internal measures, in Q1, we were pretty precisely where we planned to be. Now again, at half a year, we are there as we have planned it to be. Obviously, to 11%, when we get the volumes to a certain level, then that will generate also the very nice relative profitability. Good. Revenue split. If we start with the area split, naturally, Middle East and Africa contributing heavily to the picture with Kuwait and Saudi Arabia projects. Any specifics that you would like to bring up relating to Eurasia and Americas? Now, in Eurasia, the Bangladesh has been mentioned, that is the main contributor behind those numbers. Also when looking at the kind of a base business, that is an area where that technology sales is the strongest. Americas is clearly lagging behind, and that is something that we are not completely happy about ourselves either. Also on that area, the sales pipeline comment is valid, and we remain to see what's cooking there in the future. Good. About the solution split, more than 70% services, 1/3 equipment. Is this the future, or how do you see it? Obviously, this number fluctuates heavily based on the revenue recognition on a period, even a half a year is a short period in that respect. This is the picture we have said it is going to be, and expectations hasn't changed. Good. We touched already the order intake and backlog. Naturally, order intake going down, and same applies for the order backlog. How concerned should we be about this situation? Yeah, if picking up a couple numbers there, first of all, the total order backlog still remains at EUR 163 million, which is extremely strong to our size of the business. Then of course, for this year, it's important to notice that EUR 50 million of that EUR 163 million is expected to be delivered this year. Obviously, EUR 20 million orders for the H1 is not the number we would like to see. I said the focus will be very much on the order intake for the H2, and we want to get this graph turned. Excellent. Any other comments relating to this? I guess we have covered most of them. Good. The other topic we have been covering in this webcast, I guess each and every time, is net working capital. We see that the graphs look quite different compared to the previous quarters, especially when it comes to the receivables, so the dark blue and the lighter blue, meaning the contract assets. Contract assets now heavily increasing, but at the same time, the receivables heavily decreasing. What does this mean in practice? Yeah, if starting with the receivables, as Mika already hinted, we have now been able to normalize the Saudi collection times, what we already anticipated in Q1 release. There's a significant release of the receivables in Saudi Arabia. Now we are on a reasonable cycle in terms of collecting the monthly invoices, which is very positive news. In contract assets, it is once again Kuwaiti that is behind that. That, why is it happening is because now the progress has been heaviest, as it was mentioned, excavation and transportation, plus the bioremediation progress has accelerated. The invoicing, in turn, is tied to a clean materials to be delivered. The invoicing will catch up during H2 once the bioremediation process will start yielding the clean material, and the soil washing process also gets going. That picture will change then again. Any other comments relating to net cash flow, for instance? Obviously, rather pleased on quarterly performance there, positive by EUR 1 million. The big number, of course, cash flow from the operations is still -EUR 8 million, roughly, on year-to-date. That is the number that is tying too much or indicating that we tied too much capital on that front. Kuwaiti is the one we have to turn now, get the process ongoing. Equity ratios, net gearing, still remaining extremely strong. We published during Q2, about the bond issuance, which were then canceled, or took and decided to further investigate the possibilities about it. Any status update on that? No, yeah, as we disclosed, was it late May, early June, we have continued discussions and obviously now the silent period has a little bit hindered us on coming out with anything. The discussions have continued, and hopefully we will be able to disclose something in a short while. Good. Guidance unchanged from the one which we published, late February. Anything specific you would like to highlight here? Indeed, we are still shooting the revenue between EUR 120 million and EUR 135 million, and adjusted EBIT being between 8% and 11%. As I said, the strong order backlog is still there, pushing us to achieve this. Obviously, we need some orders also, and a good performance on the existing orders or products ongoing. No specifics, obviously, as we also said in our release, we are not immune to the overall economic uncertainty and inflation either. Those are possibly impacting also our outlook. So far, no reason to take another looks. Good. I would actually like to close our presentation with the strategy and Vision 2025 picture once again. As you heard, we've been talking about being the number one partner in selected strategic markets, entering new markets, huge amount of sales pipeline in several places. Winning five new projects really is the key for our Vision 2025 to be met, so working heavily on that as well as we've heard. Plastics recycling, moving on, so to say, with the construction beginning, and then, of course, everything comes to efficient and effective solutions, so we have happy customers as well. I would actually like to say thank you to each and every Lamorian for this first half year. There is a lot of work to be done, as we all know, for the second half as well, and for the whole strategy period. It all comes to all of us believing that we will be the preferred partner during the journey towards a cleaner tomorrow, and we are working in the scenes as well to make sure that each and everyone is working with passion towards the vision, and the vision is clear to all, each and every Lamorian working together with us. All right, we'll move on to the Q&A session. Not many questions, I'll say it, a couple of them. First one, relating to price competition, what does it look like currently? Any... Is it tightening, changes happening? And I think it's very hard to give a sort of a global perspective on the price competition. It is very market specific. Like I mentioned, in Kuwait, we know for a fact that some of the bigger civil construction companies who've been involved in these remediation projects earlier wanted to get involved, wanted to still be in the game, so to speak, for these remediation projects. They were willing to do the work without any profit. Again, if we look at it from the global perspective, we don't see any clear trend in terms of the price competition moving in one way or the other. Still quite confident on our capacity to compete. Unfortunately, we can't repeat the phrase of having 100% win rate in the most important tenders anymore, but such is life, and as mentioned, we do still believe that we'll play a role in the second part of SKETR. The second question is relating to SKETR-2. Could you elaborate or repeat how likely did you think it would be that we will win a subcontract in this second part? I guess it's a really hard question. Yeah, yeah. Never, never say, never say forever. I think if we look at, for example, the soil washing capacity that we've built in the country, and if you look at the effect of CapEx on the total cost of soil washing, we are definitely in a very strong position to offer the service in the SKETR phase II. Again, as mentioned, I mean, we do believe that our bioremediation process is the most efficient one. That should also increase our chances to take part in it. Maybe one thing that is good to understand that, I mean, these projects are quite interlinked, if you like. I mean, there is the total budget for the SKETR-1, SKETR-2, but the client can then again... I mean, it can reallocate certain amounts of the budget from SKETR-2 to SKETR-1, or between the contractors in SKETR-1. We do believe that our excellent performance, I mean, we are leading all the charts there in Kuwait, will generate also additional business in terms of the SKETR-1, or believe is maybe a strong words, but there is a strong possibility that will happen. The next question, tied to the one which you already mentioned. You mentioned that you were not successful in tendering the second phase of Kuwait, yes, due to price competition. Previously, we've been mentioning that the quality is the one which is also impacting, the, who will be selected to be the provider. Have the customers changed their views? I mean, one thing is that what is the assessment during the tendering phase of sufficient technology, and it is a sort of a paperwork exercise at that point. Then again, I mean, if we look at the current project and the difficulties some of the contractors are having in some of these tasks, I think we are still quite confident on that statement, that quality and really delivering world-class services solutions in that particular project will lead us to succeed eventually. We haven't changed our perspective on that, and stronger than ever is my belief in the chosen strategy. Soil remediation is something that is rising up in the European area as well as one of the key things when we talk about bioremediation and climate change. Does it impact our business in any way? I mean, once again, I mean, you could talk for half an hour about this topic, but maybe I'll be just blunt, a bit blunt here. If we look at the remediation possibilities globally and we look at the sheer size of the projects that are existing, let's say in South America or the Middle East or Africa. It is a lot more scalable than doing the remediation activities here in Europe, where it's typically smaller areas that could also be heavily contaminated. The sheer volume of area to be remediated is significantly smaller. You would have to build a larger portfolio of such projects, and then it is not as scalable as going for larger projects in the strategic market areas of ours. Still, for this strategy period, we remain committed in Middle East, and in South America in terms of our remediation activities. Of course, certain projects might be interesting outside of those two regions as well. Good. Question overall about the sales pipeline, is there anything area-specific, product portfolio-specific that we could highlight around it? I think linking it with the previous question, remediation is really where we see a lot of opportunities, especially remediation of legacy contamination, legacy waste of our pipeline. That makes a big part of the projects that we are going after. That's definitely interesting and important. If we look at the environmental preparedness, we've discussed that already in quite a detail. There we see a lot of potential as well, and not to forget the chemical recycling, where there's gonna be a huge growth in the future. Good. Timo, anything that you would like to close with about the what should we do during H2 to be successful? Obviously, the obvious one is that we have to get this order backlog growing again. That is obvious one, and the sales pipeline has to start to materialize in good wins. What has to be also happening, and as we also discussed, that we have to still make the cash collection and the turnover or the working capital more efficient. We know what to do, where it's coming from, and just execute that, make sure that the customers are paying our bills. Excellent. Any closing words from Mika? Questions are done. Thank you, both. I'd like to repeat the words of Timo. If you look at the position where we are at the moment, I mean, order backlog is good enough for more or less the second half of 2023 and then for 2024. We are living exciting times, and all eyes, all hands on deck in terms of really getting the next big one. Excellent. Thank you, Mika and Timo, and thank you for all of you who have been following our webcast. If you want to learn more about the release, please visit our webpage. Thank you. Thank you.