Good morning, and welcome to Purmo Group's Q3 2023 Results Webcast and Conference Call. My name is Katariina Kataja. I'm Head of Investor Relations at Purmo Group. Today, joining with us in Helsinki, we have our CEO, John Peter Leesi; our Chief Financial Officer, Jan-Elof Cavander; as well as our Chief Operating Officer, Erik Hedin, who will join us virtually. In this presentation, we will give you an update on the strategy execution during the quarter, followed by an update also to the Accelerate PG program during the quarter. Finally, we will cover the details of the quarter in the end of this presentation. As usual, we have the Q&A session in the end of this presentation, where you have the possibility to ask questions through the teleconference lines as well as through the web chat. Please also remember that this webcast is recorded, and it will be found on Purmo Group's investor relations sites later in the afternoon. With these opening words, we are finally ready to start, and I will now hand over to John Peter. John Peter, please go ahead. The stage is all yours. Thank you, Katariina, and good morning to everybody. It's a pleasure for us to talk about the Q3 and explain a little bit more of the details of what has happened in Purmo Group during the period, the Q3 of 2023. The core messages that we would like to deliver, and we try to make it as simple as possible, and we feel that overall, we have good news. We're operating in a difficult market environment, but even in this situation, we've been able, in the Q3, to actually perform and demonstrate and show a significant uplift in the group's adjusted earnings, adjusted EBITDA, as well as focusing a lot on our balance sheet, our net working capital, and actually delivering an improvement in our operating cash flow. Very important to us. The second message we want to relay is that in our Climate Products and Systems division, we have then a very strong margin development in the Q3, and we're gonna go through the details of that. In our other division, being the Climate Solutions division, we have a very concentrated exposure to a few markets that are currently in a difficult situation, where we see a market correction, and we have a downturn in construction, which is affecting this business. But as a response to all the challenges that we've seen in the marketplace, our Accelerate Purmo Group program is really delivering on all cylinders, and we are ahead of plan. This means that the guidance in terms of financial performance for the year 2023 remains unchanged. Let's look at some further detail here. This is the overall numbers for Purmo Group, and what you can see is that we have a net sales development, where net sales are 19% lower in the Q3 of 2023, compared to the same quarter in 2022. We can also see that this translates to an interesting development in terms of our EBITDA performance, where our EBITDA has increased with 20%, up to EUR 23.5 million for the quarter. Then, represented also by an EBITDA margin that has a very healthy uplift of more than four percentage points to 13.3%. So we feel that in the current environment, we have performed well, and we are proud of the organization in the way they have operated-- we have operated during this period. Let's look at the Climate Products and Systems division. Here, you can see how, net sales, due to weaker demand in the marketplace, and this weaker demand of 17% in net sales is across all our regions, in all our markets, basically. The volume, actually, in the Q3 on our radiator business is actually down 13% compared to the Q3 of last year. Year to date, which you don't see here, but year to date, the nine months of 2023, the actual drop in volume is 21% in radiators, and in embedded systems, you know, underfloor heating and those types of products, the drop is even bigger in terms of demand and market, which is 28% down. So we're talking about big volume drops here. But thanks to strong margin management on price management, on cutting cost, and delivering on our Accelerate PG program, with some help of raw material cost coming down, we have this 45% uplift in the earnings, in the EBITDA of this division, translating to an adjusted EBITDA margin of 15.5%. Strong quarter. Let's look at the other division, Climate Solutions division. Here we have a bigger drop in terms of net sales, and we're very exposed to two markets: the Nordics, where Sweden is the biggest market, but then Italy, which is the biggest market. If you look at construction in Sweden as an example of residential apartments, it's down 58%. In Italy, the market is down 30%, and these are corrections based on – and I'm talking about Italy now. Last year, we had very, very strong market environment in Italy, thanks to the Super bonus incentive programs for energy efficiency investments for everybody. Now, that program is actually reduced, and we see a normalization in the market. And here we then see also a drop in the earnings of actually 44%, taking us down to EUR 3.6 million. So this is an effect of low volumes. We do have one-off costs in the period here in the Q3, and there is a product mix effect in here affecting us negatively as well. But we have positive signs, and there are a couple of positive signs in this business right now. Overall, very positive, because we see traction in our ability to put together systems and solutions that we can sell directly to installers, but also sell through the wholesalers to installers. So we see that traction, and there are a couple of new markets in our solutions business that have been performing well. France is growing 32% quarter-on-quarter, and the UK is growing 20%. So we have growth elements in here as well, but it's been a tough quarter for the Climate Solutions business. This is the point where we walk through what we're doing in terms of executing on our strategy during the last quarter, and we would like to highlight a few things here. When it comes to solution selling, we will share a case in where we're launching a solution offering in Austria, and we will talk a little bit more about that in a second. We've launched a new control system called IQ, mainly in the Scandinavian countries, but to be expanded in other markets as well. In terms of our growth markets, Russia, as you know, we have announced that we're leaving Russia, and that is progressing a little bit slow, but that's due to kind of the government approvals that are needed and regulatory approvals that are needed, and we're working hard with that. Operational excellence, our COO, Erik Hedin, will go through the details of that, but we're performing ahead of plan here, which is really, really good news. In terms of sustainability, we are progressing well. It's not a surprise that our carbon intensity has improved because the volumes are down, but we're working with a number of things where we are improving things. You can also see that our proportion of women in management positions have increased, and our focus on health and safety is something that we have increasingly started focusing on even more. We are committed to submitting science-based targets in 2023. These will be validated by the Science Based Targets initiative organization during 2024. So let's look at a couple of examples here. So one is here in Austria. So what we're doing here is that we're packaging a heat pump, an air-to-water heat pump, from one of our partners in Austria, specifically. We put it together with what we have is then a heat pump radiator that you can see to the left, the white thing attached to the wall. It's a fan-assisted radiator that improves the level of convection and heating performance with lower temperature water from a heat pump. So this is something that we have packaged together, together with a partner, and with our ultra-low heat pump fan-assisted radiator, we call it the heat pump radiator, perfect for these types of renovations. We're now blowing this out in the Austrian market, where the product will go through from us. We will be selling the solution through wholesalers, which we have a strong relationship with, but also we will be selling commissioning, installation, services, et cetera, directly to the installers. So it's a combination of a wholesaler business and a direct business to installers, and we do this under our brand, Vogel & Noot, in Austria. But this is just the beginning. This will be expanded into other markets. Good example of our solution sales activities that are really starting up in earnest now. Let's look at a control system that we've been quite innovative around. So this is an invention where we actually move the user interface of a controls platform from a panel, from a unit to a mobile phone. So it's very simplistic and minimalistic in its design. The software and the user interface is developed by our own team in the north of Sweden, in Umeå. We have launched the product. We're selling it in the Scandinavian markets to start with. The interesting thing is that it's very easy to install. It really helps the installers with installation, where everything is handled over our app on a mobile phone, and there are no need for any type of manuals or instructions. Very easy. And more importantly, is that one of the things that underfloor heating systems have is a problem with balancing. Different loops are not properly balanced in many, many homes, and we are now combining this with an auto-balancing functions that we've patented together with our R&D team. So this is something that's gonna be integrated in this very simple, user interface-friendly environment. So we're very excited about this product, and we've launched it in the Q3. So, with this, we're now gonna go to deep dive in our Accelerate PG program, and for that purpose, we have Erik Hedin, our Chief Operating Officer, online. Erik, can you hear me well? I hear you well. Thank you, Joppe. Good morning, everyone. My name is Erik Hedin. I'm Chief Operating Officer at Purmo Group. Pleased to give you further details on the continuous achievement in the Accelerate PG program, which is ahead of plan. Just to remind us, this program addresses a broad set of strategic and operational initiatives, focusing to improve net sales, profitability, and net working capital. In the medium to long term, this program will support the financial development of the group in helping us achieve our financial targets, and Jan will come back to them later on today. And in the short term, we also see the clear effect of the program offsetting the weak effect in the markets, contributing to us being able to reiterate our guidance of unchanged profitability in 2023. The strong performance of the program continued in the Q3, supporting our earnings, and I'm now gonna give a bit more details about this. If we first focus on the targets of the program, thanks to the good performance of the program, we decided to upgrade the targets for this quarter presentation, both for 2023 and 2024. First of all, for 2023, we now expect to reach above EUR 25 million Adjusted EBITDA run rate improvement, increase from earlier estimated more than EUR 20 million. For 2024, we reiterate EUR 40 million. However, we think... or we expect now to hit this achievement already by mid-2024 instead of end of 2024, which will increase the in-year effect of 2024. As a new target, we also introduce a net working capital improvement of more than EUR 10 million in 2023, and more than EUR 30 million by end of 2024. The cost of the program, finally, excluding non-cash item, we expect EUR 45 million, of which EUR 35 million this year, and the remainder in the first half of 2024. In addition, there will be approximately EUR 10 million relating to non-cash items. If we look at the performance then for this year, we have delivered improved EBITDA, run rate improvement. We now reach EUR 22.4 million, and the periodic impact in the Q3 is EUR 4.8 million, so that's the third bar of this chart. We see the top of the chart is 22.4. That is the cumulative run rate effect, and this we can translate into annualized EBITDA improvement compared to 2022. We're now operating at 22.4, and the periodic impact in the Q3, as you can see from the bubbles below, is EUR 4.8 million, so it's increased from 3.2 in the Q2. The improvements are mainly related to pricing optimization, procurement savings, and also cost reductions from our improvements in our operating model. We also achieved a cash impact of approximately EUR 9 million relating to net working capital, which is a further improvement compared to the Q2. I'm really excited about this program, how it's progressing, and we're on track to exceed the earlier targets of EUR 20 million. Now we target EUR 25 million, and we eye the EUR 40 million target, which will include a significant footprint optimization element. This drives the cost increase, which we expect then to land in the Q4 of 2023. So with that, over to you, Jan, to give further details on the financial performance. Thank you, Erik, and good morning to everybody on the line. Very good to share the strong financial performance we had in the Q3 of the year. So in a tough market environment, our net sales amounted to EUR 176.1 million, which represents a 19% decline in this tough environment. We had strong generation of adjusted EBITDA. We generated EUR 23.5 million of adjusted EBITDA, which represents a 20% increase from the prior year, despite the headwinds in the market. This translates into a adjusted EBITDA margin of 13.3%, which is 4.2 percentage points uplift from the prior year. Overall, for the Q3 and going forward, we have two key priorities in the financial management and the overall management of the company. Number one is profit improvement, and number two is driving cash flow. Then moving to Purmo Group net sales and adjusted EBITDA on the group level for the Q3. So as said, net sales amounted to EUR 176.1 million. The organic decrease in sales was 17%, and this pretty much comes from the decline in all of our regions and countries where we operate in. We had weak demand across all these regions. Changes in FX rates contribute a negative 2% impact to net sales. And then when we move on to adjusted EBITDA and our earnings. So as a result of very strong margin management on pricing, variable cost, fixed cost, and on top of that, the great performance in Accelerate PG program, we generated this high profit and profitability for the Q3. And I have to say that, this achievement really demonstrates the underlying performance that we have, both operationally and financially, in the company. Then looking at our Q3 net sales divided by geographical areas. So our two largest areas are Western Europe and Northern Europe, which together amounted for around 60% of top line in the quarter. Western Europe region, which consists of France, Germany, and the Benelux countries, was down by 20%, which is pretty much in line with the overall group decline of 19%. Northern Europe was down by 8%, from the prior year, and within Northern Europe region, we see a more resilient market in the UK, whereas we see a large downturn in construction activity in the Nordic countries. Southern Europe was down by 34%, and this is driven by Italy. The comparison period in Italy was high due to the governmental incentive programs that boosted sales in the Q3 of 2022. So that's driving the decline in this region. Then moving to the divisional overview. So first, Climate Products and Systems division, and this division sells both unique products and complete systems through the very important wholesale channel. So here we sell products and systems via the wholesale sales channel. Here, the net sales drop was 17% to EUR 143 million. The organic decline was 14%, while the rest came from currency impact. The most important and the largest product group, product category in this division is radiators, and the radiator sales amounted to EUR 94.8 million in the Q3. The volume decline in radiators was 13%, but again, due to strong margin management, we increased overall the prices of radiators by 1% compared to the comparison period. And, very, very strong earnings generation in this division. The Adjusted EBITDA improved by 45% from the comparison period, so EUR 22.2 million compared to EUR 15.3 million last year in the same period, despite the 17% decline in top line. This really demonstrates and shows the very strong operational execution that we have in the business. This translates into a strong 15.5% EBITDA margin in this quarter. The comparison figure was 8.9%, so also on a margin level, both in absolute euros and on a margin level, a significant improvement in the division. Then going into our second division, the Climate Solutions division. In this division, we sell complete solutions of heating and cooling solutions for our installers, and these we sell directly to the installers. We do the business. We have three business entities here. We have the Emmeti business in South Europe, then in the Nordics, we have the Thermotech business, and then in UK and Ireland, we have the Merriott business. In Italy, as Joppe explained already, we had a strong comparison period, driven by the governmental incentive programs, and now we see a normalization and quite large correction of the market conditions in Italy, which is by far the biggest country in this division. That takes down sales in Italy. And also, we have a downturn, as is evident in the Nordic markets, in the construction business, which impacts large the Nordic business. Despite these two businesses, we have good progress in the Myriad business in the United Kingdom. And driven by the low sales in this division, Adjusted EBITDA decreased by 43% to EUR 3.6 million in the quarter, and the Adjusted EBITDA margin was 10.9%, where the comparison period was 14.2%. The reason behind the drop in profits and profitability in this division comes mainly from the fact that we had low sales. We had a larger sales decline in this division compared to CP&S division. The second reason is that we had partly some temporary one-off type of expenses in the Q3 that impacted our temporary basis the profitability of the Q3. And also, the product mix was less favorable compared to the typical product mix and compared to the previous year. So these are the key reasons why the profitability lagged in this division. Then moving on to net working capital. Net working capital at the end of September was EUR 118.7 million, which represents an 8% decline from September last year. Also, one point that I'm happy to report here is that our inventories are now on a decreasing path. We decreased inventories from EUR 191.2 million to EUR 163.9 million in this 12-month period. That being said, our net working capital is still on a high level, both proportionally and on absolute terms. And the good news or the good part here is that we have ample of opportunities to release cash from our net working capital going forward for the next quarters that we have ahead of us. And I said in the beginning, we have two focus areas: profitability, and the second is to drive cash flow. And here we have a source of cash, in a way, for the next quarters. Then very happy to report on adjusted operating cash flow. So this is an internal KPI that we use, within the management team and the whole company to drive the business. This differs from the operating cash flow definition in the official cash flow statement. Here we calculate the adjusted EBITDA for the last 12 months, to give a picture of the operational ability to generate EBITDA. Then we take the net working capital change and, the CapEx for the last 12 months. And with these measures, our adjusted operating cash flow from September... End of September 2022 to end of September 2023, we generated EUR 80.1 million, which is a rather high cash conversion of 91.6%. In the comparison period a year ago, we were able to generate EUR 35 million, and now we are on a much higher cash generation level than we were in the prior year. In the current environment, it goes without saying that cash flow generation is really a high-focus area for the whole management team and our clusters and businesses. Then moving on to net debt. So our net debt was EUR 238.4 million at the end of September, which is lower than in the comparison period in 2022. And this is driven partly by the issuance of the hybrid bond earlier this year. Leverage was below our target level, so we had 2.73 as leverage, whereas a year ago it was 2.91. And as our target here is to have leverage below three, so we are below that target at the moment. Our debt portfolio remains roughly similar that we had at the end of the Q2. We have around EUR 280 million of long-term loans from the financial institutions in the form of a syndicated facility. The maturity of these loan arrangements is the Q4 of 2025. Then moving to the financial guidance for 2023, I'm very happy to report that the guidance remains unchanged. So we expect Adjusted EBITDA in 2023 to be on a similar level as last year. And similarly, now volatility means a change within +5 /- +5% from prior year. And we have also, as you have seen from the report, we are also upgrading the targets for the Accelerate PG program, both for this year and for next year. So now we target, as Erik mentioned earlier, a run rate improvements of above EUR 25 million this year. Previously, we said 20. Now we say above 25. And for next year, we target to be above EUR 40 million in the run rate number. Then, finally, to remind on our long-term financial targets for Purmo Group. So in net sales growth, we target to have higher growth than the market growth in the business. In profitability, we target to exceed 15% adjusted EBITDA margin. As mentioned earlier, in leverage, we target that when we measure interest-bearing net debt divided by Adjusted EBITDA for the last 12 months, we target to be below or at three. Our dividend policy is to distribute, distribute more than 40% of the annual net profit out to our shareholders. Then I thank you for your interest in the financial section. I move over to Katariina. Yes, thank you for once again for a good presentation, John Peter and Jan-Elof, as well as Erik on the lines. Now we are ready to take your questions, and we will start taking them from the teleconference lines, so I will ask to open the lines, please. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Anssi Raussi from SEB. Please go ahead. Yes, hi, all, and, thank you for the presentation, gentlemen. I have a few questions, and I go one by one, and I start with, this Accelerate Purmo Group program. So just to make sure, should we expect clearly higher one-off costs related to this program in Q4? Just that I got this right. Erik, please go ahead. Because it's linked to the big footprint initiatives, and they will carry the biggest cost of such a program, and that's linked to the expected timing of when we reach agreement and proceed on those big initiatives. Erik, we-- you broke up in the beginning. Can you just repeat from the beginning, the answer? Yeah. Yes, you are right, Anssi. So to date, we have around EUR 10 million of cost in the program, and we expect 35 for this year. So that brings then the vast majority of 2023 costs to incur in Q4. And this is linked to the ongoing work with the footprint initiatives, notably the proposed relocation of Sonthofen production capacity to our Polish factory. Okay, that's clear. Thanks, Erik. And, then about the margins in, climate products division. So how should we think about the, the future here? Because I guess one could think that the costs are declining fast right now, and, when this trend ends, it could be negative to your margins, because I guess your sales prices have to follow with, some lag. So is this the right way to think this, or are these, margin levels sustainable, what we are seeing right now in this division? I think that the margin levels that we have demonstrated right now are margin levels that we believe that we should be at. So in terms of the reasons for it, is then that we have been able to manage our pricing well, and managing our pricing well is, of course, not about squeezing out every single dime from our customers. That doesn't work. So we're very kind of receptive to what is needed in the marketplace, but we have been managing from our sales organization that really well, and we will continue to do that going forward. The second part we have here is that operations globally, thousands of people across our factories, have been responding to the volume decline in a very powerful well, way by reducing cost in whatever way possible, which is a very, very strong achievement. If the volumes continue down, we have a capability to mitigate further negative margin impact because of that. So strong performance. And the third area is raw material prices, and one bellwether of raw material prices is, of course, the steel price. So if you look at the steel prices on average over the year 2023, you know, in the Q1 of 2023, steel prices were around EUR 859 per ton, right? That increased in the Q2 to 885. In the Q3, the price actually started dropping down to 762. And now in the Q4, that price is expected to continue down to around EUR 740 per ton. So yes, there has been a raw material decrease, but we believe that there is potential that this price is not going to go up that much going forward. And we feel that we are in a strong position to be able to maintain margins, and that is our ambition: to mitigate negative impacts. And we will adjust prices if needed, and we will then be mitigating with stronger actions on cost. Okay, sounds good. And, lastly, about Italy, and I guess you mentioned that Italian market is now normalizing, but how should we think about this, like, in absolute terms? Like, is it still rebounding from, or after this tax benefit program, or are we now at the, let's say, sustainable levels, or are these like, too low activity levels if we compare Italian market to other European markets? How do you see the situation? Well, I think we've seen... The incentive, the government incentive program of 110% tax rebates on your investments in improving the efficiency of your heating and cooling system in your home, that program has been changed to lower levels of support with a lot of details around it. But we've seen the brunt of that adjustment in the marketplace, we think we have seen. So now we have a sideways movement in the Italian market. When we look at other companies in Italy operating in our space, many of them have been dropping business in terms of net sales drops of well over 50% in this adjustment. We have dropped somewhere around the 30% level. So I think, Anssi, that we think that it—we've seen the major part of the adjustment in the Italian market. Okay, great. Really helpful. Thank you. ... The next question comes from Svante Krokfors from Nordea. Please go ahead. Yes, good morning, Svante Krokfors from Nordea. Thank you for the presentation. A follow-up on the pricing situation. Could you elaborate a bit on the pricing environment if you compare radiators and, for example, underfloor heating? Is it still that the pressure is higher in underfloor heating, given the structure of the market? And could you also elaborate on what competitors are doing on the radiator side? Yes, Svante, good morning. The price pressure on the underfloor heating side and the piping side is a bit heavier than the price pressure on the radiator side. Having said this, yes, we see an emerging request or demand for price reductions also on the radiator side, which we will manage in the good way we have been managing this during the course of this year, and we will approach this challenge, but of course, being strong on our mitigating actions on cost. Okay, thank you, and perhaps a question regarding the renovation market. From your perspective, how have you seen that developing during the year? Is it so that the outlook has gotten worse quarter by quarter? Shall I start, Jan? Yes, we have first of all, on a higher level, we've seen both renovation as well as new construction ultimately affecting our business, you know, going down in the year of 2023. We believe that looking into 2024, we actually do prepare for and plan for a potential further deterioration of the construction market across Europe. So we think that, you know, the new build market's gonna be down maybe up to 3%. We think that the new construction market is gonna be down. Did I say up? I mean down. Down around 4%. So continues weakness in construction across Europe in 2024, and we believe that there will be some form of a turn, and we will see some mild improvements when we move into 2025. Whether or not our market situation has gotten worse quarter by quarter this year, we do think that it hasn't improved a lot, and we have seen a sideways movement when the destocking in our supply channels, not our supply channels, in actually our customer channels, in wholesalers and so on. So the destocking, we believe, has pretty much come to an end, and we will see real demand coming through in our numbers, in our sales now, rather than restocking and destocking effects. But if I take the numbers, both, Jan and myself mentioned earlier, is that the radiator volume, as an example, over the nine-month period, is down over 20%. I think it's 21%. Radiator volume is down in the nine months of 2023 with 21%, and in the Q3, it was only 13%. So there is, more of stability and real demand situation that we see today, so more of an horizontal move, but we found that we're planning for additional weakness in 2024 in the construction markets as a whole. Thank you, and then lastly, a question about Russia. Could you repeat again how you treat it in your numbers now, both in PNL and in balance sheet? Yeah, thanks, Svante. So, as of now, the Russian business performance, the PNL, is being consolidated on a normal basis to our profit and loss statement, and in balance sheet, these are assets held for sale and liabilities held for sale, so they are not appearing, for example, in the inventory figure, as these are assets held for sale at the moment. But this has only had a marginal impact on our profitability this year, so there's no, no big impact from the Russian business as such. Any specification on the timeline regarding the Russian disposal? So, the timeline is... There's no specific visibility to the timeline as such. We have submitted all the documents and all kind of the papers needed for the governmental institutions to validate the transaction, and we have done all from our part and the buyer's part, and now we are waiting for the answer from the commission as such, and when we get that, then the deal will close. Okay, thank you. That's all from me. There are no more questions at this time, so I hand the conference back to the speakers. Thank you for the good questions. Now we move to the chat, and we have one question in the chat, and it's from Mark Moilanen from Nordea. You have some EUR 278 million of debt from financial institutions maturing next year. Can you please comment, how do you plan to deal with those maturities? Actually, these loans are maturing in Q4 of 2025, so there's around two year until the maturity, and this is going to be a completely normal refinancing exercise with the core financial institutions that are the counterparties, and that's going to be completely normal business as usual refinancing, so nothing special in that respect. Okay. Thank you for the answer. We have no questions, further questions in the chat, and I assume no other questions from the lines either. So we are in the end of this, in this presentation for Purmo Group's Q3 2023 results. We were very happy to see you again, all in the lines, and thank you for the good questions as well. Now we wish you a pleasant rest of the day, and see you, see you soon. See you soon again. Thank you. Thank you. Thank you.