Welcome to Robit's Q4 and 2022 Results Presentation, and Analyst Press Conference. My name is Arto Halonen. I'm the CEO of company, and I'm here with Ville Peltonen, our CFO. 2022 was, in many respects, a record-breaking year for Robit. This was done in a challenging business environment. We made a record in net sales. Net sales reaching EUR 212 million, growth of 11.1%. Orders received remained relatively flat. We saw a impact of declining orders from Russia faster than we saw it on the net sales, where we still delivered to Russia the existing backlog we had prior to the war. Also we saw, let's say, lower order intake level in the Q4, which impacted also the full year order intake level all in all. Growth was driven by our Top Hammer segment, where growth was strong, 18.7%. Down the Hole, there was a small growth of 1.15%. Growth was delivered across all market areas, except in Australasia, where sales remained relatively stable. We also made a record EBITDA, and that was as a result of successful execution of the improvement measures. The year was characterized by, let's say, high inflation, high fluctuation in the raw material prices. And we were able to cope in the situation and do the price increases were seen necessary to, let's say, protect the profitability. All in all, EBITDA reached EUR 8.9 million. Also, the net cash flow from operating activities improved to EUR 5.6 million from negative EUR 4.2 million in 2021. Also pleased that we took good steps in our sustainability journey towards our targets we have set on that front. As one highlight, the reduction in the CO2 emission intensity that dropped by 26% from our benchmark year of 2020. Q4, we continued to grow outside of Russia, but it was a challenging quarter in terms of profitability. Net sales all in all remained flat, excluding Russia net sales increased by 3.4%. Orders received decreased 23.4% and 14.6 excluding Russia from, let's say, strong comparison period from 2021. We did not receive, let's say, major one-time single orders during Q4 impacting the overall orders received number. I think there was some timing specific issues on the orders received. Top Hammer continued to grow in the Q4, 5.3%, whereas we saw a decline in sales in the Down the Hole. There was many factors impacting negatively on the profitability in Q4, and EBITDA was only EUR 0.4 million in the quarter. We had a negative impact from wrap down of the Russian entity during the Q4 while we were running down the operative actions in the Russia. Currencies had a big negative impact on the EBITDA in Q4, as well as low utilization in our factories, especially in the Down the Hole segment that had a negative impact. As we anticipated, the material costs still continued to trend upwards during Q4, although now we've seen easing up on that front, and we expect the trend to turn during 2023. There was positive development in net working capital, and that supported the cash flow from operations, which was positive EUR 1.6 million compared to the EUR 0.4 million negative from Q4, 2021. If you look with the net sales in 2022 by market area, Americas continues to be the driver for growth, growing more than 30%. We saw growth both in South and North America, and the growth was driven by the mining segment. In EMEA, we grew by 7.4%. In EMEA, it's a big market area, and we had the areas where we saw very strong growth. On the other hand, there were some regions where the, let's say, year was more challenging in terms of net sales. East continued to grow. Still we made some, let's say, good openings, good development in countries outside of Russia, and also we still had a good share of sales coming from Russia in 2022 as we delivered the backlog we had received before, let's say, the Ukrainian war started. Asia also grew nicely, and Australasia remained relatively flat. We have four focus areas when it comes to sustainability at Robit: sustainable partnerships, CO2 emission reduction in our value chain, healthy and happy workplace, and efficiency throughout the product lifecycle. For all of them, we have set KPIs and we took in many areas good step towards right direction in the KPIs. We had already mentioned one of the highlight on the CO2 emission intensity reduction, which dropped by 26% to the benchmark year. good to see, let's say, good development on the employee engagement index where we also took a good step towards the right direction. I'll hand over to Ville for a bit more details on the financials. Thank you, Arto. Like said, we had a good year overall, but a challenging Q4. Net sales grew by 11% in the year, we didn't see any growth in the last quarter as the net sales were pretty much on the same level as the year before. Due to the facts Arto already mentioned, the Q4 EBITDA declined to 1.4%. Again, for the full year, it increased to 7.9%, the highest we've ever seen in Robit. EBIT percentage declined to minus 4% in the Q4. Again, for the full year, increased to 2.7%. For the full year, our result was EUR 0.9 million, basically the same as we had a year ago. Here it's good to note that we had some withholding tax assets that we wrote off in one of our subsidiaries at the end of the year due to the fact that we are not able to utilize them. The whole Robit team has been working extremely hard on our net working capital. As you can see, we've seen a good development in the last part of the year, especially in Q4, so the trend is on the right path. Net working capital totaled at 46.7%, down from 49.5% in Q3. Inventories continued to decrease to EUR 44.3 million, and receivables decreased to EUR 22.5 million. Payables stayed pretty much the same at EUR 19.9 million compared to Q3. The positive development in net working capital can be seen on the cash flow statement as the operating cash flow improved to EUR 5.6 million from the comparison year, where it was minus EUR 4.2 million, there's almost a EUR 10 million improvement on that front. The cash flow before changes in net working capital also improved to over EUR 10 million. Cash flow from investing activities was minus EUR 1.1 million, cash flow from financing activities resulted in minus EUR 6.4 million, including the loan prepayments we've made and use of credit limit. Here you can see the positive trend that we had in 2022 in the cash flow before changes in working capital and also the from operating activities. Our financial position remained steady. Cash and cash equivalents at the end of the year were EUR 7.7 million, total interest-bearing loans and utilized credit limits at EUR 36.3 million, down from EUR 41.5 million in 2021. This includes the IFRS 16 lease liabilities of EUR 7 million. Our net debt was EUR 28.7 million, and the net debt EBITDA ratio was 3.24. Equity ratio remained solid at 47%. Loans from financial institutions at the end of Q4 total EUR 27.5 million. Just as a kind of a reminder that we still have EUR 3.5 million remaining to be raised from the financing agreement made in 2021. The loan amortization schedule is EUR 1.5 million at the end of June and at the end of December. Thank you. Thank you, Ville. If you look 2023 and what are the key focus areas for us. First is that we focus to get all cylinders in the Robit engine firing. What we mean by this is that the growth in Robit has been driven by Top Hammer segment. Now, beginning of 2023, we implemented a, say, operating model change, and then we have three profit and loss responsible business units, Top Hammer, Down the Hole, Geotechnical. Focus of these units is to especially ensure we have the right sales channel for all of the segments that we were able to drive the profitable growth of all of the three businesses. net working capital continues to be a focus area. We have a group-wide fit for service program launched already end of 2022, and it's focused on improving our, let's say, net working capital management, especially focused on inventory management, but looking also the other elements of net working capital. We saw, let's say, positive results from this program and the actions already in Q4 of the year. Thirdly, we continue on executing on the actions to ensure positive profitability development. We continue to execute on the sourcing saving action plan, as we progress on that, we'll start to see gradually, step by step, improvement on the cost competitiveness side and profitability side. Also, we have a good product development roadmap that is fostering profitable growth by bringing in new products to the market during 2023. As a reminder, our financial targets, long-term financial targets, that is 15% annual growth and comparable EBITDA of 13%. We are showing a positive trend towards those targets, but obviously we have still a lot of room to improve to reach those levels. Robit Board of Directors is proposing to the AGM a dividend of EUR 0.02 per share to be distributed for the 2022 financial period. Finally, our guidance for 2023 is that Robit estimates that the net sales and comparable EBITDA profitability in euros in 2023 remains unchanged or increases slightly compared to 2022, assuming that there are no significant changes in the exchange rate from the level at the end of 2022. Now we are ready for questions and answers. Please, Erkki, go ahead. Hi, good afternoon. It's Erkki from Inderes. Can you hear me? Very good. Actually, I would have... Okay. Yes, please go ahead. Yes. I would have three questions if you can bear with me. Firstly, how big were the costs linked to the rundown of the Russian subsidiary, and were all these booked in Q4? Yeah. The impact from Russia subsidiary rundown, we are talking about couple hundreds of thousands in that range, from the Russia entity ramp down. Okay, thanks. Secondly, regarding numbers, what kind of impact did the operational Forex gains and losses have on Q4 profitability? I mean, you are going to disclose this figure in your annual report. Can you give us. In Q4, it was over EUR 800 thousand. Negative. Negative, yeah. A major significant impact on the profitability. Okay then. Finally, a link to the guidance. It looks very conservative, considering Russia and all the cost headwinds that you had in 2022. Well, I mean, why wouldn't your profitability improve year-over-year? Now, you're guiding practically flat 8% EBITDA for the third year in a row. Why is that? Well, if you think, when we enter 2023, we still had for full year, a good positive impact from Russia. Also Russia was out of the net sales, 8%-9% all in all. You know, effectively, we need to grow the level we will lose as a Russia sales, which because those are going to be zero for this year, pretty much. Sorry to interrupt. You said 8%-9% of your net sales in 2022 was from Russia? Yes. Is that the only reason? I mean, if you're guiding flat sales nevertheless, I mean, for instance, steel prices, freights, and so forth, they have come down quite a bit. Yeah. last year. Will those have impact? Yeah. I said, I think, you know, there is obviously a delay when what you see on the steel price, on the spot price in the market, when it realizes in our, let's say, cost base. As, you know, steel prices or let's put scrap prices, not necessarily even steel prices, in a broader scale, started to go down already mid-mid last year. Still, you know, the realized costs we have have been trending up towards the end of the year due to the delay there is in the kind of open- purchase orders we have, inventory we have, and before that has turned around when the impact starts to see. As I mentioned, the expectation on the, let's say, cost inflation side or cost pressure, as of today, the expectation is that there's an easing up on that front, which then naturally supports the profitability development. The delay is around six months plus? I think it's a fair assumption, yes. Thank you. Yeah, I can continue. Harri Rantanen, SEB. If we start from orders which were down 15% ex Russia, and you mentioned some timing issues in there. Are you talking about customers' inventory reductions, or could you open up that a little bit more? I think partly we are impact is that, I think there is a. We've been living a period of, let's say, heavy uncertainty in supply chain in broader scale. That has resulted that, you know, in many parts of the supply chain, you have a lot of inventory. Now when it's starting to ease up, the, let's say, the supply chain constraint, you start to see that the inventory levels have been reducing down. I wouldn't say that's the only reason in that. I think there was a softer orders all in all in Q4. Partly, I think when the crisis started, for example, on the construction site, there wasn't necessarily that many projects were a bit postponed as we have communicated already earlier, you know. I think we see a bit of that impact also in Q4 orders. Now it seems that there is also already kind of a resuming of those projects, whether they were definitely move ahead, that remains to be seen. At least, you know, there's a fair amount of activity on that front as well. I guess reflecting to Erkki's question about the guidance, it's a tough start for the year that you have a bit of a poor capacity utilization start of the year basing on the orders, and then it takes time before the price and cost adjusts and so forth. I think that's a kind of a fair conclusion that the beginning of the year, given the kind of the softer orders in Q4 and still relatively high, you know, material cost base, the beginning of the year is going to be a bit tougher, what we expect, let's say, as year progress, where we expect the development to go. Okay. Second question is cash flow in 2023. If we are getting roughly flattish EBITDA contribution, what's your ambitions on or possibilities for net working capital and also CapEx for 2023? If you think a bit saying that cash flow beginning of the year is going to be, you know, bit tight. We have already turned the corner on the net working capital development. We have today excess inventory, too much inventory, in our books, and we have clear action plans to deplete that. That will obviously positively contribute on the cash flow as year progresses. I think during 2023, we will get a positive support to cash flow from net working capital development. Even kind of with what we have guided, stable or slightly growing EBITDA level, we should be, you know, in a good positive cash flow situation. Having said that, beginning of the year still is a tighter start for the year. Here you're referencing to the profits. I mean, the working capital should be fine start of the year as you are not really- Yeah. Well, cash flow, cash flow profits, obviously, you know, cash flow is generated from profits and net working capital. Net working capital, the trend has turned and we aim to keep that trend going forward. CapEx in 2023? CapEx in 2023 will be, let's say, not significant. We are going to see some individual bottleneck investments, some ongoing kind of replacement type of investments. We are talking about, let's say, low EUR 7 figure numbers, you know, compared to where we have been, 20 21 even 2022, we expect lower level. Okay. Then on cost of debt, will that change year-over-year, 2023 versus last year? Will the kind of the higher interest rates have an impact? I don't fully remember now, what's your kind of interest rate exposure on that debt? Definitely it will grow, but we have an interest rate swap for EUR 10 million of that senior loan that will take effect at the end of June. That will even out the effect, but we'll see a raise on the financing cost. Okay. Then maybe last, just a small housekeeping question. The negative FX impact that you had on profits on Q4, was there any kind of a positive impact throughout last year on any quarters, any similar magnitudes or? No. I think we had a positive effect for the start of the year, last year, and it kind of even out at the, at the end of the year. Okay. Thank you. If no one else is on the queue, so let me continue. Regarding the negative tax or the taxes that you had to pay for the negative result, was it just the cancellation of the tax asset you had regarding to your Russian subsidiary? It was the Australian subsidiary, yeah. Okay. Now that you have cleaned the table, Could you give us any kind of ballpark figure where the tax rate, corporate tax rate would be in 2023? I'd say in the low, low 20 22, 2021, at that level. Thanks. Secondly, coming to wage inflation. Mathematically, it seems that in the wage inflation played a role already in Q4. What's your take on the wage inflation that you're going to face in 2023? Yeah. Well, I think we are seeing this 4% to 5% range, you know, as we've seen in Finland, but also I think in many other countries. I think that's a fair ballpark figure. Thank you. Finally, linked to your sourcing and the competitive cost country plans that you have are increasing their share. Could you give us any kind of feeling how you have proceeded with that? Yeah. I think we made a steady, good progress and now we have been able to increase the share of purchases slightly during 2022. Now I think in 2023, we will have, let's say, couple ramp-up cases that we are starting to push through our sourcing mix. I think we are I would say steadily increasing the speed on that front. Okay. Thank you. I can still ask one question, maybe a bit broader one. Now we look at last year's figures and it's again Down the Hole and Australasia, which kind of stand out of not growing. Could you talk about kind of the new operational model, the new actions that you are taking? What is concretely now changing going into 2023? How to kind of get all cylinders firing up, as you mentioned before? Yeah. Well, first of all, one concrete action that you've seen also with there's a new leadership on the Down the Hole segment. We drive all of the businesses, including the Down the Hole with, let's say, greater transparency on the business, greater, let's say, ownership by the business owner in getting the results. One key action there is that I think it's fair to say that, as I mentioned on the slides that Robit has a strong sales channel in many markets. We have too many markets where the sales channel, let's say, is strong for Top Hammer segment or Top Hammer business. We don't necessarily have a strong representation or strong channel for the Down the Hole or in some markets on the Geotechnical business. That's a kind of a very concrete step that we take, is that We look the sales channel more business by business to ensure we have the right sales channel for all of the businesses in the markets. I think, in this year, in Down the Hole, we are going to see some new launches in the offering side, in the product side which will then support, let's say, the profitable growth of the business. In Australasia, I think, in 2022, we have strengthened the sales team. Those take time to, let's say, bring results. When we enter 2023 compared to when we entered 2022, we have a much stronger sales funnel in Australia. Again, proof is in the pudding. We need to show that in the results because, you know, it might be that this has been a kind of a pain point for Robit for a long time. I think we need to show that in the numbers as well. I think I have a much higher confidence level today compared to what there was like six, nine months ago. I think we have a very strong sales funnel now in the Australasia market. Erkki? Yes, it's Erkki again. Still one question, linked to pricing. You previously said that in Q4 we should have seen the tail end of your price increases carried out before. How big were the price increases altogether in 2022, and what's the outlook for 2023? Take a basic bit, for instance. How big price increases are we going to see? Yeah. Yeah, obviously it's also kind of a mix what you, what you sell, which market you sell. I think the overall 2022, I'd say like high single-digit numbers that we would be talking about. 2023, you know, there's going to be a modest change, but lower than what we saw in 2022. Okay, thank you. Any other questions? All right. If no other questions, we thank you for participating the event.