Ladies and gentlemen, welcome to Uponor's Capital Markets Day 2022. My name is Franciska Janzon. I'm from Uponor's Investor Relations, and I will moderate the event today. Our big theme of the day is Uponor's new group strategy and new financial targets, which will be covered in the presentations. Starting with the presentation from Michael, our President and CEO, on the group strategy, followed by presentations from Karsten, Sebastian, and John, taking us through the strategy execution in their respective business divisions. After that, we'll hear from our CFO, Markus, on how the strategy will affect us in financial terms. We very much encourage you to send us questions throughout the day. There will be a short Q&A session after each presentation, and then we also have a joint Q&A at the end of the event. To submit a question, you can send it through the webcast platform. Before we start, I would like to draw your attention to the disclaimer, as we might be making forward-looking statements today. With these practical details, I wish you warmly welcome, and I welcome our President and CEO, Michael. Welcome. A warm welcome from my side and from a sunny Helsinki. In the studio, I'm here with my colleagues, and I'm very, very happy to present to you our new strategy and how we create value. This is a digital event for obvious reasons, and hopefully next time we can really meet in person at one of our sites where we can show you that Uponor is more than pipes. Before I come to the official presentation, to the strategy, let's talk a few minutes about the very special situation we are currently in about the Ukraine and how we handle the situation. As you might know, two weeks ago, we have suspended all the shipments, and we haven't accepted any supply from Russia and Belarus. This was a tough decision, but I think the right decision. More important than the business we are talking about in these countries, we take care about the people. We have an organization in Russia, about 90 people, 4 people in the Ukraine. We are in permanent contact with the people in both offices. So far, they are doing okay, and our teams, especially in Europe, they've really taken care of their colleagues and make sure they are in safe places. Some of the families have been, or could be evacuated. I think that's really important. It shows also the heart of the Uponorians to take care of their colleagues. Again, this was just 2.5% of sales, but of course, the tragedy and the human impact is much bigger. Of course, this is something we deal with, and we are more concerned about the mid- and long-term implications for the people. This is so far everything we could do, and we really took care of our organization. Let's come back to the agenda of today and the question how we really create value. We have basically two themes you need to remember from this session. We create value by maximizing the core and sustainable innovation. We are well-positioned to benefit from mega trends, net zero, productivity, and clean water. The good thing is, really, we have a strong base, a strong starting point. We can maximize the core, looking at more opportunities in the countries with existing customers, channels, and categories. Driving productivity, looking after our OpEx and investments. That's really good. Our starting position is good, and we want to be systematic and looking after opportunities with the resources we have today because this is what we can start to implement today and tomorrow. Secondly, a step change in innovation, technology, manufacturing technology, and last but not least, our people, our organization. That's so important because innovation and technology is in the DNA of this company, deeply rooted. What is our starting position? What is Uponor like these days? The starting position is very, very good. It's a EUR 1.3 billion company. It's highly profitable. Last year was an exceptional, a record year, EUR 160.5 million of operating profit. 4,200 Uponorians work in 17 sites and offices. We have three divisions. Two-thirds of the business is in Europe, with Building Solutions Europe and Infra. 1/3 of the business is in North America. We have three business categories: Infra, Indoor Climate, and Water Systems, which is more than half of the business. We operate in more than 80 markets. The good news is, nowadays, that 1/3 of the business is in U.S. and Canada, so it's well-balanced, and roughly half of the profitability comes from North America. The biggest market being United States, Germany, Finland, Sweden, Canada. You see also here, Russia is just 2% of the global business. It's rooted, Uponor is rooted with strong foundations. It has excellent international presence and leading positions. This means number 1, 2 or 3 position in the marketplace. Uponor also has a heritage, 105 years heritage of innovation, technology, sustainability. I would even say more, this is one of the few companies who could really disrupt itself because they started a business 105 years ago, totally different business. Then back in the 1960s, they changed their model completely. Innovation technology is in the DNA of this company. In the 1980s, the company decided to go for one global brand, and that's fantastic. One brand in more than 80 markets with great platform for even more global expansion. The good thing is our scores, NPS scores, are really high, and the customers, not only the ones who buy us, but more importantly, the ones who put us into the house and the buildings, the plumbers, they love this brand, and they love this for very specific reason I come later to. The company is also built on strong culture. When I joined, I was looking, of course, at the engagement factors. I say, "Is this a group of motivated people?" Yes, it is. The engagement scores are really leading in our industry. We have a highly motivated team at Uponor, and that's really great. What is this leadership team about, you're meeting here today? I'm really proud of this team. It's a highly experienced global team. Karsten Hoppe from Europe with a blue chip background. He runs from a sales point of view, the biggest organization of Uponor. Sebastian has a really strong experience of the infra business. John, as Interim President, he runs the Americas. In January, Markus joined us as CFO. This is the team, and of course, you see it is very diverse from an industry background, not so diverse from a gender background, but this might change. Let's really talk about the heritage of innovation I was talking before, and this is really important. I made the choice here to just cover the last 10 years of Uponor. Back to 2009. This was the company putting in the first modular press-fitting range. In 2010, the first self-attaching underfloor heating Klett system into the market. What is the result? This system can be implemented by 1 plumber and not 3 or 4, so it is highly operational and saves time to implement. That's really important. Since 2017, we have really accelerated our efforts to invest into prefab solutions. That's important, we continue to do this and just about to install a new site in Sweden. In 2018, we continued to really cope with the demand, the increasing demand of PEX pipes in the United States and launch a new manufacturing site. In 2021, we were the first company launching a new product called the Ultra Rib 2 Blue, which has a 70% carbon footprint reduction. This year, the PEX pipe, the blue version, which up to 90% carbon footprint reduction. Innovation, manufacturing is really at the heart of this company. This is all rooted on what I would call the megatrends. What are they? These innovations don't come by surprise. They are rooted on three main megatrends, and you could almost say they are absolutely not new. A demand solution for contributing to net zero. More than 30, up to 40% of all the carbon emissions are coming from buildings. Of course, it's obvious there's a need for more sustainable heating solutions. Consequently, there will be an increasing demand for sustainable products. Secondly, labor will be short. I just heard the other day a statistic in the area where I live in Frankfurt, a quarter of all the plumbing companies will exit the markets in the future because nobody finds a successor. The owners are 60-65 years old, and they hardly can find a successor here. Labor will be even more short in the future, and that's a phenomenon across Europe and across the Americas. We need to have strong demand solution for easy to install, saving time, prefabricated system and integrate system and making sure we develop the company from components to systems. There's the demand for safe and clean water. The expectations are really high everywhere in the world for high water quality under all circumstances. I believe I'm a big fan really to cope with this demand because that's probably not something which is obvious. For a Finnish company where the quality of the water is absolutely excellent in most European markets in the United States. In the world, this looks really different, and we should really look into more innovation exactly in this sector. Three megatrends, and they stay. Let's really look what will accelerate these megatrends. When the European countries said, we want to go to net zero by 2050. 2050, net zero. What does this really mean for our sector? I mean, there are other sectors who also need to contribute. But for the construction sector to get there, to get to net zero, this means from today, new buildings need to be 100% fossil-free. Wow. It also needs to be a renovation which is double the pace as of the previous years, double the pace of renovation. I'm not sure where all the capacity should come from. Then after 2025, there shouldn't be any oil or gas boilers. Of course, the current situation, I mean Ukraine and the challenging environment now, will even put from our perspective, more pressure and accelerate this whole trend. You see on the right side, and of course this study is a few months old, and it shows there's an increasing accelerating demand for heat pumps. Demand is not an issue in this industry, and especially for us. The current situation in high energy prices, and everybody feels in business or privately, this will put even more pressure on the system. At the same time, we need to, of course, cope with higher prices, higher input prices. How are we really coping with all this? I just want to make sure you take away one big thing. Uponor is more than pipes. Because you see really, we are almost a network provider for the energy and water in your house, starting with segment number one, it's the indoor climate. Basically, that's also the system where Europe, Uponor in Europe is very popular. If you think in Europe about Uponor, it's the indoor climate sector. This will be very, very much driven by the increase in heat pumps, renovation. We have a whole portfolio here of underfloor heating and cooling system, digital energy monitoring, heat interface units. A lot of really different technologies which supports this segment. There's more to come, and our colleague, Karsten, will explain to you later how we really build up this portfolio further. Our biggest segment, however, is water systems. This is where the United States, this PEX pipe is really great, and we think there's even more potential back in Europe. 55% of our portfolio is in water systems. Last but not least, infra. Infra also is more than the famous 3.5-meter diameter pipes. It has storm and sewer solutions, water monitoring, district energy solutions. Over the years, they have really nicely improved their margin by changing their mix, and that's really a high achievement in their sector. We innovate in all the three segments, and that's really, really good. What does this really mean for the future, for our numbers, and what's our ambition? Let me show you what we plan to do. Basically, the last two years have been excellent. 2020 was excellent in getting the margin up, 12% operating profit. 2021, we showed a 16% growth in sales. When you go a bit back and truly look at the numbers, the company hasn't been growing for a long time. Recent performance has been very good. In the long run, it was a company which has a bit underperformed in terms of sales, and we want to change this. In order to do this, we have a two-stage approach. Number one, it's the first stage, 2022-2024. We look at organic growth over and above 4%. Over and above 4% means gaining share and achieving over and above 4%. Really, we want to give you a concrete commitment growing over 4%. At the same time, this goes along with growing share. At the same time, we want to keep the 12% over and above 12% OP, which is, I think, very, very good. We take these three years to invest into the growth pipeline to drive innovation. From 2025 on, we have ambition for more. More growth and more profitability. I think it's a fantastic journey for the future. What does this new strategy really mean, and what's our focus? What does this really mean specifically? We will have a more active growth agenda supported by organic growth, commercial excellence, and selective M&A. Markus, our CFO, will talk to you later through what we plan to do. An increased investment in our focus areas in innovation, in technology, net zero and people. While the company has been always very good in looking at OpEx and productivity, yes, we will absolutely remain there, but at the same time, we increase the investment in innovation. If it's the right innovation, gross margin will go up as well. This is really important. The mix needs to improve. Of course, the group role will play a bit more active role in collaboration across the divisions, and you will see later how the division colleagues talk about the synergies and how they collaborate together in the future. I think it's very important the company is based on strong divisions, but at the same time, we look at strengthening core competencies. I take one example, strategic pricing. When I joined in, back in August and raw material prices were going through the roof, we sat together as a team and really changed the pricing policy and how fast we can pass on prices. This was a bit of a evolution or call it revolution in the company. This is one of the examples, and there will be more. Maximizing the core means the following. It's very important that everybody understands there is a lot of potential still with the status quo of the current portfolio. I call this good news. We can still grow in Europe and in Americas with the portfolio we have. Very often you have companies where commercial organization sales will say, "Yeah, we have a good portfolio, but if I only would get this or this," then you have a bit of an organization which can only sell what we don't have. Now, at Uponor, we have a fantastic portfolio, and we have room to grow in Europe and in Americas, by country, by customer, in channels, and by category. The same is in North America. When I was talking to my colleagues in North America and say, "What should we do beyond PEX?" They said, "Michael, PEX is still an innovation in some of the market segments." I'm saying again, we need to do both. We need to grow the core and maximize, and it's highly profitable, while we start to put our effort into new things and diversify. This is an example of the growth opportunities in multiple markets. This is the view by country, and I haven't put in on purpose market share. I put in here the net sales per capita. You clearly see, and it's no surprise, your home markets are on a very high level. It's up to 5-6 EUR per capita per year. This is the dark blue. You also see markets like Austria or the Netherlands are on the high range, and you see the mid-range are markets like Germany or United States. There are also other markets like Italy, Spain, France, Belgium, U.K., where we have a lot of potential. This is what I mean by going after this market really systematically. The good news is we can do this at short notice. When Karsten Hoppe later talks about Europe and his great performance achievement over the last two years, that's basically the recipe to grow with the portfolio. That's really good news. Growing the core and innovation. What does this really mean? We have basically three elements. Number one, we look after high-performing systems to drive energy and water efficiency. This is what we are after. You see, for example, there's this product called Ecoflex VIP. What does it do? It reduce 60% the heat loss. This is exactly what we need nowadays, right? Secondly, we look after material efficiency and transition to renewable and recycled materials. PEX Pipe Blue reduces 90% the CO2 footprint. With all the crazy world we are currently facing, these targets are really long-term, and they don't go away, and we will continue to do the right thing and put our effort on sustainability. Last but not least, productivity, the easy-to-install systems. This Combi Port E, for example, reduced the installation time by 75%. I think that's just great, and this is what the market is looking at. We can be really, really flexible. Three elements you need to remember. High performance, material efficiency, and productivity. That's the recipe for the future. The message here is, you will see more. When I was talking to my customers, and I know them for more than 10 years as I worked in this industry, they say, "Michael, we love this company. We love this brand. Just dial up the innovation agenda." It's very, very good. We have workshops going on to collaborate together and develop an innovative portfolio. I'm really proud also of Uponor's sustainability agenda. Before everybody was talking about ESG and new targets, and it has been becoming a bit fashionable, Uponor has done the right thing anyhow. The greenhouse gas emissions went down by 74% since 2015. This is on average about 20% per annum and double the pace versus our dear competitors. We looked at the products, this Ultra Rib 2 or the Ecoflex VIP, but also we look at our safety targets and could reduce the LTIF by 63% over the last five years. Every management meeting starts nowadays with how are people doing? Did we have an accident? What's going on? Nowadays, of course, Russia and so on is highly on the agenda. It's always the first agenda point. Of course, this is also the company which first committed to the Science Based Targets initiative. Uponor is really leading in our sector. What does this mean now for the future? We have set ourselves very specific targets by 2027 as well. We continue to reduce the greenhouse gas emissions. Also for our portfolio, we want to have sustainable alternatives for half of the portfolio. Want to make sure when our customers, they have the choice to go for the sustainable products. They might be a little bit more expensive in the beginning, but this doesn't mean that we don't have an alternative. That's really important that we don't get called out one day, and then we don't have time to develop, because developing these products takes time, could take years. I'm so happy that Uponor has something already in the pipeline, already launched, and we want to dial up this innovation process. On the employee side, we have a fantastic strategy called People First, and we want to clearly become a top employer. In the United States, Uponor, about EUR 500 million company, is listed under the top 3% of all the U.S. companies. It's a true top employer in the United States, and I think the team over there they can be really proud. I talked briefly about diversity, and I mean, really diversity goes beyond gender, but clearly this industry lacks female in management positions. We have currently 20% at the top fifty, the top 50 of our team, and we really want to double this over the next midterm horizon. I think this will be great. We put an effort there as well. We have top-tier engagement scores, and we have a zero accident ambition. Every accident gets reported to us and our board. From a society point of view, clearly this is also one of the strengths I've seen at Uponor. They are really deeply rooted with the local environment, and that's really, really good. We want to do two things. 1, we want to make sure that we collaborate with our top 25 customers to make sure this agenda really gets implemented. The second thing is, I really encourage our local teams to really deliver these social programs. The current situation I talked in the beginning was a great example how proactive everybody operated in the company. I'm really proud of. For the first time also, we have integrated the ESG targets into our STI and LTI programs. What does People First really mean? Here's the agenda, and this will be kicked off in our management meeting in early April in Spain. It's really building a world-class global team with a mindset of performance. We really want to attract the best people in our industry. We really look at diversity in many areas. We want to be a differentiated employer. I very often say, you know, "Is this a company where our kids want to work?" This is how we need to really design this company. Uponor is a company where young talents can really make a difference. We look after health and safety. Really summing up here, we want to create value, and this goes beyond sales and profit. We want to do this by maximizing the core and sustainable innovation. The company is in good shape. We are well-positioned. A few months ago, people could have said, "Wow, the balance sheet," somebody called it even lazy balance sheet. What are you doing and investing? Today, I would say we're in a good position here. We have options. It's great to have options. My CFO says, "Michael, company is in good shape, I can sleep well." We can really start an innovation agenda from a solid ground and can benefit from the trends, net zero, productivity, clean water. We have a fantastic agenda looking at maximizing the core. I will personally really look into the innovation and technology agenda because this is what really differentiates Uponor versus competition. We need to have an interesting portfolio like one of my customers said, "Michael, this is what we're expecting." Uponor has a heritage of innovation. Uponor is almost seen as a disruptor and dial up the innovation agenda, and this is exactly what we do. I'm open for any questions. Thank you. Thank you, Michael. We have a few questions online. The first one from Marko Moilanen. As we all know, the green agenda is all about getting rid of fossil fuels, and we know that Uponor is making its products from plastic made from oil. Do you think there is a risk that regulation will, at some point, ban the use of plastic water pipes in buildings and in infra? I don't think so. I don't think so, but I think it's a very, very good question. I think we need to look at all the, let's say, the different material options, and this is why we have been one of the first looking at, you know, this bioplastic, called bioplastic. I don't know even what the exact term is. This is one of the things where we have moved the company from just looking at performing products to renewable, ingredients, and that's important. Will it ban these products because they are made of oil? I don't think so. Thank you. We have a question from Anssi Raussi from SEB. At this point, do you have any estimates how long it takes to exit Russia, and what kind of expenses are you facing before the exit is complete? I understand that it is probably impossible to give any precise estimate, but any kind of plans so far? I can't give you any details, but I would say, as I said in the beginning, the impact so far is not really big. We have just 2.5% of our sales both in Russia and in Belarus. I said until further notice. Until further notice, there's still hope that this situation might change. We have acted very swift, but at the same time, we need to look at different options. We are currently, of course, looking into this, but I can't comment further at this time. Thank you. A question from Svante Krokfors. Where do you see best opportunities to outgrow the market, splitting into Building Solutions - North America, Building Solutions - Europe and Infra, or Water Systems and Indoor Climate and Infra? Whoa, these are six questions in one go. That's very good. I mean, number one, I think we put the agenda where we have our strength, not our weakness. We have the strength, clearly, in the Water System in Americas, and we continue, of course, pushing our efforts on PEX pipes. At the same time, this fuels innovation. While Karsten in Europe is dialing up the indoor climate because this is his strength, at the same time also, he looks at innovation too. Infra, this is probably, I think, the area where our investors should have a close look. This is, you know, more than these regular pipes. They've developed their portfolio over the years, really from components to solutions. It's always a combination of core and innovation. Thank you. Now a question from Paul de- Thierry: Which technologies does Uponor not have yet that it would like to have? Which technologies can Uponor develop in-house and which technologies would need to be acquired? That's a fantastic question. I think, you know, when it comes to our core products, of course, we have a lot of innovation and capabilities in-house. The second what I would answer is, really, I talk to many of our engineers, and they have a lot of ideas beyond what we currently do. I would say, before I answer this and say we go outside, I believe 95% of what we need to do is already in our company. What's missing, we buy, clearly, but I think that's it. We have time for one more question. What were the key things that you learned during your time with GROHE, and how can these experiences positively impact the Uponor Group? My key experience is really these markets, they are looking for great brands, global brands. Uponor is one. They are looking for differentiated technology. This is what we're really working on. Secondly, we need to have an answer for sustainability challenges, and this is probably where Uponor is positioned best. Because clearly, while the other company is talking a bit more about design, this is talking about the sustainability agenda. Of course, I mean, the importance have increased big time. Thank you. We will continue with questions for Michael at the joint Q&A, but right now, we will move over to Building Solutions Europe. Unfortunately, Karsten could not join us today here in Helsinki, so we will be listening to his video message, and his questions will be taken also at the joint Q&A. Thank you, Franciska, and good morning also from my side, and welcome to Building Solutions – Europe. Building Solutions – Europe is the largest division within Uponor, representing 43% of total net sales, and it is well-positioned for future profitable growth. Why? First, we made a very successful turnaround from flat growth to 7% CAGR, and at the same time, we doubled the profitability to close to 13%. With this growth, we also strengthened our leadership positions in key product segments and geographies. Second, looking forward, we have all the ingredients for further acceleration. Let me just highlight two key elements here. We have a full five-year pipeline of new product and services supporting the growth and profitable development. These innovations are directed to support our unique position for integrated systems offering in the water and indoor climate systems in the buildings. This brings several advantages to the customers, like better performance of the system, less investment and operating costs, and less interfaces in the project management for faster project execution. I would say the foundation is set and multiple opportunities for future profitable growth are there. Let us now dive a little bit deeper in our recent history to understand where the division came from. Uponor's Building Solutions Europe has been, in the decade before 2019, not seen any organic growth and no breakout in double-digit profit numbers, with this lagging behind peers, losing market share in a growing construction market. With the launch of our Double Up strategy in 2019, a clear guidance for leadership was established, resulting in higher growth and profitability. Several initiatives have been kicked off, helping in the turnaround. Just let me highlight two here. First, the Operational Excellence program, in which we streamlined the organization, the locations and processes with over EUR 17 million in savings, of which 50% had been above the gross profit line and 50% below. Second, our rework of our pricing approach in key countries. We increased the net sales price pull-through by reworking pricing structures and reducing complexity between countries and customers to create an approach which is towards more pay for performance. The result was doubling our OP margin to close to 13% and the gross margin increase by 4%. On the top-line side, we benefited from being right on spot at the mega trends, and Michael had elaborated on that already in his part. Also from our revitalization of the product pipeline with innovations like S-Press PLUS fitting and Ecoflex VIP LHD pipe, we are benefiting. Furthermore, we invest in the sales and marketing excellence to create more customer pull. Our biggest lever here is the rollout of our Salesforce CRM Ucompass to 25 countries. It will create the transparency needed and opportunity that's in the market along potential-oriented steering, and it brings all phases of projects together, from planning, engineering to installation. It is a prerequisite to continue on our growth trajectory. The result is a 7% net sales CAGR since 2019, and it will include the full year net sales of our acquisition, Capricorn. It would have been 10% outperforming the market and most competitors. You can see I started in 2019, and we basically fixed and maximized the core there. Now there's still more room to grow, and we are ready to take it. As you well know, for profitable growth, the leadership position is a key driver. The result is a 7% CAGR since 2019. If we include the full year net sales of our acquisition, Capricorn, it would have been 10% outperforming the market and most competitors. You can see since I started in 2019, we basically fixed and maximized the core. There's still room for more, and we are ready to take it. As you well know, for profitable growth, the leadership position is a key driver. Let's look at our position in the market in key segments. We have four main product segments in which we have between 10%-15% market share in Europe. Let me briefly explain the segments to you. The first one is water system, and there we bring clean drinking water to the user in a building and out again. Products in these categories are, for example, riser pipes, which are big up to 110 millimeters, distribution pipes, mainly 16 millimeters, fitting valves, special equipment like our digital flushing unit to avoid Legionella contamination. Second, radiant heating and cooling systems. This is our heritage, where the main components are the radiant pipes from 9.9 millimeters in our Minitec renovation solution up to 16 millimeters. Panels for insulation, manifolds for controlled flow, and control units to manage the room temperature. These two segments represent over 80% of our net sales in Building Solutions – Europe. The other two segments are our, you can call them rising stars. That is number three, the heat interface units. These are the interface between drinking water systems and heating system. Heat interface units use heating energy to provide hot drinking water on demand, and that is around 30% quicker than if you would use it with central heating units. Finally, number 4, the entry point into the building. Our local heat distribution system, which connects the heating networks of a town to the building. The key here is to minimize temperature losses during the transport. As you can see from the different color shadings, in drinking water systems, radiant heating and cooling and LHD, we are holding the leading position in most European regions. For heat interface units, this is only the case in Central Europe. This is also one explanation why we believe that we can still accelerate our growth. In markets with leading position, we will benefit from our offering of system solution. Meaning we are bringing additional product lines into the building, into the project. In the markets where we are still in a follow position, that means we have huge additional growth opportunities, as we want to catch up there and reach a similar level like in the other markets. Out of this understanding and position, we derive our ambition to become the European leader in integrated, sustainable water and indoor climate solutions. We base this ambition on two strategic pillars. The first one is to leverage the shown top positions through our sales excellence initiative. To go wider, so more relevant customer projects. Go deeper, more product lines. Go earlier, meaning covering all planning phases. Our Salesforce CRM will provide the data foundation for that. Already during the implementation, we discovered untapped potential through a more systematic data gathering with CRM. We will drive towards a potential-oriented steering, which will optimize the time and outcome per visit and customer, allowing our sales rep to target the right big fishes and to do more visits, and finally, do more sales. Our second strategic pillar is innovation and systems offering that are addressing key needs of the industry, productivity and sustainability. Out of our 172 unique new product launches in the last three years, let me provide you two very practical examples. First, Ecoflex VIP. The already mentioned newly vacuum-insulated LHD pipe. It helps both productivity and sustainability. As the insulation material is significantly smaller in diameter, the professionals need to dig smaller trenches, can do the cutting quicker, and the bending, of course, is easier. That results that the insulation time is up to 20% less. Two, the new insulation solution. By the way, the original came from the medical sector for temperature-controlled transports and was used to transport our COVID vaccines. Through that, our heat loss is up to 60% less, providing a strong advantage for LHD providers and the end users. Another example is our prefab solutions, which will boost productivity in the industry and help against the lack of skilled labor. We already sell prefabricated systems like manifold station, HIU and full prefab wall systems. That brings me to our four key growth driver to accomplish this ambition. We have four growth drivers supporting all four product categories, and these four drivers are all interlinked. I touched already on the first two. New products and services, and merging these to one offer covering the application, creating integrated prefab systems. Number three is based on our geographical position in different countries. We have great catch-up potential in geographical markets with lower market share like Italy, France or U.K. We will utilize our mentioned sales excellence toolkit to drive systematic demand for our customers here. Or in other words, you could say we do active pull creation. In addition to gain market shares, we also selectively consider M&A as we did with Capricorn in Poland. The number 4 growth driver is addressing the building and construction types. Our growth potential lies in winning more projects with our portfolio within the multi-family home segment, as this segment is 40% bigger than the whole single-family home market. That single-family home market is our historical stronghold. The market is furthermore split into a new build and into a renovation sector. We are currently more in the new build-oriented. However, the renovation market is 54% of the total market, and that again offers a great opportunity for us to grow further. All this will support our unique position. This house that you see here shows and explains our unique positioning in the market best. Uponor offers today the two key water systems in a house, and that applies for single family homes, multi-family homes, and other building types. The drinking water system on one hand with risers, distribution pipes and sewage, here shown in blue. The radiant heating and cooling system on the other hand, with radiant pipes, manifolds, smart controls, and even digital energy monitor, here shown in red. The interface between the two systems is a heat interface unit. All the remaining parts here shown in black, we need to be able to integrate and manage, but not necessarily own. Uponor has all the elements for these two systems, all the capabilities to integrate and to optimize them. Imagine this is your house, and it will be a quality sign if you can say it is built on Uponor integrated system, as this means optimal material usage and high quality, optimizing the energy usage in the house, and supporting the energy transition from fossil heat sources to heat pump and solar, where Uponor offers the needed solutions. Bringing both water cycles into one solution is our sweet spot. That is why our ambition is become the European leader in integrated water and indoor climate solutions. With this, I conclude my part. What I would like you to take away from Building Solutions Europe division is strong foundation and market position after the turnaround in sales and profit. Unique position in the market as integrated water and indoor climate solution provider and innovator. Last but not least, not to forget, a strong team to execute on it. I can say we have a really good opportunity with all this at hand to provide profitable growth and take further market shares. Thank you. Thank you, Karsten. With this, we now move over to Uponor Infra. Sebastian, welcome. Good afternoon, and welcome from my side as well. Today, my message will be that Uponor Infra is much more than pipes. We will continue to grow where we add most value to our customers, supported by megatrends. Megatrends like climate change, urbanization, and clean water. We have an improved performance, a stable business to build on. We will strengthen our position in Northern Europe by increasing solution sales, and this too will help us to continue to drive profitability going forward. Let's have a look at what we have done. Starting point is that we have a strong margin improvement that is driven by turnaround actions. The turnaround actions are twofold. First of all, we have divested our business in Thailand, in Canada, and in Czech Republic. That means that we have a focused business in Northern Europe. We have streamlined our production footprint in Nordics. We went from 10 production sites to 5. These two things together means that we have a focused, streamlined business in North Europe to build from. At the same time, during these years, we have also been able to have a double-digit design solution sales growth, where we add more value to our customers, and by that, also improve our margin profile. Now, looking at the chart on the left-hand side, you can see how we have developed. We have taken out the divestments that we have done in 2017 and 2018. You can see the gray dotted line and the red orange line that shows how the operating profit performance has improved year-on-year. Yes, in 2021, there is a drop, but still the trend is good. What happened in 2021 is that we experienced unprecedented input cost increase, mainly driven by resin prices, and then we had to transfer those price increases, cost increases to the market. The time to transfer the prices to the market is what you see also in reduced profitability. One of the important learnings and activities like Michael also referred to, we've talked about pricing, and that means that we have now been able to improve the agility going forward on this topic, and this is a job that we will have to continue to work on. We have a clear focused business in Northern Europe, streamlined footprint, and with a successful operating profit development. This is a good place to be to look forward. Let's go and have a look at what our ambition is. Our ambition is to be the most valued partner of sustainable solutions in infrastructure. When it comes to sustainability, there was a good question already given to Michael here on what is the plastics role in the future in piping and infrastructure. What I would like to say that if you talk about plastic products, then to put plastic into products that last hundred years is the best place to put it in. In that respect, this is an area where we see that plastic will remain for a long time forward. At the same time, Michael was also talking about the blue products. The blue products meaning products where the CO₂ values go down reduced by 70%. These products are produced by waste from food processing industry. There is a route to plastics also from totally non-organic or, let's say, non-oil based products. That's far in the future, but we have those products already available. The profitable core for us, that's where we will have to innovate, and that's how we want to look for also opportunities to add value to our customers. To do this, we have invested in a totally new organization in development. We have a new leader, and by the end of this year, we will have doubled the resources in product development. We have also invested in or renewed our offering organization with product management. Also here, we have added new capabilities to be able to innovate the core. We have as well invested in digital marketing skills and product data that is very relevant for this segment in the Nordics. These products mainly go through distribution, and there is a big channel going through the web channel as well. Looking at investing also into solution capabilities, our idea here is to continue on our design solution sales, experience and success that we have had. Now we will invest further in our sales organization, technical sales skills, and we will also develop our application knowledge. That means understanding our customer needs, not from a product point of view, but from a system that they operate, and this way we can add more value to our customers, which gives more value to us. These are ways of us through the profitable core, product innovations and the solution understanding to improve our mix as a whole. On top of this, we will continue to deliver on our productivity improvements. This is based on our continuous improvement culture that we've been working on many years, focusing on safety, quality, on-time delivery, and efficiency. This we are doing for the benefit of our employees and our customers. We will also innovate and invest into automation in our production sites. We have a good setup here to build on a good track record and now investing into profitable core and further solution understanding on a good platform. Let's have a look at what this profitable core is. On the top here, you can see the different applications we are present in. On the left, you see the main markets where they operate. In Finland, we have a very strong market position. As we can see, there are opportunities in some other markets and applications. The profitable core is the three top applications: sewer and stormwater management, wastewater management, and in-house drainage. That's the profitable core, and that's also the area where we will invest a lot of product development to innovate the core and understanding on the solution side. Cable protection, pressure systems, district energy, we will continue to work with our customer and leverage our good footprint that we have here. Now let's take a look at the sewer and stormwater area specifically. The reason is that, you know, the infrastructure market is growing 1.7%-1.8% every year. The sewer and stormwater market we expect to grow 3%-5% per year, and that's an area that we will work closer with. In this picture, you can see suburban areas on the left side, and on the right side, you have an urban area. You know, all of us have experienced flooding somehow, either through wet feet or a cellar that has been filled with water. It's on the TV, everybody sees it. The reason for this is basically three. One is climate change. That means stronger rains in shorter times. The second is that urbanization drives more buildings, more roads, which means less area to absorb the water, and again, you need to have stormwater solution to solve this. In the middle here, we have an urban wastewater and stormwater treatment plant. As the amount of storm water or let's say stronger storms come, the capacity of the wastewater treatment plant potentially can't handle it. What happens, there is a backflow, and the water flows into the river, lake, or sea untreated. This is, of course, not what anybody expects anymore, so there is investment in separating the sewer lines and the water, stormwater lines. This again giving us opportunities for investments. The network providers and the utilities, their job is to make sure that the stormwater, the sewage water is treated before it is sent to the rivers, lakes, or sea. That is what the society, you and me also expect. Let's look at just a few products that are on this map, but I can't go through all of them. Let's have a look at a few of them. On the left side, there are some chambers that are used for the suburban areas, smaller capacity, 75 liters per second, for instance, kind of things. On the left-hand side, there is a filtration unit. In the middle, there is a flow management system that actually makes sure that heavy metals fall into the bottom. Then we have the vortex chamber that separates fat and other debris through a circulation move. On the right-hand side, there is a Uponor Vault. This combines all of these three things. Basically, the stormwater comes in from the left, we clean all the debris, leaves, branches, and plastic bags. The flow goes into the vault and slows down, and the sediment, the metals and other debris falls into the bottom. Finally, it flows through a filtration of limestone that takes bacteria and other debris as well, finally, and then the water flowing out is clean. This way, we participate also to ensure that there is a clean water environment around us. As you can see, this is much more than pipes. To summarize, we will continue to grow where we add most value to our customers, and this is supported by megatrends. We have a stable performance and improved profitability. We will strengthen our position in Northern Europe by focusing on solution sales, innovating the core, and this will drive profitability. I have a very strong team in all the markets and in my management team, so I feel very confident on the way forward here. Really exciting times. Thank you for listening. Thank you, Sebastian. Now let's move to some questions. We have a first question here from Christopher Arnemark. Plastics are derived from oil. Are your current price hikes enough to offset the cost inflation in the Uponor Infra division? Yeah, that's a very important question, and this is what we are working on. It is like that normally we have to give our customers some time to respond to a price increase. We announce a price increase, and then we have a lead time to implement this. Obviously, when that lead time is over, there is a new price situation in the market. We have to continuously work on this, and of course, that is exactly what we are doing. We try to look forward, assume the market price of resins, and then we announce those prices to the market. Thank you. Sometimes we miss, and that has been the situation last year when the situation is exceptional. The answer shortly, this is our job. Thank you. Next question from Anssi Raussi. Seb, could you remind us what is the share of sewer and stormwater management products and systems of Infra segment? That's a good question, and actually it is close to 40%. Another question. According to your reported data over the years, Uponor Infra has not been growing. Why do you think you can grow now? That's also a qualified question, I would say. The situation is like that, you know, if you remember that I said that we have closed 5 production units in Europe, we have divested 3 businesses. There has been a lot of internal focus. Why we are confident on this is that we have very strong relationship with our customers that we have built over the years, and we have design solution sales growth that we can also internally refer to, which we have not reported openly. Thank you. You have a significant minority owner in Uponor Infra. Would you like to own it fully long-term, given your strong balance sheet? Are there some pros and cons with having a large minority owner? We have a very good minority owner that I have worked many years with, and this question obviously goes to the owners. This time I don't have more to say. Thank you. Where are you seeing the most component inflation in 2022? How do you pass this on, and how often? Where do you see the most? Component inflation. Okay. This year. The inflation pressure, the biggest inflation pressure, if I understand this correctly, is on the resin input cost. We have energy cost increases and probably also going to have logistical cost increases, but the resin price increase is the biggest inflationary pressure on us. Thank you for these. Now we move over to our North American business. John, welcome. Good afternoon. My name is John Reuter. I'm Interim President of Uponor North America, and excited to be here today to share our story of North America, where we've been, where we're going. To remind everybody, Uponor came to North America about 30 years ago. We're headquartered in Apple Valley, Minnesota. We've built the business now to 1,000 employees. We introduced PEX to that market, introduced it in plumbing and introduced it in radiant heating and cooling. We've mastered the Uponor system with a cold expansion. We've built this business over time. It's a proven, successful formula in a growing market. We have a track record of strong, profitable growth. We're well-positioned to accelerate that growth in both water systems and indoor climate, where we have a leading PEX position. We have an opportunity to expand this leadership position through new channels and new offerings. A lot of this is rooted in the people. As Michael mentioned, we're recognized as a highly engaged company. We are. Within Minnesota, we're the highest-rated manufacturer by employee survey. We're also recognized at the top within the entire country, as Michael mentioned, a distinction only 3% of all companies get from an engagement score perspective. We're very proud of that. It's more about what we do, but how we do it. When you think about what gives you highly engaged employees that are focused on customer solutions and customer experience, well, it delivers strong, profitable growth. Here you can see over the last 5 years, but even going beyond this, it's been a very profitable business for Uponor North America. We've accelerated that as of late. You can see we've gone from a 7% CAGR, accelerated 5 points to 12% over the last 3 years. Meanwhile, we've built the bottom line. We've gotten leverage in the P&L during that time, not just growing top line, but bottom line as well. That's up and down the P&L. That's managing good price discipline, that's getting efficiencies in the plant, and that's managing our bottom line and operating expenses. We believe we have a leading position within the single-family residential homes, where 1/3 of all homes that are in the U.S. have Uponor pipe in it. To put some perspective on that, there were 1.6 million new home starts last year. 1.6 million. One of every 3 homes had Uponor pipe in it. This is 16% growth over 2020, so this market continues to grow. One point six million new home starts was the first since 2006. You go back to the financial crisis, this is how long it took this industry to rebuild back. There's a shortage of affordable housing in this country, in the U.S. One point six million since 2006, 16 years to grow that back. A ton of opportunity still. This growth has been supported by the boom in the housing market. Expansion, our expansion in the commercial construction space. There's still continue to grow, to share within this metal space in copper, particularly in that commercial space. That's through performance, quality, and frankly, our very big value driver of labor efficiency. Again, if you recall, this pipe, while it's, yes, less expensive than metal and copper, it really, it's in the system. It allows the plumber, that contractor, what could take a week to plumb a home, can be done with ours in a couple of days. It's that labor efficiency and that mega trend that Michael mentioned that drives our value. We've done this again in a responsible way. All the investments Michael talked about, a couple that we've done to expand our manufacturing. We now have over 1 million sq ft in U.S. and Canada in manufacturing space, warehousing space, office space, operations. We're proud of that. We're getting better and more lean in construction there. That's also driving our margins. As I mentioned, we've been targeted in our pricing to make sure we're commanding the margins that we deserve. Then we've managed our bottom line, OpEx scrutiny. Let's specifically look at where we play. In water systems, again, we believe we're the market leader in plumbing products and residential applications with PEX pipes and fittings. We have a market position in PEX and indoor climate, and residential heating and cooling as well. There's other indoor climate opportunities that aren't mature enough, frankly, for us to focus on right now. As we continue to monitor what's happening in Europe and be ready to bring those solutions over to North America when we need to. How do we command this market leadership position? It's knowing the customer, staying close to the customer. Who is that customer? Is it our distributor partners who actually buy our pipe? Is it the national builders and big general contractors in commercial construction? Or maybe it's the plumbers, that contractor that's actually installing our pipe. The answer is yes to all three. We have a highly experienced sales force within Uponor that has these relationships, as well as we leverage rep agencies outside, coast to coast, both in Canada and U.S., to make sure we're in front of each of these customer segments. Let's look about where we're going. As Michael mentioned, we're maximizing the core. We have this position of strength in North America, as you saw. We can maximize that core to drive expansion leadership in water systems and indoor climate. We'll continue to grow the market share in core PEX products. We have that capability. While we have the dominant share, it's only 25%, a lot of opportunity to grow there. We'll broaden our core plumbing and indoor climate portfolio, leveraging global offerings. Talk about that in a moment. We'll innovate and expand into new products and services beyond PEX, beyond the pipe. Finally, we can expand the channel footprint to grow Uponor's reach. This all is in the core of maximizing our core. This allows the foundation for us to invest, to fuel the future in investment in these other areas by maximizing the core position. Let's get specifically on what we talk about growing the core. We can grow with the market. As I mentioned, we just got back to levels from 2006. In this other underserved market of construction and new home, we have a great opportunity to go further there. Meanwhile, we're gonna continue to focus and double down on commercial plumbing and radiant solutions. As mentioned, commercial plumbing still in its infancy and moving towards a plastic pipe or a polymer solution. A lot of opportunity there. Radiant solutions, as discussed, another mega trend. The sustainability and emerging trend of radiant solutions is well positioned for us to take advantage of. We're gonna continue our plan to roll out new core offerings such as kitting and prefab services. These are value-added services that we've been going after lately. Kitting, for example, again, goes at this core of labor efficiency on the job site. This is us and our ability to package up off-site parts, pieces, fittings in a bag perhaps, such that can be dropped off in a multifamily unit, high-rise, right? The labor on site there is not spending time picking out of bins what they need. It's already prepackaged and drop-shipped by us straight to the job site location. We can charge for that product, charge for that additional services. Same with prefab services. To the extent we can do subassemblies off-site, we can get that value for the service as well as for that product. Finally, we can cultivate new channels. We've got great distributor partnerships, but really going through perhaps an e-commerce channel, we can open ourselves up to the repair, remodel, maintenance side of the business. This isn't about new products. This is basically targeting some new customers or in a new way. Let's think beyond the core. Innovating beyond PEX. Where are the opportunities there, both in water systems and in indoor climate? From an indoor climate perspective, this is some of the stuff that Michael had talked about. This is the synergy within Uponor. I talk to him about shopping in the company store. Well, this is us shopping in the company store. BSE has technologies already, proven successful technologies that have been established in Aqua Port, heating and cooling panels. We're already doing this today. We're piloting some of these offerings here today and bringing this technology. The price is right. We've developed them already in-house. It's bringing these advancements. It's sharing technology. It's these synergies. Great opportunity for us. Also, continue to grow the share of wallet within our water systems. This complete polymer offering is PP-RCT. PP-RCT is a technology, a polymer pipe that gets beyond our current size limitations today. Our PEX technology today only goes up to about four inches. PP-RCT allows us to think up to 24- to 30-inch pipe, which allows us to have a full complete end-to-end polymer solution at some of the bigger commercial projects. Additional opportunities, just new fitting offerings. We own that pipe as it comes into the home. We own that line. We certainly have the opportunity to add on new fittings and offerings from our core PEX. Finally, I wanna talk a little bit about our acceleration of our design service offering into building information modeling. BIM is an emerging trend that frankly we're getting pulled into. A lot of our customers are asking us to do this. We have an excellent design services team, and they see our ability to deliver here. This allows us to provide, again, this efficiency on the job site. When you think about this industry and construction, it's wildly inefficient. Over the years, the last 20, 30 years, other industries such as auto manufacturing or microchips or what have you have gained efficiencies over time. Construction, new home building largely hasn't. It's still digging a foundation, pouring a foundation, building the walls. It's all manual labor. BIM allows the ability to have a much more efficient build. In the old time, it was, you know, the architectural plans on-site, and then it went to computer-automated design and then 2D design and then 3D design with information. That's where we're at today. It allows to make sure that there isn't job waste. When you go to a job site, you see people standing around or you see product waste. You go into the bins, you see time waste. Time is money. BIM allows for a essentially almost like a just-in-time build to make sure that that product shows up at the time that the labor's there to install it much more efficiently. Huge opportunity for us and an exciting piece for us. In conclusion, where are we at? We're a proven successful formula in a growing market, where you do have this track record of strong profitable growth. We're well-positioned to accelerate growth in water systems and indoor climate. We have an opportunity to expand this leadership position through new channels and new offerings. This is rooted in a formula that's fairly simple. We have highly engaged associates that are focused on customer solutions and customer experience. We're excited. I hope you are too. With that, I'll turn it over to some questions. Thank you, John. We have a few questions here for you. Starting with a question from Marko Moilanen. What are the biggest challenges you faced and which have restricted growth in commercial plumbing, and how do you plan to overcome these challenges? Great question. I guess it's just kinda cracking that space, right? I mean, we're largely seen as residential, but we've done some targeted investments with PP-RCT specifically, as well as the BIM investment, will get our name bigger in that space. Right now, we're experiencing nice, strong double-digit growth since we've entered that space, and we expect that to continue. Thank you. A question from Svante Krokfors. Looking back at the relatively weak Q3 2021 performance for Building Solutions – North America, what have you learned or fixed, and what, in your opinion, was the keys for fast recovery in Q4? Well, that was our friends within supply chain world around the world, right? This is a very dynamic environment. We hit a challenge with getting some of our key resin for our fittings, and that caused a bit of a delay and an outage there, but that quickly recovered. We have strong partnerships. I will say we source virtually everything locally within the U.S. We have some outside fittings from Italy that we bring in, but for the most part, all our resins are sourced within the U.S. All our partnerships and all our parts and pieces we build, and we manufacture within the U.S. While we're not totally immune to what's happening globally, we are isolated and we are well-positioned to manage these going forward. Thank you. A question from Mika Karppinen. How much more can you sell with the current production capacity? It's a good question. We continue to expand. We're expanding right now. We're finishing off an expansion out in our Hutchinson facility, as well as adding space in our warehousing facility in Lakeville. We will. I think it's been proven, Uponor, when they see the opportunity to invest in North America, they do. Thank you. A question from Anssi Raussi. How many price hikes did you do in 2021? Thinking about the growth for 2022, and how much of an impact can we expect from higher selling prices on top line? That's a good question. One thing I learned when I came into this industry, I couldn't believe we took one pricing a year, and that was it. I just couldn't. It's gotten to be so dynamic. One thing that's come out of this is the dynamic environment that we're in. We took several price increases. It depends. We took some that were across the board, and others that we took more targeted. We've gotten smarter about how we deliver on our pricing and the targeted aspects and which SKUs get impacted. We delivered 4 or 5 price increases. Right now we'll continue to monitor that. We have contracts in place such that we have the flexibility and ability to get pricing when needed, but it'll be a driver, and we're ready to take the next one when we need to. Great. What further investment is required to develop Building Information Modeling? How important is BIM in meeting your divisional targets? You know, I'd say from a revenue perspective, it's not a huge number in the early years, but it helps drive this continued growth in commercial. It's very important to our overall value. The investments that are required, frankly, are people. It's finding the right people. I think we've got a lot of smart people within our construction services world today that design how our pipe goes into a complex commercial building. That's why we were pulled into this, essentially. We saw this opportunity, and the contractors and our building partners said, "Hey, we think you can do this." We can. We have the right people. It's about investing in people and the technology, which we're doing. What's the current sentiment among U.S. house builders? Timber prices have come down somewhat, whereas interest rates are on the rise. Should we expect growth 2022 and 2023 versus 2021? Yeah. You'd think not. You can't believe the growth we've had, but frankly, our building partners are sharing that, yeah, the growth is still there. Again, there's this demand for affordable housing. It was limited, frankly, by supply chains meeting that demand. I think you can expect additional growth. As far as interest rates, I mean, you look historically, it's still extremely low. Mm. The Fed is managing interest rate hikes so as not to paralyze the industry. I think we're in a good position. One last question from Paul de- Thierry. What is the biggest challenge for your division in 2022? That's a pretty broad question. I guess it would be the overall supply chain environment, the unknown, right? Again, I think we've mitigated that largely in how we've structured our business and our reliance, you know, without overseas. I think we're in a good position. You never know what you don't know, but I'm proud of the team and proud of our ability to meet any challenge that's out there. Thank you, John. Now we move over to our CFO's presentation on the new financial targets. Markus, welcome. Good afternoon, ladies and gentlemen. Before I go into my presentation, I would like to share some of my personal reflections on Uponor. I joined the company in the beginning of this year, and during these two and a half months, I can only say I am super excited to be part of this team, and I'm truly impressed on the opportunities that lie ahead of us. First of all, I'm excited about the team. The Uponor team, or the Uponorians, like we call ourselves, are really professional. I mean, highly committed and really engaged in the betterment of the company, as well as improving the industry as a whole. Second of all, I'm really excited about the opportunities. We've heard today some of the ideas that our colleagues have across our three divisions on how can we grow. That gives me the full excitement on the strategy journey ahead of us. In my presentation, I'd like to share with you how do we articulate the strategies that we've heard from Michael, Karsten, Sebastian, and John into financials. Our value creation journey is now also updated in our capital allocation as well as in our financial targets. In my presentation, there are three points that I think you can take as a takeaway with you. First one is the strong financial baseline. Like Michael noted, Uponor team has done great job, especially over the past two years, in improving the financial performance, making strong cash flow, and thereby improving the balance sheet. Our net debt at the end of last year stood at EUR 21 million, and the gearing at the end of year was 4%. Really solid baseline. Under these volatile circumstances, I think it's a great asset to have. It helps us to weather a storm should there be one, and like Michael nicely noted, it helps me as a CFO sleep better. But the key point for our strategy journey on the financial baseline is that it allows us to invest in growth. It allows us to fund our growth initiatives. The second point, I would like you to take with you, from my presentation is this two-stage approach that we have applied in our financial targets. I will talk in a bit, in a minute a bit more detail the growth and profitability targets, but we've decided under these circumstances to set ambitious yet realistic targets for the near term, both in terms of growth as well as then keeping the ambition levels on the profitability side. That's helping us to invest in growth while we then target for the long-term initiatives. The third element is the actions. We've heard a snapshot of our action plan, and we have a roadmap in place to deliver on the strategy journey ahead of us. Let's look back a bit into history. How did we actually then use the cash to deploy the balance sheet we've earned over the years? This is an illustration of the sources of the cash on the left-hand side, as well as the uses of the cash on the right-hand side. Operating cash flow over the past five years has been strong, supported by some divestments that we've done also during the five-year period, and then on the right-hand side, the uses of the cash. We start on the right-hand side from the top. We've done investments obviously into our company, not only capital expenditure, but also some M&A over the past couple of years. The latest M&A was the acquisition of Capricorn that Karsten mentioned, and the Capricorn deal was closed last autumn. Second on the right-hand side, dividends. We are proud of our growing dividend trend, and this spring now is going to be, let's assume that the AGM tomorrow approves the dividend proposal, will be then the eighth consecutive year in which we improve our dividend. Big chunk of our cash flow over the past five years has gone into serving the debt and deleveraging the balance sheet. That is now the starting point, the strong foundation we have to support us now into the strategy journey. On the strategy journey, I'd like to next discuss our view on value creation. We want to aim for top-tier total shareholder returns in our industry. We've split the total shareholder return bridge into three elements, whereby growth, in our mind, will be a key driver for the value creation. When we zoom in on the growth part, we will now look at it on a sort of two-stage approach. Near term or medium term, we'll be building on our core. We'll be building on our existing offering, leveraging, working together, across the group, and sharing, for example, the offering. Like John mentioned, using some of the products that Building Europe has developed and to introduce those to the North American market. That is our commitment on the near term while we invest then in the longer-term growth. The longer-term growth is then more of a balanced act between building on the core, harvesting on the innovation, tech investments, as well as supporting our growth agenda with selective M&A. The profitability part. While we invest in growth, that obviously creates in the short to midterm pressure on our margins. We aim to counterbalance that, with staying focused on our margins. We will stay focused on our strategic pricing. We've heard already a number of questions to the divisional colleagues on the immediate pricing pressure that we see, around us today. We will also continue to invest in productivity and improve in our productivity. We'll also build on the good work that we've done on the operative expenses and keep the OpEx management under scrutiny. The third element of our value creation agenda is the cash flow. I already mentioned the dividend. We've been growing our dividends for the past eight years now. The historical operating cash flow has been strong. Now, like I said, with the strong financial baseline, we have additional headroom than if we so desire to fund additional growth. Our thinking is that once we are able to evidence on delivering on these three elements, that should be then visible also in the Uponor trading multiples. Speaking of cash flow, I'd like to share with you our updated view on how do we want to deploy the capital going forward. We want to shift the focus from deleveraging, which it used to be in the past five years, to supporting a growth ambition. This page illustrates in a way how our view on the capital deployment looks like. Now, on the right-hand side, I'd like to start actually from the bottom. We heard from our divisional colleagues that we have opportunities to invest. We will see some increased capital expenditure to support growth. That is investing in innovation, technology, on our sustainability agenda, as well as production capacity. All of those carry their merits in our value creation journey. Second of all, we want to stay committed to our dividend trend. We want to stay committed to growing dividends also in the future. On top, selective M&A to boost growth. Michael already alluded to this in his presentation. Selective M&A to us means something that will support our growth agenda. We have developed for each division as well as for the group strategic lenses through which we are scanning the market. We've developed target lists of targets that would be natural extensions of our current portfolio. Meaning, targets that could support us in the geographies where we operate today, with additional products, technologies, or markets that will then strengthen our leadership position within the categories where we operate. This is how we look at M&A. Moving over, how do we translate the strategy as well as the capital deployment into our financial targets? So far, we've had five financial targets. The fifth one that you don't see on this slide was return on investment. Now we've decided to focus on four strategic targets, growth, profitability, gearing, and dividend. On the left-hand side column, you can see the current articulation of the targets. In the middle, on the right-hand side, you see that we have actually adopted now a two-stage approach in our financial targets. When we look at the near term, 2022-2024 financial targets, you should look at the growth target as well as the profitability target as a pair. We aim to grow more than 4% each year, organically, year-on-year. Under these volatile circumstances, it is ambitious enough, yet we want to commit to it, so we feel that it's realistic. The organic growth target, like I said, should be paired and looked as a pair with the operating profit margin. Our team has done great work in improving the profitability over the past 2 years. Now, like you heard on the value creation part, during the next couple of years, and you've heard it in the divisional presentations as well, we will be investing in our capabilities and in our capacities to really build on long-term growth. Still, we want to hold the line with the operating profit margin. Thereby, we are setting ourselves a target that in addition to the 4% organic growth, we want to keep the 12% operating profit margin. Longer term, we're harvesting on our growth investments and growth initiatives, and we aim to accelerate the growth rate, and we aim to increase the operating profit margin through margin expansion and at the later stage. That time will come and we will keep you updated on the future ambitions. On the gearing target, you can see that we stay within the same region that we've had or the same range that we've had so far, giving you an understanding on the types of balance sheet flexibility that we're looking at. On the dividend part, we want to aim for growing dividends year on year. Next, I'd like to share a bit more understanding and a bit more highlights on how do these then these strategic initiatives impact our financials. Maximizing core innovation, working towards net zero, and People First. The key themes that we've heard in Michael's presentation as well. They all have an impact, financial impact on our 2022 to 2024 financials. A bit different, each of them. I'd like to use innovation, for example, as an example here. We want to invest in innovation. We heard it, for example, from Sebastian, that it means that we are investing in people, more talent, to drive the innovation agenda. We want to invest also in capital expenditure, to build on the innovation part. That will then drive the margin expansion and growth, especially on a longer term, and that's why we want to highlight it here. Finally, to conclude, how do we drive value? We've learned today that we have a ton of actions in place. We have a roadmap ahead of us, to drive the value. Maximizing core will drive our margin, especially in the near term, and that will allow us to invest in longer term growth. We have a pipeline of investments in place, be it in technology, capacity, sustainability, or innovation. Innovation will help us then drive margin expansion and especially the longer term growth, thereby boosting our value. We have the balance sheet flexibility in place to support our growth agenda with selective M&A. We do all of this while keeping our focus on the margins. We will stay focused on what happens in the world around us, and the margins, and we will stay focused on our pricing power, and we will stay focused on our cost discipline as well. We have the two-stage approach with the financial targets. Thank you. Thank you, Markus. Let's move over to questions. I have a first question for you from Paul de- Thierry. Research and development costs were at 1.6% of sales in 2021. You state that there will be a step-up in R&D to drive innovation. What is the new research and development cost target? Well, we don't set cost targets, but we will invest more, that is for sure. I don't believe in a way, setting cost targets. Once we have good ideas, we'll make sure that we deliver on them and put the resources we need to invest in it. Thank you. Question from Svante Krokfors. Given the volatile pricing environment, does the 4% organic growth target for 2022 to 2024 refer to volumes fully? It refers to organic growth. We want to take share from our competitors as well. We need to bear in mind that it is our target, not only for 2022, but for 2023 and 2024 as well. Thank you. Another question from Svante. Have you seen M&A multiples moving downward in tandem with the equity market? No, not yet, but I guess the colleagues in the investment community are probably more advanced in understanding this. We obviously are interested in seeing those moving downwards. Question from Anssi Raussi at SEB. What is the main obstacle in doing M&A currently? Finding a good target or high valuation? I think it's more about finding the right targets and, as everybody knows, it takes two to tango. I think that's the dilemma. Here's also a question on M&A opportunities. How do you see the opportunities with companies like Purmo to broaden your offering into indoor climate solutions, such as radiators, heating and cooling? Well, Purmo has their own strategy. I cannot comment on that, but I can comment on our strategy, and I think it's great. I think we have a tremendous portfolio, like we heard from Karsten's presentation, and it's the sustainable agenda that really supports our strategy. Thank you. Now we have one more question before we move to the joint Q&A. You are presenting targets for increasing profitability, but isn't the new target actually below previous years' profitability levels? That's a great question. We need to take the 12% operating profit margin that we set ourselves under these current circumstances while we want to invest in growth at the same time. That will make it at least ambitious in a way, if I put it in a way a bit mildly. I think it's ambitious enough. Thank you. Now I would like to invite all speakers to the stage, and you can present questions to all of them. Thank you for moving up to the stage. Now we will take some questions that have been sent in also earlier. Here's a question from Gilles Lecoeur. Do you have some patents on some of your products? What should be your innovation rate going forward as a percentage of new products versus total sales? Hmm. Should I take? Go ahead. I think the great formula for the company's success is combination of organic growth, number one, plus price, plus the innovation, plus M&A. These are the four components. Of course, this innovation part in our model will start to increase from 2025 on. Clearly one of the measures is patents. Of course, this is also was one of the first things I was looking at, and clearly we need to protect our IP. That's close to my heart, really looking at putting more emphasis on R&D in total. Thank you. We have a question on taxonomy. How do you stand in taxonomy alignment? Markus, you want to. Well, we haven't reported on the alignment, but on our net sales, you can find information on the taxonomy eligibility, 2021. Out of our net sales, 25% were eligible on the taxonomy. Thank you. To continue on M&A, should we expect a bunch of small acquisitions, or are you aiming for some bigger strategic acquisitions? Why don't we have Karsten who is, you know, has some experience, and he has done the recent acquisition. Karsten, what do you think about more acquisitions in Europe? Thank you for the question. As Michael and Markus laid out, acquisitions should fit to our portfolio. It should fit to our leadership aspirations. Also, I think there is no small and big and right size. It needs to fit is the key that we need to look for, and we need to find something where there also the other side, as Markus laid out, is willing to join in this dance. Of course, we also look for bigger acquisition, which are then group-wide acquisition, as also outlined, but it needs to fit, and we need to find the right timing, and the deal also needs to be at the right valuation, of course. I would say we got our list, we have our homework to do, but everybody knows M&A is not as predictable as sometimes other organic growth we are doing, and that's why we are also focusing so much on maximizing the core. Thank you, Karsten. The following question is about dividend versus buybacks. What's Uponor's take on share repurchases? That's a classical. That's a classic question. Yes, indeed. So far, we are using dividends. There are no other decisions on share buybacks. Thank you. Now over to Karsten again. A question, how will you secure continuation of growth and keep the momentum up in Building Solutions – Europe? Good, good questions. We have been successful, yes, a turnaround for two years. I think we got the right ingredients to continue on the growth. Let me just highlight what I see as the key points to continue on that. The first is our leadership position that we have currently in the market, in multiple markets and geographies and product categories, that we expand on it and can bring in other products into that based on the leadership position. Second, we clearly also see we have our, you can say, white spots or gray spots. And that, of course, is something that will help us to grow quicker than the market because there we can still catch up a lot. Third, it is our innovation pipeline for the next five years, on which I can say it will support our growth. It's addressing the right mega trends of productivity and sustainability. Last but not least, it is all the efforts that we are doing in prefabrication, which is again helping to have offsite construction and therefore building quicker for the demand that is out there. I'm optimistic that we are set for further growth and continuation on keeping the momentum. Thank you, Karsten. A follow-up question for you. What kind of operating margin do you see Building Solutions - Europe to generate when it reaches its full potential, or has it reached its full potential already? As you know, we are not giving guidance on what is our operating margin full potential. You have seen in the presentation also that we have this two-stage approach. Along with this two-stage approach, of course, we are also looking to improve and further grow the profitability after we have now set our foundation. Thank you, Karsten. Next question. In the market areas where you're currently positioned outside of top three, what are main reasons you haven't previously been able to increase your position? For example, is there some other strong brand that is controlling the market, and what are the key steps that would allow you to improve your position in these market areas going forward? I think this talks to maximizing the core. I think it always comes back to deeply understand what the recipe is. It might just increasing capacity, sales force and focus. It might also overcome some of technology barriers. Sometimes you find in this market some very small, usually very small tweaks to adjust the product and then to move forward. The good thing here is we talk, let's say, with our top 25 customers, and they usually cover, you know, multi-countries, and they are interested in to work with great brands covering more markets and not just one. I think this is something we could leverage more by maximize the core. Thank you. Following question. Where do you see the main impact the Uponor Group will deliver in the future to increase efficiencies between divisions? I think, you know, at the end of the day, there are two areas. One is really the sales excellence point. Do we have highly efficient sales teams in the market? I think more importantly, and this is something beyond the innovation, we need to look, of course, also in improving the manufacturing productivity. I would say one of the secrets, and today we're talking about some secrets, right? One of the secrets of America's success is really excellence in manufacturing. This is probably something we can learn from. This is what I was talking about synergies. It's not just product synergies, it's also know-how synergies. We have an excellent operating team in U.S., and maybe there is something to learn from globally too. Uponor has a strong track record already with systems and innovations. What really changes with the new strategy? You know, I think this is largely what I talked about in borrowing technology, right? We have this innovation here in Europe that hasn't been brought to North America. It's breaking down these silos and these barriers between these divisions and sharing that technology. That innovation there is there, it just perhaps hasn't been brought to the right markets. That's what we're doing today, and I think that's how we can accelerate the growth that we currently have. Thank you. You have had a significant and successful cost savings program targeting mainly Europe. Do you see opportunities for further streamlining, like optimizing your manufacturing footprint? Yes. I mean, clearly, one of our thinking is it's always yin and yang. You look at productivity measures. I mean, this process never comes to an end. I think also Karsten would say, "You know, yes, this was very successful, and it delivered." I mean, Europe, Karsten and his team, they doubled profitability, and one of the drivers was successful, the OpEx program. Do we have potential? Absolutely. A clear answer is yes. Thank you. You have a new team in place, new CEO, new CFO, and director in U.S. How do you ensure continuity in the business? I think at the end of the day, we have a fantastic team of Uponor and a highly committed team. At the same time, I think it needs to be a team of, you know, experienced people with, you know, Sebastian, long being in the business and new people coming on board, with some new insight, and I think the right mix is always the key. This, of course, in combination with diversity, where people come in as they have new ideas. I would say you're new to the role, but not new to the company. There you have, you know, some new thoughts to this, and I think this is really encouraging. I think that's the success of any global company. Can you elaborate on where do you plan to expand geographically? That's a good question. I mean, first of all, the first three years would be really focusing on our core markets. We are an international company. We are not yet a global company. Do we have the potential in the long run to really become a global company? Absolutely, yes. If you take Infra business out for a moment, we deliver, for the Building Solutions, EUR 1 billion to 1 billion. Means EUR 1 billion sales to 1 billion consumers. That's EUR 6 billion potential. Let's think about Middle East and India and core Asia. That's probably something we can discuss at the next Capital Market Day. Thank you. We have a question for Sebastian. Uponor is emphasizing profitable growth, but Infra's operating margin levels are lower than other divisions. What is the role of Infra in this growth and margin story? That's a good question, and it was great also to see that Michael and Markus presented the different targets that we have for the different divisions. We all start from different positions and have different targets for ourselves, and we play that role. Thank you. Michael, a question for you. What are the focus areas for innovation and why? I mean, number one, it is really the question, I would say twofold. I think the Uponor team has done a lot to improve current product. So many of the things we have shown today have incremental, it's incremental innovation, and that's important too. These are usually this innovation where you close gaps, you get a question from customers, et cetera. I think there's more in the pipeline. When I was talking, and I have visited many sites, Uponor talking to R&D, and of course I was looking to say, "What should we do? And what do you think?" I had interviews with the top 75 leaders in the company. It comes out that they have, you know, tons of ideas of products which are really new to this market, and I think that's exciting for our customers too. Thank you. We have one last question for Karsten about Building Europe. How would you answer Building Europe's right to win in integrated systems? I would say it is coming from our competitive advantage of understanding the two core water systems within the building, the drinking water system and the climate solution system. By this knowledge, capability and offering, we can bring significant benefits to our customers and to the users, whether it is in productivity by having less material, building it quicker, or on the sustainability side. Also here helping to linking it to a fossil-free environment, you can almost say, with our underfloor heating, which links perfectly to heat pumps. I think that is our unique position, and that will bring us a competitive advantage in the market. Thank you, Karsten. Another question. Have you experienced difficulty in finding and retaining skilled personnel? What are your key attributes to attract skilled employees versus competitors? That's a good question. I think to be honest, that's the. Remember in the eighties, there was the war for talent. I think this is where we're in right now. really finding qualified people is absolutely key. Not only, you know, we have stress because of cost inflation and salaries increase, but it's finding the right talent, I mean, in the factories, office, et cetera. The only way out is to have a company which has a clear vision, has strong purpose and a sustainability agenda. This is where I think the young generation, the next generation of leaders can really make an impact. We need to build a highly attractive employer brand. We are on the best way, I think. Thank you. Now we are rounding off the session of joint Q&A with this last question from Anssi Raussi. Thanking first for the great presentations, and his question is about the short term. Do you see any pressure on your 2022 guidance due to global uncertainties, or are you still totally confident in your guidance? We are totally confident because this is a robust company, and it has a really a broad base in the countries and the offer is there, the demand is there. Is this volatile? Yes. Is this a walk in the park? No. Do I believe in the strength of the organization? Absolutely, yes. This is something which I think will make us only stronger. I think we are positive. Of course, let's take pricing. We need to be just more agile. I think that's this will be key. This will be a faster organization too. Thank you. We have one more question here coming from Christopher Arnemark about Uponor Infra. Many municipalities are postponing investments due to lack of funding. Have you explored different financing models for municipalities for upgrading sewage systems, et cetera? That's a good question. We have explored the kind of thinking of, you know, should we own something, operate the networks, but I think this is not the area where we are going. We are continuing to stay in the business where we are serving these customers. One thing that I would like to add maybe to that question is that the infrastructure, the municipalities over the years, there is a huge debt. Actually, we should invest double the amount what we are investing today. There is not so much that can be reduced anymore. Therefore, I'm quite confident that the market will stay on the level that it is. Thank you. This concludes now our joint Q&A, and I will now hand it over to Michael for his closing remarks. Thank you very much. Thank you very much for those of you who have listened to our presentation. It's an exciting beginning of a journey towards more value and creating value by maximizing the core and innovation. I think that's really key for us. It's so important that we really stand on these two pillars. Really, when I look back, it was 21st of August when I joined this company. During the last months, we've really worked on a new strategy. Almost the first week, people came into my office and say, "So Michael, what will you change?" I took my time talking to the people. In the factories, individual interviews. We had specific calls with our board, and everybody contributed. I must also say, you, our investor community, also contributed. Really interesting calls on and your thinking, and I like the conversation. The little secret is, I had even some of you talking to me back in summer last year before I even joined. When I was on the path to join Uponor, I thought, "This is really a diamond in the industry." Finding this diamond is really key, and it's difficult. I must say I found one. I'm really proud we can take this company to the next level with an excellent leadership team, with an excellent team in all the markets. It's really exciting despite all the challenges we're currently facing, but this makes us only stronger. I would like to thank you for all the great questions. I really hope next time I can really see you in person, and we start from next week on the rollout in the markets, also talking to you. I would really appreciate your feedback, and your insight. Thank you very much. Have a good day. Thanks.