First quarter investor meeting, where CEO Arnar Thór Thórisson and CFO Stacey Katz will go over the First Quarter Financial Results and some key business highlights. My name is Tinna Molphy, investor relations, and I'll be your moderator in today's session. We will start with the presentations from the two of them and then move into Q&A. If you would like to ask the questions, there's two ways. You can use the Raise Your Hand feature in Zoom, or you can email us a question to ir@marel.com, and we will then read out your name, your company, and the question. With that, I'd like to hand over to Arnar Thór Thórisson, CEO. Thank you, Tina. Dear investors, today we present the first quarter 2023. 2023 is a year where our midterm targets change into year-end targets. The year-end targets are 14%-16% EBIT as a run rate for the full fourth quarter. Investors have started to say, because we talk about seasonality and first quarter, "Are you talking about fourth quarter and then you fall down again?" No, no. We are talking about the run rate going forward. To recap, we still have a long-term 16% EBIT target with 40% gross margin and SG&A of 18% and continue innovation at 6% level. This year, we add the contingency in, now we are removing it from overall contingency into the gross profit, targeted 38%-40% at year-end in fourth quarter, and SG&A going down to 18% and remaining the innovation cost at 6%. We have to bear in mind as well that we are a growth company, we foresee quite substantial growth the next three years. We are investing in the business. We are changing and repairing the boat while we are sailing and even fishing. We have a target of 50% recurring revenues in 2026. We strongly believe that by that, we service the food value chain best, we create most value for our customers, the industry, and ourselves. By snapping a finger, we could turn tomorrow into 16% EBIT by stopping investing in those growth avenues, those better servicing their customers, and et cetera. We are not going to do that. We are shifting the gear now after investment in optimization, digitalization, and et cetera in recent quarters toward harvesting from that blended approach and continue to go into, for instance, the Amazon of the spare parts distribution that will go live in end of first quarter next year. Global distribution system in endpoint. This quarter is quite substantially there in investment. I wanted to highlight this because we are steering the company towards the fourth quarter and beyond in profitability. The EBIT and the cash flow are the drivers and to finance our dream. Finance our dream to keep the global leadership in this industry, continue to transform the way food is processed in partnership with our customers. The forces are strong in the industry, both headwinds and tailwinds at the moment. The tailwinds and secular trends remain intact. The labor scarcity at the moment has never been as high. The skilled labor force into the factories, I'm talking about. We are seeing some closure of factories. That's due to lack of labor. In general, there is higher demand for proteins, even though there is a fluctuation between proteins, for instance, from beef, pork, into poultry, into fish, and into plant-based. Let's start with our weak point in first quarter, the order intake, EUR 363. We have not seen it so low for a while. That can be explained by the counter forces in beginning of the year, continuous rising interest rates and suddenly rising again input costs for our customers. The hawkish talk by central banks, both sides of the Atlantic Ocean, is of course delaying investment in large projects. I was just coming from the Barcelona trade show. Six days I was there, even though in the trade show itself, two days, with a lot of engagement with customers. They asked, "How is it going in Marel now?" I reversed the question just before we are publishing our numbers. Of course, I don't answer it. I asked, "How much did you invest in first quarter?" The answer was literally nothing. My next question was, "How much are you going to invest next 12-24 months?" The answer was above normalized level. This is the situation in first quarter. We are seeing large project in a low order intake in the quarter. Nota bene, we have some orders in the end of the quarter from long-standing customers with some prepayment, we are rigid. It's not fully letter of credit, and we don't book order until it's financially secure. That means that it could shift into second quarter, and most likely it is shifting into second quarter. We are already in there. We are foreseeing higher order intake vis-a-vis revenues for the remaining of the year. The target is to be close to book-to-bill for the total year. Maybe we will not catch up the delta for the first quarter, but that is how we foresee it. 43% recurring revenues from service compared to target of 50, compared to 10% 2005. We are bearing here the fruits of our investments. We are starting to see more productivity and delivery performance here, and now we request as well higher profitability out of it. More and more productivity, more and more speed and scale. This is the journey we are on, and this is second to none in the industry. Revenues are up 30% year-on-year. 13% from our good acquisition in Wenger last year. Plant, Pet and Feed is the new vertical in our business. You see the order intake. We are here flagging a disclaimer that we can see, and we did that in beginning of the year, more variables throughout the year. We saw a very high revenue recognition in fourth quarter, 12% EBIT. Here we go down to 9% EBIT in this quarter. There is, like I said, quite a lot of investment taking on here. No business related cost that is non-recurring. As we are opening up the global distribution center in end of the first quarter next year, there will be ongoing non-recurring costs. However, the peak is now. We foresee that sliding down. Very important that we are in 36% Gross Profit compared to historical level for 22 quarters at 39%. Our quality of earnings is much higher now. To recap how the price action last year worked throughout our system. We said that we were on right price line from middle of last year. We said as well that it would take the service business eight weeks to filter through, meaning that more or less in on right price line in third quarter last year, delivering the 10% EBIT in third quarter. We said standard equipment takes six months to filter through, meaning it's more or less in fourth quarter. We get the extra volume in fourth quarter on 12% EBIT. We said that the large project would filter through in second, third quarter this year, meaning that the inflation input cost is still higher than the price increase in first and second quarter this year. We will get the full effect in the second half of this year from those actions. We are as well have been investing in optimization in our manufacturing footprint in our total system, and we are requesting more productivity. We have been moving things around, optimizing the footprint. We have been moving things, for instance, meat from Boxmeer in Netherlands into Lichtenvoorde in Netherlands. We have been moving things that are non-salmon or fish related in Denmark into Boxmeer and so on to get the clustering effect, to get the syncs and et cetera. Now we are focusing on harvesting from it and partly we do it starting in first quarter because we maintain the 36% gross despite volume goes down between quarter and despite we don't have the price filtering, until in the second half of the year. We will focus here on 38%-40%. Our target is 40%. Product mix will play a game here. It's very, very important to get more of the standard equipment in the secondary industries. Very nice to see recent installation in Accuro system in secondary meat in Australia, Americas and U.S., where the customer are very pleased with the fat trim and the security from the SensorX i n those system. We are getting very good reference here. We are shifting the gear, for instance, in the meat into the secondary because overall volume in meat in Europe and U.S. is going down into poultry, fish and plant-based. Let's move on and look into our commitment here recap as well the SG&A. It's 21% in first quarter. We have a target of 18%. We will take the SG&A down to 18% regardless of volume. Here we have been ramping up the front end ahead of the growth curve. There is a growth curve in this industry. We will maintain and secure the front end. We are having even more service requests than we are delivering. We are delivering on time all our commitments, and we foresee that we can penetrate the market in the standard equipment. That has been in learning and developing the new people there. At the same time, we have implemented Focus First, go live 3rd of April, taking some non-recurring costs, but go live in beginning of April. Clearer visibility, clearer accountability. We will take the sales and administration costs in absolute terms in the coming quarters. I know some people told me not to say this. I would create turbulence inside Marel, but we need to be on the toe, toes, and I'm saying the obvious fact, when we have invested in the system, when we have gone to shared services into Poland, we will request synergizing, streamlining, and down with cost in the back end, sales and services. All of us know, even you in the bank in-industry, if the back end is clearer, leaner, and faster, we create room for the front end for more efficiency, more time with the customers. Our revenue base is diverse. Nice to see the new verticals at 12%. We announced it would account for 10%. We are starting to cross-sell and upsell. We are getting more diversification geographically. What I'm personally most interested in, we are getting new customers. Recap how Marel was few years ago. We were obsessed with poultry, meat, and fish. We are still obsessed to passionate about that, but now we are in all the produce. What that means is that we were only focusing on those customers. Now we are opening up the doors for other food, very forward-thinking food companies that have been in the conventional food, Nestlé, Mars, and so on, that are opening up doors now for endless of opportunities and vice versa, our global reach, our global sales and service network is opening up doors for the plant-based and pet food around the world. Look at the pictures. over to you, Stacey, and then we will take on all the matters in end. I try to speed it up even though clarifying because without doubt there will be Q&A. Sounds good. Thank you, Arni. Thank you for joining us today in person and online as we present our results for Q1 2023. I will start off going through some highlights of the quarter. Revenue's at a good level in the quarter at EUR 447 million. As we described last quarter, Q4 was a catch-up quarter, and we did not expect to sustain that level of revenues yet going into Q1. We are pleased with the revenue delivery, which is up 20% year-over-year, split 13% acquired and 7% organic growth. Aftermarket at 43% of revenues in the quarter. Aftermarket revenues have increased for 12 quarters in a row. Here we see the opposite effect of what we saw in last quarter, where we had a strong catch-up on delivery on the project side. Even though aftermarket was growing, it was 39% of revenues. This quarter, we see stronger aftermarket and comparatively lower projects revenue. You see the jump to 43% of revenues. It is clear that our investments in our end-to-end spare parts journey are paying off. As Arni mentioned, orders received from projects started softer this year, with total orders received at EUR 363 million. In the quarter, we saw continuing rising interest rates and bank instability, which is impacting the timing of making investments. Our demand and pipeline is strong, and we do expect a pickup of orders with the external environment moderating in the coming quarters. Last quarter, I mentioned the currency effect on the order intake and the order book. That was not material to mention this quarter. Order book at EUR 590 million, 33% of trailing twelve months revenues, impacted by the good revenue delivery and then the softer orders received. It is clear to run the whole chain efficiently that the order book is currently on the softer side. Gross profit development was okay in the quarter, though not yet where we would like it to be, impacted by the product mix with a lower proportion of standard equipment and lower project revenues than last quarter. It will be important, as Arni mentioned, to see improvements in the gross profit to hit our 2023 targets in the back end of the year. EBIT at 9% in the quarter or EUR 40 million. The reduction in volume quarter-over-quarter has about a 2%-3% effect here. Performance is impacted by the fish and meat segments. As well, we have higher selling and marketing costs in the front half of the year as we were busy connecting with our customers. Here, I will also mention that we have seen supply chain easing in Q1 in terms of availability and costs, though still increasing, but at a lower rate than they were increasing previously. We are seeing on our most used logistics routes easing that will kick in in the coming quarters. Free cash flow of about EUR 0 in the quarter. Underlying cash flow is improving. Working capital is affected here by the book-to-bill ratio and the elevated investments in the quarter in both our global distribution center and our manufacturing parts warehouse in Boxmeer, which I'm happy to say is now fully operational as of last week. Leverage at 3.5x net debt to EBITDA, which is improving from 3.6x at the end of the year. Good signs of deleveraging that we are following closely to be within our targeted capital structure of 2x-3x net debt EBITDA in the beginning of 2024. Financing costs around EUR 12 million cash out per quarter at current rates. Let's now move into the segments. Solid operational results in poultry in the quarter at 15.4% EBIT and 51% of revenues. We did see that project orders received were soft in the quarter due to the external environment, with rising interest rates and unfavorable input costs and margins of poultry processors. Outlook is promising and pipeline is strong. We do expect elevated uncertainty in terms of timing of conversion of that pipeline into orders. We are, though, confident that it will pick up. As expected, meat is facing quite a challenging external environment that is not yet moderating. Results in the quarter were below expectations, 0.7% EBIT and a soft order book. 25% of total revenues and we are targeting margin recovery in the second half of the year. In terms of the market conditions that both Arne and I mentioned, beef has been more resilient than pork. North America is showing promise, while other regions less so. We see continued shifts in consumers trading down to more affordable proteins, and we as well see overcapacity in the market and expect that there will be further consolidation. Sofie Cammers, our new EVP of Meat, joined the company in April, and with the team is working on the strategic and operational review with actions already ongoing. Roger Claessens is with full focus back to poultry. Quite important to mention, as Arne mentioned, the Accuro system in Australia, that we see very promising opportunities in terms of the launches of those secondary processing products recently. Great promise, where I would say that even though the external environment is challenging, there are still great opportunities to grab. Fish had a good level of orders received in the quarter, heavier in whitefish than salmon. Salmon investments are impacted by the Norwegian tax proposal. It is, though, expected there will be a recovery in salmon investments in the second half of the year. Just last week was the Seafood Processing Global Exhibition in Barcelona with great attendance and excitement of our customers, and we'll hear a bit more about that later on. Revenues in the quarter at a decent level, 11% of total, though EBIT clearly below expectations at -7.4%. If you look at what's impacting the EBIT in Fish, it is that the team is working to finalize low-margin projects that were from acquisitions that will wrap up in the short term. There's other integration initiatives ongoing, the product mix is impacting results with heavier projects than standard equipment at the moment. It is very clear that we are targeting EBIT margin expansion within Fish. With the recent strong demands in Fish solutions, various actions are ongoing to improve the operational results. Keeping up the volume to have better cost coverage, at the same time, taking actions on the costs in parallel. We go over to our fourth vertical, Plant, Pet and Feed, which is performing in line with expectations in the quarter, about 12% of revenues and 13.9% EBIT. We have stated quite clearly last year that Wenger had a stronger second half of the year than first half of the year, and we do see a similar pattern as well this year. Though, the first quarter results are stronger than they were last year. The outlook is good, with cross-selling opportunities on the horizon. The pet food outlook is solid. The feed pipeline is balanced with opportunities and challenges, and plant-based temporarily soft, though positive developments expected to come with our partnership with ADM, which will also be covered later in this presentation. I would mention that Marel in general has recovered from parts availability issues. These are still affecting Wenger for selected vendors, which is impacting performance at the moment. Overall, good quarter for Plant, Pet and Feed if we compare it to historical performance and expectations. Now, on the income statement, I've already mentioned quite a few things in the financial highlights, so I will just go through a few key additional points here. It is clear that we have lower cost coverage this quarter if you compare to the record EUR 489 million in revenue in Q4, so we start there. In terms of looking at the individual lines, R&D is in a good place, as expected, at our 6% innovation promise. In G&A, we do see actions kicking in, and we have started trending downwards on an absolute level from Q4 with further actions in place. On sales and marketing, as mentioned, trade show activity is front-loaded in the year. We do see higher costs related to meeting with our customers. As well, higher customer-related travel, if you look year-over-year compared to Q1 last year, where there were still restrictions in place. As already mentioned, we are dedicated to reducing our sales and marketing costs, and we do have ongoing action to review how to make sure we achieve our targets while balancing the mid and long-term growth. Non-IFRS adjustments, nothing major to mention. Elevated due to the amortization of the purchase price allocation of Wenger. Acquisition costs are slightly below what they were in Q4. A good amount here still related to Wenger for the share grant that we had disclosed previously that will be finalized in Q2. To be clear, no other adjustments are built into the numbers. Net finance costs elevated as previously mentioned, ending at EUR 12.9 million in the quarter. Order book of EUR 590 million, 33% of trailing-twelve-months revenues. This is a figure we would like to see go up. Book-to-bill at 0.81x in the quarter, which if you look at the EUR 447 million in revenues, clearly shows the softer orders received of EUR 363 million. Pipeline is good. Our customers have reiterated their investment intentions for the year. The topic is more about the elevated uncertainty in terms of when to pull the trigger for the investment. Good to mention, as usual, our order book includes financially secured orders with down payments and letter of credit. Operating cash flow in the quarter was EUR 34 million. Underlying cash flow is improving. The cash flow is being impacted by the lower book-to-bill ratio regarding the orders received, which means lower down payments in, which affects our working capital. Investments are elevated, as we have previously stated, up to 4%-5% of revenues, excluding R&D, in the next years. In this quarter, we're at 4.4%. We have made good progress on our global distribution center in Eindhoven, scheduled to open at the end of the first quarter in 2024. As well, our additional production facility adjacent to our operations in Nitra, Slovakia. Lastly, the exciting milestone that our manufacturing parts warehouse in Boxmeer is now operational as of last week. Free cash flow, close to zero, which is impacted by the book-to-bill and elevated investments. The EUR 3.7 million that you see here under acquisitions of subsidiaries, this is related to a donation and start-up of the Marel and Wenger Community Fund, which was part of the acquisition to support the greater Sabetha community in sustainable development. Just want to mention, this does not hit the P&L in Q1. This was part of the purchase consideration that was disclosed last year. We continue to target our cash conversion ratio to move up towards historical levels by the end of 2023. Over to the balance sheet. I would say assets, relatively stable in the quarter, so not much to mention. The increase in property, plant, and equipment is related to the investments previously mentioned. We do see inventories decreasing below the 400 million mark, which does make me happy. This is related to amortizing the inventory uplift for Wenger and as well our actions that are still ongoing to rebalance our inventories. Trade receivables, we did have good collections in the quarter. You do see the number going up quarter-over-quarter, and that is mostly related to timing of invoicing in the quarter. Contract assets, those are related to the book-to-bill ratio as well and the revenue level. Good progress on ongoing projects. On the equity and liability side, headroom is similar if we compare to last quarter. Contract liability is decreasing in relation to the book-to-bill ratio and orders received. Trade and other payables are increasing relating to timing of payments, personnel costs, and the dividend payable, which was booked as payable in Q1, but was now already paid in Q2. Leverage at 3.5x net debt to EBITDA compared to 3.6x last quarter. Continuing efforts in place to deleverage and reach our targeted capital structure beginning of 2024. On earnings per share, it is clear that we target that to grow faster than revenues. Basic earnings per share trailing twelve months was EUR 0.0612. Net result, though, is colored by numerous one-offs, such as the 5% headcount reduction, the purchase price allocation, amortization for Wenger, costs relating to integrations and investments, as well as, for example, the higher financing costs at the moment. Free cash flow and the leverage I already covered. Back to you, Arnar Thór Thórisson. Thank you, Stacey. Clear as always. book-to-bill at EUR 125 million more in cash flow. It's that's our model, and we are moving in that direction. Let's recap a little bit external environment. I'm not going to have it long, even though I start to say 11 PPI. This meeting is being recorded. What has been inflation in 10 years? 135 now, a little bit down from previous months. It's much better forward-leading indicator than the CPI, the Consumer Price Index. This is the environment. This is as well the environment that the central banks were seeing when hiking the rates before signaling the pause yesterday. Very important to bear in mind that we are going into normalized levels in the supply chain. We are seeing that on the delivery performance by suppliers. Although some of our partners are not out of the woods, we are seeing the easing here. Part availability in manufacturing and spare parts is essential. There are many things that we can control ourselves. That's why we have changed the organizational structure. That is why we are investing in Eindhoven. Other things are outside of our control, those things are easing and getting to normalized level. Of course, there is always something. Overall, as we count it in our KPIs, it's normalizing. Let's go into acquisitions. A very small one in this quarter that we finalize. Very important one in the meat segment that we are cascading into the poultry. This is a grading inspection and quality inspection in beginning of the process. Look at what is happening in the world. $40 billion going into the agriculture business from the government in U.S. Same happening all over. This will not be done without grading. We are the market preference in U.S., and we are now already seeing interest here in, from customers in Asia and so on as well to take on this. This is complementing innovation and accelerating the speed. What is maybe more interesting is the Accura system that we were talking about and the vision on grading in the beginning of the process and being the only one with the data points throughout the processing, securing a full trade traceability and full data collection throughout the process. That's a future music, but here we are seeing the opportunities, and I can tell you this was not on the same multiples as the large programs. Partnerships are very important as well to accelerate the journey. ADM is number one in the ingredients, the flavors, and et cetera, in the food sector here, in the protein sector. Plant-based industry has been for centuries, now we are commercializing it. It's not all alternative meat. Plant-based proteins have been for centuries, commercialized now. Those that have been shopping those plant-based meat in supermarkets know that it's sometimes lacking flavor. If it has a good flavor, you don't know what are the ingredients. Here we are partnering with ADM, showcasing at Wageningen University, dragging our customers in, and ADM is much larger company than Marel, dragging their customers in, showcasing it on our solutions. We have filled the bench more or less throughout the leadership here in Marel. To mention, it's coming from succession on growth planning inside the company, it's always healthy to get fresh pair of eyes and legs into the game. Tatiana coming to Service and Sophie Kam is coming to Meat. Good to see you back, Viðar Erlingsson, after taking some learning and development in the Össur on the other side of the IT landscape, and so on and so on. You can click on this later on and see it. Target confirmed, midterm target, year-end target now. 2026 target. Our gain this year is to balance those targets. We are not giving away the 2026 target, 50% recurring revenues. Like I said, it's like snipping our hands, taking the EBIT up above 16%-20% if we would not be investing in the infrastructure. We are going for the 14%-60% in back-end and beyond with balancing act of continue to grow and continue to service our customers better. Trade shows have been quite extensive this quarter. Seasonality it is in beginning of the year. We are in all industry, many geographics. I had the opportunity to be in Barcelona last week. If you look at it as photo snapshot instead of film every year, what a change of how we are doing business. I'm talking about the whole value chain. More diversity of the people, seeing the spouses and families even joining, seeing the CEOs of our customers, seeing everybody there focused on long-term and how we transform the way food is processed. Very high engagement level throughout all the days. I'm pretty amazed after this, still melting the investment appetite that is coming in the coming one, two, three years. Same stories we have. We are dividing the forces. I know Arni Sigurdsson went to the meat shows and Roger Claessens to the poultry shows and so on, just to give you a glimpse how we are operating here in the new setup in a larger company. Should we do the video? Should we free up time for Q&A? It's short, Tina. It's very short. Yeah. Let's look at, and you see we speeded it up because I'm getting excited to get some questions, so. Okay. like Arnar mentioned, we're very keen to open this up to the floor and start the Q&A. I see that Akash Gupta from JP Morgan has raised his hands. Please go ahead. Yes. Hi, good morning, everybody. Thanks for your time. I have two questions, please. The first one is on pricing. Can you elaborate on what is going on pricing? I mean, you raised quite significantly last year. If you can comment on whether there has been any price pressure in the market and whether some of this customer hesitancy to invest is also linked with high prices where they might be waiting for a better deal later on. Any comment on pricing is what I'm looking for. That's question number one. Then the second question is on inventories. You still have inventories which are at more than 20% of last 12 months revenues. Historically, we had a smaller level, but I see that you have invested in a spare parts service organization, so probably the previous levels may not be the right indicator. I wanted to understand, like, when the things will normalize in terms of supply chain and the availability of components and et cetera, what would be the right inventory to sales level that we should be looking for? Thank you. Thank you. I'll start with the pricing, and then Stacey go into the inventories. To recap what I said about the PPI and to recap what we said, that we are on right pricing level in the middle of last year. I talked about the filtering earlier on. In beginning of the year we adjusted prices upward to compensate for inflation. There is salary inflation, there is some inbound inflation already in beginning of the year. We changed into quarterly cycles as well instead of yearly cycles in the general pricing, although we use constantly value-based pricing more and more throughout. Decision was not to raise prices in beginning of second quarter because we believe we are on a fair price point, as we have stated again and again. You see as well the PPI starting to slide downward as well. We believe we are fair here in the pricing. We do believe that we have the people and system in place to do it much more rigidly than we have done before. Perhaps, Akash, on the inventories, I would mention that first of all, we will not sacrifice our business for our inventory level. While we are making sure that we rebalance our inventories and our working capital, we are also really trying to think about this, in a, let's say, mid-long-term standpoint as well. In relation to comparing to historical levels, I think there are two structural changes that have happened, which would mean that we are rebalancing to find, let's say, the new sweet spot in inventories. First, as you mentioned, is that end-to-end spare parts journey and splitting our spare parts and our manufactured parts, really making sure we're able to deliver on time to our customers to be able to continue the growth from that 12 quarters in a row. That's the first one. Perhaps we can see on the end-to-end spare parts journey, some rebalancing after the global distribution center would go live, for example, since that will be quite an efficiency point for us. The second point is really the inventories that we also acquired in acquisitions, particularly with Wenger. Family-run business, elevated working capital level because they did not need to care as much about it or pay attention to it. And that's something that we will also work on, rebalancing in terms of also bringing into the Marel platform. We are being conscious to also not interrupt their results since we did say that we would run Wenger standalone for the beginning. Maybe even to add to it, this excellent answer is that we are working outside of Marel as well, so we are in partnership with customers. I have spent equal time now with the team like Linda here, with our suppliers. We foresee that we can maximize inventories throughout the value chain much more. We have splitted our warehouses into manufacturing parts and spare parts. The tick tack is different in spares than manufacturing Parts that you can plan and schedule. Now we are maximizing the flow with our suppliers. It's not only about price, it's about the speed and scalability in the value chain. We will see some different ways of working going forward. Okay. Thank you. Any follow-up question, Akash, or? Okay. Next up, there's a question from Johan Eliason from Alkilte. Please go ahead. Yeah. Hi, sorry. I want to ask a question about the loan agreements. On an unadjusted basis, the net debt leverage ratio is about 4.3 or well above the 2.3, 2-3x EBITA target. Are you in breach of any of your loan agreements and, or is the spread on the loans being raised due to the high leverage ratio? Thank you. We are complying with all of our covenants. As we have mentioned in relation to the Wenger acquisition, that we did have an acquisition spike that was in the agreements and we are within that. Maybe to add to it, our bank leverage is lower than 3.5. We have, this is maybe very important. It's going completely out of hand how other companies are adjusting for the results. You should look at the EBITA, the cash flow in those companies. There is a change in way of doing business. It's a period of five years now that people are investing higher in the business and so on. However, we have agreements with the banks that we can still adjust for those items in. The EBITA toward the banks is higher than we are reporting towards you. We are having fabulous cash flow model. When the book to bill is coming closer to one or above one, we will delever very quickly. No, it's completely out of question that we are close to the covenants. Okay. Thank you. The next question is from Andre Mulder from Kepler Cheuvreux. Can you hear me? Can you hear me? Yeah. Okay. Yeah, question on the, on the order intake. You, you said that the quarter started, quite low. Can you give a description of the development within that quarter and possibly what you've seen in Q2 so far in terms of order intake? Of course, the development throughout the quarter, I think that it's a very short period to report 3 months, and many companies are talking about 6 months, giving it month by month. I can tell you, Andre, it started very slowly, the year. The reason I'm hesitating to give more is that we said last year, the year started very slowly in January, February, and then came a fabulous March, and then we had not a very strong second quarter. We are trying not to give you further insight into the quarter. It developed positively throughout the quarter, and the momentum has developed much more positively. The pipeline is building up, and we measure very rigidly the pipeline. The 40% likelihood, 60% likelihood, 80%, 90% likelihood before we close. That's developing in right direction, plus the atmosphere and the momentum has changed. Not further insight into quarter by quarter. A question on the pipeline itself. Order intake was down 15%. Can you give a delta of that pipeline? Was it also down or? You said it is strong, but how strong is that? The pipeline is building up, but the order intake is down in first quarter. I would say that you cannot compare those two together in terms of their development, when it's also related to timing of conversion of orders, I mean, that means that the pipeline is there, it's just that it has not yet converted into orders that have down payments and letters of credit. It's also good to mention that we have really heard the sentiment changing from the customer side from, let's say, the end of last year through to now into this quarter. If you also look at some of the markets, there have been discussions about the margins of the processors, for example. You do start seeing signs going in the right direction in quite a number of areas, and we also hear that back in the discussions with the customers. Okay. Thank you. It's quite important as well, the market dynamics. U.S. has been on a run for two and a half years in the food sector. Very natural is you take a pause for one or two quarters. That has always happened. Maybe the strange thing this year is that we are seeing signs that Asia, and China are finally picking up. Latin America is quite upbeat. Europe has been in a stagnation for two, three years. It could be the scenario that we would see in the middle and second half of the year, all geographies moving into the same direction upward. Why? As our model is supposed to balance each other out. There is more volatility and people are moving now. The U.S., all our customers in the U.S. are confirming their investment plans for the year while taking pause in beginning of the year. Maybe no wonder that there is a pause. We see that the seamless flow can be much, much better than it is. We have been maximizing the silos too much throughout the processing when we know we can do it differently. We see our reference plants in Costco, Bell & Evans in U.S. We see Rodenkötter plants in Germany. We see Cranswick in U.K. We see now what we are doing in Australia and et cetera. No wonder that we take wait-and-see rethink in the U.S. Asia, China, all signs are picking up, but remember, that's only 12%, 13% of our total business, while U.S. is 30% of our business and so on. All signs pinpoint towards a stronger demand and conversion in coming quarters than we are seeing in beginning of the year. That's the low point in the order intake. We don't want to overpromise where we are heading in second quarter, but we are optimistic for the second half of the year. Okay, we're moving on to some email questions from Felix Weimann of SFO. Can we provide any more detail on the soft Q1 order intake, especially perhaps adjusting for the Wenger acquisition? What that number would have been, the split between product business and standard equipment, and give some more detail on the end markets by segments. Yeah. Perhaps I think we first mentioned, I mean, I think it is fair that if the order intake is going down 14% and we have added Wenger that we are aware that it's a softer project orders received. I think we have already stated that, and that is the case. We don't break down our intake by our end segments at the moment. But it is clear that our standard equipment is at a lower ratio than it would be in, let's say, a normal quarter, which also then impacts the product mix that we're delivering within the quarter. Perhaps you wanna add, Arni? No, it's fair. Wenger is 12%, once again, it's not the interest rate level, it's the rising interest rate and the messaging that is counting quite a lot. You see it already in BB companies, the margins starting to go down. You can take fixed and floating here. It's the uncertainty and the hawkish talk and rising interest rate that were meant to slow down investments that is having it. We are seeing many other capital goods company showing a good order intake in first quarter. If you look carefully into the food sector, that is a growth sector, a growth sector midterm, long term, it was quite a lot of turbulence in first quarter. By our peers, by our customers, by the supermarket, that is stabilizing. Okay, his second question is around margins. Given the strong growth in higher margin aftermarket business, equipment margins must have been particularly low in Q1. Assuming this was meat and fish, how come margins did not benefit by price increases executed in 2022 and partly declining input costs? I think we have answered it. Price filtering in second half of the year, crossover the company taking on inflation, quite large proportion of the 57%, not the 43% from the service is project visa versus standard equipment. Our target is to change that mix, but price filtering later on. Additionally, in fish, we stand by our commitment toward our great customers here. Although Valka did that commitment. Now Valka is part of Marel. We are Marel here, and we are here on very close to final completion of those projects, so there is extra hit there. Additionally, we are streamlining the cost down in fish and meat that is taking on non-recurrent costs that we don't adjust for. We need better coverage toward the innovation costs and the SG&A costs in the fish and the meat sector. It's clearly that we are going to stabilize the cost basis here going forward. While we are having 43% as well, service revenues, on average for the company, it's clear it's much higher in poultry, but you can see in the great results there throughout the years, even a little bit lower than the peak levels, though they are keeping the levels there. The service revenues are lower in meat than fish. Here we need to work aside, learn from each other, and it's a great beneficial in the new Focus First operating model that we have a service as a special division, and we are investing in the common digital and automated platform, Eindhoven, in end of next quarter and then regional distribution centers. Taking the other industry there, so it's not only defense. We are here in offense as well in both meat and fish. Go to the secondary in meat and take the service revenues up in both meat and fish. Okay, Akash Gupta from J.P. Morgan has a follow-up question. Please go ahead. Yes. Hi. Thank you, Tinna. My follow-up is on M&A. I mean, when I look at historic development, my observation has been that normally you do more M&A in the market environment like we are today, where you have uncertainty. Historically, we have seen that some of your smaller competitors have bigger impact, and then they are more willing to sell than in good environment. At the same time, you have acquired Wenger last year, which you are in process of integrating, and then we still have some work to do internally in terms of back-end optimization and bringing down SG&A. The question I have for you is that, are you ready internally to take on any M&A opportunities that may arrive, keeping the balance sheet or leverage ratio aside? I guess you can also do deal in equity as well. The question is more in terms of readiness of organization that are you ready to step up if there are any opportunities or would you like to wait for, let's say, a couple of quarters before stepping in? Thank you. It's a good question. Our growth story is unchanged. We will drive the growth by innovation and being close to the customers. We accelerate that journey with M&A and acquisition. Two-third of our growth in the past has been acquisition with wonderful average 6% organic growth throughout the 20 years. Are we ready internally? Are we financially ready? Let's show discipline. We started our journey here when the largest company in the industry was EUR 200 million Stork Food Systems. We were EUR 130 million. We are the leader here in the industry. It looked like a candy store, this industry, in 2005, and still does. It's a highly fragmented industry. There is 130 companies here. There are fabulous family-runned companies that are lacking the digitalization and the global reach we have. Missing few opportunities in 6 months period, nothing is going away. We are here in close contact with our peers and et cetera. We are ready as such, but let's focus on delivering our results that we have promised, 14%-16% EBIT. It's the EBIT and the cash flow that is financing our dream. Having taking on Wenger, I would not want to replace it with anything that is out there in the market. How can we be? We are 100% focused company in food, 97% in proteins, and other are taking on all other verticals that doesn't, don't have any synergies. I'm talking about synergies in front of the customers. I'm talking about synergies in operation and in innovation. We would not want to replace any of the opportunities that are ahead of us with Wenger that we are now utilizing, and we will cross-sell and up-sell and take it to other geographies. Discipline, patience, nothing is going away. Our cash flow model is unchanged, and we will deliver into our target leverage, and we are back on track. Okay. Thank you. There's a question from David Christensen from Jefferies. You mentioned non-recurring factors in 1Q23 that you do not adjust for. What are these items, and what does the underlying profitability look like excluding those factors? We don't typically give a number, is what I would say. Probably you would say, somewhere 1%-2%-ish is what I would say. It depends on what you would wanna classify as non-recurring. I think as we've also mentioned, like, we are implementing our Focus First refined operating model. There are costs that are associated with that. Also doing quite a few investments at the moment as well, which, like, even if they are capital expenditures, there are always associated operating costs with that as well. That's at least the color that I would give. Okay. The second question is: It seems the profitability recovery to 14%-16% EBIT will be mainly realized in the second half of 2023. What are the key drivers, and will the target's profitability be sustainable beyond the 2026? It is- 20. Sorry. Sorry. 2014 fourth quarter and beyond. Like was stated here, we are not going to fix the numbers in fourth quarter. We have had and will take the 16% EBIT target due to the volatility. We put a buffer on the gross profit. We are working here in procurement, productivity, utilizing, harvesting our automization investment throughout. The easing in the supply chain will of course become a tailwind compared to the previous quarters. We are reaching very close to normalized level there. SG&A then down to 18% compared to 21%. Non-recurring items magnitude may be above 1%. That is the delta there. We will streamline the back end to harvest from our investment in Poland, for instance, and synergize the business division and the customer center in the back end. Every single industry is doing this. We are ahead of the game in the investment. Now it's harvesting time in the back end. Okay. Finally, any questions from the audience here in Iceland? Okay, if not, many interesting questions raised here today. Thank you all for joining us both online and here in the headquarters. Thank you so much for your time and attention and continued support for Marel. Thank you.