Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Carel 2020 Full Year Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Francesco Nalini, CEO of Carel. Please go ahead, sir. Thank you. Good afternoon, and thanks for joining our call for the presentation of 2020 full year results. I'm starting from page two with the main financial highlights. In this incredibly challenging year, we confirmed the resilience of the group and its ability to seize new opportunities, even in such a fast-changing and uncertain scenario. We grew our top line, we grew our profitability, and we generated an outstanding cash flow. Revenues grew by 1.3% or 2.8% net of the foreign exchange. The positive market trend that we saw in the third quarter continued in the fourth quarter. Throughout the year, we had a very good performance in data centers, hospitals, heat pumps, food retail. In the fourth quarter, we saw an improvement in all geographies and in most applications. We started to see a recovery also in the most challenged applications in the first part of the year, like, for example, automotive and food service. This is particularly remarkable if we consider that we faced, in the first half of the year, the temporary shutdown of more than 60% of our total production capacity due to the lockdowns in China and Italy. EBITDA margin was 19.7%, 40 basis points more than the 19.3% of 2019. Thanks to the effective implementation of a number of measures to contain operative expenses, we managed to offset the lack of operating leverage, which was not there as we would have liked. We offset the negative impact of the foreign exchange and extra logistic costs due to the disruptions. We had an exceptional cash generation. We had a free cash flow of approximately EUR 38 million, net of the purely accounting effect of the IFRS 16. The net financial position went down to EUR 21.4 million from EUR 46.9 million, so it's way below the EBITDA, and that means that we have a very strong firepower to invest. I'm now moving to page three with the main non- financial highlights. In fact, in 2020, we achieved a number of very important ESG milestones, and more are expected in 2021. In April, we gained one notch in our MSCI ESG rating, achieving a score of B B. We have been invited to take part in the CDP rating, and we decided up front to disclose our score. We received a score of C, placing Carel in the awareness category. We basically skipped the D disclosure category, which is typically granted when you take part in the CDP for the first time. In the summer, we created an ESG team, a multifunctional team led by the CFO, to collect, elaborate, and execute the inputs received from the main stakeholders. At the beginning of 2021, we started drafting our new three-year sustainability plan, again, taking into consideration all those inputs from the stakeholders and with the objective to further improve our sustainability profile in the coming years. On page four, we can see some additional figures. Revenues were EUR 331.6 million, up 1.3% from 2019. If we look at the revenue bridge on the top right, though, we can see that we lost EUR 5.1 million for the foreign exchange and EUR 0.6 million for the non-core. The purely organic growth in 2020 was 3.1%. EBITDA was EUR 65.2 million, up 3.3% or 19.7% of sales, 0.4% more than the 2019 results. The efficiency gains during 2020 offset the lack of operating leverage, offset approximately EUR 2 million of extra logistic costs, and offset EUR 2.5 million of impact of the foreign exchange. The impact of the foreign exchange was EUR 5.1 million on the top line, but EUR 2.5 million at the EBITDA level, thanks to our natural hedging position. Net profit was essentially stable. It was up 0.3% to EUR 35.1 million, and it benefited from a slight reduction in the tax rate. The tax rate was 21.1% from the 22% in 2019. CapEx were EUR 13.3 million, in line with expectations. There was a strong reduction from the EUR 23.6 million of 2019. Due to the fact that the capacity expansion program was over in 2019. In 2020, we basically did maintenance CapEx. In 2021, on the other hand, we decided to accelerate our capacity expansion in Croatia, since demand in Europe and Eastern Europe is growing faster than expected. We also decided to accelerate on our digitization roadmap that was extremely important in 2020 in order to become stronger and more resilient for the future. The board of directors this morning proposed a dividend distribution of EUR 0.12 per share, which is in line with 2019, and it corresponds to a payout ratio of approximately 34%. Now on page five, with the revenue breakdowns. To the left, there's the breakdown by region. All regions improved in the fourth quarter. Net of the foreign exchange, basically all regions grew in 2020, apart for North America. EMEA grew by 5%, net of the foreign exchange. We had a very good performance throughout the year in Eastern Europe and Northern Europe, and at the end of 2020, we started to see a recovery also in the other countries, like in Southern Europe. In Asia Pacific, we grew by 1%, net of the foreign exchange, with a very good result in China, partly offset by a softer performance in the rest of Asia. North America sales declined by 7.7% in local currency, with a slight improvement in the fourth quarter. Let's say that in North America, the market in 2020 was particularly challenging, also because in 2019, we had an exceptional growth. In any case, in this beginning of 2021, we already see a remarkable improvement in the scenario in North America. Latin America, we grew by 10.1%, net of the foreign exchange. A very good result, especially concentrated in Brazil. In euros, of course, the performance was negative because we had a very strong impact from the foreign exchange in the region. If you look at the breakdown by sector to the right, also in both sectors, we had an improvement in the fourth quarter. HVAC grew by 2.1%, net of the foreign exchange. We had a very good performance, positive performance in data centers, heat pumps and hospitals. We had a negative performance in other industrial applications like in automotive, but we started to see an improvement at the end of 2020. Likewise, in refrigeration, we grew by 5%, net of the foreign exchange, with a very positive performance in food retail. In the fourth quarter, we saw an improvement in the general market in food retail, while previously we were growing through market share increase, and we also started to see a recovery in food service that year to date is, in any case, negative. The growth in the core business, net of the foreign exchange, is actually 3.1%. We have 14.5% decline in the non-core business. I'm now moving to page six, and I leave it to Nicola to comment the items below the EBITDA. Thank you, Francesco. Slide number six details the group result from the EBITDA to the net profit. The 2020 result was impacted by higher D&A costs, mainly related to the relevant CapEx level of 2019. In the period under review, financial charges were pretty in line compared to 2019. Instead, foreign exchange losses were higher, in particular related to the U.S. weakness versus Europe of the last quarter of 2020. The tax rate of the period was 21.1%, slightly below 2019 level. Such a decrease is mainly related to a different country mix. The group net profit at the end of 2020 was equal to EUR 35.1 million, in line with the 2019 figures. Slide number seven shows the net financial position evolution of fiscal year 2020. The net financial position strongly improves compared to 2019 level. At the end of December 2020, the net financial position was equal to EUR 49.6 million, compared to EUR 62.1 million of the end of December 2019. Such amount includes EUR 28.2 million of IFRS 16 liabilities. This amount was equal to EUR 15.2 million at the end of 2019. The net financial position with bank improved of around EUR 25 million. The fund from operations was equal to EUR 38 million. The decrease in net working capital was mainly driven by seasonal effect and a better credit collection management in 2020. In June, the group paid a dividend of around EUR 12 million. At the end of December, the group has an amount of cash equivalent in the available credit line of more than EUR 100 million. I leave Francesco to go on with the presentation. Thanks, Nicola. I'm on page eight with the closing remarks. In terms of operations, in 2020, we faced the temporary shutdown of more than 60% of our capacity due to the lockdowns in China and Italy. We mitigated this effect thanks to our longstanding mirroring production strategy, and so we limited the backlog, which was entirely recovered between June and July. On the demand side, we started to see a strong improvement on the market at the end of Q2 that continued in Q3 and Q4. In Q4, in particular, we saw an improvement in all geographies and in most applications. We have a positive performance year-to-date in heat pumps, data centers, hospitals, and food retail. We have a negative performance in the other industrial HVAC and in food service, but we started to see a remarkable recovery in both applications at the end of the year. All of this led to an improvement in the top line, in profitability, as well as in cash generation, even in such a challenging year as 2020. Looking forward, it's still too early to provide a precise guidance for the full 2021, since there are still significant elements of uncertainty linked to the end of the pandemic and the current situation of global shortage of raw materials. We have an optimistic stance considering that the positive trends that we saw in the second half of 2020 accelerated in the first month of 2021. Thank you very much for your attention. We are now more than happy to answer to all of your questions. Excuse me this is the Chorus Call conference operator, we will now begin the question-and-answer session anyone who has a question may press star and one on their touchtone telephone. To remove yourself from the question queue please press star and two. Please pick up the receiver when asking question. Anyone who has a question may press star and one at this time. The first question is from Alessandro Tortora with Mediobanca. Please go ahead. Yes, hi. Good evening to everybody. Good afternoon. I have, let's say, some question. Sorry, it should be five, okay, but I will try to be very quick. The first one is on the business. As you mentioned before, there is a widespread recovery by the region in the last quarter of the year. What I would like to understand is if you can elaborate a bit more on North America, which, let's say, was the underperformer, okay, in the past year. To understand what is your view, okay, on this area. This is my first question. Okay. Thanks, Alessandro, for the question. Yes, I confirm that in the fourth quarter, we saw an improvement in all geographies and most applications, and that trend is accelerating at the beginning of 2021. Especially, also in North America, we saw this improvement, and we are seeing a strong acceleration, a strong improvement in the beginning of 2021. The trend is definitely positive. I remind that during, let's say, at the end of 2020, we also changed leadership in North America. The former CEO of Latin America is now CEO of both Americas, North and South. In any case, also the general context of the market is more positive, and we are getting results from the actions that we took during 2020. Okay. The second question is on the application. Clearly, we have, let's say, the overall picture, organically speaking. Can you, let's say, give us an idea of the top performers, for instance, heat pumps or data center? If you can share with us, let's say, the organic performance of these specific application, an idea at least. I would say that the top performance in 2020 were heat pumps and food retail. Both were growing at double digits. Data centers, as mentioned, was positive. HVAC, related to indoor air quality. For sure, the top performance were heat pumps and food retail, both with a double-digit growth. Okay. The third question is on the margin. If you look at the second part of the year, the company's been able, clearly, to post a high single-digit organic growth, but also to achieve a significant EBITDA margin expansion, reaching in the second half an EBITDA, let's say, close to 20%. The question is, considering also the structural or partly structural cost savings you implemented in 2020, what's your view on the progression on the margin side, on the back of a positive outlook on volume, if understood well, but also, if we also consider some cost inflation risk you mentioned in the press release? Okay. Yeah. Let's say our expectation mid-cycle is to stay with the profitability between 19% and 20%, so more or less where we are now. For 2021, we do expect for sure, a better contribution from the operating leverage. On the other end, as you mentioned, there could be some tensions on the raw materials cost side. Also we are definitely investing to make the group stronger for the future, for example, in digitization. Let's say that our mid-cycle expectations is to maintain the profitability where it is. Just a comment on the raw materials cost side that I just mentioned. Yes, there could be, and there are already signs of tensions on the cost of raw materials. We don't expect that to be major on our income statement. We are taking all the countermeasures, that since the end of 2020, we are working on the countermeasures on this. We don't expect any significant impact. Of course, those tensions are there, and they create some uncertainty, that's for sure. Okay. The third question is on the working capital side. Clearly the level you achieved, let's say this year, was extremely low. Are there any, let's say, indication or a normalized level that we can assume for net working capital on sales? On the back of also what we discussed about electrical components and there's probably some, let's say, stock, you're going to do on that side. Look, Alessandro, this is Nicola. With the view of the year-end, we believe that the incidence of working capital on net sales should be around the 15%, 16%. It is related more to the possible increase that we want to have on the inventory side, even taking consideration the service level that we wanted to guarantee. To our customer and to have a good level of safety in our stock. Okay. The last question, maybe is for you, Nicola, is on the CapEx side. You mentioned before a capacity expansion project in Croatia. Can you give us an idea of which level of CapEx we may assume for 2021? Okay. The total amount of CapEx that we are foreseeing for 2021 is around EUR 20 million of CapEx, and it includes even the investment in Croatia. That is pretty significant for our side. Okay, thanks. The next question is from Will Turner with Goldman Sachs. Please go ahead. Hi, everyone. Thanks for taking my questions. Hope you're all doing well. I guess my first question is on the outlook. I perfectly understand why it's hard to give a formal outlook. Could you just give a little bit more color on what optimistic means for you going into 2021? Should we think that, is this going to be a year in line with how Carel has grown historically, which is mid to high single digits organically? Are you expecting it to be less than that? Could it be greater because of some pent-up demand from places like the commercial HVAC part, which may see in the second half, a good recovery? Just a little bit more color on that would be really interesting. Okay. Thanks, Will. Let's say that, as we mentioned also in our last call for the third quarter 2020, we entered into 2021 with, let's say, an expectation to more or less be in our mid-cycle expectation, which is high- single- digit. The fact is that we have both upsides and downsides for 2021, because we have an upside related to the fact that there could be pent-up demand, there could be a strong recovery in many applications that were late in investing. There could be the effect of the NextGenerationEU plan in Europe. There are definite upsides. There are also downsides, related, for example, to uncertainties on the supply chain for the shortage of raw materials. Now, for that, we started taking action at the end of 2020. We increased our safety stocks. We booked capacity in advance. We placed orders for the entire 2021. We don't see any disruptions at the moment, but there could be some increases in lead times that we believe would be absorbed by the end of 2021, by the end of the year. In any case, the uncertainty is there. Of course, needless to say, the pandemic is still going on. There are these virus mutations. There are elements of uncertainty that provide downsides. I would summarize by saying that, o n the demand side, we see mainly positive things. We don't see negative elements on the demand side. There could be upsides on the market. There are uncertainties related to exogenous factors like the pandemic and these supply chain issues. It's not easy to provide the guidance at this stage. Okay. That's very clear. Thank you. Just touching a little bit more onto that, kind of like the components and the raw material supply issues. Is it semiconductors and electronics, which is the item which is in particular of concern to you? Then I can understand that you're doing quite a lot to try and offset it at the moment. Are you expecting to try and offset that with price increases? I know how historically you haven't really put through that significant price increases, are you expecting 2021 to be a different year in that sense? Yeah. Yes. We are referring mainly to electronic raw materials and semiconductor-related components. Because the situation is pretty general on all commodities, but especially for us, semiconductors and electronic components are significant. Again, we started implementing countermeasures during Q4 2020, increasing our resilience, which is already pretty strong. On the cost side, there could be some tensions and some possible countermeasures, yes, could be acting on prices. You're right that historically we tended not to increase prices, but the strong volatility we're seeing in these last quarters led us, for example, during 2020, to increase prices. In 2020, we had an average positive effect coming from prices, also because of the extra logistic costs. In 2021, we could also do something on the price side, if that's necessary because of the cost tensions. Coming from experience, we don't expect any big impacts on the P&L coming from the cost side. Probably it won't be necessary to do anything major on prices, but we are prepared to do that, and we can do that. In any case, let's say the order intake in this moment is very positive, and we don't see any disruptions related to the raw materials. Of course, the situation is very volatile, so there is uncertainty. Great. Thanks. My final question. You mentioned earlier in the call how your de-leveraging is giving you some greater financial power to invest. Can you elaborate that a bit more on where you're looking to invest? Quite importantly, why that particular either region or product category? Okay. Well, organically, we mentioned that we are investing now a little bit more on digitization, and we are accelerating the capacity expansion also because demand is growing, especially in Europe, faster than anticipated. That's not a big investment overall because, as Nicola said, we're talking about a possible EUR 20 million CapEx in 2021, so nothing really big. Capacity to invest means the possibility to accelerate even more in digitization and means adding more firepower on the M&A side. On the M&A side, let's say that we strengthened our M&A team in the last few months. After the most difficult situation due to the COVID, where we were forced to slow down things, we are now pretty active on the market, and we are strengthening our pipeline. That's the main direction, in the end, where we want to invest, which is M&As. The guidelines are the same. Complementary components, market share, geographical expansion, and services. We are definitely strengthening our pipeline in this moment. Okay, thanks. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is a follow-up from Alessandro Tortora with Mediobanca. Please go ahead. Yes. Thanks again. Two questions from my side. The first one is a follow-up on the capital allocation strategy. You mentioned before two direction. The one is expanding the product range. The second one could be, let's say, the service side. Can you give me, let's say, a better idea of what Carel could do on the service side, considering that now there is a booming world for everything related to edge computing, edge analytics, whatever it is, but just try to understand which sort of service the company could do and maybe which M&A opportunity you see on the service side for Carel? Okay. Yes. One, I would say there are many possibilities also because, as you just mentioned, the service landscape is in flux, is in strong evolution. A broad general direction is energy optimization. Service companies that basically provide interventions on the installations, on the plants. There could be many different kinds of plants, from supermarkets to buildings to data centers, to many other kinds of different plants. Services related to energy optimization, which could be strongly augmented by our analytics, so by our products and by the analytics that we can provide through our products. That's very broad. There are many different possible ways that this can be implemented. There are many also different possible targets all around the world doing this. The priority for us would be Europe for this kind of new service, because that's something newer for us. We would prefer to stay, let's say, closer to home. That's a broad direction that we are definitely exploring. Again, there are many possible ways to do that, many possible targets and many different ways we can execute that. That's the general direction. Energy optimization. Okay. The second question was on, let's say, tax rate. Considering also Croatia, considering the investment in Croatia, maybe some fiscal incentives you can get there. The 21% level tax rate, is something you consider sustainable for, I don't want to say forever, but at least three, four years from now? Look, the investment that we are going to do in Croatia will have a fiscal incentive for the future, and it is around 25% of the investment. We are foreseeing for the future a higher amount of taxes compared to 2020, to be around 23%, we believe. Sorry, Nicola. The reason for this higher tax rate is due to, I don't know, China, is due to regional mix? It will be mainly related to Croatia because the fact is that in Croatia, we had last year, a part of the year was covered by the, let's say, the old investment that we are doing. Now we are foreseeing higher volumes, the benefit will cover just one part of the more profit we are doing in this country. Even in Italy, we had some incentive from a reduction in IRAP because we had the ordinary IRAP, not the extended IRAP, let's say it like that. It is possible that, if in the future we are going to do some M&A activities, we will be back to the longer, extended IRAP. Okay. Thanks. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is from Gian Bompun with GMP. Please go ahead. Good afternoon. Could you confirm the level of free cash flow that was generated in Q4? If we do a sort of back on the envelope calculation, seems to be around EUR 13 million. Is that a good basis to estimate what's going to happen in the next few quarters? Yes. The last quarter had a very positive effect on the cash conversion rate because we were something above 80%, and it was very high. Even because, as we mentioned, we were able to reduce the level of net working capital to a very low level. We believe that, as we said before, that the ordinary working capital with the year-end level during the different quarters, there is a seasonal effect that is not always stable, but we believe that it will be around 15%, so it will depress our cash conversion. We are forecasting for a sustainable level, a level of cash conversion around 70%. Thank you. Gentlemen, there are no more questions registered at this time. Okay. Thanks everybody for your participation and for your questions. Looking forward to present the first quarter 2021 results. Thank you very much.