Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the CAREL first half 2021 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, everybody, and thanks for joining our call for the presentation of the H1 2021 results. I'm now starting from page two, with a recap of the main corporate events related to the execution of the group strategy. In this period, we started the construction of our new plant in Croatia, intended to support our growth in EMEA, as well as to increase the resiliency of our supply chain. This plant will start operating at the beginning of 2022. A new board of auditors and a new board of directors were appointed by the shareholders, and tasks and powers concerning ESG were assigned to the director, Carlotta Rossi Luciani. As anticipated, we strengthened and accelerated our M&A activity, and we pursued two opportunities in this period. We acquired 51% of the share capital of CFM, a system integrator very strong in services on the Turkish market and a longstanding distributor and partner of ours. We also completed the acquisition of 100% of the share capital of Enginia, a leading company operating in the ventilation and air handling unit sector. I will spend a few words on Enginia at the end of the presentation. We also entered into our first sustainability linked loan for EUR 20 million, linking the loan specifically to achievements in gender equality. I'm now moving to page three with the main financial highlights. Basically, Q2 confirmed the already excellent performance that we had in Q1. Revenues grew by 25.9%. If we exclude the positive effect of the consolidation of CFM for approximately EUR 1.6 million for one month, as well as the negative effect of the exchange rate, the real like-for-like growth was 27%, even more. All regions and markets contributed to this achievement. Of course, the background is one of strong economic recovery in most of the world. However, we continue to execute our strategy of end user engagement and innovation for energy efficiency and for the transition to sustainable refrigerants. Thanks to this, we managed to seize very important opportunities in several key strategic applications, like indoor air quality, data centers, and heat pumps. In food retail, we continued to expand our market share, we also benefited from an expected recovery in the investment cycle. On top of this, we saw a strong recovery in the most cyclical applications like HVAC industrial, as well as food service, that had a strong recovery almost all over the world. Adjusted EBITDA margin was 22.4%, basically in line with the first quarter, up 320 basis points on the first half of 2020 and 270 basis points on the full year 2020. This excellent performance was driven mainly by operating leverage, but also to the continuous execution of the efficiency measures that we started taking last year. All of this offset the increased costs caused by the situation of raw material shortages. Organic net financial position, basically, so net of the M&A activity, decreased by 13%. We had a free flow from operations of approximately EUR 37 million that easily covered EUR 13 million of increase in net working capital, EUR 7 million of CapEx, and EUR 12 million of dividends. I'm now moving to page four, where we can see some more details. Revenues at EUR 202.6 million grew by 25.9% from the EUR 161 million in the first half of 2020. As we can see on the top right, we also had an increase of 21.4% compared to the first half of 2019, which was not affected by the pandemic. If we exclude the negative effect of the exchange rate, fixed exchange rate revenues grew by 28%, almost 30% growth. EBITDA at EUR 44.1 million grew by 42.9% from the EUR 30.9 million of last year. If we adjust for some non-recurring items, which are basically expenses related to our M&A activity, the EBITDA adjusted was EUR 45.3 million, growing by 46.3% and representing 22.4% of sales. Net profit was EUR 26.8 million, up 64.4% from the EUR 16.3 million of last year. This is thanks mainly to the operating result, also thanks to a significant reduction in the tax rate compared to the same period of last year, mainly due to a favorable geographic profit mix, as we will see in more detail in a few minutes. CapEx, at EUR 6.9 million, grew by 37.1% from the EUR 5 million of last year, this CapEx also starts to include some expenses related to the construction of the new plant in Croatia. I'm moving to page five, where we can see the revenue breakdown. To the left, there's the breakdown by region. All regions have an outstanding performance. EMEA grew by 26.2% net of the foreign exchange, with a very strong performance in all applications. APAC grew by 40.9% net of the foreign exchange. Here we have a really outstanding performance in China, but also a strong recovery in South APAC. In China, in particular, our strategy of end user engagement and innovation for the local market is delivering results in some key applications like, for example, data centers and indoor air quality for the local market. In North America, we have a strong impact from the foreign exchange, but net of the foreign exchange, sales grew by 18.1%. In Latin America, sales grew by 72.5% net of the foreign exchange, and here we have a recovery in also the countries outside Brazil. This very good performance basically involves the entire region. To the right, we can see the breakdown by market. HVAC grew by 25.6% net of the foreign exchange. Again, here we have a confirmation of a strong performance in key applications like data centers, indoor air quality, healthcare, as well as heat pumps. We have the recovery of the cyclical industrial applications. HVAC commercial in Europe saw a slight recovery. However, the full effect of the investment cycle in HVAC commercial will be probably visible from our standpoint in the next 6- 12 months. Refrigeration grew by 33.4% net of the foreign exchange. We confirm an excellent performance of food retail, where the market share growth is compounded by a recovery of the investment cycle. We had a strong recovery all over the world of the food service application. The core business net of the foreign exchange grew by 28.3%. The non-core business grew by 7.7%, the total result net of the foreign exchange is 28% growth. I'm now moving to page six, and I leave it to Nicola to comment the items below the EBITDA. Thank you, Francesco. The slide number six details the group result from the EBITDA to net profit. The first half of 2021 was impacted by D&A pretty in line with the 2020 level. In the period under review, the financial charges were higher compared to last year due to an increased effect deriving from the IFRS 16. The Forex impact in the first half of 2021 was a loss for around EUR 250,000 compared to a gain of around EUR 30,000 realized in the first half of 2020. It was mainly related to the group operation in Brazil, Croatia, and China. In the first half of 2021, the result of the company consolidated with the equity method was a gain of EUR 618,000 compared to a profit of EUR 250,000 of the first half of 2020. The tax rate of the period was equal to 19.9% compared to 23.1% of the first half of 2020, originated by a different country mix. The group net profit of the first half of 2021 was equal to EUR 26.8 million compared to EUR 16.3 million of the same period of 2020. Slide number 7 shows the net financial position evolution of the first half of 2021. Net of the M&A activities, the net financial position was improved compared to December 2020 level, reducing from EUR 49.6 million to EUR 43.3 million. The free cash flow from operation was equal to EUR 36.7 million higher than the CapEx and the increase of net working capital of the period. The organic increase in net working capital was mainly driven by strong growth of revenues and to a planned increase in inventory to better cope with raw material shortage and the seasonality effect in account receivables. It should be noted that the DSO at the end of the period improved compared with the same period of last year. During the first half of 2021, the company paid a dividend of EUR 12 million, and the net financial position was impacted by M&A activity, which implied a payment of around EUR 35.6 million. At the end of June 2020, the net financial position of the group was equal to EUR 78.9 million. Taking out the accounting effect of IFRS 16, the net financial position with banks amounts to EUR 50.2 million, a level significantly below EBITDA. At the end of June 2021, the group has an amount of cash equivalent, available credit line of around EUR 90 million. I leave the floor to Francesco to go on with the presentation. Thank you, Nicola. I'm on page eight. To summarize, on the demand side, we have a background of strong economic recovery almost all over the world. However, in this context, we continue to see strategic opportunities executing a strategy of end-user engagement and innovation for service. On the operations side, of course, we had the impact of the global raw material shortage, but in this period, this was mitigated thanks to a number of countermeasures that we took in the last 12 months. Increased flexibility through the deployment of new production lines, homologation of alternative components, even alternative microprocessors, as well as an increase in inventory. In this period, the effect of the shortage was mitigated by the actions that we took at the end of 2020, while the actions that we took at the beginning of 2021 during this six months will be visible mainly starting from the fourth quarter. Am I referring in particular to the homologation of alternative components. For these reasons, probably Q3 will be the most impacted quarter of the year. In any case, the tensions are expected to continue at least for the second half of this year, and they are still pretty challenging. All of this led to a confirmation of the 10-year record growth rate in revenues that we reported at the end of Q1, with an EBITDA margin significantly higher than 20%. As anticipated, we improved our M&A activity, we used our strong balance sheet to pursue two important opportunities in this period, with two bolt-on acquisitions, CFM and Enginia, that are fully in line with our strategic guidelines. To conclude, taking into account the very positive trend experienced in the first half, as well as the indications from the current order intake, without any worsening in the current scenario with respect to the pandemic and the raw material shortages, we expect to achieve an organic revenue growth rate between 15% and 20%, we therefore improve the view that we had at the end of the first quarter. Before leaving it to your questions, I'm now moving to page 10, with a few words on the last acquisition, Enginia. Enginia is a leading manufacturer of components for air handling units, mainly dampers to control the airflow. Enginia has been constantly growing in the last few years. However, like for Recuperator, we intend to accelerate the growth of Enginia using our sales footprint, since currently Enginia does not have an international sales force. Besides commercial synergies, in any case, the industrial rationale of this acquisition is basically expanding our offering for air handling units. Air handling units represent a strategic application for us for a number of reasons, not least because it's expected to grow significantly, thanks to the increased sensitivity to indoor air quality as well as to the energy efficiency of buildings. We also expect significant operating synergies with Recuperator. The two companies are actually geographically very close, and in fact, the entity that acquired Enginia was Recuperator itself. Some key data, revenues of Enginia last year were EUR 12.3 million, with an EBITDA of EUR 1.5 million. The enterprise value was EUR 12.4 million, corresponding to approximately eight times the EBITDA. The impact on our net financial position, therefore, is very sustainable, and this represents a bolt-on acquisition. Thank you so much for your attention. We're now more than happy to answer to all of your questions. Excuse me, this is the Chorus Call operator. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their touch-tone telephone. To remove your self from the question queue please press star and two. Please pick up to receive when asking questions. Anyone who has a question, may press star then one at this time. The first question is from Alessandro Tortora with Mediobanca. Please go ahead. Yes. Good afternoon, everybody. I have four questions, if I may. The first one is related to the CapEx and investments you are planning to do, because if I remember well, you were planning to spend around EUR 20 million, I'm assuming that probably you should speed up, okay, the pace of investments in the second half, I would have liked a confirmation on that. The second question is on the shortage that you mentioned before. Are there any specific area, I don't know, Europe, for instance, or Western Europe, where we are going to see this tougher impact from shortage? In terms of geographical mix, can you comment a little bit also the performance for North America, that if I understood well from the first quarter to the second quarter slow down, if there are any specific reason at constant effects that explain this trend? The third question is on the Turkish acquisition. If understood well, you are going to, let's say the minority stake, 49%, is going to take a valorization of almost EUR 50 million, something like that. Can you explain at least or give us a qualitative indication of what are the underlying assumptions behind this huge amount for this minority stake, considering that you paid the 51%, EUR 23 million? The last two question are on the cash flow side. If you can, first of all, confirm to us that the overall build-up you made to working capital in the first half, more or less should be stable going forward. On tax rate, if this level of 20% is overall sustainable for you. Thanks. Mr. Nalini, maybe your line is on mute. Mr. Nalini, please check if your line is on mute. We cannot hear you. Ladies and gentlemen, please hold the line. The conference will resume shortly. Thank you. Okay. Sorry. We had some technical problem. With reference to CapEx, I confirm you the level, Alessandro, and we are confirming to arrive around EUR 20 million of CapEx. Anyway, as you know, it could happen that some projects will shift from one month to the other, and so there could be some adjustment there at the end of the period. Anyway, the CapEx projects are confirmed, and we are going to invest on this. With reference to CFM, you were asking how we put a liability in the balance sheet of around EUR 49 million. That is a relevant amount. To make this evaluation, we were supported by an external consultant who took the contract and even the business plan that we have prepared with the seller, who is still involved in the management of the company, on the future evolution of the business plan. It is based on this and the technicality that was used from the consultant, it was a model, a sort of Monte Carlo model, where he made several different scenarios, and to each scenario was based on a different probability. It is mainly based on the expected evolution of the business of the new subsidiary. There was, I think, a question about the working capital. The working capital of the period, what you see, it takes into consideration even the acquisition that we made, because we made the consolidation, full consolidation from the balance sheet set for it, both of Enginia and even of CFM. We can confirm you that our aim is to have a level of working capital, even taking expression of these two subsidiaries, of around, at the end of the year, of around 16% of net sales. This is the target that we have, even because our aim is to have an inventory level that is in line with the needs of our customers. You were asking about the tax rate level for the future, and from this year, we are taking benefit even of the top mechanism that was applied two years ago. We believe that 20% should be a sustainable level for the group for this year. I give Francesco to comment about- Yes -the shortage and the geography. Yes. Thanks, Nicola. Let's say in terms of geography mix, the shortage is basically affecting all regions. Let's say that currently, probably we expect a slightly higher impact on HVAC, more than on refrigeration, concerning the specific product and component mix. Let's say the differentiation is more market related than geography related. Of course, we are taking all the countermeasures, and in particular, the homologation of alternative components is being mainly addressed to HVAC just because of this reason. As far as North America is concerned, the reason why there was a slight decrease in the growth rate is basically related to HVAC, because the growth rate in refrigeration improved. We had a slowdown in HVAC OEM especially tends to have cyclicalities from one quarter to the other related to a number of factors. We are not absolutely concerned about the performance of North America looking forward, and we are still in the process. We are starting to execute all the actions to improve our performance there. Basically, this is a contingent fluctuation mainly related to HVAC OEM. Okay. Thanks. Maybe I will come back with some other. I leave the floor to others. Thanks. The next question is from Will Turner with Goldman Sachs. Please go ahead. Hi, everyone. Alessandro asked many of the questions that I had, which is quite useful. You've already touched on some of them. I want to go into a bit more detail on your comments on the electrical component shortages. Just, you mentioned how it could get worse in the second half of the year. Could you just give a bit more color on how that's going to impact you and whether it's quantifiable, the extent that it's going to be worse? When I look at the two key results, it does look like it has had a impact because the cost of material and components as a percentage of sales is higher in 2 Q 2021 than it has been in historical years. You obviously still managed to achieve a quite good profitability by historical standards. Is that going to get worse, therefore, we should expect lower margins in the second half of the year? Is it that sales might be worse because you cannot ship products because you do not have the components in order to finish assembly? Okay, thanks, Will. The impact on the second half from the cost standpoint, let's say, will be more visible in the second half than in the first half, because, of course, on the P&L, the effect will be more visible now going forward. However, we are still talking about a low single-digit cost increase for the raw materials, so it's something manageable. Yeah. We are in the process of recovering most of it through prices. That will translate probably to some margin deterioration, but nothing too meaningful or scary, let's say. The impact will be definitely more visible on the top-line growth because basically it represents a bottleneck on our possibility to grow. In fact, our guidance of 15%-20% organic growth for the full year basically reflects our assumptions and uncertainties related to how much this bottleneck will affect our possible growth rate. In general, the effect will be, let's say, more visible in terms of limiting the potential for growth, rather than on the cost side. That's quite interesting. If you didn't have the bottlenecks from these components, do you have an estimate of how much you think you would have been able to grow this year? Is your orders running a lot further ahead of your sales? Well, definitely. Definitely. The demand is definitely higher than sales because there's this supply chain bottleneck. The order portfolio we have is very high. Demand is extremely positive. Unfortunately, we have this bottleneck related to the raw material. That, of course, we're trying to mitigate as much as possible, but demand would be definitely higher. Okay. My final question is on the end markets you're exposed to. It feels like most of them are obviously very favorable. Commercial buildings has obviously been one of the relatively weaker ones, but a very important one. Your comments that you made around on the cycle for commercial HVAC starting to become more apparent over the next six to 12 months. Just so that we understand that fully, you're expecting commercial HVAC to see stronger growth in the next six to 12 months. Is there any of your markets now which you see easing or where growth seems to have peaked and you think will be weaker over that time horizon? Okay. Yes. Commercial HVAC is recovering. It's growing. Now not considering projects related to indoor quality, because those are performing very well. The rest of commercial HVAC is improving. Already on the end market in Europe, we are seeing definitely a more positive outlook for commercial HVAC. The end market is already picking up. However, we are late in the cycle for the end market in commercial HVAC. That's why we expect to see a more significant improvement in the next 6 to 12 months. It's already growing. We expect it to grow even more in the next 6- 12 months. Probably it can be a medium-term growth, due for example, to the attention focus on the energy efficiency of buildings in Europe. Sorry, what was your second question? The second question was, is there any of your kind of end markets which you think may be easing in growth over the next 6-12 months? Okay, thanks. No, not really. Not really. We have a very positive outlook on the demand side on all applications, with some of them that have the potential to grow even more. Great. Thanks. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. The next question is a follow-up from Alessandro Tortora, Mediobanca. Please go ahead. Yes, thanks. The question was, let's say, just a follow-up related to the discussion we made on the profitability. To just understand better, considering the trend experienced in the first half, are there any specific reason why we shouldn't be, let's say, marginally better than your historical range between the 19% and 20%? Clearly, we have such an improvement in the first half and, if, let's say, the shortage is much more related to lower deliveries instead of, let's say, additional cost, I guess maybe we could be a bit better than these historical guidance you gave us. Thanks. Okay. Let's say that in the second half, we expect that profitability to converge towards our historical target, which is between 19% and 20%. The reasons are basically three. One is the fact that we will see, as mentioned, we will see more the impact of the cost of the raw materials. Again, we're working to mitigate most of it, but of course it will show some additional deterioration on profitability. The second reason is because every fourth quarter of the year, profitability tends to go down because typically the fourth quarter is softer in terms of profitability. The third reason, which is also the most uncertain, is related to the top-line growth because, of course, we have an important operating leverage, so the real extent of the top-line growth will have a very strong effect on the final profitability. In case the top-line growth will be in the high end of our range, of course, we can also expect our profitability to be in the high end of the range. Let's say we expect a good profitability this year, but converging towards our historical target due to these reasons. Okay, thanks. Mr. Nalini, we have no more questions registered at this time. Okay. Thanks everybody for your attention. I'm looking forward to talk to you again for the presentation of the third quarter 2021 results. Thank you so much. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.