Good afternoon. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Carel 2024 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 Francesco Nalini, CEO of Carel. Please go ahead. Good afternoon, and thank you for joining our call for the presentation of the Full Year 2024 Results. I'm starting from page three with the main highlights from this period. As you know, after three years of annual growth exceeding 20%, 2024 has proven to be a transition year, due mainly to the decline in heat pumps and to a generalized destocking process. In spite of a revenue decline, though, we managed to maintain a good profitability and especially strong cash generation, easily supporting record investments, especially in innovation. Now, looking at the figures, revenues declined by 11% in 2024 to EUR 578.5 million or by 13.7% on an organic basis. As expected, in Q4, we had a significant improvement since the quarter was broadened in line with Q1 and Q2, but stronger than Q3 in spite of the usual seasonality, where Q4 is normally the softest quarter of the year. In fact, the year-on-year performance of Q4 went from minus 15.3% of Q3 to minus 4.8% in Q4. During 2024, the revenue decline is almost entirely due to the poor performance of the EMEA region, in particular for the sharp decline in heat pumps. This vertical declined by approximately 70%, explaining by itself close to 10 percentage points of turnover decline. The weight of this vertical on total sales is now in the mid-single-digit range. Also, refrigeration was weak in EMEA during the entire year, and everything was compounded with a massive destocking process that happened across almost all markets. EBITDA margin in the full year was 18.1% in continuity with the first nine months, as the OPEX containment initiatives and a relatively stronger Q4 helped to offset the usually seasonally weaker profitability. We basically managed to maintain an adequate level in spite of the negative operating leverage, thanks to a number of savings that led to lower overhead expenses compared to 2023, even considering the perimeter change, as well as thanks to an improved gross profitability, which is related to the positive trend in raw material costs and a positive mix. On the other end, we reached record levels of R&D expenses that are confirmed at the target of above 5%. Overall, CapEx were also at the record level, but cash generation was very strong, with a cash conversion of approximately 60% and a final net financial position of EUR 15 million. This is after EUR 44 million for the acquisition of the residual 49% stake in CFM, without which the NFP would have been close to zero. The balance sheet of the group remains very strong, with NFP over EBITDA approximately 0.5, but actually 0.2 if you exclude EUR 31.6 million related to the IFRS 16 accounting principle. Now, on page four, we can see some more figures. Revenues at EUR 578.5 million were down 11% from the EUR 650.2 million of 2023, with a decline of EUR 88.5 million in organic revenues. The positive contribution of EUR 17.4 million from the perimeter change and the small negative effect for EUR 0.6 million related to the foreign exchange. The perimeter change is mainly due to Kiona that grew by 15% in recurring revenues at fixed exchange rates. EBITDA at EUR 104.9 million was down 23.6% from the EUR 137.2 million of 2023, or 18.1% of sales, versus the 21.1% of 2023, entirely due to the negative operating leverage, partly offset by higher gross profitability and the discretionary cost containment plan. The higher gross profitability, again, is due to a favorable trend in raw material costs and a positive mix. The EBITDA margin was stable during the year, so we did not have the usual seasonal decline in Q4, thanks to the cost containment itself and thanks to a relatively stronger quarter. R&D expense was at the record level, above 5% of sales, and the contribution of Kiona was accretive with a profitability in excess of 20%. The profit in the period has been EUR 62.6 million, down 11.7% from the EUR 70.9 million of 2023, entirely due to the operating performance, while the tax rate at 20.7% is in line with the previous year. As anticipated, in 2024, we sustained record CapEx, mainly in R&D and in the expansion of the Klingenburg plant in Poland to centralize and increase the efficiency of our mechanics production process. We invested in the period EUR 31.6 million, which is approximately 5.5% of sales, up 15.3% from the EUR 27.4 million of 2023. Finally, we propose a dividend distribution of EUR 0.165 per share, corresponding to an approximate 30% payout ratio. Moving to page five, we can see the usual top-line breakdowns. On the left, we have the breakdown by region, and as we can see, almost all the decline in revenues in 2024 comes from EMEA, with a decline of 16.3% at fixed exchange rates. Q4 confirmed, in general, the trend of the previous quarters, but we started seeing a material improvement in the order intake and in the expectations, especially in refrigeration. The EMEA area as a whole was, of course, the most impacted in 2024 by the heat pump and the stocking trends, and the comparables in 2023 were extremely challenging due to the backlog recovery during the entire year. In APAC, sales declined by 5.8% in the full year at fixed exchange rates, also in this case with a significant improvement in Q4, which has been the strongest quarter of the year. We have very positive results in refrigeration, data centers, and industrial, mitigating in China the still weak macro scenario in the country. In North America, the strong momentum continued, driven in particular by data centers, with Q4 being the highest of the year at EUR 28 million. Growth in the full year was 6.7% at fixed exchange rates, and obviously, also here, we have to consider the very challenging comparison of 2023, with the backlog that, in the case of America, was recovered mainly in the second half. These results have to be considered as very, very positive. North America has now reached 18% of total group sales, as we can see from the pie on the left. Latin America had also very good results, with a growth of 19.8% at fixed exchange rates, particularly concentrated in Brazil, while the rest of the region had mixed results. To the right, we see the breakdown by sector. HVAC had a decline of 13.1% in 2024 net of the foreign exchange, with a slight improvement in Q4 due to the strong momentum of data centers in the U.S. On the other end, EMEA was stable quarter on quarter, but with an improvement visible in the order intake. In refrigeration, we had a decline by 3.9% at fixed exchange rates, with the continuity of the trend in Q4, in particular a stagnant market in EMEA and a strong trend in America, with a focus on natural refrigerants and energy efficiency. In EMEA and Q4, also here, there's an improvement of the order intake, even stronger than in HVAC. I now leave the stage to Nicola for the items below the EBITDA on page six. Thank you, Francesco. Slide number six details the group result from the EBITDA to the net profit. The increase of D&A cost is related to the purchase price allocation of Kiona for EUR 1.47 million, and the residual part to the relevant CapEx activities of the last few years. The decrease of financial charges is mainly related to the interest rate reduction, to the lower level of financial liabilities, and the different comparison base since the second half of 2023 was impacted by the bridge loan of EUR 180 million related to the acquisition of Kiona. This line is also impacted by relevant figurative interest of accounting effect, such as put and call options, earn-out liabilities, and IFRS 16 liabilities. The net financial charges paid to banks and other institutions decreased from EUR 4.8 million of 2023 to EUR 3.3 million of the present year. The forex gain is mainly linked to the effect of the Kiona's put and call option expressed in NOK. The capital gains refer to the difference between the estimated fair value and the actual amount for the put and call option of CFM and the different fair value of Kiona and Senva. The result of companies consolidated with the equity method includes the valuation of Ri.Pos.Ca a company owned by Alipaco, focused on sourcing activities. The tax rate of the period was 20.7%, in line with the level of last year. The group net profit in 2024 was equal to EUR 62.6 million compared to EUR 70.9 million of 2023. Slide number seven shows the net financial position evolution of fiscal year 2024. The cash conversion of 2024 was around 60%, including a record level of CapEx equal to EUR 31.6 million. The period was impacted by M&A activities for EUR 44.2 million, and the group paid a dividend for around EUR 21.3 million. Net working capital improved in the last part of 2024 due to typical seasonal effect and a good management in all the main components. Taking out the accounting effect of IFRS 16, the net financial position is equal to EUR 18.7 million. I leave Francesco to go on with the presentation. Thank you, Nicola. Now we are on page eight, and I would like to take the opportunity to provide some updates and examples of our continuous innovation in different areas. We've already mentioned in previous conferences the breakthrough coming from the software side, with STone on the edge and with Kiona on the cloud, but of course, we strive for maintaining our competitive edge also in the hardware and service side. In electronics, for example, we introduced in 2024 the new generation of our control platform for refrigeration, specifically the controllers that drive cabinets in food retail, the MPX PRO. There are many innovations in this new range that is powered by STone and so gets all the extremely powerful features of this system. It's, of course, fully compatible with all leading natural refrigerants, including propane, and it has additional sensors embedded so that it's possible to get more physical data points from the cabinet to run more powerful algorithms in the controller itself or at the store system level with our local supervisor BOSS or at the cloud level. In mechanics, specifically in heat recovery systems, after the launch of B.blue, which has a new surface material for the plates of the heat exchanger to make water usage in data centers more efficient, we introduced a groundbreaking innovation in indirect evaporative cooling, which is the V-Series, a range of heat recovery systems in PVC. This is the first on the market and ensures much higher durability and longevity against corrosion vis-à-vis traditional materials, making the V-Series vastly superior for harsh industrial applications and data centers. In sensors, as a joint development between our two sensor companies, Arion and Senva, we just launched an infrared propane gas leakage sensor, the MiniGLD. It's specifically designed to support the transition to natural refrigerants like propane that, being flammable, has, of course, to be checked for leakages. This new sensor delivers exceptional accuracy and safety since its infrared design makes it immune to poisoning effects. It's auto-calibrating and has redundant microprocessors for unparalleled reliability. This is the first product of our new mini-architecture sensor platform that will be fully modular and will support different sensing elements for various applications in HVAC and refrigeration. In services, we just launched in Europe an initiative called Total Store, where, in addition to our comprehensive control system for food retail under refrigeration, as well as HVAC sites, we will have digital services and also consultancy to provide performance and energy optimizations. These will be obviously supported by AI, for example, with the new automatic rule engine for alarms currently under development in Kiona that we already mentioned in our last call. On page nine, I also take the opportunity to briefly mention our new multi-year sustainability plan. As you know, sustainability has always been one of the main driving forces of our activities, and the last plan, the 2021-2024, allowed us to achieve many successes we are very proud of and have been consistently integrated with the industrial business plan. In this page, we can see several examples of results from the last plan and goals for the next 2025-2028 plan. I would just like to mention, in terms of results, the approval of Carel's near-term decarbonization targets by SBTi and the goal of implementing a 10-year greenhouse gases reduction plan to cut scope one and two emissions within 2033. I'd also like to mention that our quarter in Italy has just obtained the gender equality certification, as we firmly believe that increasing our gender equality will lead, among many other things, to a more innovative organization in the future. Now, finally, on page 10, for the closing remarks, 2024 has been a challenging year of transition, with contingent but very steep trends like the heat pump decline tha de stocking, the tough comparison with the backlog recovery of 2023. Visibility and volatility have been through the roof throughout the year, but all the secular drivers underlying Carel Industries growth for the future remain untouched. Despite the negative operating leverage, we maintained a solid 18.1% profitability, thanks to discretionary cost containment and gross profitability improvements that also offset the typical Q4 seasonal decline in profitability. We also had a strong cash generation, easily supporting record investment levels, particularly in innovation, strengthening the foundations for our long-term growth. In fact, we introduced a number of cutting-edge products and initiatives in all our technology domains, and we also just launched our new multi-year sustainability plan to execute our commitment to sustainable growth. Needless to say, the current macroeconomic landscape remains challenging and volatile, with geopolitical tensions and limited visibility. In our markets, the EMEA region shows significant signs of recovery, especially in refrigeration. The APAC region presents a mixed outlook, with solid developments expected in data centers and industrial, while North and Latin America remain positive. To conclude, since the beginning of the year, we have been observing a significant improvement in the order intake. That obviously takes some time to materialize into actual results, also due to the supply chain ramp-up. We expect Q1 revenues to be close to those of the same period of 2024, with an acceleration in performance starting from the second quarter. This is due to a recovery in EMEA, especially in refrigeration, and in APAC, where the launch of new locally developed inverters is giving us very interesting opportunities for HVAC. At the same time, we confirmed the solid expectations for North America, driven in particular by data centers and inverterization. Thank you very much for your attention. We're now more than happy to answer your questions. Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. To remove your question, please press star and two. Please pick up the receiver when asking questions. Once again, that's star and one for questions. The first question is from Christian Hinterhacker from Goldman Sachs. Please go ahead. Yes, good afternoon, everyone, and thanks for the opportunity to ask questions. I wanted to start on the comments about the significantly positive trend in orders at the beginning of 2025. You touched on it a little bit in the closing remarks, but I wonder if this is concentrated by end market. I guess curious as to why it's likely to take months to benefit P&L. Is that suggested that you've been running a bit lean on inventories? Thanks, Christian, for the question. Basically, we actually started having a significant improvement in the order intake, especially since the beginning of the year. Of course, the supply chain was quite lean after what happened in 2024, and it takes at least a few weeks to ramp it up. Let's say the turnover itself, from what we are seeing in this moment, is improving during Q1, but especially we will have the first significant materialization from what we expect in Q2. We have also to consider that in Q1 2024, especially the beginning of Q1 2024, we had still some residual backlog of heat pumps. There was, especially in the very beginning of this year, still some, let's say, challenging comparison, which is basically going away now. Basically, the point is that it takes a few weeks for the supply chain to adapt to a higher regime of order intake, and that's why its turnover is improving during Q1, but especially we'll see the materialization in Q2. As far as the verticals are concerned, I briefly touched that we're seeing an improvement in EMEA, especially refrigeration. Now it's becoming really tangible, the restart of refrigeration in EMEA, and that's probably the biggest change. Plus, we have, let's say, quite good expectations for APAC for Q2. Q1 last year in APAC was very, very strong for some specific reasons. While on the other end, Q2 in APAC will see a significant improvement in performance from what we are seeing, also because we are having this new project for the inverters that we developed locally in China and that we are launching in the market in this moment. As far as America is concerned, we confirm the expectations that the results, let's say, and the expectations that we have been seeing in 2024, so quite solid expectations in especially data centers, but also from the introduction of variable speed compressors. Thank you. Just moving to margins, obviously you had the unusually strong margin for the fourth quarter, which usually sees a seasonal step down. You have obviously saved some costs. I am just curious how we think about the evolution of the cost lines as we move through 2025. Okay. We expected some evolution of costs that will be pretty much in line with this year, with some relevant investment in R&D costs and quality costs, but that is pretty much in line with the evolution of this year. Yeah, quality costs, meaning quality improvement projects. Yes. Okay, makes sense. Finally, interesting to read your 2028 sustainability report. In that, you talk about major investments in plant infrastructure as you move away from non-renewable energy sources. If I look at consensus, there is about EUR 92 million of cumulative CapEx over the next three years, roughly EUR 30 million a year. Does that figure need to be higher to account for these investments, or is it inclusive of the existing CapEx framework? No, no, Christian, it's included in the existing CapEx goals, so around 5% of sales. Everything is included. Thank you, Francesco. The next question is from Niccolò Storer of Kepler. Please go ahead. Good afternoon. Thanks for taking my two questions. First one is on the outlook. If you maybe can comment about your expectations for what concerns HVAC commercial and HVAC industrial X data center. I was wondering if also in this space you are looking to some early signals of recovery or if it's still too early. Second question, again on cost, in particular on cost of materials. Probably 2024, the weight of cost of material on revenues was the lowest in many years. So what was behind this, and do you think that maintaining, if I'm not wrong, 41% weight on sales could be something sustainable into the future? Thank you. Your microphone is probably on mute. Yeah, yeah, no, sorry, sorry. Yes. Thanks, Niccolò, for the question. As far as HVAC commercial industrial concerns, speaking especially about EMEA, because I think that's what you're referring to, that's a little bit more unclear, especially in commercial. Industrial, industrial, we are quite optimistic, apart from the side of industrial related to automotive, but commercial is a little bit more uncertain. We are optimistic and confident for a number of reasons that the market will continue to improve, but we have a little bit less visibility. The stronger visibility we have in this moment is for a significant restart of refrigeration in EMEA. Overall, though, there is a generalized also in HVAC improvement that we are starting to see in EMEA. It is not only refrigeration, it is also in HVAC, but the situation is a little bit more unclear and more volatile. As far as the raw material costs are concerned, let's say that we do expect to continue having additional improvements in electronics. On the other end, for the mechanical part, of course, even if we are investing, especially in Poland, for improving the efficiency of the process, as far as the materials are concerned, of course, that's more difficult to forecast because it depends on the metal price, on the duties, and so on. Tariffs notwithstanding, more or less overall, we can say that we expect to maintain this level of incidence of raw materials on prices. Thank you. Maybe a quick follow-up. When you talk about, just to frame a little bit better what you are saying, when you talk about significant improvement on refrigeration, if we had to quantify, this means double-digit rebound, mid-single-digit rebound. Which is the range we should think of? It's difficult to quantify at this stage, Nicola, because it's true that the order portfolio is slightly longer due to the supply chain ramp-up, but it's not so long. Let's say it's material, so it's a material rebound. Grazie. The next question is from Alessandro Tortora of Mediobanca. Please go ahead. Yes, hi. Good afternoon to everybody. I have three to four questions, but they are brief, if I may. The first one, Francesco, if you can comment also, let's say, a little bit. I heard your comment on the regional performance, but considering, let's say, your comments on EMEA, but also North America and APAC, can you give us also a kind of sense if you see, for instance, North America accelerating in 2025, considering clearly the greater exposure to data center application? Secondly, if you believe that making the sum of all the application in EMEA, you see basically EMEA, let's say, returning to a decent level of growth. Lastly, considering the comment you made on China for APAC, do you expect basically APAC to return to a positive territory this year? That's the first question. Thanks. Okay. Thank you, Alessandro. It is definitely too early to provide a quantitative indication for the full year. I can give you some qualitative indications on the trend. North America remains very positive. The results should be pretty good this year. We have to consider last year; the growth was very good, but we had a very tough comparison in 2023, which to some extent should normalize in 2024. This could help, but we have very solid expectations. Again, please consider the evolution of, for example, inverterization, which is very important. Having said that, of course, it depends on then we cannot forecast what could happen with geopolitical induced recession, stuff like that. We cannot know. Looking at the current market conditions, this is what we expect. In EMEA, we do expect, yes, we are optimistic about a return to growth. You said that decent growth, it depends, but what you mean by decent, but yeah, we expect. Let's say mid. Mid to mid. Mid to mid. Mid-single digits. It's difficult to say, but let's say we are optimistic about a return with positive results. In APAC, likewise, we have good expectations for an improvement during the year. Yes. In APAC, probably yes. Again, the comparison in Q1 is quite difficult, but the rest of the year should be definitely better. Okay. Okay. Thanks. The second question is, you mentioned initially the cost efficiency measure the company put in place, not also to de-seasonalize a little bit with profitability last year. If we need to think about also the historical corridor you had in terms of EBITDA margin in the past years, and also, let's say, this return to growth in the coming quarters, do you believe this year the company can come back, let's say, to the normal corridor, which is at least, let's say, the 19% EBITDA margin? That is still our target, of course, related to our usual path of organic growth. Assuming high single-digit growth, the result should be 19-20% profitability. That remains our target and expectation for the mid-term. This is not a guidance for 2025. It is our mid-term general expectation. High single-digit growth, 19-20% profitability will confirm that at this stage. Okay. Thanks. Let's say, the third question is, let's say, some major moving parts for the cash flow generation or the cash conversion in 2025. If we need to think about the CapEx on sales close to, let's say, around 5% also in 2025, but also on the networking capital, which kind of assumption, okay, we need to think about also for the networking capital on sales? Thanks. Look, in terms of networking capital, I expect stability with the end of the year. I'm talking about the end of what we are expecting of 2025. There could be some improvement maybe on the inventory level. Instead, the other relevant matters, it will be pretty much stable with this year. Okay. Thanks. The last question is on, let's say, the M&A strategy. You briefly, let's say, commented the Kiona performance, okay, last year. I think that probably first of all, if you can share a little bit also your feeling on 2025 performance, okay, expected for Kiona, if you're assuming some kind of acceleration. Beyond Kiona, considering the current environment, also let's say by region, where do you see, let's say, interesting opportunities for Carel in terms of possible, let's say, M&A targets? Do you still believe North America is a top priority for you, or maybe considering also this return to growth for EMEA, maybe you also see some opportunities in our region? Thanks. Okay. Kiona had basically had in 2024, as we mentioned, 15% recurring revenue growth, which is a little bit behind the initial expectation. I mean, considering how challenging 2024 was in Europe, we consider that quite satisfactory results. Results, sorry. For, let's say, our expectation for 2025 is for an improvement of this performance. Likewise, for example, also Senva had a very solid result and a very solid profitability, accredited profitability. In terms of strategy, we now have a pretty solid balance sheet. We have quite a significant firepower. We are increasingly active. We maintain the focus on North America, but of course, we do not exclude Europe because there could be some interesting technological or market opportunities. The focus is still North America, but we do not exclude other regions, especially Europe. Okay. Thanks. Thanks for all the answers. The next question is from Alessandro Cecchini of Equita. Please go ahead. Hello everybody, and thank you for taking my questions. The first one, actually, it's on cash generation in 2025. During your last call, you were, I mean, expecting net working capital on sales to be below 20% from 22-23% of this year, 2024. If you can elaborate a little bit more on these. Secondly, maybe also on the cash flow, I didn't catch about the CapEx because this year CapEx were significant, so EUR 40 million if we include also leasing rental fees. If you can elaborate a little bit more on these for 2025. My second question is instead on you were referring that you expect some growth in the first quarter. It's growing, maybe not big growth, but it's growing. It's correct, my interpretation in terms of sales. My final question, it's about data center. If you can share, I mean, which kind of growth you saw in 2024 and which are the projects which are the feeling that you have for next year. Thank you. Okay. Sorry. I start from these last two questions, then I leave it to Nicola for the questions on the cash flow and the CapEx. Actually, our expectation for Q1 is for a flattish Q1 compared to Q1 2024, which is, in any case, an improvement year on year because we would go from minus 15 in Q3 to minus 4.8 in Q4 to more or less around zero in Q1. It would be a year on year, let's say, an improvement. As I said, we do expect a flattish Q1 compared to Q1 last year, while we do expect an acceleration in Q2. Concerning data centers, we're having very important projects, especially in North America. Quite, let's say, we have some very important customers playing in data center cooling there. Some of them are specialized, and they have very, very important growth prospects. They have fully booked order pipeline. We're working a lot on liquid cooling. That's the fastest growing part, but of course, it's across the board. As I mentioned, we're also, let's say, creating, we're in the process of creating a competence center specifically for data centers, which will be based. Initially, we thought to base it mainly in the U.S. Now we're thinking to base it in the U.S., but also in China because also in China, there is significant investment going on, and we are seeing quite good results in data centers also in China, like for chillers, for example, or for CDUs, coolant distribution units for liquid cooling. We're seeing good results and strong investments also in China. Probably this competence center will have a double, let's say, double leg, one in this competence center, one in the U.S., and one in China. From an organizational standpoint, that's the main project. Of course, we are talking to customers, exploring the market, exploring the path to market to see if it's possible to have stronger exposure to the end users. Senva is getting very good results from data centers. They have a range of sensors which are specifically suited to data centers. They're growing a lot. They have some access to end users in data centers, and they are, let's say, we are trying to leverage on those relationships also for the rest of the range of Carel. Yes, Nicola, what was the question? With reference to the networking capital, to go below the networking capital, below 20%, it could be our, let's say, mid-term goal. I think that it's something that we can reach. On the other end, you have to take into consideration that this year we were grounded 22%, considering that we had a good December result in terms of sales, that we had a higher level of account receivables on the other end compared to last year. Compared to, if you're taking into consideration our, let's say, credit, the quality is very high. We are at minimum level of overdue compared to what was in the past. We think that there is even space to improve, as I told you, in the inventory. It is a choice that we can do during the year, but it depends even where we see the opportunity. In this moment, we have no pressure from our because we have a strong financial position, and we will decide if we invest on the inventory in order to fulfill the requirements from the customer or to work on the working capital. If on 2025, we can project something in line this year, but in the mid-term, we can think about even an improvement on this. In terms of CapEx, we always gave a guidance, and we are confirming this to have 5% of the CapEx without taking into consideration the lease effect or around the 5%. We are confirming this amount, including, as it was said before, even the ESG investment on this. Okay. Yeah. This year it was, like I said, about 5%, 5.5% approximately, but let's say it's around 5%. Of course, it's not. It depends even on the date when you complete some investment. It is not something that is CapEx, as by definition, fluctuating on a quarterly basis. Okay. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. Management, there are no more questions registered at this time. Okay. Thank you so much for your attention and for your questions, and looking forward to speaking with you again for the presentation of Q1 2025 results. Good afternoon.