Good day, and welcome to the Atlas Copco Q3 2022 earnings call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Peter Kinnart, CFO. Please go ahead. Thank you, operator. Good morning, good afternoon, good evening, everybody, and a very warm welcome to the earnings call to the Q3 results for the Atlas Copco Group 2022. My name is Peter Kinnart, and together with me is Mats Rahmström, to comment on the different elements of the result. Before I hand over to Mats, I would already now like to ask you that, when the Q&A session starts after our introductory presentation, to please only ask one question at a time in order to make sure that all participants on the call have the opportunity to raise their most important question. If we get through all the questions, then of course, you are more than welcome to put in another question. Thank you. Mats, over to you. Thank you, Peter. I will start with the picture actually on the introduction. This is one of our recent acquisition. It's the Lewa pumps. I thought I would put this in the right environment so everyone understands what it is, because we do get a lot of questions. The three pieces in the middle, these are the pumps that we sell, and you can see it's really an industrial pump environment. In this case have dosing capabilities. Just like we like in Atlas Copco, it's an important part of this process, which I think everyone understands, and it's still a smaller part of CapEx. It gives us also a greater opportunity with an interesting service business. I think the Lewa acquisition fits very well with what we like in Atlas Copco and what we are good at. With that introduction, I will go to slide number two. It was on orders received, we were up 6% organically, and very strong performance from three of our business area. Compressor Technique up 21%, Industrial Technique up 21%, and Power Technique up 16%. Also in Vacuum Technique, which was -23%, the industrial and scientific continue to do really well, and the minus mainly related to the semiconductor industry. And all in all, that was close to SEK 40 billion, which is another very strong quarter for us. We continue to have strong growth in service, which is good for our resilience, and also the orders received came from all regions around the world. As I said, sequentially down 8%, so in line with how we guided last time. We had record revenues and up 18%, and also sequentially here, positive down 8%. Although we are still challenged by supply chain issues, we could still push out a little bit more products. We could see strong performance on all business areas. Compressor Technique up 13%, Vacuum Technique 27%, really remarkable. Industrial Technique 14%, and Power Technique 20% down. We have a number of acquisitions in the quarter, 11 of them, and for the year, we are at 21. We can go to slide number three to look at the profit. The first two just it's the orders received and revenues, and the third point is the operating profit, which increased with 40% versus the quarter last year. With a 22% margin now, we had the record operating profit at almost SEK 8.4 billion. Extremely pleased with that development. We of course have support from currency to get to this level. At the same time, we have the dilution from the supply chain issues that we continue to have. Return on capital employed 29%. We can look at the quarters. It's a completely new level right now. We have four very strong quarters in orders received. Also sequentially, we can see that we managed at least to step by step improve our performance as well. Can go to slide number four, which gives a little bit of geographical. I start in Asia. It might look down in the light blue there, says 4% up. This is the part of the world that we have most of our sales to semis. Vacuum Technique was negative, but all the other business areas was actually double-digit growth in Asia. Very strong performance there. If you go to Europe, also fairly strong performance from all the business areas. But maybe this is the area where we see that business could be at least a little bit softer. South America, a strong performance on record levels for all business areas. North America is very similar to the Asian story where we have double-digit growth for all business areas with the exception of Vacuum Technique. Pleased to see that our offer is appreciated in all regions, and that we have a product portfolio that fits the application in all these areas. We go to slide number five, and that's more a confirmation that we now have eight quarters with growth and the last quarter, that's 16%. Slide number six. Here you have the bridge, first on orders received, and you can see the help we had from currency there, 13%, but organic 6%, and on revenue down 15% on currency and 18% organic. Go to slide number seven. Here you should see a pie chart with the different business areas. Although the fantastic performance from Compressor Technique, with 21% growth, share has declined somewhat in the group. Let's start even though with some of the Compressor Technique, we can see very strong development around LNG application, battery application, and even carbon capture application. Many of the businesses that we believe will be more resilient over time. Power Technique benefits, of course, from the recent acquisitions with pumps, with Wangen and Lewa, but also a very strong business for many of the product lines and especially the rental also had very good performance in the quarter. Industrial Technique, they benefit from the CapEx spent on the EV transformation in the auto industry. It's final assembly, its flexible automation, but also battery manufacturing there as well. In Vacuum Technique, although -23%, we should remember how much growth we have had in semi over the last two years, and industrial and scientific vacuum are doing really well as well. Go to slide number eight, which is Compressor Technique. I'm quite amazed with the continued strong order growth at 21%. You can see that we separate a little bit that the larger compressors that we see in Gas and Process, we see them in oil-free, are doing better than the smaller ranges of products. It's more project type of business. Here we can also see that we have a number of applications which I mentioned before. Maybe on top of that, we also see more and more project builds for hydrogen, which is of interest to us as well. They had solid growth in all regions around the world and a flattish development in Europe. Service is good for us, and they continue to grow in creating products, which is very good. Revenues on record levels up 13% and an operating margin at 24.2%. Here, of course, supported by the growth of the currency, but held back somewhat on the supply chain constraints. A very good return on capital employed with a 50%. They continue their journey on acquisitions. I think Oximat, which was acquired in Denmark, on-site air, is strengthening our position there. Very interesting. They continue with the rollout phase on distribution to get access to both product, but also distribute service. One that stands out a little bit is the one in Germany, where we have bought a digital channel to reach our customers as well. Of course, if you look at the graph, it looks quite impressive both on orders received, development, and revenues, even if you take away clouds. You go to slide number nine, which is Vacuum Technique. There we can see the decline, which I refer to as this in semi equipment. You could see that trend already in the previous quarter that memory is not performing as well as logic. On the other side, from our perspective, it could be equally vacuum-intensive. It's dependent more on the process around those products. Service continued to grow as well, and we expect that to continue considering the amount of products we put in the market. For semi, I mean, there might be a softening of the market from a very, very high level for a few quarters. On the other side, if you look at the CapEx cycle in the coming years and the change in society, how we live and operate and run industries, we don't have a concern long term for this. They pushed out record revenues, an increase of 27% and operating margin at 23%. They are challenged both by the supply chain, but they're, as we discussed, before as well, price increases are more difficult when you have long-term contracts and long lead times. Yeah. If you take the next one, which is slide number 10, that's Industrial Technique. It was a very strong order intake, again, 21%. We believe Automotive can be divided into pockets of business. One is the traditional combustion engine business. Very few products available in this market. It's more an OPEX spend, replacing tools, maybe do upgrades. The lion's share of the business is coming from the new EV market and the battery manufacturing as well. I think we have been asked many times about the potential in an electric vehicle versus a traditional combustion engine vehicle. I may just confirm that we see equally or higher potential per vehicle when we go to EV or hybrids. Also Service continued to develop. Record revenues, still very challenged on the electronics, but we are scrambling there. A spot market buys to satisfy lead times to our customers. An operating margin at 21.4% and return on capital at 18%. Into Power Technique. There we have continued growth down at 16%. The portable compressors are doing really well and generators as well. But even better, the specialty rental and service continued to grow as well. We have had a very good start with the two pump acquisitions as well. Revenues 20% organically strong for us and a very strong margin for this end market at 18.9%. Driven mainly by the organic revenues of course and diluted from the same challenges as everyone else has with the supply chain. Which I mentioned already, the acquisition of Lewa and Geveke was completed in the quarter. On slide number 12, you have the profit and loss, and we give you two indications there. For reference, you have the EBITA as well, which is at 23.2%, and then what we report on operating profit at 22%. By that, I think I hand over to you, Peter Kinnart. Thank you, Mats. I will continue on the income statement on the same page. Net financial items, a minor element in the income statement, but the change compared to last year is due to positive financial exchange differences, basically. Then we have, of course, profit before tax of SEK 8.5 billion, and then an income tax expense of around 22.6% of that. So, that is roughly our tax rate for the moment. We also expect that that will be more or less what we will see in the last quarter of the year, when it comes to the income tax rate. The profit for the period adds up to SEK 6.5 billion compared to SEK 4.6 billion a year ago, which is 43% up, and resulting in basic earnings per share for the quarter of 1.34 compared to, for the share split adjusted, of course, 0.94 SEK last year. The return on capital employed, that reached 29%, 28.7%, I think you saw in one of the earlier slides, versus 27% last year. That I would have to add here as well is mainly driven by the currency, basically. Return on equity of 32% versus 30% last year. I move on to slide number 13, where we give a little bit more color on the profit bridge. What we see here basically is a strong support from currency, as you can see. Slightly negative impact from the acquisitions, which is not uncommon for the first year, given the high integration costs that we typically have to bear. We see a drop-through of 13% on the revenues, which is slightly negative on the margin. When we do the analysis, basically what we see is that cost increases, whether it is material, labor or energy costs currently for the Q3, are compensated by all the effort that our divisions and business areas are spending on trying to increase the price levels to the market. We also have supply chain inefficiencies, and those are more temporary issues, I would say. Inefficiencies in our factories or spot market buying in order to get electronic components, for example. Those we don't really manage to compensate, even though there is a positive impact on volume, as well as mix. Last but not least, we also continue, as we have already indicated at previous calls as well, to spend increasing amount of money on product development. That is, of course, the currency for the future. Also in our activities when it comes to digitalization, improving presence in the market and so forth. That all adds up to slightly dilutive effect still of 1.1%, but mainly and predominantly, the very good continuous progress on the pricing. If I move to the next slide 14, where we see the breakdown of the bridge by business area, then basically the conclusion is the same. What I would like to highlight here is the very strong performance of Power Technique with a very positive drop-through as well. All business areas supported by currency, some to a higher extent than others, but overall a very positive impact from currency across the board. Depending a bit on the different business areas, that they're able to cope with the different challenges, pricing or cost increases. As we already said earlier, particularly in semi industry, for example, or motor vehicle industry where we deal a lot with key account customers, it is a little bit harder to get the same type of price realization in the market than with the more broad-based industrial applications. Moving on to slide number 15 then on the balance sheet. Maybe first of all, before talking about any specific category, I think it's worthwhile mentioning that when we compare the quarters, that there is an enormous amount of currency impact in that balance sheet as well, due to devaluations. You could say that about SEK 19 billion year-on-year is the impact on our balance sheet from currency. Of course, there are still other increases out there on the intangible assets. Most notably, of course, the change in our intangible assets, thinking of the acquisitions of Wangen, Lewa, Geveke, Oxymat, and many more. The other probably remarkable item here is the other property, plant, and equipment with an increase of SEK 3.5 compared to September last year. That is of course due to the investment that we have approved for capacity expansions, mostly in VT, but also in Compressor Technique, basically. Then I think the two items that really stand out here as well are inventories and receivables. Net working capital or working capital components that have gone up by about the same amount. We see basically all the business areas increasing there. For inventories, the ratio is slightly up. For receivables, however, it's very flat, and we also see no increased risk on the receivable side. It is all related, largely related to the volume increases that we have seen, aside from the currency impact. Then, the cash and cash equivalents, as you can see, that has gone down a bit, compared to September last year. Of course, there the reasons are the redemption, the first payout of the dividend, and then of course, the numerous acquisitions that have been done, in the course of the year. Then going to the equity and liability side. On the interest-bearing liabilities, we have increased our short-term funding a bit by having a few bilateral loans, which is due to the fact that our working capital has gone up and of course, also due to the high amount of acquisitions that we have done. We also need to think about the dividend that will be payable in the course of October. On October 26, we will pay out the second part of our dividend, 4.95 SEK at that moment. Then last but not least, here, the non-interest-bearing liabilities, they have also increased. It's quite a mix of many different things, but the most predominant part are of course, the trade payables that are linked to the purchasing of all the inventories. Secondly, quite large as well, the advanced payments linked to the project business that is going quite well during the quarter. Other types of accruals such as income tax liabilities or other accruals that we need. Before I continue to the next slide, I would still like to mention one thing with regard to the bridge, and that is the outlook for the currency development. Here we actually think that it is most likely to be similar positive compared to the Q3, however, most likely slightly lower than what we have seen until now. I will really move to the next slide, and that is slide number 16, talking briefly about cash flow. I think the image is very similar to what we have commented over the last number of quarters. We see a very solid operating cash surplus, I would dare to say. At the top line there, almost SEK 10 billion. The taxes paid are a bit higher, but that is purely linked to the volume, the increase of the business and the profitability that has gone up. The change in working capital, which is still negative, but significantly less negative than it has been over the last two quarters, as you also can calculate from the year-to-date numbers here. It's of course across all the different categories that we see increases, including the payables, although not at the same extent as the inventories. We see the investments linked to the capacity expansions that we are realizing in Europe, in South Korea, in China or in the US, and in Belgium as the four dominant locations where we are doing quite large investments. That is, of course, increasing the cash outflow, as you can see. That gives us overall, after all of these different items, an operating cash flow of SEK 5.7 billion compared to SEK 4.7 billion a year ago, same quarter. Of course, the big difference at the very end of the slide is the amount of acquisitions, the money that has been spent over the quarter. You have the list in detail, but of course, the biggest contributors are Lewa here and Oxymat here. with that, I conclude on the cash flow, and I hand back to you, Mats, for the near-term outlook. Thank you. Here we are trying to guide the customer activity level, as we call it, between Q2, Q3, and Q4. There is no huge science in this. We go by business area to see what are the signals they get from their customers. This time we said that we think, believe that will weaken somewhat compared to the high level that we have seen in the Q3. Of course, we have had three very strong quarters. In somewhat, you might want to read in that we haven't seen any signs of a recession type of scenario. We still think that in the quotes, number of quotes we have for strategic programs, long-term strategy like in CapEx and oil-free, it still looks fairly positive. We're also gaining market share in what we call resilient technologies linked to the sustainability, which we believe is future-proof our company. Semi, we do see short term being softer, which is already confirmed in the previous and this quarterly report. Long term, we don't see that as being an issue, the other way around, actually, that there's many investments to come in that sector. On the negative side, we have seen the slowing down in general industry. That could be industrial tools, could be industrial vacuum, for example, industrial compressors that we see slower growth in or no growth, as we see it. There's still some hesitation about the corona linked to mainly China. There's an uncertainty there. Recently introduced was also this CHIPS and Science Act that we are evaluating to see how that will impact the semiconductor business globally. Of course, the Russo-Ukrainian War makes it more challenging in Europe in many ways, as you know, and it's probably not so good for business. That's why we have concluded that somewhat less activities for us as From a very strong quarter, yeah. We have, before we start the Q&A, we would like to remind everyone about the Capital Markets Day. If you really like to know the inside of our group and learn more about the strategy and what we will do going forward, this is on November 17 here in Stockholm. If you'd like to register for that, you need to do that before October thirty-first. Should we then open up for questions? Yes, Mats. Thank you very much for those comments. Operator, I would like to hand back to you. Before we start, I would again like to remind you to please respect the request to only ask one question at a time to allow all participants to raise their burning question to us. Thank you. We'll now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Guillermo Peigneux-Lojo from UBS. Please go ahead. Thank you, good afternoon, everyone. I wanted to ask about, obviously, your technique, and I guess you commented on a number of factors impacting your orders and also the outlook, I guess, into Q4. I wanted to elaborate on one of the statements in your report when you talk about the ramp-ups from customers being slower. What do you see there? In addition to that, on cancellations, do you see any risk on cancellations? Last, but not least, on U.S.-China ban, are you seeing anything there or any comment there will be helpful from our standpoint? Thank you. Thank you. On the ramp-up, but we can see that, of course, there is long lead times from many of the suppliers. That could be timing-wise as well, that they don't get all the material they need to be able to ramp up production. I assume that it also could be where they have better capacity, but they are slower to ramp up some of the factories. This is what we see. I believe that the first one comment I made on this is probably the most relevant one. It was very difficult right now to start a new line with something, and you need to coordinate all the efforts from all your suppliers. The second one was, it was cancellations. No, we haven't, in this quarter, we haven't seen any big shift in cancellation. It's quite on a normal level. The follow-up question on that normally is if we believe that we have, like, air or fake orders in our system. I think I've been through this in Industrial Technique. It's very linked to projects. We can see the projects. That is the same for Vacuum Technique as well. For semis and VT, the same thing, we know where the products are going. The only way we can see that there could be a change, of course, would be products that goes to distribution where they have stocked up. But we don't see anywhere where we can see that anyone plays doubling, ordering or anything like that. With that said, I'm not saying that we cannot see cancellation, but that's not been a major change in this quarter. The next question comes from Lars Brorson from Barclays. Please go ahead. Yeah, great. Hi, good morning, Mats, Peter. Maybe just on that, can you remind us, I think you know I was asking about the kind of impact from what we see in the semiconductor industry right now. Can you remind us, please, how much is China of your VT business? What I did wanna ask, too, was the organic drop-through margins in VT. In the short term, Peter, it looks like you bottomed out. You had a couple of quarters of negative drop through in the first half. We are now turning positive. What's the cadence here on the margin improvement? Can we get back to incrementals in the forties, fifties over the next sort of three to four quarters in VT? If I can, sorry, just over the medium term, I'm trying to get a better understanding of the organic drop-through in semi VT. My assumption is that's probably in the 60s%. Any reason to believe that will be materially different in a downturn that we may hit over the next year or two? What can you do effectively to lower that break-even point, lower those drop-through margins and de-risk the earnings profile as we get into perhaps 2024 on the other side of the backlog that you'll be invoicing this year? Thank you. Maybe I can start on Vacuum Technique and semis. We have not disclosed exactly how the sales is around the globe. China, along with Americas and Korea are the top three countries. It's a significant part of that business. All in all, I think we have maybe 20 customers, and it's spread among those three countries, so it's a significant part, of course, China. Okay. Thank you, Mats. I will move on to the other question on the drop-through for Vacuum Technique that turns positive. Yes, I think first of all, from our point of view, we are at least very, very pleased to see that we are able to make that turn and to get these positive numbers on the bottom line versus our revenues. Even though from a margin perspective, we're not quite there where we would like to be. Let's say happy but not satisfied still. Of course, I think it's very much thanks to the strongly increased efforts on the pricing side to counter all these negative impacts. While at the same time, of course, the inefficiencies in the factory still are difficult to handle with supply chain issues, particularly on the chip side, causing still similar problems as we have seen over the last few quarters, and there's not really been a firm improvement there. Whether this drop-through will now go all of a sudden to sky-high levels of 60%, I can't really say. What we have generally said when we talked about drop-through is that over a longer period of time, we normally count with something around 30%-35% across the business areas, and I would not see any reason why we should not continue to believe in that scenario rather than having these enormous drop-throughs. I think we also want to make sure that we continue to invest in the future, that we do the right R&D initiatives and so forth, that we upgrade our systems so that we are able to cope with the future rather than trying to max out on the drop-through. Thank you. The next question comes from Daniela Costa from Goldman Sachs. Please go ahead. Hi, good afternoon. Thanks for taking my question. I wanted to focus on your biggest business, Compressor Technique. It was down organically in 2020, I think -3%. Obviously everyone is wondering when there is a slowdown. I don't want to ask you when you think that is. When we have the next slowdown, in macro-wise and in general industrial, do you think? Can we look at 2020 as sort of perhaps a bottom of what your orders could do? Or do you think there's specific things that were unique to 2020 where that drop was maybe much lower than, for example, if we look back at history at all, 2018 or even 2008 or even 2015? Just for us to think about how do we contextualize a potential future downturn versus the example of 2020. Thank you. Thank you for the question. Yeah, 2020, I think, on the negative part, 2020 that we might not see in the next slowdown would be the access to accounts. COVID limited us to have service on site. That limited that possibility for us. On the other side, if I recall it correctly, we had a lot of government support programs that made us be able to keep a lot of the employees employed, so we could have a quick ramp up when we saw business again. A couple of other things that I think might be positive for us is, of course, that we continue to develop the service business, and as long as the operations are running, even if CapEx is still the OpEx continues, and then that will support the service business. And myself, even if I don't have the evidence that this, I believe that sustainable applications like wind power, battery, hydrogen, many of these investments, I think many of our companies will customers will continue to invest in that, and I think that will speak positively about that as well. There are some changes, but I don't see that we would be significantly worse. I think that could, depending a little bit how we get support as well, of course. There's no structurally things except for those things that I said, and those are actually positive. I might also add, for example, that the strategy of climbing the service ladder in the service organization has been quite successful. Of course, that means that we also have a higher relative proportion of service plans into the portfolio, which is typically one of the elements that of course make the business more resilient. Clear. Thank you. The next question comes from Mattias Holmberg from DNB. Please go ahead. Thank you. I'm a bit curious on the strength you see in Compressor Technique. If you could elaborate a bit on how much of that, in sort of the current environment you believe comes from higher energy prices. I don't want to put the words in your mouth, but I sort of sense that you're downplaying a bit the urgency from customers to make these investments right here and now. I'm curious to get some thoughts on that. Just so I understand the question then, the link from the Russia-Ukraine conflict to having higher energy prices, and then how that impacts the business then, I guess? Yeah, I think essentially if you're seeing much of the demand growth in Compressor Technique as a direct result of the high energy prices. I think that's a little bit too early to say that the customers are taking decision based on that. On the other side, energy prices are a big factor for selecting your compressor or any other of our equipment, and it's normally 75% of the cost. Every increase pushes customers to the premium brand with energy efficiency. Also the sustainability science-based targets, and more and more of our customers sign up for that. I think there is the willingness in many regions around the world today to talk about both the efficiency of the product itself, but also the CO2 platform and that is of course also linked to the financials in terms of energy costs. I think it actually speaks in our favor to distance ourselves from the copycats out there, but also help our customers down with the CO2 footprint that they have in Scope three inside Scope four. Great. Thank you. Thanks. The next question comes from Andrew Wilson from JPMorgan. Please go ahead. Hi, good afternoon. Thanks for taking my question. I actually wanted to ask on Industrial Technique. It just seems over the last couple of quarters, we've moved to quite a different place to where we've been historically in terms of the run rate on orders, and clearly there's a good tailwind in terms of EV, and I assume that the recent acquisitions, or recent-Ish acquisitions are making a difference as well. Is there anything to point out in terms of kind of one-off nature, or do you think this is the kind of sustainable level we should expect going forward, given obviously the commitment from lots of the OEMs on the auto side? I'm just sort of trying to understand if this is just a run rate that we can kind of assume going forward or whether there's anything we need to be a bit more cautious on. I don't think there's any one-time effect at all. It's the transformation then. I think Tesla showed the way into electrified car market, and they also now show the profitability seen from those investments, and everyone else is playing catch up. We see very little fossil fuel type of products. I mean, it's mainly in the EV. We can see the number of cars manufactured has not caught up with the record levels that we've seen in the past. As we can see now that China versus Europe and America is almost doubling, it's bigger in size. We need to have a very strong presence. We have a very strong presence in China and in the neighboring countries as well. That transformation is what builds our business right now. We gain market shares because we have these different technologies to build lighter vehicles and also help them with the battery assembly, which is engaging three of our business areas. You're absolutely right, with the recent acquisitions that we have done, we take a bigger part of the scope when we see the investment today. If it was the tooling before, we do more on the flexible automation. We just point out we are not a machine line builder at all, but we do flexible automation per station. Little bit bigger group, well-positioned for the transformation is what you see in Industrial Technique in the auto sector, and also a boom in battery manufacturing around the world from both the OEMs, but also tier ones. That's very helpful. Thank you, Mats Rahmström. The next question comes from Klas Bergelind from Citigroup. Please go ahead. Thank you. Hi, Mats and Peter. Klas at Citi. I just want to come back to the outlook to confirm that the group outlook of somewhat lower demand into the fourth quarter is a reflection of further semi equipment weakness and relatively stable industrial demand QoQ. Your China exposure is pretty big in VT, and I'm wondering if you've seen any weakness here linked to the new export rules or if that is yet to come. Quickly a follow-up on the backlog in CT, book-to-bill now 1.15, getting stronger still. The backlog in VT, however, is shorter, 0.9 book-to-bill. I just wanna ask on CT whether there is any pre-ordering there at all, or if this seems very secure to deliver solid sales growth into next year. Sorry, that was a lot of questions in one. Sorry. Yeah. We will try to take them one by one. In the outlook, yeah, you're absolutely right. We see the trend in semi, so it's linked to that as well. Then I also mentioned general industry. That could be a manufacturer of white goods or anything like that, and you can see the consumer brands struggling at this point. We can see a softer market there. Those are the on the negative, but at the same time, I said that we see still a lot of quotations for bigger machines, bigger projects, more strategic projects. We will see how that plays out with Solo after that. On the CHIPS Act, there's a limitation down to which accounts you can sell to, and on the technology level, if you can have American workers in your organization, and the content of American content into your product. Initially, if I ask Geert, we don't have any Americans working for us, so it's not a problem. We foresee that the cryogenic is the only product range that we actually manufacture in the U.S. and maybe some other small products that's limiting factor to us. The direct impact of where we have the dry pump would be fairly limited. On the other side, if the tool makers in the US don't have licenses to sell to these companies, of course, we cannot sell to these tool makers that the product will end up in China anyway. This, I think we will see in the coming couple of months who gets licensing, who doesn't get licenses to sell in our markets. The direct impact is fairly limited, but could be significant if we can see our customers in other parts of the world cannot import or sell to Chinese customers. I think that's the best I can do on that right now. I think Peter. Yeah, I think you had a question about the backlog on CT and if there's any pre-ordering in that. I think what we have discussed about pre-ordering in Vacuum Technique, and that has been the case for a while without any double ordering. For CT, this is not really an issue, maybe a bit on distributor side potentially to, let's say, stay ahead of maybe price increases, but I would say that it's rather minor compared to the bulk of the business that we are running in Compressor Technique. Okay. Well, that's helpful. Thank you. Welcome. The next question comes from Max Yates from Morgan Stanley. Please go ahead. Thank you. I just want to ask a question around the compressor growth and the Gas and Process compressors particularly. I think you mentioned a couple of kind of new areas of technology, so carbon capture, hydrogen, and obviously you talk about sort of significant increases here. I'd like to understand really kind of what is driving the significant increase. Is this really kind of the core Gas and Process business into, say, industries like oil and gas and LNG? Or would you say kind of any of these newer technologies that you referenced are actually big enough already today to have a meaningful impact on growth rates? I think those you picked it up absolutely correctly, and the segments you mentioned represent more than 50% of sales in Gas and Process for the quarter. It is a very big shift from what it has been in the past, that we have been working on strategically for quite a number of years to make that happen. There is still business in refineries and some oil and gas in there, but it's not the lion's share anymore. I mean, on something like carbon capture, is that sort of a meaningful part of growth, would you say? Or is it really or not so much? Carbon capture for most companies is still a project business. I said that that's the smaller part, but if you then rank natural gas as one of the resources that is something in part of the transformation that's significant for us. The hydrogen is also more on project business, but there is a number of project businesses out there right now, and it's important for us to be early into these applications to be selected as a supplier when it's commercially available in another way. It's everything from transport to plane, and I think those experimenting in a project in many different segments. Understood. Thank you. The next question comes from James Moore from Redburn. Please go ahead. Yeah, good afternoon, everyone. Mats, Peter, Daniel, thanks for the time. Can I clarify an earlier answer and then ask one? Just on earlier, we were talking about cancellations, and I'd also like to ask on deferral policies. If a major semiconductor OEM customer says, "Can we cancel?" Do they have to pay a fee? But alternatively, can they defer an order, up to six, 12 months, and is there a contractual limit to the timeframe on deferrals? My question is, hypothetically, if the global semi CapEx was to fall 20% next GSA, would you expect to see a similar magnitude in the organic sales of the Semi OEM division of VT? Or would you expect to see a better outcome because of backlog protection? The contract with the different OEMs could look quite differently. That might be not one answer. I would assume Atlas Copco as a group would be more of the forgiving part to maintain a long-term relationship with customers. Maybe we rearrange it a little bit to help them with something else. If they need to push it, we try to support that as well. It is only a handful of customers that makes a difference in this segment, and I think you need to keep a good relationship. That said, there still might be penalties in there per contract, and I don't have the details on that presently. Then there was another question. What was also the second question, James? If global semiconductor CapEx all in was to drop 20% next GSA. I'm just trying to understand because traditionally you have seen a much more direct one-for-one relationship between the organic sales, not the orders, the sales of the Semiconductor division to that number. If we were to see that again, would you expect that same one-for-one relationship? I'm conscious of your backlog. Or do you think because of the specific U.S. Arizona-style projects to get sovereignty nationally in U.S., Europe, China, that we might see something that's different? If you get the question. Yeah. No, of course, if there's a huge drop from many of our customers, that will of course impact us. I'm not sure we see a slowdown, as we said in 2023, and we don't know so much more than you can read yourself in terms of CapEx outlook for the industry. What we have learned over the years is that they are normally wrong. We try to stay close to the customer and capture. I mean, our presence with these key accounts are so close, and the relationships are so close. If they continue to develop the business, we will for sure have our share of that. If there will be a sharp decline, that will impact us equally much as well. I'm not sure if I helped you, James, but that's how we see it. Thank you so much. Thanks, Mats. The next question comes from Rizk Maidi from Jefferies. Please go ahead. Yes. Hi. Thanks for taking the question. I just wanted to ask about the items that you were not able to compensate for, and that was sort of spot market buy-in, air freight and factory inefficiencies. Whether you've seen any changes or any easing there and any easing on the supply chain constraints, please. I'll start there. Thanks. Yeah. Maybe it's not so much that we can't compensate for it because of course, you could continue to push prices up to the limit that you would actually be able to compensate for it. It's more that it's almost intentional, I would say that we don't really want to compensate for our own inefficiencies in our factories that are resulting from the supply chain issues, because those will be only temporary. At some point, as demand might, general demand from customers, global demand might go down a bit, maybe there will be some easing in the supply chain. That would then, of course, result in the fact that the items are flooding into our factories, we are able to produce, and we get back to the normal utilization that we would like to see, and we would be able to get rid of those inefficiencies. The same is valid for the spot market buying. If the market for the chips eases up a little bit and they become more easily available again, then of course, those unusual spot market buys will actually completely disappear. We would normally use our regular channels to buy these items. We would rather absorb that for the time being than to try to even put that burden on the customer. Again, from a long-term perspective, how we want to deal with the customer and how we want to secure the long-term business with those customers. Interesting. Just very quickly, if you could just on CT, if you could just give us a sense for how big is the large industrial compressors and Gas and Process compressors as a percentage also of overall CT, please? If you refer to the Gas and Process business, it's approximately 10% of the CT. the large industrial compressors as well, Mats, within the industrial application? We haven't made that reference externally. Okay. Not there. Thank you. The next question comes from Andreas Koski from BNP Paribas Exane. Please go ahead. Thank you very much, and good afternoon. I would like to ask on higher selling prices. Could you please give an indication of how much of your organic- Andreas? order growth. Andreas, it's very difficult to hear you. It sounds like you're in a box. Okay. Give me one second. Do you hear me better now? Yes. Yeah. Sorry about that. Yeah. On your selling prices, could you please give an indication on how much of your organic order growth that is related to higher selling prices, and if there are any major differences between your business area? Well, on the actual numbers on the pricing, we don't disclose that information. As I already indicated, there are differences between the business areas. Those business areas or even divisions within the business areas that are more exposed to a very broad-based customer base are more likely to be able to transfer prices into the market. Whereas if we talk about divisions or business areas that are more exposed to a key account type of channels, there it is much more difficult given the type of long-term contracts that are in existence, and that are very hard to kind of deviate from. When I talk about those key account type of markets or channels, then of course we talk mainly about semi, first of all. As Mats mentioned, it's always a handful of customers that we are dealing with. Then the second one, which probably stands out more than the motor vehicle industry, with a number of very large players as well, and their activities. If you're talking about general vacuum, for example, or broad-based smaller industrial compressors, then we would typically, of course, have a very broad-based customer base, and that gives a little bit more room to be able to impose those price increases to the market. Yeah, I understand that. I just wanted to understand the magnitude of your higher selling prices. Okay, if you don't want to disclose that, I understand. Can I follow up on James' question? You have accumulated orders on hand around SEK 15 billion since Q1 2021 for Vacuum Technique, and I guess most of that is related to semi equipment. How much of that backlog do you expect to deliver in Q4 and during 2023? I don't. I'm looking at Peter here. I don't have a number on that. I mean, our factory is running at full capacity right now, and it's a little bit down to our sub-suppliers as well, if they can commit to give us products on time. It's a little bit wait and see, and that is also a struggle to commit to customers, of course, and make sure that we get that. We don't have a firm number that we would like to commit to at this point. Okay. Lastly, do I understand it correctly that pre-ordering stopped in this quarter? Sorry, can I please interrupt to give the opportunity to one or more of your colleagues to ask their questions, as we have only very few minutes left and still a few questions in the- Of course. Thank you. Thank you, Andreas. The next question comes from Gustaf Schwerin from Handelsbanken. Please go ahead. Yes, thank you. Just to follow up on the U.S. bans on equipment. On the Chinese exposure that you have in vacuum, do you have a rough split of how it looks between domestic and foreign players, as there seems to be some exemptions likely? We've seen that from TSMC, Samsung already. Thank you. We are looking at each other. What is it that you like us? We didn't fully understand what you're looking for. It looks like in the bans, there are some exemptions for foreign players in China. We've seen announcements from like TSMC and Samsung already that they've gotten, I think it's a one-year exemption from these bans. I'm interested to hear of the China exposure you have. Do you know roughly how much is actually domestic players and how much is foreigners? In our case, it's from the new CHIPS Act, it's very limited impact on us. It is the product that we get from the US, which is a cryogenic, which goes on the tools, which is a very small part of our total business. If our customers that supply into the US could supply, then would have limited impact on us. But if they don't get licenses, and I don't know who will get licenses at this point, then of course it could be a larger impact on us. The direct impact for us as being a Swedish, English, Belgian type of company, it's not a big impact at this point. Right. Fair enough. Does that conclude the question? Yes. We are out of time now. Sorry, Andreas, for interrupting you. I just want to give one other participant a chance to raise one more question. I see that there are a few more people in the line, on the line that still have a question and have not been able to ask. Our investor relations team is at your disposal to answer those questions that you might have. You know how to contact them. Please reach out to them, and they will be happy to help you with these questions. That's it from our side. Thank you very much for attending the call and for your very interesting questions. I would like to hand over now back to the operator. Thank you very much. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.