Welcome to the Atlas Copco Q1 2023 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to CFO Peter Kinnart. Please go ahead. Thank you, operator. Good afternoon, everybody on the call. A very warm welcome to this quarterly earnings call for the first quarter 2023 for the Atlas Copco Group. Together with me is Mats Rahmström, our CEO. Before I hand over the words, and of course, you have heard me say this many times, and I will continue to repeat it, I will ask you when we open up for questions to only raise one question at a time in order to make sure that all the participants are able to raise their question. Of course, if we then go through all the participants and you have more questions, then you can, let's say, get back in the line for a second follow-up question. We will also be a little bit severe on the number of questions, considering that we really have this 1 hour to go through the call and try to answer all of your questions, as we also have the annual general meeting of shareholders taking place today, and we are a little bit on a tight schedule. That being said, I would like to now hand over to Mats Rahmström, who will guide you through the first part of the presentation. Thank you, Peter. On the first page, this time we have a picture of a Gas and Process machine from that division. It's part of the explanation why we have such a strong orders received. There were very strong orders received from this type of machines, both for liquefied natural gas and carbon capture. Very proud to show this picture to you all. We can go to slide number two. I'm confirming then the orders received. That was close to SEK 48 billion, 5% growth. If you break it down per business area, it looks quite much more impressive that the Compressor Technique, they were up 19% organically, and that was a record for them. In Vacuum Technique, they were down 27%, still related to the Semi industry. Interesting enough, both the scientific and the industrial vacuum continues to grow. Industrial Technique, with tailwind from the electric vehicle market, we're up 20%. That's also a record for them. A fantastic record for Power Technique. They were up 11%. Of course, in Power Technique, we see that there is seasonality, they also outperformed what we expected. We can see that the CT Gas and Process was very strong and the big machine in oil-free as well. At the same time that Industrial Technique have tailwind then, as I said, from the electrification and battery manufacturing. Also happy to see because we also need to understand when we were at the Capital Markets Day, I took quite some time to explain the new growth platforms for the group, how we have invested both organically and also through acquisition. We can see a significant part of growth is actually coming from the new areas now. At the same time, I can see that the sustainable segment, if I can define them like that, like wind, solar, batteries, is also a significant part of orders received and in invoicing. Very happy with the orders received development. If you look at the revenues, we can see that it was close to SEK 40 billion then, 18% up. Of course, there is still a gap between orders received and invoicing. On the other side, the 18% up, we are quite pleased with that. In terms of deliveries and the challenges you see there, I think we can summarize the picture that Compressor Technique and Power Technique, they see at least the light in the tunnel. It's an improved situation for them. We still see challenges with Vacuum Technique and Industrial Technique, and that's mainly electronic supply. If you change slide to slide three and take position three, you can see the operating profit at close to SEK 8.7 billion with the margin at 21.8%. The profit is up 29%. It's supported by volumes of course, both in terms of volume and pricing. Currency also positive for us. We still have, as I said, supply chain challenges. Also worth mentioning is that we continue to invest in new generational products, as we continue to invest in R&D. We also invest in the customer relationships in terms of where in the world we should be and of course, competence as well. We think that's really, really important. I think looking at the graph, at least internally here, we are very proud of the significant growth we have seen for this quarter. If you look at the geographical map on slide four. We can see that we have green numbers in the, what we call the powerhouses around the world. In Asia then, we have 37%, it's also Oceania, 37%, and sometimes you can see slightly higher number there. We have double-digit growth in Compressor Technique and Industrial Technique and the change here is of course in the Semiconductors with the Vacuum Technique. Very pleased with that. That goes also for Americas, where we see double-digit growth for all business area with the exception of Vacuum Technique. In Europe then we have two, Compressor Technique and Industrial Tech stand out with very strong, Vacuum down and PT flattish, I can say. Happy to see that there are so many customers in different continents that see us as a very competitive alternative, helping them to generate value for their operations. Slide five. Yeah, just the confirmation of the organic 5% growth. Have in mind that we had a - 27 on Vacuum. On slide six, you can see the sales bridge, the structural changes. We did 30 acquisitions last year, and that you can see on that line, can see that we still have help from the currency, 7% on orders received and 8% on revenue. Peter will little bit later try to guide you on the currency for the coming quarter. Slide seven shows the split between the different business areas. Of course, with high profitability and high growth rate, it's very positive for me to see the Compressor Technique growth rate of 19%. One other thing that I recognized internally was also that on the orders received, actually Power Technique this quarter is bigger than Industrial Technique. Although that Industrial Technique is growing 20%, that's also of course part of the acquisitions that we have seen. We change to slide eight. Compressor Technique, and they had record orders received, organic SEK 22 billion. As I said on my first slide, a lot of the bigger orders has come from Gas and Process, but we're also seeing strong orders on the bigger machines, and that goes a lot into the newer segments that could be EVs, battery, hydrogen, LNG, even lubrication of ships is becoming an interesting application for a sustainable segment for us. Very happy to see that the already strong service performance continues, and they are growing. They also manage then to deliver on record revenues, although that we are pushing them even harder to see if we can bounce that number up even further. An operating margin, outstanding 24.1%, and return on capital employed 82% and somewhat diluted from the acquisitions that we have done last year. Here you can read as well. I've mentioned it earlier, the growth platforms that we discussed is of course filters, the chillers, low pressure, high pressure, and industrial gases. We can clearly read that this is a strong development for us, and a lot of the development is into this sustainable segment. That's part of the explanation. Hope that's sustainable over time, that they continue to perform. We go to Vacuum Technique on slide number nine. Of course it's a negative development, but if you look at the graph, you can see that we had a SEK nine and a half billion quarter. Yes, it's below what we have seen over the last two years, but if you compare with 2020 or 2019, you can see it's still a very strong quarter from that perspective. We see of course that Semi is down, memory first, and we have also seen cancellations in this quarter. The level is still up there, and we still believe it will be probably the, from a CapEx perspective, I think it will probably be the third best year anyway. I think the growth drivers for Semi is simply the number of devices that we are using that need semiconductors. That could be AI, 5G, cloud computing, gaming, medical, supercomputing, automotive, and industrial is very strong as well. We will see some cyclicality, although that we think that that becomes less and less over time. As you recall, when we acquired this from a strategic point of view, we also said that we will focus on the industrial vacuum, the scientific vacuum, and the two service division. I think that strategy is really proving to work out for us in a good way. Operating margin at 22.7%. You can say it's a quite quick turnaround from Q4, but they have also had some help here from currency, clearly. Here, if you look at the performing new growth plans on the cryo, the liquid ring pump is doing well as well. Process diagnostics is also up there, a lot small, but they're also stepping into these new areas which is paying off. Of course, I think it's once again then interesting to see that scientific and industrial continue to grow. Industrial Technique, once again, the record orders, they were up 20%, SEK 7.7 billion. We can see that the auto sector have done really well. The main part of that is two new projects in electric vehicles, the transformation, both in Europe, but also very, very strong in Asia. We can also see that on the industrial vision part, strong orders received there as well. We are now combining the vision with automation or not fully automation made, but the flexible automation that we offer station by station. Of course, our sales is mainly driven by CapEx, and you can follow OpEx more on the service level. Service also continue to have a strong delivery. On revenues up 19%, we are still have challenges with the power electronics, SEK 6.5 billion there, and an operating margin on 21.1%. Group segments that we have talked about before, electronics dispensing is doing very well. We are combining that to offer the dispensing part together with the screwdriver as a package. We get better and better penetration in the electronic industry. Machine vision and inline quality control and flexible automation is also growing. I think they are in a very good position for some of the bigger macro trends, EV, battery, and automation. Power Technique, they surprised us with fantastic orders received and also done the record at SEK 8.9 billion. Of course, there are seasonality in these numbers that you all know. Strong demand from rental companies in the U.S. on equipment. I also mentioned before that this is the business that I've ever had most difficulty to get the full traction on service. Now I think they combine growth with improved margins and I think that looks promising for the future. They also have record revenues, and they see that less of problems when they have dual sourcing now on engines and an operating margin at 19.1%. It's very interesting to look at the new product here, I think. More than 90% of our product we sell to the market is electrified already. The surface pump traditionally have been driven by diesel engines, but now we are starting to introduce also then the pumps that are electrified. The steam rental is doing well and the newly required so far, industrial pumps is also doing very well. I think it's a strong development for a business that traditionally was mainly in construction, and now we are transforming it into more industrial applications. On slide number 12, we have the profit and loss. Yes, we give you the EBITDA, and in our case then it's the amortization of the intangibles of the acquisitions, and that will be at 23.1%. I should do highlight when we drive the company, it's on operating profit, and that is 21.8%. Maybe this is a good to hand over to you, Peter. Yes. Thank you, Mats. I will continue. Of course, we have the small amount of net financial items, which have dropped in spite of our lower or higher net indebtedness, but that is mainly linked to the fact that the interest rates on our cash have gone up, and therefore it's a little bit lower cost than before. Profit before taxes, they have SEK 8.7 billion compared to SEK 6.7 billion last year. The taxes are SEK 2.1 billion, which is an effective tax rate of 24.6%. That, of course, as you recognize, is a significantly higher ratio than we have seen in the last many quarters. The reason for this high effective tax rate is, you could say a shift in the geographical mix of our business. We have grown quite substantially from a revenue perspective in countries and regions with higher nominal tax rates. As a result of that, we end up with this higher rate. There is no other main reason for this shift. When it comes to then, of course, a forward-looking view on the tax, then given this development, it's likely that the effective tax rate will remain on a higher level than we have been used to. We are, of course, trying to find ways to mitigate that by making use of measures given to us by different governments to support, for example, R&D initiatives, et cetera. But it's likely that, going forward, this will be rather close to the 24% as it looks now, compared to the past. That gives us an net profit of the period of SEK 6.5 billion, which is a 25% increase compared to last quarter or the same quarter last year, sorry. With basic earnings per share, SEK 1.34. A return on capital employed of 29% and return on equity of 32%. If I move to slide number 13, and look at the profit bridge for the group, then you see that we, comparably went from 22.4% a year ago for the first quarter to 21.8%. There is on the one hand, the negative impact of the share-based LTI programs, as well as, a dilutive effect, from acquisitions. That is then partly compensated by, positive currency impact, as you can see here. When it comes to the outlook for the currency impact, there we would rather assume that it will continue to go down, gradually as we have already seen from last quarter to this quarter, and, is likely to end, let's say, probably still slightly positive, but rather close to zero, we expect. We have, volume price mix and other, which are showing, positive drop-through, let's say, the same level, in fact, as we had in Q1 2022. The margin doesn't really improve neither deteriorate from volume price mix and other impacts. On the next slide number 14, we dive a little bit deeper into the respective business areas. Because you do remember, of course, that when we reported Q4, we had two business areas that were performing less strongly than we have been expecting. We indicated that different measures had been taken to try to bend that trend, while at the same time, we also said that some of these measures might take some time to really materialize. I think that is also, in fact, visible in the detailed bridge by business area. If I focus immediately to vacuum technique and industrial technique, which were the two business areas I was talking about, then the 22.7% for vacuum technique remained flat on 22.7%, and in fact the drop-through is positive, but is lower than the 22.7% from last year. So in fact, there is still a dilutive effect from volume price mix and other effects, also from the acquisitions, while in fact the currency compensates for those two effects still. But as you will notice, if you compared to the figures from Q4, the negative impact, lets say it much, much lower that it was in the last quarter. We are very happy to see that some of the measures already started to have some contribution, but we are not fully there yet, and we need to continue to work further on the drop-through here. For Industrial Technique, it's more or less a similar picture, one might say. There is, in this case, no dilutive effect from acquisitions. The currency for Industrial Technique is in fact slightly negative on the margin, while then the measures that have been taken across Industrial Technique have proven to be contributive and to the operating margin. There we see a better drop-through than actually the comparable period last year. Of course, we have two business areas left, starting with Compressor Technique, moving from 23.8%- 24.1%, which is partly diluted by acquisitions, but then a positive impact from volume price mix and other items will end a slightly smaller positive impact from the currency there as well. Last but not least, definitely a valid statement in this particular case, a very strong development from Industrial Technique from 17.9%- 19.1%, with some dilution from the acquisitions that are nonetheless performing as planned and in a very good way, but also some positive impact from currency, but a rather solid improvement also there from volume price mix and other items. With that, I move to the next slide number 15, which explains a little bit more on the balance sheet. In fact, I would say the balance sheet, comparing first quarter 2022 to 2023 is not very eventful. Of course, on the intangible assets, we see mainly the impact from the acquisitions that we have done over these 12 months. Otherwise, we also recognize, I would say, the impact from the strong investments that we are rolling out, mostly in Vacuum Technique and also to a slightly lesser extent in Compressor Technique to increase our manufacturing footprint, partly as a part of the strategy also for the local for local. The other two main areas here are inventories and receivables. Receivables are perfectly in line with the volume growth that we have seen, and we also feel quite comfortable with that level. In relative terms, there is no increase. Also from a health perspective, I would add, the situation is quite good. The inventories continue to grow a bit more as we will also see in the cash flow. That is maybe, let's say, the one pain point a little bit on the balance sheet where we also are working with the different business areas to see how we can manage that in an even better way, I would say. Of course, as a result of all of the above, and then also the fact that we had the redemption last year and the and the different acquisitions, we see, of course, a reduction of our cash balance compared to the same quarter 2022. On the liability side, I would say on the interest-bearing liabilities, we have increased slightly our short-term funding to bridge the upcoming dividend payments, for example. Also no drama in those numbers. The non-interest-bearing liabilities are mostly linked to an increase in payables that go hand in hand with the increase of the business as well. Then, quite a diversified list of many small other effects that add up to this difference for the non-interest-bearing liabilities. All, I would say, in line with the business growth. Going to slide number 16 on the cash flow. No records here, but I would say nonetheless, a very solid development. We have a very strong operating cash surplus, close to SEK 11 billion. The taxes paid are, of course, standing out a little bit based on what I explained earlier. We also see here the continued negative effect from the changing working capital, which in this case is almost entirely allocatable to the inventory development still, and which I mentioned is one of our working points in the organization. The investments of property, plant, and equipment also here reflect our continued development of the different manufacturing sites across different parts of the world, now mainly focusing on the United States, I would say, as well as China for Compressor Technique, which then leads to the operating cash flow of close to SEK 5 billion, which is slightly north of doubling the operating cash flow from 2022 Q1. We also see the impact from the couple of acquisitions we have done this year so far of between SEK 500 million and SEK 600 million. With that, we come close to the end of the presentation, and I would like to hand back to Mats to briefly comment on our near-term outlook. Here we are trying then to guide on our customers' activity level, and we go internally through each business area to check with them what they see. From that we have then concluded that Atlas Copco expected the underlying, which we actually always talk about, customer activity level will remain at the current level. On the negative side, I guess you can take into... if you look at where we operate, the PMI in those countries has a negative trend. I guess also some of the GDP trend for some of those countries are slightly negative. The protectionism isn't positive in a way that we can see. Of course, we have Semi, though, although sequentially it was slightly better than. We operate in a world where we see quite a bit of uncertainty, and I think it's better to be a little bit humble and ready for different scenarios. We cannot see in the future either. On the other side, I think despite the gloomy outlook for some of our markets, still think that companies that will outperform many others will be the ones that has tailwinds from the mega trends. As we have seen in this report, when we build a product portfolio, if you follow the growth strategy that we have in terms of organic and acquired, I think the energy transition is in our favor. We can see the digitalization, of course, with the Semis is very positive. The electrification is positive for many of our businesses, specifically for the EV transformation and battery manufacturing, and also that they are quite present and close to our customer, both in West and the East. I believe that we have a very good position. On the other side, of course, we don't know how the quarter will look like, but we can see that there's still a lot of activities going on, and we cannot guarantee that some of these bigger orders will be repeated. Of course, we hope that we get many of them as well, but we cannot guarantee that. I think that's a little bit how we see the market at this time. Should we then open up for questions, Peter? Yes, Mats. I think that's a very good idea. With this, I would like to hand back to the operators to lead us through the question-and-answer session. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Andrew Wilson from JP Morgan. Please go ahead. Hi, good afternoon. Thanks for taking my question. I wanted to, I guess, probably pick up on the last comment you made, Mats, around the Q2 demand commentary. Obviously, you always do talk about underlying demand, but you specifically added that word to the outlook comment this time, I guess that's to try and stop us from baking in SEK 48 billion of orders for the Q2 in terms of unchanged activity. Can you just try and help us in that context, sort of how much of the strength in the Q1 was a result of timing of orders, large orders? You talk about the significant orders. Just to try and help us get a quantum of what maybe you're trying to allude to in terms of underlying activity, appreciating there are lots of moving parts. Thanks. Yeah. No, but sure, you read me correctly. If you look down sequentially from Q4 to Q1, of course, you all know that we don't talk about the seasonality, but that of course adds, if the gap between, let's say, it's SEK 11 billion, something like that, between the quarters, and then you have the seasonality might be around SEK 2 billion down that we get. The remaining part, I would say approximately half of that is coming from Compressor Technique, and then you have very, very strong on Gas and Process, but also the bigger machines mainly in oil-free. We should also remember then that the industrial smaller compressors are rather flat. The remaining part is the fantastic performance from PT that we can see, and part of the remaining part is also then the Industrial Technique tailwind from more electric vehicle products than we expected. That's a little bit a bridge of how we see this has built up from Q4 to Q1. Thank you. Thank you, Andrew. The next question comes from Guillermo Peigneux from UBS. Please go ahead. Thank you for taking my question. Thank you, and hi to everyone. My question is regarding Compressor Technique, and notwithstanding the current and existing backlog at hand, how are you expecting to close the gap between orders and revenues? Maybe actually the question is also do you need extra capacity? Do you need to build capacity? Then adjacent to that question is, could we assume that the operating leverage that you were commenting on is a normalized one, or are we gonna see any fluctuations as we go through 2023 on operating leverage for Compressor Technique and in which direction? Thank you. If I look at, I mean, I cannot blame the team for such a fantastic development year-over-year, but of course, it's not enough. Then in Gas and Process, we are developing our capacity close to customers, and it's mainly how we do the packaging of elements and to make it to a customer product. Then we are pushing, and we have done for quite some time, to see if we can bounce up our capacity. But I still believe even though that they say that they see the light in the tunnel and it can be slightly better, but I think it will be difficult to catch up quickly on that and the leverage. I hand over to you, Peter. Yeah. I think on the leverage, of course, we are getting close to what we generally referred to in the past as kind of, yeah, drop-through that we would on average see. I guess this is, yeah, close to the best level that we have achieved. Sometimes, of course, it can be higher. In general, I think we talk about 30%-35% on average, and we are not very far away from that. From that point of view, and I think considering the fact that there's still a lot of uncertainties, the supply chain is indeed somewhat better, but it is not always... It is not something one can fully rely on yet today. There's always things that might pop up a bit unexpectedly. Given the capacity we have, we will hopefully be able to continue to invoice and produce and invoice more. Whether the operating leverage will increase further, that of course remains to be seen. It's currently already at quite a healthy level from our perspective. Thank you. The next question comes from Sebastian Kuenne from RBC Capital. Please go ahead. Hi, gentlemen. My question relates to the price mix and volume growth in your orders. I can imagine if you are touching your capacities now, then you can maybe, you know, turn the wheel of pricing a little bit more these days. Could you maybe give us an indication especially for the strong divisions, CT, IT, PT, how the pricing was and the volume growth in Q1? Thank you very much. I think we don't talk so much about it, but I try to give some color to it at least then. As we have said before, Compressor Technique have been quite good at compensate themselves for if that has been inflation in salaries or in inflation in cost in terms of components, and I think they've done a fantastic job. When I look at the gross margin, I think they come a long way. Of course, we can see that there is more inflation to come. I think we need to be on our tools and manage that as well. Power Technique been extremely successful with that. Of course, there have been a shortage of capacity, and we have quoted higher prices for that as well. I think they've done a good job. It's more complicated in the Semi industry, where we have more long-term contract. I think some of those have also been challenged, and I think this is the time to do that. I'm also happy, even though it's on a lower level, the result of those, that we can see a little bit more traction there. The same goes a little bit for the auto sector, where it's more long-term agreements, but with new products coming in, we can put new pricing on that. I think that's the main opportunity for us still, is to generate more innovation, new products, and to come with that is new pricing. So far, I'm very happy with the outcome of what we have managed on pricing. Thank you very much. The next question comes from Max Yates from Morgan Stanley. Please go ahead. Thank you. My question was just around compressors. If I look at your compressor orders, they were SEK 13 billion kind of before we went into COVID. You've just done SEK 22 billion now. I guess what I wanted to understand is when you talk about these end markets or these orders from things like clean energy, battery, and carbon capture, some of these markets that are maybe newer, how much of your order intake today are these sort of new markets accounting for where maybe you didn't do so much business if we compare it to sort of pre-COVID levels? It would be great to understand kind of how big those sort of newer clean tech carbon capture are within that SEK 22 billion number. Yeah. I mean, if you look at the quarter, I think it's a very good question, we are trying to track that segment by segment ourself. I wouldn't say that we have, you know, very accurate numbers. We estimate that in the quarter from this newer, sustainable clean tech segments, it's probably around 10% of the orders received for the quarter. For us, that's huge. It also shows that the product are really valid for these segments. So we are really happy with that. Sorry, 10% for the quarter is into these new segments. What would be the biggest part of that? Is it carbon capture, or is it just split across a number of different things? Is it easy to identify within that exactly kind of what a, what a big portion of that is? I would say that, without having the numbers, you have gut feeling, battery manufacturing, that hits first the Compressor Technique, the oil-free with big machines. You have both the Vacuum Technique for many of the assembly processes, and for tightening and dispensing, you have Industrial Technique. Battery is one of the key application. Of course, we see that it's growing very quickly around the world. China is, of course, the leader. Now we can also see more and more both packaging product and cell manufacturing in Europe and in Americas, of course. This will also be supported by the IRA in the U.S., of course, to bring this home. on Gas and Process, if we just look at Compressor Technique, I think the liquefied natural gas right now is really strong. Great. Thank you very much. The next question comes from Klas Bergelind from Citi. Please go ahead. Thank you. Thank you. Hi, Mats and Peter. Klas at Citi. I have a question on carbon capture. What is interesting is that you're adding this comment. First, it was more LNG, and then you add this comment that this was seen at the end of the quarter. This is sort of happening before IRA in the U.S. really has started to kick in. Even if you say growth was exceptional in the quarter, it feels like in carbon capture for you, this is a start to sort of drive growth. The reason for asking is that we're hearing that the demand in the U.S. is still held back until the domestic content requirements are clarified, which we will see here in May, and that can sort of unleash a lot of growth around IRA. I'm curious around the carbon capture outlook, Mats? Yeah. No, that's a very relevant question. Of course, I think the first step is not to use the energy, so you don't need to catch the carbon. Of course, we don't do the catching ourselves, but we then compress it and move it somewhere where it should be. I would say that it's very early stage in this technology. We mention it more because we think it's such an interesting technology for us. In relevance to financial numbers now, I don't think it's huge. It could be, just like you say, if this is a technology that is accepted as an energy efficient way of doing things. I think there is a lot, as you know, tests, how to catch it and where to store it. Of course, there is a huge upside for everyone selling compressor if this is a technology for the future. We, we see that as opportunity, and this is more that, yes, we do have the equipment for this type of technology. Financially, it's rather small, even if we are happy for the orders we get there as well. Just a very quick follow-up. When we have done work on this, on carbon capture, LNG, and then hydrogen further out, we can see that I can add about 2 percentage points of growth to CT. The division can grow 8% long term. Can you help us a little bit about sort of the medium-term kicker here, how you in your assessment as a management team thinks this can sort of improve the long-term growth of Compressor Technique? As I said on the Capital Markets Day, if we see many of the clean technologies kicking off independently, what you need to compress and move somewhere and expand, there is a huge market for compressors, and it's new markets. I think Wagner and I even made a statement that the compressor market as such could double. We don't know when and if it's gonna happen, but if this comes alive with the commitments we have made to the SBTi with the one and a half degree and below two degrees, and for the carbon, I think of course that is quite a big market out there for many different applications, but it's early stage Klas, so it's not gonna be seen in Q2 or Q3. Of course. We won't extrapolate the SEK 48 billion. Don't worry. Thank you. Thank you, Claes. The next question comes from James Moore from Redburn. Please go ahead. Yes, good afternoon, everyone. That's Peter. I think I'd like to come back to the strong orders in CT, if I could, and just ask about the Gas and Process business, which I think has been about 10% of sales for the last four years or so. In terms of percentage of orders in the quarter, is it materially bigger than that? Is it sort of 20%-25% and a very exceptional number? You mentioned the extraordinary growth. I wonder if you could scale GP as a percentage of orders in the quarter. On the industrial small and medium-sized compressors, I think you've said that it was flat year-on-year, which is pretty impressive given that it's up against the pre-buy of last year. Could you say what that looked like sequentially? I think I will give this one. I tried to answer it already, James. I will give it to Peter to see if he can add. Yeah, I think, Gas and Process, of course, will have the, well, managed to get a lot of orders for the quarter, a lot of big-ticket items and a bit more, I guess, than we anticipated, as it is so difficult to predict when some of these big-ticket items drop in a particular month or even a quarter. Of course, we have always indicated that, as you correctly say, that Gas and Process has been around 10% of Compressor Technique. Of course, given the current order volume, it is, I would say, clear that it is a more substantial part than it traditionally has been in other quarters in the past. Okay, an exact number, we will not share exactly on that. Of course, you're right to assume that it's a more significant share of the total picture. On the comment, with regard to the smaller industrial equipment, indeed, the development quarter-on-quarter or year-on-year, sorry, was indeed flat. Sequentially, in fact, the development was a little bit down. As Mats already indicated, we have in CT, we have seen overall good activities when it comes to price development. I think if you put two and two together, we can also assume that on the volume side, with pricing continuing to be a contributor, that the volume is maybe a little bit softer on the smaller equipment compared to especially, of course, large and Gas and Process compressors. That's very helpful. Thanks. You're welcome, James. The next question comes from Ben Heelan from Bank of America. Please go ahead. Hi. Thank you for taking my question. I just wanted to touch upon the Power Technique margin. You highlighted the strength that you saw in the quarter. How should we think about that progressing through the year? Is that level of margin sustainable? Thank you. I think it very much depends on the mix we will see going forward. We have some businesses that is lower in profit. I mentioned it before, that the generator business, for example, is significantly lower, but they have had a good run the last year, I think both in terms of volumes and profit. Of course, if that continues to grow, that will have a diluting effect on the margin. Then we are very pleased with the rental business as long as that performs. It's better that especially if the renter performs, now we have portables, lower margin on the other side, and we are introducing also the electric portables, where we think over time that we will have higher margin because we have a bigger part of the content there. Very much depending on how this develops. I still look positively at this, and I guess it's not stable at this level. I think that there is a downside to it. On the other side, there is also an upside if we continue to deliver on the mix as I described it. The more industrial it is, the better it is for us over time, versus construction. We like line production instead of, you know, just a simple machine that can be easily replaced. That's good for us. I don't know if I helped you, but that's a little bit how it looks like. Okay, great. Thank you. The next question comes from Jonathan Day from HSBC. Please go ahead. Hi. Thanks for taking the question. I was wondering if you could talk a little bit about what you've seen in China across the divisions over the quarter, and then also just a little bit on the automotive side? Maybe you could talk a little bit about the runway that you see less for the automotive segment, both on the sort of battery and the EV side, that's still very much a long-term sort of trend versus, say, the developments that you might see in Semi? Yeah. Both in terms of semi, of course, China is normally one of top three markets for us. It seems like this new act coming out of the U.S. limits of course, the progress somewhat on the smaller nodes. On the other side, what China is focusing on is normally the higher nodes, the bigger nodes, 14 and upwards, and I would guess that's probably 70%- 80% of what they do today. I think it stops them from developing quick, the lower nodes, but that has not been the focus. I think that has more of an impact of an uncertainty what they can and cannot buy since this has been changing over time. It seems to be full speed ahead when it comes to the development of the industry as such and then with the 14nm nodes and upwards. There is no limitations for us to be a partner to that development. When it comes to EVs and battery manufacturing, I mean it's shocking to see the top 10 list of EV manufacturers in the world. I think it's only from the Western world, I think it's only Tesla that qualifies on that list. Of course they develop with tremendous speed over there. That is also positive for us both in terms of the batteries itself but also then to the EV manufacturing. That is just positive. Compressor Technique then the benefit of course on all these big programs, if they set up a new factory for batteries or whatever it might be, there is a need for Compressor Technique. I think that the only area where we are not as successful in China is Power Technique. There is a couple of product ranges that we promote there, but there is also a handful that we don't promote due to profit reasons. Three out of four business areas is very successful and the quarter was very strong for us in China. Great. Thank you. The next question comes from Andreas Koski from BNP Paribas SA. Please go ahead. Thank you very much and good afternoon. Could I ask about Vacuum Technique? Could you please quantify the cancellations that you had in the quarter? What did you see in terms of underlying orders in the Semi segment in Q1 versus Q4? Lastly, do you think you'll benefit from the trade restriction between China and the U.S., as you don't seem to be particularly impacted by that while some of your competitors can be? Thank you. Repeat the first one again because you had two there. What's the first? Cancellations. Oh, cancellations. The underlying order trend in the Semi segment in Q1 compared to Q4 last year. We haven't disclosed specifically the cancellations. In Q4 we said it was SEK 1 billion for the group. The main part of that is within Semi memory, but also some other orders are postponed and canceled. We don't think we have lost any one of those orders. In this quarter that number is around SEK 700 million, so it's less. We will see then when we come to the next quarter here if it continues, but at least the trend is a little bit less than we saw in Q4. The underlying demand, I mean, sequentially it was up, but when I listened to Geert today, he said, "Well, I don't read too much into the numbers just yet." I think we believe that 2023 will be somewhat of a slower year throughout the year. That it looks fairly positive actually on 2024- 2025. We have in mind and that we haven't sold on the U.S. and the plan on the U.S. is developing in a positive way. There are more making bigger commitments to plants in the U.S., and that we have in front of us. At the same time, China, as I said in the early comment, is continuing with full speed on the 40 nanometers and above. For us, we like free trade globally, I don't wanna put anything positive in protectionism. Short term, of course, it could be positive for a group like ours. We prefer still a free trade where we can make our business in a more traditional way. Thank you. The next question comes from Guillermo Peigneux from UBS. Please go ahead. Thanks for taking my question again. I wanted to follow up on Power Technique. I guess the margin now, above 19%, it's been almost there before, but I was wondering whether this belongs to like the rest of the divisions of Atlas Copco to margins above actually 20% at a divisional level or this is something that you're seeing as probably a little bit more of a seasonal or, you know, cyclical, positive cycle operating leverage help that will at some point normalize to a lower level? Yeah. I think we had a similar question just before. If I look at the other business areas, the performance between the different divisions is more equal, and in Power Technique, there is bigger gaps between the really good ones and the ones. Normally not so much dependent on how we deliver and perform, more or less how competitive is the end market. As you have listened to me over a number of years now, we are trying to drive this more to an industrial where it's more line production, where the value creation is much clearer. We are doing that, and that what you see in the numbers, but it's still very dependent on the mix from quarter to quarter, dependent on the margin then because we have bigger gaps between the divisions. It's difficult for Peter or myself to predict exactly how it will look like. As I indicated before, if we see generators being very strong, that's dilutive, and also if we see too much of the smaller portables, it's also dilutive, but more positive if it's the bigger machines for water wells, for example. I cannot give you more guidance on that, Guillermo. All right. No, thank you very much. Yes, we have time for one. The next question comes from Daniela Costa from Goldman Sachs. Please go ahead. Hi, good afternoon. Hopefully you can hear me. Just wanted to ask, we're seeing large, huge investments in terms of tech companies in increasing capacity for artificial intelligence and also for quantum computing. Is it too far-fetched to think that this would increase materially the density of some of the products you sell in Vacuum Technique and also potentially having an impact on areas like machine vision and quality control in Industrial Technique? Is it too far out, or do you start to see sort of the incoming and the tendering interest for your products on the back of that? I think I need to read up a little bit on the quantum computing myself. One of the acquisitions that we did in the US for vacuum technologies, they are touching on this from a chiller perspective. Of course, all data that will be in any form, will collected, transported, and run analytics on them, is very positive for our vacuum business. There's no downside to more AI for us. It's just upside in terms of memory and logic needed. I don't know if Peter have a comment on that. No. My only reflection was that I think it's early days, and that this is just pioneering currently, and that of course, with some of the products we have, we will be well-placed most likely, but it's hard to assess right now what kind of size of market this might be over time. In principle, it should be also here positive from the demand side for us, we think. With that, I think we have concluded all the questions. Would like to thank everybody for listening to us and providing us with some very good questions to be able to clarify some of the positions in the result of the first quarter 2023. With that, we are all ready to close the call. Thank you very much, and talk to you soon. Thank you.