Welcome to the Beijer Alma Q1 2023 Conference Call. For the First Part of the Conference Call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the speakers. CEO Henrik Perbeck and CFO Johan Dufvenmark, please go ahead. This call is being recorded. Good morning, everybody. Welcome to our webcast, where we present our first quarter 2023. I'm Henrik Perbeck. With me, I have our CFO, Johan Dufvenmark. Good morning. We're calling from a beautiful Uppsala, which is today celebrating our king's 50th anniversary with a royal visit. Two big events today. Today present the overall performance and recent developments of the group. In addition, we'll also present our reporting segments, our two main subsidiaries. These are Lesjöfors, a full range supplier of standard and customized industrial springs, as well as wire and flat strip components, acting globally with the majority of sales in Europe. It is Beijer Tech acting mainly in the Nordics with specialized manufacturing, value-adding industrial trading, and automation in profitable niches. Beijer Tech is also a platform for acquisitions into new industrial niches. Moving on to the next slides. Today I'm happy to present to you what I believe is a solid report in a somewhat uncertain world. In this first quarter, we, the group noted overall stable demand, of course, with variations within our very diversified customer base. There was an improvement compared with the preceding quarter, volumes are somewhat lower year-on-year. Nordics and North America remain the strongest regions for us, whereas demand was weaker in the rest of Europe and Asia. This was partly due to that customers reduced inventory levels. Supply chains in general have stabilized, also we have taken actions to reduce inventory levels. In Lesjöfors, demand varied between geographies and customer segments. For business area Chassis Springs, the quarter began with continued inventory reductions of customers. However, as the quarter progressed, demand gradually increased as we moved closer to the spring high season. For industrial springs, as mentioned, Nordic and U.S. were the strongest regions, with slightly lower demand in Central Europe and Asia, which I'll come back to. In China, we do not still see the hard signs of the anticipated pickup in demand and economic activity. Beijer Tech in the Nordics had a favorable demand situation. Order bookings increased sharply, partly as a result of important new projects, also underpinned by broad demand in Norway and Sweden. Further, during the quarter, we've renewed and secured a robust financing to secure and support the group's growth strategy. In the beginning of the year, two acquisitions were completed. Amatec, which is a successful Dutch spring distributor, was acquired by Alcomex within Lesjöfors Group. The second was Botek was acquired by Beijer Tech, and it's a manufacturer of scales, RFID systems, and software for waste management vehicles. Botek offers highly technical proprietary products, commands a strong market position in the Nordic region, and exposed to an interesting and growing international market. Both companies had a good start in our group and contributed profitable growth. Finally, as I will come back to later, in April, Lesjöfors acquired American company Tollman Spring. Continuing with an overview of the group's financial performance. Since Habia Cable was divested in Q4 last year, Habia is reported that discontinued operations are not part of the consolidated accounts or comparables in this report, nor in this presentation. Looking at the performance, we can see that order bookings grew by 25%, and the increase was 8% organically. Net revenues grew by 16% but was flat organically. Bearing in mind the continuous price increases during the last year, this means that volumes are somewhat lower versus Q1 last year. To give you some flavor on the developments during the quarter, we saw a stable performance the first two months and order intake and revenues improved in March. The adjusted operating profit increased to SEK 243 million with a margin of 14.3%. There are no adjustments this quarter, only in the comparables in the last year where SEK 25 million was reserved for the exit from the Russian market. More interestingly, moving on to the performance of the reporting segments, our subsidiaries. Lesjöfors, our spring manufacturer, is organized into two business areas. These are industry, with mainly customized products to a very diversified customer base globally, and its Chassis Springs, which are standardized replacement springs sold to car part wholesalers, mainly in Europe. Order bookings for Lesjöfors increased by 22%, supported 16% by acquisitions and currency effects of 6%. Net revenue grew by 18%, declined 2% organically. Looking at the business areas, for industrial springs, the largest business area growth was 25%, whereas mentioned Nordics and U.S. were the strongest. In Europe, volumes have been somewhat lower and more varied. Some industries, such as medical and automotive, we saw growth, whereas, for example, building sector was weaker. In Asia, as mentioned, we have not really seen any real uptick in demand, but anticipate this based on improved macro. Recent acquisitions, John Evans' Sons and Telform contributed well to growth in the quarter. For Chassis Springs, and I hope to say this for the last time, the negative growth was driven by the exit from the Russian market one year ago. Apart from that, we saw an increased demand evolving during the quarter. We started off with continued in-inventory level reductions of customers, but improved as the spring high season approached. Adjusted operating profit improved to SEK 194 million. Here the adjustment is only in the comparables, where SEK 25 million was reserved last year for the Russian business. Finally, as you can see, top right, operating margin also improved versus preceding quarters and was 16.3% on EBIT terms this quarter. In this report, we have also complemented with the information on EBITDA level, and the EBITDA margin was 1% higher than the EBIT margin. That is 17.3% this quarter. Moving on to Beijer Tech. Beijer Tech operates in two business areas, fluid technology and industrial products, both acting within industrial trading and manufacturing. Further, it's a platform for acquisitions into new attractive industrial niches such as building automation, which is reported into industrial products. Order bookings improved significantly from Q4. This quarter increased 35% year-on-year, organically by 25%. The organic growth was partly thanks to new projects and agreements in building automation, industrial consumables, and fluid technology. This order book will support sales development over the coming year. Net revenue grew by 13%, of which 6% was organic. Within both business areas, industrial products and fluid technology, demand was stable and stronger in Norway and Sweden versus the Finnish and Danish markets. The organic revenue growth was primarily driven by last year's price increases. The latest acquisition, Botek, had a good start, and it contributes to growth in the industrial products business area in this quarter. Beijer Tech's operating result increased despite challenging comparables to SEK 56 million. As you can see, top right, operating margin recovered versus last Q4 to 11.2%. I will now hand over to our CFO, Johan Dufvenmark for some more comments on the financials. Thank you, Henrik. Let's look into some of the financials. As mentioned, net revenue is up to SEK 132 million compared to last year. Acquisitions contributed with SEK 179 million, which was an increase of 12%, while the organic growth was almost unchanged on the total. We did see a positive organic growth in Beijer Tech +5%, but a negative organic growth in Lesjöfors of -2%, mainly related to the discontinued business in Russia, but also related to parts of the European market. Order bookings were strong with an increase of SEK 368 million to SEK 1,808 million. This was due to all three factors, acquisitions, organic growth, and currency. The acquisitions contributed with almost SEK 200 million, an increase of 14%, whereas the organic growth was 8%. Looking at the underlying business, Lesjöfors order book was organically flat, but Beijer Tech had an increase of 25%. As Henrik mentioned, the increase in Beijer Tech order bookings was mainly related to building automation, industrial consumables, and fluid technology. Next slide, please. Now a short look on the segments and how they contribute to the revenue and operating results. As we saw on the previous slide, net revenue increased, and the main effect was within Lesjöfors and was related to the acquisitions. Some of the increased revenue is related to price increases, and these were mainly carried out during 2022. Operating profit was SEK 243 million in Q1, and the quarter did not contain any items affecting variability. Of the profit, Lesjöfors contributed with SEK 194 million and Beijer Tech with SEK 56 million. Both segments delivered strong results. The change in adjusted operating profit is small compared to last year, but do keep in mind that Q1 last year still had some profits from or that originated in Russia. Next slide, please. Now to some of the key financial ratios. As you can see in the report, we have made some changes. We have added EBITDA and EBITDA margin for the group and the segments. We have as well changed what was previously called items affecting comparability to adjusted, as for example, adjusted EBIT. The use of adjusted compared to items affecting comparability will not change. EBITDA is up SEK 30 million compared to last year, the difference to EBIT being high depreciation following acquisitions as John Evans' Sons and Tollman. Cash flow after capital expenditure was negative SEK 70 million in the period, affected by seasonal changes in working capital related to mainly accounts receivable. Overall, accounts receivable have increased following good sales compared to last period. In inventory, we have seen positive effects from the work being carried out to increase working capital efficiency. The cash flow in the quarter, while being negative, was still stronger than last year, which was minus SEK 145 million. During Q1, as Henrik mentioned, we have renewed our main credit facilities. This was related to the previously short tenor in the loan portfolio and consolidation of debt to receive better pricing. The new financing is more flexible compared to previously, it will support Beijer Alma's growth ambitions. Thank you, back to Henrik for a look at events after the quarter. Thank you. I would now like to mention a positive event after the quarter. On April 14th, Lesjöfors completed the earlier announced acquisition of Tollman Spring Company situated in Connecticut, USA. By this acquisition, Lesjöfors further strengthens its position on the North American market and is now one of the leading industrial spring groups. Tollman Spring had a turnover of approximately $22 million in 2022, generating a pro forma EBIT of $3.3 million. The company has a solid reputation with long-lasting customers in attractive segments, for example, in industrial, electrical, defense, and automotive applications. We are happy to have Matt Zink and his team on board, and we welcome Tollman Spring to our group. Following on that, to summarize, you know, our strategy to further grow by acquisitions is having an increasing impact. We continue to look for good companies which fits into our group and can deliver long-term growth. In 2022, the acquired companies are bringing around SEK 620 million in net revenues with good profitability. Now in 2023, three new companies mentioned today have already been added to contribute profitable growth. Now, before I summarize the quarter, I would like to switch the attention to our sustainability work, which is an important basis for Beijer Alma's operations. In March, we published our 2022 sustainability report. Today is a good opportunity to present our focus and progress. Beijer Alma's sustainability work is focused on four prioritized areas. It's sound business ethics and social commitment. It's more efficient use of resources, such as energy and materials. It's reduced climate impact and a safe and stimulating work environment. This work was further developed in 2022. We have set objectives on a 5-year timescale until 2023. Sustainability reporting has been expanded to include the companies acquired in 2021, and also the divestment of Habia Cable has been adjusted for, pro rata. In particular, in terms of climate impact, in the middle of this quite busy slide, we have reduced our carbon intensity by 41%. This downward trend from the base year of 2018 shows the results of measures over time. It's driven by large share of renewable energy through solar panels, transition to bio-based fuel, and energy savings. Assessment of the climate impact throughout the value chain, called Scope 3, have been further developed. Will continue to be reported for the future. We can note that for a manufacturer like us, the key footprint is coming from raw materials. Here you can see it's 10 times our own footprint. We have a high ambition level for circular contributions, ensuring that our generated waste is used as new material or energy. We have some challenging waste fractions. Work closely with our partners to find new innovative solutions. I'm also very happy to see that workplace accidents are continuously reduced, which is our highest focus, no matter where in the world we have our production. The sustainability arena is moving fast towards a greater responsibility throughout the value chain. I would like to highlight three areas for a broader scope already in 2023 here in orange. Firstly, in our collaboration with our business partners such as suppliers, agents, and distributors, we have put forward business partner code of conduct principles and perform a risk-based ESG assessment. Number 3 here, we can see that the climate and climate related issues are high on the sustainability agenda of our customers and other stakeholders throughout the value chain. The group has begun to develop science-based climate targets in accordance with the Paris Agreement. Finally, when it comes to the development and innovation of components and services, we see that life cycle perspective is becoming more prominent and supporting the transition to lower clean pact and will create new business opportunities. This broadened scope will be fully reflected in our new updated objectives for the next year's goal period. Coming back to briefly summarize our first quarter 2023, and now what I initially called solid report. The main points, demand was stable but varied across customers and regions. Nordics and USA strongest with Europe and Asia lagging. Growth in the quarter came mainly from acquisitions. Year-on-year volumes are somewhat lower. Strong order intake, especially in the Nordics and in Beijer Tech. As mentioned, during the quarter, we renewed and secured robust financing to support the group's growth strategy. Two new acquisitions were welcomed in the quarter, Amatec in Lesjöfors and Botek in Beijer Tech. Finally, the acquisition of Tollman Spring after the end of the quarter strengthens Lesjöfors in North America. Thank you. We will now open up for questions. 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 Aline Garten from Carnegie Investment Bank. Please go ahead. Thank you, and congratulations on a great report. I have a question regarding the margin. In the margin in Lesjöfors, we saw an improvement quarter-over-quarter. I wonder if you could discuss a little bit about the components on the margin development, looking essentially quarter-over-quarter then. A short comment from my side. I think the components are the increases coming from also larger volumes. We have, compared to last quarter before in the Q4, a good mix between the business areas and also the regions I mentioned. Partly mix, but also better volumes. Okay, thank you. Would you say there is a lot of price increases that will be offset by suppliers going forward, or it is mainly operational leverage? Well, now it's of course important thinking what we compare with. If we look on a year-on-year comparison, there is certainly a significant portion of price increases. There are still some going on, but it's to a lesser extent if you compare with Q4. There I would say it's more relation to operational leverage. Okay, thank you. I had a similar question on Beijer Tech as well. If you can just touch upon the EBIT margin improvement quarter-over-quarter. If you touch upon it shortly in the presentation, but I wonder as well if it's operational leverage or pricing as well, and also if you're seeing that suppliers are increasing the prices? Yes, actually there will be similar answers to that. There is certainly, you know, a good development of turnover, so some operational leverage versus what, if you remember, I commented last time that December was a bit slower. That is the main reason there. Once again, there are some price increases being made, but, you know, compared to, you know, six, nine months, the pace of price increases is ticking off. Compared to a year ago, yes, significant part of price increase, but compared to year-on-year, more operation leverage. Also, a good contribution of, as I mentioned, newly acquired company is also adding. Okay, super. Thank you. I have one last question that's regarding inventory levels. Have you seen the customers have reduced their inventory enough, or should we see that they're continuing in Q2 as well? Well, that's... You know, we have a very broad customer base and, it's, I think this is a more of a continuous process if you look at the industrial segments. What I did comment on was a little bit more specifically in the Chassis Springs business area. And there, we saw that around, in the beginning of the year, that was still sort of a, you know, a strategy from our customers to work on that. Whereas as, we know, it is a seasonal business, and the volumes, are typically highest in the spring in Q2. You know, based on that, you know, the end customer demand will create also a good demand for us to our wholesale customers. You know, there is an end to that, of course, to the reductions. Okay, thank you. I will get back in line. The next question comes from Hjalmar Jernström from Erik Penser Bank. Please go ahead. Hi. Good morning, Henrik and Johan. First one is on Beijer Tech and the strong order intake. You mentioned the particular industries here. I was wondering, can you maybe elaborate a bit on this and maybe the implications then for the Q2 margins from these particular segments? Are these projects in general accretive or dilutive? Maybe you can develop some on this, please. Good morning, Hjalmar. Yes, it's a good question. Beijer Tech, you know, looking back, you know, taking a little bit longer perspective on Beijer Tech, you know, it's a group that, of course, has evolved during the last couple of years. Historically, you know, the order book or the order intake, the order book was short time between order and sales, so typically the revenues and order intake were almost the same. What we do have is some other companies that are working a little bit more with project-based. For example, as mentioned in building automation, we also have in fluid technology, or we have machinery, machine builders. There is an underlying strong demand, which I pointed out, but there is also some of these orders are a little bit more long-term, and as I commented, you know, it will support our sales during this year. It's not an automatic Q1 order gives Q2 sales impact. Now on the question of accretiveness, I would say, yes, it's a good interesting business for Beijer Tech companies that have built this order book. All right. Thank you. Second question is then on the price increase initiatives in Lesjöfors. Could you maybe elaborate a bit on the general reception of these in the first quarter, and maybe give us some flavor on what you expect in terms of pricing looking forward, please? Well, I think a general comment like I gave to Elena before is that, you know, we have been through a very strong cycle of price increases for Lesjöfors. That was, of course, lot driven by raw material increases. They have peaked raw materials, we are now on a sort of different curve. Having said that, you know, there are other inflationary aspects that we must ensure that we can cover our margin for. It is an ongoing work, but compared to a year ago or 9 months ago, certainly the way this is. Yeah, it's harder to push through price increases, but you know, there needs to be a logic behind it, definitely. All right. Thank you. Then one final question. If we look at the acquisitions then from 2022 and maybe, for example, John Evans' Sons, do you see the operating margin contribution here being accretive for Lesjöfors in the first quarter? Maybe you could give us some flavor then on the general margins in the U.S., please. Yes, I think the acquisitions that we have made in the U.S., actually both, you know, Plymouth that came in already now, it's 15 months ago, and also John Evans' Sons later, it's certainly very good and healthy and profitable business that is adding to our group. Also this is of course one of the reasons why we have started also to report the EBITDA, since we do have some amortizations of material assets related to this. It's certainly a good contribution to Lesjöfors and Beijer Alma, also in terms of profitable growth. All right. Thank you. That's all on my end. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more phone questions at this time. I hand the conference back to the speakers for any written questions and closing comments. Clear it. Okay. We have no further questions, no written questions. Thank you very much for today, and have a good day, everybody. Bye-bye.