Hello, welcome to the Beijer Ref first quarter 2023 earnings call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. On today's call, we have Christopher Norbye, CEO, and Ulf Berghult, CFO. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Christopher Norbye, CEO. Please go ahead. Well, welcome, everyone. Christopher and Ulf here, going over the Q1 report. I think we can start and move on to slide three. Beijer Ref at a glance. I mean, the main thing added here is, of course, that our rolling 12-month sales continues to increase a lot. Here is also part of the U.S. adding more markets, branches, and customers. We continue, I would say, to grow at a rapid pace, which we of course are very satisfied with. Moving on to the next slide, the highlights. You know, if you read the report, I would say amazing sales development here for Q1, an increase of 50%, strong on organic side, 15%. Of course, with our acquisition and Heritage, starting to add value here from January 20th, and a continued positive EBIT effect. Almost SEK 7.4 billion sales in Q1 and a annual record level. That, you know, the way we're structuring now, that's gonna continue with good development throughout the year. EBITDA of SEK 702 million, which is a margin of 9.5%. We continue to, I would say, track well on our both cost and gross margin and our plans here on improving the margin step by step. That's of course also is a very, very good growth of 72% on the EBITDA, both driven organically, driven through acquisition and also good initiatives to continue to work with our gross margin. We do have a one-off to communicate it before related to the bridge loan on Heritage that now being sold to the rights issue of SEK 138 million. So that's I would say it's a little bit better than expected as the timeline was very, very good. On the cash flow, as expected in Q1, we do build inventory to support as we're moving into a high season on the heating side. We're in a good position as supply chains are improving to be set up for a good support for our different markets. Also as we have strategically launched our private label now in 11 markets and driving that through also the Freddox side. Also the U.S. are moving into high season where you continue and build inventory where you can, because in the U.S., you still have supply chain issues. For us, it's a very good development to building up for the season. Acquisition, we'll probably talk more about, we just closed one today. We'll continue to have a good pipeline to create value and strengthen our business model. Then you have an EPS increase of 67%. I mean, highlights for us, this has been a fantastic quarter and strong and good development across the board. We're very satisfied with execution that would have both in the different regions and of course also in the U.S. We'll come back a little bit as the newest member of Beijer Ref. Next slide. You see the organic growth by product group. I would say, you know, very strong across the board on the commercial industrial cooling side, good activities also especially in the APAC region. The OEM, we also say we had some, as we said before, supply chain increases and some pent-up demand shipping out, but still a good development also in a newly acquired business to support this growth level. That's also strong across the board. On the HVAC side, you know, rounding out the high season in the APAC region, I'll come back to, you know, a good tailwind for us in Q4 and Q1, as we're more active on the heating side as well as we're getting more present there. Now we move into Q2, Q3, all focus for us will be on the cooling side as that becomes the high season. North America we'll come back to, we believe came in at a good level, so stable and good. We'll come back to the replacement market and the margin side also, I would say is good. We also had our first quarter with transcritical cooling in South Africa continue to do well. The rights issues were closed end of quarter, as you know, in a very successful manner. I would say also, if you break it down by product group, it's a very solid quarter for us. On the next slide, going into the new structure, where we go through the regions, as we said, we're going to start now in Q1. EMEA strong across the board in the regions. You saw the HVAC growth there is very good, and it relates to being more active on the cooling the heating segment that we have not been driving that much in the past. That, of course, gives you a good tailwind. That's especially in the Q4 and Q1 segments. Now in Q2, we move into more traditional heating season. OEM continues to deliver well. Fenagy that we acquired some years back, I talked to before, continues to grow at a very good pace, both from an order side and delivery side. Of course, that's a very, very strong number, +38%. We have double-digit sales in all of our main regions, and of course, a very good EBITDA increase. EBITDA of 10% in Q1, I would say is a very good level for us in EMEA as that's still not the high season for us. You know, executing on the plans we have, both on the growth and also on the EBIT improvements, so we feel very good about the execution in Q1, and of course, the last couple of years here in EMEA, setting up well for the future. Moving into the APAC region, who's just finishing their summer season. Also here, good growth in all the segments. The HVAC extremely good, also driven by acquisition side, as we acquired last year, AAD, that continues to grow very well. The integration together with our existing business is positive. Very happy with that acquisition and the integration process. Also in the commercial and cooling side, high activity on the project side of the business. Of course, parts of Southeast Asia opening up and China open up. We haven't seen that much activity yet in China. We expect more of that coming into Q2. Australia, very solid for us. It's the largest market in the APAC region, and they also have a very good EBITDA growth and also margin. We step by step, if you follow us historically, we continue to improve the margins here in the APAC region, and moving towards a better profitability that's been part of our plan all along. Moving on to the next slide, our newest member of the family, North America. Most of you who follow on the call has, of course, been following the process of Heritage, the acquisition that we did close January 20th, the share issue to support it. Of course, now after the prospectus and everything is behind you, continue to focus on the business. What we see in the market in the U.S., 1st quarter is very much as expected. A softening on the new construction side, not a big area for our platform that's mostly active in repair and replacement. This market continues to be stable, and that's of course, 90%-95% of the business we do as a wholesaler distributor in the U.S. This continues to be active. The difference I would say in the U.S. compared to what we see now in Europe and Asia Pacific is there's still constraints on the supply chain. I would say commercial HVAC is still very long lead times. Again, it's not a huge segment for us. Of course, with all the new regulation, in ASHRAE 15 in the U.S., also on the residential side, we're waiting on products to make the complete offering to our customers. You know, this is what we expect the market development. We continue to have a positive development in the U.S. here, in the market and also, I would say very good profitability for being in Q1. Of course, also they are moving into the high season now also in Q2 and Q3 on the heating side. Just mention integration, we continue to do well on supporting the platform, looking at CO₂, looking at suppliers and pricing. It's a long-term plan that will see effect over the next 2 years-3 years. I would say a very positive start for us in North America as well. Summarizing Q1, I mean, we personally think it's fantastic numbers with sales growth of 50%, EBITDA growth 17%, strong organic growth, I would say, higher than expected here in Q1, and of course, also falling down to the bottom line. A very good Q1 for Beijer Ref. Moving on to next slide, you can see the bridge here. We have the organic 15%, M&A 30%. Of course, we know and expect through Heritage that we'll have a very good tailwind throughout the year on the M&A, growth, in the business, and especially now moving into, to high season. We also have a, of course, a good margin developing, leveraging a fixed cost. FX continues to be positive at 5.8% here in Q1, which adds up to SEK 7.4 billion, which is a, you know, a very good Q1 for us. Next slide. If you look at our sales development, for quite some quarters now, you can look at very good organic growth, very good acquisition growth, and we'll come back to the margin development. Very solid development. We'll of course know and expect acquisition growth to continue here and also adding a lot of value for us. Of course, as we move in now to Q2 and Q3, focusing on the cooling side will get tougher and tougher comps. Of course, we expect that the organic growth rate will start. Be shown when you compare it to very high comps here in Q2 and Q3. We'll come back to that. Still in a positive mode and gearing up for the season here in Q2. Yeah. The sales goals, I mean, we I think we continue and show very EBITDA growth higher than our sales goals as we continue work with our margin, leveraging our fixed cost base, also driving our private label strategy and driving our mix. Of course, we're very proud of continuing to have an improvement on our margin side and creating a lot of value in the business as we also grow the organic side. Of course, for us, it's not just about growing sales, it's also growing the right type of sales and leveraging our assets to continue and drive and improve our margin compared to last year. Of course, very happy with the development on the margin side as well. Also remembering this being a Q1 and of course, as we move into the bigger quarters for us, it should continue and be positive. Moving over to the next slide, EBITDA. Here you can follow the margin development for us in the EBITDA. Also a very positive trend and also a margin, I would say stabilizing on a higher level than our history in the market. I think we feel good about the initiatives and driving the margin as we've done over the last couple of years to a higher level for Beijer Ref. Moving over to the next slide. I'll hand over to Ulf to go a little bit more in detail on the P&L. Okay. We are on slide 14, that is the P&L. Christopher went through the operations down to EBIT, or EBITDA. You can see the EBIT and items affecting comparability that was reported in Q4. That has an impact on the rolling 12 months. We had the financial cost of the Heritage, the short-term financing cost, which is SEK 138 million. That was the cost of the bridge that we needed in order to before we got the right issue fully into the books in end of the Q1. That has burdened the profit. The normal net financial, that is SEK 69 million, that is higher than the previous year. That's coming from we have a higher underlying debt. Also then that we... The rates are going up, but so we are having a higher financial cost. Tax is in line. It is at 23% in the quarter, so it's basically in line with what we have reported earlier. Then if we then take the earnings per share in the bottom page here, you can see excluding items affecting comparability and including that is also then the impact from the Heritage financing cost reported under the net financial income. It's excluding that in the quarter we have then SEK 0.67 +. In the next slide, on page 15, you can see then that it's an increase of SEK 0.67, and that is excluding both the excluding the financing cost of SEK 138 million. The next slide, the cash flow on the page 16. We have, so this is then showing year-on-year performance. Last year we had then SEK -295 million. Then of course we have an improved performance in EBITDA. We have a seasonal impact in working capital of SEK -162 million. Slightly more CapEx, SEK 25 million, and leasing than IFRS leasing, SEK 23 million, and then others, SEK 41 million, ending up on SEK -209 million for the quarter. Also then, one need to remember also now we have the Heritage, and Heritage is also then moving up into their season. As Christopher said that we will have a main season in Q2 and Q3. Which again you can see in the next slide on page 17. Here you can see that from a seasonal point of view, it's last year we had SEK -295 million. In Q1 2021, that has that was impacted by COVID impact. That's slightly odd from a seasonal point of view. Moving on to slide 18, where you see the net debt and leverage. We have added a new KPI or leverage, which we have excluded in leasing and pension. The reason for that is that is basically, you know, all IFRS 16 leases. The only leases that we have that is normal rental contracts. It is no hidden financing or machines or et cetera. It is basically a rental contract. If I look and excluding the items affecting comparability, we have SEK 238 million leverage. If you exclude leasing and pension, so the underlying net debt versus kind of interest bearing liabilities, that would be then SEK 186 million. I hand over to Christopher for making the closing remarks. Yeah. I mean, running through the numbers, it continues to be, you know, very solid for Beijer Ref. You know, plus 50% on the growth, strong organic, strong acquisition, you know, even better execution on driving the margin through our cost base and our initiatives that we've been working on for the last couple of years. As you saw, also very solid in all our product groups and regions. A very, very good Q1 to start off the year. Of course it's fantastic to get off to a good start to the year compared to of course, very good development the last couple of years. What we see in the market continue being long-term, as that's how we run, invest, and drive our business. We, of course, continue to see the drivers on sustainability, electrification, in a lot of countries. Also where we expect long-term, these trends to continue and even accelerate on most of the plans that we have in the EU. Also we see, you know, drivers to this on the CO₂-based development in APAC, and also the first signs here now moving into the U.S., where we have a lot of discussions and possibilities within the refrigeration, the CO₂, the different regulation that will happen over the next five years. Of course, also, when you look at how the heat pump and natural refrigerants will move into that in Europe, that's happening already 2025 in the U.S. The long-term trends continue to be very good, and that's how we're investing in our business as well to make sure we can be part of this development. We are moving into our high season. I would say Q1 and Q4 that we just went through has a lot of tailwinds on us moving also into the cooling segment, both from air-to-water, but also air-to-air solution, where people now are also using that type of solution in the heating to reduce the dependability on direct electricity or gas or other type of, you know, pellets and other type of very expensive solutions. Now we're moving into Q2 and especially Q3. I mean, it's focused on the heating season and a bit less capacity or focus on these type of solution until we move in and ramp up again in Q4. We like to highlight that we're moving into very strong comps here moving forward as growing 16% last year, very strong in HVAC. We have one less trading day also in Q2. We still feel very good about the market, but it's more of, we crossing a lot of very, very high comparables over over the year, and also in Q2 having less of a trading day. Being a trading company, that makes a difference for us short term. On acquisition side, close one today. We'll continue being very active, both in, you know, three regions in the world. Good discussions in the U.S., good discussion in Europe and APAC. We also feel very good about the possibilities to continue our journey of consolidating the market and create an even stronger Beijer Ref. Also, as we can see here, we'll see here during the year, we'll continue and deleverage the company as we move into Q3 and Q4 with strong cash flow as we start releasing the inventory that we're building for the season. We feel very possibilities on that side as well. Then maybe just wrapping up with Heritage as it is a, you know, big new member of the family. We say we had a good start, good EBITA margin. Executing very well on the plans that we have there, on top of the long-term integration with good activities in the region, especially continuing the replacement market, which is the main part of their business. New construction a bit weaker, and that's what we expect, and we expect that to continue, but it's not a major part of their business model. This will not have a major effect on our business. We do a healthy backlog. We are missing some products. We are actually trying to find ways of building inventory before the season so we can service our customers in the best way as their supply chain continues to be a challenge. We think it's gonna, you know, start easing up towards the end of the year. Of course, that also creates, I would say, a pent-up demand moving into 2024, as you have long lead times in the business. Then we'll continue to invest there where we're setting up the company now on the same platform, getting our Power BI systems in place, but also looking into the, you know, pricing our global supply agreements. We're now going over to suppliers who also have a lot of interest for our other suppliers to enter the U.S. together with us, a lot of activities. Just want to summarize, it's a very good start, both financially and also on the integration work together with Heritage. A very positive addition to Beijer Ref for the long-term future as well. With those words, we have wrapped up our presentation, and we can open the forum for questions from people online. Thank you very much for listening. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Carl Ragnerstam with Nordea. Please go ahead. Hi, it's Carl here from Nordea. A few questions from my side. Firstly, I mean, in the U.S., you said that the market is characterized by slightly lower volumes, especially for the new production. Could you maybe help us understand how this impacted Heritage during the quarter as we have no comparables? I mean, to what extent the replacement market so far managed to offset the weakening in new build sentiment? If you could sort of give any comments on the current trading now entering Q2 for Heritage which is inevitably a quite strong quarter for them. Yeah. As you don't have any comparison, you know, I would say if you look at the historical numbers, it's a very good Q1 and it's positive on the organic side as well for them. A solid Q1 and in most of their regions, you know, down in Tennessee, Alabama, and being very active. It continues to develop well. As you said, we do see most of the shipment data going down that's more from an OEM point of view. We were just there last week, we met with all team, all their installers and most of our customers are fully booked, full of business. It's more of us getting more products on the residential side and replacement market to support them. There we don't see any weakness in the market. I think positive, we still are fighting it to supply chain issues also related to all this new regulation and new products to be launched from our suppliers. In general, a good sentiment in our core part of the market. And of course, also the replacement market is our most profitable piece of the market. We continue to be positive. On the trading here in Q2, April is not. I mean, it's a month in between. The big month here is when you move into May and June, and then you have Easter and holidays. April is not a very strong month for us in general. There's nothing that's really changed since Q1. Continues to be active, continue be looking for getting the right inventory at the right places to support the customer. Especially now as we, you know, when it starts getting hot, you get a big boost on your sales as well. We're happy with development. We think the market continues to be stable for us. I think the margin is very strong. All in all, we continue to be solid believe in the U.S. both short term and long term. Okay. Very good. On speaking about the new regulations on energy efficiency standards in the U.S. I mean, we have heard quite a few of the, or maybe all of the OEMs raising prices by mid to mid, I think it is in January, March. Will this burden your margin in Q2 for Heritage? Or were you prepared for increased prices from the OEMs, meaning that will get the flattish margin but an organic growth boost from it? Yeah, it's more on the second side. It's we're comfortable with the margin we have in the pipeline and in our products. There's no surprises. We know what's happening. We know how to work with it. And to be honest, that's the way it's been the last couple of years in the U.S., right? No, we don't see any. I mean, our biggest, I would say, thing is that we would need more products that with shorter lead times that would support the business. But, you know, hopefully that clears out during the during Q3 and Q4. But that part is not a big concern for us. Also, a bit on the margin, group margin. If we exclude Heritage, I mean, quite still a solid year-over-year uplift. To what extent would you say that it's driven by the quite good volumes, and to what extent is it driven by maybe a higher share of own product as well as maybe better efficiency? You, for instance, wrote that the e-commerce side of the business is growing quite rapidly. Yeah, I think it's a little bit of combination on everything. It's good discipline in the market. It's focused on the pricing initiative we're doing, leveraging our fixed cost on the volume. Also of course private label, especially on the HVAC side. It's. I would, you know, more you take those four or five things, you know, of course you want your volume growth to leverage your fixed cost base no matter what, because that's a healthy market you're running in. These are adding, you know, sustainable margin improvement as you can see now as we move into Q1 comparing to, you know, very good margins development last year. Of course for us it's not continuing to improve margin to infinity. I think we're starting to get to a solid level. We still see, you know, we're going to have higher volumes in Q2 and Q3 than we have in Q1. Of course, we'll, if you use this as a baseline, it'll be a, you know, a good development, going forward as well. Okay. Very good. The final one from my side is maybe on the HVAC segment. We obviously read from everywhere about the weakening consumer sentiment. On the other hand, we have subsidies on both air-to-water heat pumps, air-to-air heat pumps, and also quite, I mean other AC products as well. I mean, will it be enough to offset the weakening consumer sentiment, would you say? Will it sort of be tougher during the second half? Do you have any view at all? I mean, I know it's difficult. I think it's a valid question or comment. It's a little bit of a mixed picture. If you really go down to details, you can see that, you know, you have larger countries in Southern Europe where the water heat pumps for the first time in March, shipment was below last year because you changed the incentive models, et cetera. You'll have a mixed bag supporting your business. As we now at Beijer Ref are moving into high season for cooling and replacement market, the bigger thing for us is that we have extremely high comps. We know it's gonna be an active summer. You have the weather and one day less. It's a little bit of a mixed picture, but a little bit tense. There's no, you know, big signals either because right now you're ramping up. We're building the inventory. We're working with our suppliers and wholesalers. They continue to be active in the market. Of course, you have things around it, you know. Will it be a really hot summer where the hot spell starts in May or in June and July? You have things that will affect it. We still expect, you know, a solid development from what we're hearing out there in the market. You have some factors on, you know, weather, one day less, and the comps that you need to consider, of course. All in all, there's no signals out there that you have any major changes in the market sentiment. Okay, very good. That's all for me. Thank you. The next question comes from Douglas Lindahl with DNB. Please go ahead. Oh, excuse me. I just... Hello, gentlemen. Thanks for taking my questions. Starting off with one that I know you heard several times before. On the organic growth side, if you could break that up in price versus volume in the first quarter, that would be very useful to begin with. Thank you. I think you asked that before, have you, Douglas? Exactly. [crosstalk] The fair comment to make is that we continue and we don't disclose or break that out. I think we said it before, as we move throughout or into Q2, Q3, and Q4, the pricing component will continue and be a less part of the number. We always said, and in Q1 it's the same, that the majority is still volume, but the pricing component you will see start coming down here in Q2 because it's catching up, right? As I said before. Mm-hmm ... I think that's healthy, is that what we're seeing in the market. Now I think we're in a, in a market where you can see most of the trends is a stable price development, going back to historical numbers, both in ref components and HVAC, you know, in, in low single digits. It's, it's stabilizing. We think it's at a good level. I would expect, you know, this component if, you know, nothing extreme changes, in the market, but we don't see any of those signals right now. We know we just went through the season in APAC, now we're moving season to Europe. Of course, we have the pricing set for our suppliers and the inventory already set up and the market and what the competitors are doing. It's a stable historical level. The pricing component will decrease, starting to decrease there in Q2 to, you know, Q3 and Q4, to more normal levels. You will of course see it's part of the component and the strong growth here in Q1 that will be less of a pricing component as we see right now in the rest of the year. Okay. That's very. That's understood. You still see that the majority is coming from volume in Q1, that is? Yeah. Okay. Just another question then on the heat pump HP exposure. I believe you previously said that your ambition has to be to break this out sometime during 2023. Can you give some sort of timeframe on when we can expect some more indications on that? Yeah, any numbers? Yeah. ... your heat pump exposure essentially? We're working on setting dates here in towards October, November on a Capital Markets Day, then we'll come back to more breaking it down in detail. You'll get it towards the, you know, in Q4, more accurate than today. We'll break down some other things also on the. Yeah On some other segments to make it easier for you also to analyze the company. It's a little bit that we still, you know, as I said before, as the segment has been growing a lot for us, especially made a difference in Q4 and Q1 numbers. Now we're moving to Q2 and Q3. Most of our installers and the customers segment we're focusing is all driven by the, you know, the heating, the cooling side. Of course, Q2, Q3, we're not, it's not as big segment. Then it's ramping up after the summer for setting up Q4. We'll get some more details. It shows in our Q4 and Q1 numbers that's been, I would say, very strong. It's driven also by, you know, people using our products for heating and not only for cooling, of course. Hello? Okay. It looks like he had disconnected. We'll go to the next question, which is Andreas Brock with [audio distortion]. Please go ahead. Hello, can you hear me? Yep. Yes. Great. Great. This is Herman from [audio distortion] on behalf of Andreas Brock. Just a quick question. What are your plans for the American market going forward? I know you recently closed this big acquisition, you know, just wanted to know, you know, what are you seeing going forward here? What's the plan? Are you hungry for more acquisitions? What's the M&A pipeline looking for? Are there a lot of targets out there on the American market for you to go after? Just curious. We closed it. We had it now for a couple of months' time, of course, as you get to know us in Beijer Ref, we move in a fairly quick manner in a lot of things and in a good way. As we close the acquisition, we already had, you know, a pipeline that we thought was very good, and also did the company that we bought. We continue those discussion. We are spending time in the U.S. meeting companies. It's created a lot of interest, of course, as we close this acquisition and the profile and the strategic targets that we have. For us, it is the combination, you know, of three things that we are working on and according to timeline and plan is, yes, we'll continue and do consolidation in the market of what we believe strategic opportunities. It could be, you know, strengthening the position where we are, strengthening with more refrigeration, other type of products that we wanna build into our platform, and also expand into new states with market leading companies. That will continue, you know, for the foreseeable future and be part of Beijer Ref, you know, growing here over the next 5 years-10 years. Of course, we also have an organic journey where we're looking at white spots to open up branches. We can't do that right now because we don't get the products to support it. That will happen more in 2024. We're also looking at the synergies right now on CO₂ as we started the phase out of HFC gases in the U.S. and also on private label and some other initiatives. It's a strong playbook. It's more of prioritizing, having the right timing for the different things. It'll be a combination of both organic initiatives and acquisition here as we move forward during 2023 and in the future. Great. Thank you very much. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Christopher Norbye for any closing remarks. Thanks all for calling in. Thanks for listening. I mean, I think summarizing Q1 is fairly easy for us. An amazing start to the year. Solid performance in all regions, product groups. You know, moving from, you know, Q1, where we have been, you know, very active, and driving the growth through also, the cooling side, or the heating side, now moving into high season for us in Europe and the U.S., and of course, building the inventory to support that development over the next couple of quarters. APAC moving more into, you know, normal season. Also, we can see releasing the inventory starting here in Q3. Moving into the next wave, you know, we still see a good market out there for us. Short term, of course, Q2 with some one day less and high comps, but still, you know, good market sentiment out there from our customer and a good activity level. With that, I'd like to wrap it up and thank you for listening. Of course, any specific questions, we have our AGM today, so we might wanna find time for that later this week. Thank you very much for listening. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.