Welcome to the Q2 earnings call for Bufab. Today's conference is being recorded. There will be a question and answer session at the end of the presentation. At this time, I would like to turn the conference over to Johan Lindqvist. Please go ahead, sir. Good morning, everybody, and welcome to this Q2 report for Bufab. We look at the presentation on page one. Once again, a strong quarter in a continued challenging market. Bufab once again reported the highest sales, highest operating profit and earnings per share for ever for a single quarter. We see continued strong demand in the second quarter across all segments. Organic growth up to 16%, driven by price increases, underlying demand and improved market share, and also the order intake remains stable. Improved gross margin, driven primarily by Segment North and Segment East. We also increased share of operating expenses due to remeasured additional purchase considerations. Adjusted for this, strong improvement in EBITDA plus 66% corresponding to an operating margin of 14% compared to 13.4%. Weak cash flow this quarter due to high lead times and inventory buildup. However, that's a good sign. Turning point expected soon to be reached. Acquisition of CDA Polska in Poland, adding annual turnover of approximately SEK 90 million, strengthening our offering, especially in the construction industry. Over to Marcus on page two. Thank you very much, Johan. Page two, where we have the financial highlights for the group. As Johan just mentioned, you can see we start top line or with order intake. You can see that we had an order intake that was more or less in line with net sales, which kind of indicates stable development at least short-term going forward. Net sales growth was strong, 57%. Organic growth, 16%. Those 16% comes mainly from a somewhat higher underlying demand compared to the previous quarter, as well as from price increases and that we continue to take market shares. The gross profit, as you can see, was stronger than the comparable quarter. The high gross margin is mainly driven by strong performance in primarily Segment North and Segment East, driven by a combination of positive business mix, and that price increases were passed on to customer, et cetera, and also higher volumes in the manufacturing companies as well. Operating expenses, like Johan said, we have one-off, you can say, in this period, which has to do with remeasured additional purchase considerations of approximately SEK 80 million. That has a negative impact on the operating expenses. Adjusted for this, the operating expenses was slightly up compared to previous year, which is mainly due to that we continue to invest in our business and that traveling, et cetera, has gone back more to somewhat of a normal level, you can say. All in all, this summarizes down on operating profit of SEK 223 million. Adjusted for the remeasured additional purchase consideration, the operating profit was SEK 313 million, meaning an increase of approximately 64%-65% compared to the comparable quarter. If you look at the right on page two, you can see the bridge showing which segments are generating mainly the increased results compared to previous year. Strong development in North, driven by both organic growth and through acquisition, mainly Pajo-Bolte and Tilka, who is the contributor. Segment West also solid organic growth, but also contributions from the acquisition of Jenny Waltle. We'll comment more on Segment East in a couple of pages. Segment U.K./North America, as you can see, have a negative impact, but mainly due to those remeasured additional purchase consideration is in that segment. We'll talk more about that as well. We'll turn to page three, and we'll see more of a long-term development. First on the graph on the left side, we have the growth trajectory of Bufab. As you can see, 57% growth, and over the last seven or actually eight quarters, we have seen organic growth during the last five quarters, you can say a very strong one as well, driven by both volumes and price increases. If you look on the right graph, you can see that the strong trend when it comes to overall profit level and also net sales development is still in a very strong trend, which is of course driven by continued strong underlying demand, price increases, slightly increased gross margin and cost under control, you can say. If we turn to page number four and have a look at Segment North, as you can see, Segment North had an order intake that was in line with net sales. Organic growth up about 9%. I said earlier, this was mainly supported by price increases and higher volumes in the manufacturing companies, which are operating in this segment, you can say. High gross margin, mainly due to favorable business mix and price increases. Slightly lower cost in percentage of net sales, mainly due to good cost control and operational leverage on the increased sales. All in all, this sums up to an EBITDA of SEK 104 million, meaning an increase of 58% and a corresponding EBITDA margin of 13.8%. If we turn to page number five and have a look at Segment West, you can see that Segment West had a slightly stronger order intake than net sales. Net sales in total grow with 39% and organically by 10%. This segment saw healthy underlying demand both now and also going forward. Gross margin, as you can see, is lower than previous year. The main reason for this, it's actually a combination of many things, but one of them is that Jenny Waltle, the company that we acquired, two almost two quarters ago or almost three quarters ago, has a slightly lower gross margin than the rest of the segment. It kind of waters it down, you can say. On top of this, also price increases have not yet fully been offset by price increases to customers. There is also a slight negative business mix in the quarter, as well. However, when it comes to price increases, the work with this is going in the right direction. We have good faith going forward when it comes to the gross margin of Segment West. Operating expenses, as you can see, lower than previous year in percentage of net sales. Also a kind of effect of the acquisition of Jenny Waltle. In general, you can say that they have a lower gross margin than the segment in general, but also a lower cost in percentage of net sales, meaning that they have kind of a comparable EBITDA margin like the rest of the segment. There is an offset between gross margin and operating expenses. All in all, this results in an EBITDA of SEK 46 million, meaning an increase of 44% compared to previous year, and also the operating margin increased slightly. If we turn to Segment East, you can see that Segment East also had an order intake that was more or less in line with net sales, slightly below. Net sales increased with 22%, organic growth up approximately 9%. The growth was higher in East than in Asia, mainly due to that Asia was negatively impacted by COVID lockdowns, et cetera, at least in the beginning of the quarter. Gross margin increased compared to the previous year, mainly due to price increases and a slightly positive also here customer mix. Operating expenses, as you can see, increased in percentage of net sales compared to previous year. The main reason for that is that, as was written in the last interim comparable quarter report, the segment made some adjustments when it comes to accruals, that pushed down the costs compared to net sales in the comparable quarter. All in all, this leaves us with an EBITDA of SEK 44 million, meaning an increase of 4% and a corresponding EBITDA margin of 16.4%. Finally, we'll turn to page number 7 and have a look at Segment U.K./North America. In UK/North America, you can see that they had an order intake, which was exactly the same as net sales. Net sales increased with super strong, I guess you can say 165%, whereof 43% were organic. The organic growth is driven by both price increases, but also due to strong demand mainly in American Bolt & Screw in the U.S. and Apex in the UK market. Gross margin remained unchanged compared to previous year. Operating expenses in comparison to net sales increased significantly. The reason for this is of course the remeasured additional purchase consideration of SEK 80 million, which are isolated in this segment. It has to do with the recent years acquisitions that has been on an overall level had a significantly better development than expected in the first place. All in all, due to the negative impact of additional purchase consideration, the operating profit or EBITDA declined with approximately 9%, leaving us with an operating profit of approximately 5.6%. If we adjust for those SEK 80 million, actually the operating profit increased with approximately 142% to SEK 131 million, and the margin then amounted to 16%. It deserves to be mentioned. If we turn the page to page eight, and we'll just have a quick look at the cash flow development and the indebtedness level of Bufab. As you have seen in the report, we have had a slight negative trend cash flow wise during the last couple of quarters. There are several reasons for this. One of them is that we are growing, as you can see, at quite a pace organically, meaning that we need to build up both accounts receivable and inventory value in the balance sheet. On top of this, as you know, in the wake of quite strained supply chains during the last year, lead times, et cetera, from suppliers, has increased, quite a bit, which is also something that needs to be reflected in our balance sheet in terms of safety stock, et cetera. What we have seen during the last couple of quarters is kind of a normalization effect to our balance sheet being normalized to handle the general market situation, I guess you can say. If you look on the right graph, it's the development of The Net Debt/EBITDA. As you can see, we have increased it quite a bit during the last couple of quarters, and that is of course driven by acquisitions. We have made quite a few, namely six of them during the last three quarters. We are up on slightly higher level now like we were in the end of 2019, but also in the end of 2015. Now going forward, the focus from our perspective will be to make sure that we integrate those companies and that we land them good in the group, in a smart way using, you know, the full integration principle that we have for our acquisition and that we leverage on potential synergies like we have done historically, and that we focus on getting back to a good cash flow profile of the group and pay off debt just like we did during 2016 and 2020. With that said, I leave the word over to you, Johan, to talk about acquisitions on page nine. Yeah. Maybe also mentioning about the inventory level. I think also we have been really happy to have that level during the last year, due to we have served our customer really well, I think. We've had a lot of positive feedback, regarding that, and that's also, I think, one part of our growth organically, that the customer trust us in this situation. Now as Marcus said, we need to focus to get it down to a good level again. To number nine then. We continue to do acquisitions. This quarter was CDA, a company, our first company in Eastern Europe, we acquired a company SEK 90 million in turnover and working or rounded company in the business of building or construction you can say. That will be a complement, I think, to both TIMCO and also in some part Pajo-Bolte with that. We welcome them to the group of course and see what we can do together with them. If you go to page 10, the summary and outlook and yeah. It was a challenging quarter in terms of operational you can say with the supply chain and so on. We have a strong growth, a good growth margin and also robust result, I think. If we look forward, everybody knows about the geopolitical situation, of course, with the war and so on. We have a really tough situation regarding inflation, I think, going forward. We'll see where it ends up, but that will create, I mean, a lot of job for us also of course to take care of that situation. There is still some issues in the supply chain, but the situation is definitely stabilized, but also we see good signs that we get less and less issues, so to say there. I'm quite hopeful in that area, to be honest. Priorities going forward. Of course, we continue to work with development of our operations, mainly digitalization, sustainability, not least, and also our team of course. We continue to handle the supply chain issues, even if get less, as I said, and also take care of the increasing inflation pressure, I think. We touch again this improving cash flow. It's important for us of course, and we will see the peak here any day, I think, regarding our inventory. We continue to work and investing in our sustainability program. It's a big thing for us, and it's more and more important both for us and also our customers, that we can help them in this area. As always, we also invest in our people and team because that's everything you can say if we will have this still continue with this success, I would say. That was the last page, I think. Now over to if there is any questions. Certainly. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. A voice prompt on the phone line will indicate when your line is open. Please state your name before posing your question. Once again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for question. Again, press star one to ask a question, and we'll take our first question. Hi. Congrats, Bobby [Newest], Independent Analyst. Thank you for taking my question. Congrats on a quarter that's operationally excellent. Two big questions on it. Margins seem to be very, very strong. I was wondering how sustainable that is for the coming quarters and next year if the performance is above your long-term goal. Are margins driven by value-added services? You quote favorable mix, but is that your sales team doing a great job of passing on costs or is it more value-added services that we can hope to see roll over at similar rates in the future? Any color on your margin outlook and goals for the coming quarters and years would be amazing. The second question on the additional purchase considerations. Based on the covenants of the agreement. Do you expect additional accelerations in the coming quarters or, is that mostly factored in by this stage? Thank you. Maybe I can start with the margin a little bit there. It is a combination of what you said there. It's of course that we have our sales team have worked very hard to push, so to say, the cost or price increases from our suppliers and so on to our customer side, the one thing. It's also a mix between different areas you can say segments from our part. Also I think that we have our service, as I said before, when we have this inventory level for some of our service, we can also take some benefit out of that in terms of margin. Maybe Markus can continue with the. With the additional purchase consideration. Yes. Yes, of course. It's a good question. I mean, the reason for the upwards revaluation in the quarter is, like in the last couple of quarters actually, due to that acquired companies has had a stronger development than we estimated in the first place, and in some cases, also significantly stronger development than estimated in the first place. I mean, given how the market looks and that everything can go both upwards and downwards, so to say, we can see changes in those valuations going forward, both upwards and downwards, so to say. Hopefully not as big as we have seen now, so to say. There is a reality, given the fact that we are acquiring companies with not an insignificant proportion of additional purchase considerations, that we can have these effects also in the future. I mean, the revaluations we did now in the quarter reflects our best guess of what's supposed to be paid out in the future, given the run rate of the companies, so to say. The changes in this quarter is based on our best judgment, based on what we know now. Yeah. Well, thank you for that. If I may, just one follow-up. If we go back to the margins, you're way above your long-term goal, which is 12% for EBITDA. Is this something that you'll be looking to reconsider in terms of goals or not at this stage? That is, of course, a good question, and we get that every now and then. We don't really want to speculate in that. I mean, we have communicated 12% operating margin, and that we should have that and keep that on a sustainable level, latest at the end of 2023. Now we're a bit ahead of that schedule, so to say. Whether we should increase, you know, operating margin goal or if we should try to accelerate growth even further, that's typically a board question, and I do not want to forego such a decision. Anyway, I mean, just like you say, a very nice development of this, I think we're very happy with the results. Yeah. Congrats again. Thank you. Thank you. Once again, to ask a question, press star one, and we will now move to the next question. Hi, this is Robert from Carnegie. I had a question about order intake. Your comment was that order intake was stable, but it was up a lot year-over-year and up a fair amount Q-over-Q. Was that a comment on also the organic order intake growth or day rates, like-for-like Q-over-Q or what was that? I guess you can say that. I mean, if you look at the run rate of the organic growth, just to understand the question, Robert, can you please elaborate a bit again just so I answer the right question, so to say. I think I read that you had a comment about order intake being stable somewhere. Yeah. Yeah, on the first slide. Okay. Yeah. I understand what you mean. Yeah. It's stable in comparison to net sales. That's what we mean with that comment. Maybe it wasn't clear enough, so to say, but that's what we are saying basically, that order intake was in line with net sales, and therefore, you know, we can expect kind of a stable development, at least short term. That's how you should read it. Okay. Got it. Can you say something about sort of the lead time of that order intake? Because, I mean, in the past maybe, you know, order intake in one quarter has been sales in the next quarter. What is the sort of average lead time of the order intake? Is no longer? Yeah. I would say that at least from a historical perspective, when looking at the order intake of Bufab, that reflects kind of what to expect during the coming three months or the nearest quarter, so to speak. After that, it becomes more uncertain. I would say that it indicates the development of the coming quarter. All right. Well, that sounds like a good Q3 too then. Another question on the leverage. Leverage has come up after these acquisitions that you've made. Could you say something about sort of covenant headroom and also maturity of your debt profile. Yeah. It's a good question of course. In terms of covenant headroom, we have headroom, which is enough for us under the current circumstances in terms of leverage. We are not worried about that. In terms of cash, we also signed a new credit agreement almost a year ago where we increased the credit facility, and we also increased it at the same time as we acquired TIMCO earlier this year, so to say. We believe that we have unused credit facilities together with cash in the group, which is more than enough to operate also going forward. Anyway, you know, when looking at cash flow, it's quite obvious that we are not happy with the run rate as for now. I mean, Bufab is a trading company, which historically has shown very nice cash flow figures, and we want to get back to that. There is a reality out there, which our balance sheet needs to reflect, and we have been normalizing it to reflect that during the last couple of quarters. Like Johan mentioned earlier, the focus now is to get back to the nice cash flow profile, pay off debt, generate new headroom for future acquisitions, and continue doing what we have been doing during the last four years. All right. Perfect. Final question. I mean, net order intake, I mean, in Q2 was very good in my view. Did you see any trends during the quarter? Did you see a slowing down towards the end of the quarter? It was better at the start or similar across the quarter? No, I can't say that, really. I mean, of course there is always some deviations between different customers or industries, but no big such that deserves to comment on, specifically. I mean, the order intake, I mean, if you look at it per segment, it was also quite even among the different segments, so to say. Most segments had an order intake in line with net sales. There are no real worries, I guess. I mean, like we write in the CEO's overview, what the future brings, we don't know. So far it looks promising for the coming quarter. All right. Sounds good. Thank you so much. Thank you. Again, as a reminder, to ask a question, press star one. We will now take our next question. Yes. Hi, this is Rasmus with Handelsbanken. Had a couple of questions. If I just wanted to start on the organic growth side. Can you sort of elaborate a little bit on roughly how much you think was price in the growth in this quarter? Yeah. It's a good question. It's actually so, and this kind of goes with the same comment that we had in the last quarterly- Mm-hmm on the call, that is that we're not able to give you a percentage of how big, how much of those 16% in organic growth that comes from price, so to say, because it's. Mm-hmm It's super complex to calculate, right? You know, we are selling 150,000 items to the same customers, right? It makes up a super complex thing. Like we said also in the first quarter, as 2022 goes, we expect price increases to become a bigger and bigger portion of the overall organic growth. That was also the trend we saw Q2- over Q1. The majority of those 16% is from price, but there is still also a strong and stable underlying demand, and we continue to take market shares. looking forward, I think this might be a question that lots of people have. Like, if raw material costs roll over, you know, inflationary pressure is definitely there now. Is there a risk that prices start to decline because steel prices and oil has rolled over? Is the inflationary pressure just so high that you don't see anything of that now? Yeah, that's also a good question you can say. As I said, the price is a combination of all these things that you said there with inflation. Mm-hmm It's energy, it's oil, you know, transports and everything like that. Now we see, I mean, quite a lot of these raw materials like aluminum, copper and so on going down, that will of course be some effect of that. I think in general, we're still on a really high level, and we don't see right now that it's going down heavily. It's also a delay in this kind of actions. I mean, if the raw material is going down, it must be through all the chains, so to say, the supply chain to reach us and also the customer in the end. I don't see it right now at least. I mean, even if lead times are flattening out, like going and also going down, at certain geographies, so to say, there is still high lead times or long lead times, so to say, which makes it take longer time before we see those effects being worked through, like, just like you said, Johan. Yeah, I think so. Would you know, if prices go down and you have a lot in inventory, would you still be protected, sort of being able to sell that inventory at the prices you acquired it? Or how has that worked historically if there has been Yeah. It It is a mix there, you can say. In many cases we have contracts and agreements with the customers, and we have bought these parts from, I mean, with their forecast in our minds, so to say, and they need to take that part for that price, even if it's going down. Even it's going down, I mean, if you buy a part now for a lower price, you will don't see that part for, I don't know, for at least maybe six months away or something like that. It's Mm. It's also that. That's a way to washing it out, so to say, if you can say so. Yeah, just a final question. This inventory buildup that you have, is it possible to sort of analyze where geographically that is? Is it, you know, broad-based, or is it specifically in certain regions, or how would you sort of describe it? No, I would say it is all over the place, so to say, because I mean, it is our business model to have a, an inventory for our customers to feed them, so to say, mainly down to daily shipments. I would say it all over the line. It's nothing sticks out there. Just a final question. Given the, I mean, the only reason for asking is, of course, these higher costs for the acquisitions. What are those kind of earn-outs based on? Are they based on EBITA, or is it a combination of EBITA and cash flow that you sort of Yeah. It's of course a good question. They are in the vast majority based on EBITA increased. Right. EBIT increase or EBITA increase, and a significant such. Okay. Right. You know, technically, it could mean that you pay more despite not getting the cash flow now at least, or is that fair to say? Yeah. It could be. It's a question of timing, right? Right. Yeah. I mean, eventually cash flow comes. I mean, as the company grows in general stronger result, they also pay off more cash, so to say, but that's also a normalization effect that we're aware of. All right. Very good. Thank you. Thank you. Thank you. We don't have any further questions over the phone at the moment. As a reminder, to ask a question, press star one on your telephone keypad. Okay, it appears there are no further questions for today's call. I would like to turn the conference back to our host for any additional or closing remarks. Do you maybe have any additional or the closing remarks? Thank you very much. If there's no further questions for this conference call, and I wish you a nice summer. Bye-bye. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.