Welcome to CTT Q3 report for 2023. 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 CEO Henrik Höjer and CFO Markus Berg. Please go ahead. Good morning, and thanks for joining us at the CTT earnings call, third quarter 2023. I'm Henrik Höjer, CEO, and I'm here together with our CFO, Markus Berg. We will take you through our financials for the third quarter and our forward-looking outlook. Starting with the Q3 business highlights, we have received two private jet orders in partnerships with Airbus Corporate Jets for 1 ACJ320 and 1 ACJ319, with deliveries in Q3 and Q4 this year. Further, I can conclude that the gradual improvements in our business environment continued in the third quarter. Particularly, Airbus and Boeing announced large wide-body orders on top of a strong first half of 2023. In Q3, we could also see that our pipeline improved with more opportunities of premium cabin interior retrofit projects. We move on to the next slide to summarize the quarter in numbers. A review of our financials, in short, shows that the delivery. We delivered a solid quarter and included some expected factors that offset our performance. We will analyze those later. First, on a high level, net sales continued to grow 13% year-over-year to SEK 74 million, in line with our forecasted range. CTT delivered an EBIT of SEK 30 million, and an EBIT margin was 41%. The net profit was SEK 25 million, and earnings per share were SEK 2.02. We had an operating cash flow of SEK 28 million. If we break down net sales and compare it with Q3 last year, we're up 13% from SEK 65 million to SEK 74 million, mainly driven by private jet and OEM, adding five, respectively three, of a total increase of nine. Private jet sales were driven by kit system deliveries pushed from Q2 into Q3 due to delayed projects at the completion centers. OEM sales increased, but as communicated in Q2 report, lower than actual demand as it were offset by transitory factors. The weaker demand is explained by temporary inventory excess at the aircraft production sites. The slow aftermarket growth is explained by, one, a tough comparable quarter last year, driven by large size orders from one of our distributors. Two, an uneven demand spares with high concentration of previous quarter that lower such sales in Q3. The sales mix shows that the aftermarket sales accounted for 77% of the turnover. CTT booked orders for SEK 100 million versus SEK 99 million in Q3 2022. This is a strong increase compared with previous quarters, all in the SEK 50 million-SEK 70 million range, driven by aftermarket demand with deliveries in Q4 and orders for our OEM products. The inventory levels at OEM have adjusted and normalized sooner than we previously anticipated. We will see a positive sales effect early in Q4 as we return to normal correlation between our deliveries and aircraft build rates. We expect that the order backlog will continue to increase, driven by OEM demand from wide-body build-up rate ramp up. I now hand over to Markus for more in-depth comments on Q3 financials. Thank you, Henrik. EBIT in the third quarter amounted to SEK 30 million, a decrease with SEK 3 million from SEK 33 million in the third quarter last year. We had a positive EBIT impact from higher sales volume, adding SEK 4 million compared last year, but this gain was to greater extent offset by negative sales mix, offsetting SEK 4 million due to lower aftermarket share, 77% compared to 86% last year, and negative currency effects that offset SEK 3 million, explained by accounts receivable, accounts payable valuation compared last year. Whereas the US dollar SEK rate in the third quarter last year had an exceptional weakening from 10.2 to 11.2 during the quarter. Now, we move on to the next slide and look at the cash flow. Operating cash flow was strong and amounted to SEK 28 million, driven by improved financial performance, EBITDA, adding SEK 33 million. In addition, working capital was reduced by SEK 4 million, explained mainly by inventory reduction. Let's continue by looking at the next. Net debt amounted to minus SEK 44 million, compared to plus SEK 5 million in the third quarter last year. Cash closed at SEK 89 million. In addition, CTT has SEK 52 million in available credit facilities. Solidity at 73%, compared to 71% in the third quarter last year. So all in all, CTT has a strong financial position with net cash. Let's move on to the accumulated Q1, Q3 numbers. Accumulated net sales amounted to SEK 228 million, an increase of 32% from SEK 173 million last year. Adjusted for currency effect, the increase was 23%, mainly driven by the growing after market. January to September, EBIT increased to SEK 87 million, compared to SEK 71 million last year. Earnings per share increased with 40% to SEK 5.43 from SEK 3.87 last year. If you look at the accumulated cash flow, it amounted to SEK 86 million compared to SEK 43 million last year, driven by improved financial performance, EBITDA, and positive working capital. Positive effect on inventory reduction and accounts receivable, partly offset by payment of variable remuneration in the second quarter. Payment of tax debt regarding 2022 in the first quarter increases tax paid this year compared to last year. In the second quarter, we paid a dividend to our shareholders with SEK 51 million. Finally, if we look at the rolling four quarters, net sales amounted to SEK 295 million compared to SEK 215 million last year, up 37%. EBIT increased to SEK 108 million compared to SEK 79 million. EBIT margin was 37%, up from 36%. Earnings per share, SEK 6.85 compared to SEK 4.22, up 62%. Operating cash flow was SEK 104 million, up from SEK 64 million. I now hand back to Henrik. Thanks, Markus. I will now shift focus to the future trends and put it into our context and outlook. First, our forecast for the fourth quarter. We predict that we will resume a quarter-to-quarter growth track. Q4 net sales are forecasted to SEK 80 million-SEK 85 million on a year-over-year increase of 17%-25%. As previously stated, the inventory levels at the OEMs have adjusted and normalized sooner than we previously anticipated. This will have a positive sales effect early in Q4. The aftermarket is also predicted to increase compared with Q3. In private jet, we foresee a weak quarter due to delayed completion projects. The sales pipeline in private jet looks good, particularly in ACJ projects, where Airbus continue to promote humidification as a basic option for healthier cabin climate. With this forecast, we will reach SEK 308 million-SEK 313 million in trailing twelve-month sales, compared to a pre-pandemic high of SEK 365 million. I will now go through our outlook beyond 2023 with detailed comments. Before I start to review our various businesses, I'm happy to reveal a breaking airline order. Airbus today early in October confirmed that one additional, yet undisclosed airline, has selected humidifiers to be line-fitted on A350-1000 aircraft, with scheduled deliveries from 2025. This airline has specified humidifiers to cover all three premium cabin zones, as well as flight deck and crew rest. CTT has not received any orders from Airbus, but we expect the first to be placed in 2024. With this latest selection, two in the undisclosed airlines have selected humidifiers and three passenger cabin zones on new-built A350-1000 aircraft, with deliveries scheduled to commence in 2025. We are with this creating a momentum on the market, and we will make sure that more airlines will follow. Our aftermarket is important part of our business model. Our installed base of moisture control system generate revenue from consumables, repair, and spares. Short term, aftermarket sales will again in Q4 grow quarter to quarter. Looking at the rolling four quarters, we are currently at the trailing 12 months run rate of SEK 228 million, compared to pre-pandemic high of SEK 148 million and a low of SEK 62 million during 2021. Going forward, aftermarket growth rate will be lower than 2022 and 2023, as underlying demand is normalized and again, track changes in population size, driven by Airbus and Boeing aircraft that enter into service. We also, to a large degree, benefit from continued growing demand of repair and spares from our population out of warranty. If I look at our OEM business, we're in a turnaround situation. Trailing twelve months sales are SEK 31 million compared to a pandemic low of SEK 20 million and a pre-pandemic high of SEK 166 million. Demand outlook for OEM humidifier is robust and growing with wide-body aircraft production ramp up commencing in 2023. This will generate significantly higher OEM sales next year, and it will continue to increase upcoming years. The main driver will be from Boeing 787 program, currently at the build rate of four aircraft per month, forecasting to reach five by the end of 2023, compared to 1-2 aircraft, end of 2022. Boeing is targeting a build rate of ten 787 per month by 2025, 2025-2026 time frame. The scheduled ramp up is in steps. Another important driver is A350. Airbus is currently targeting build rate of six aircraft per month and then increasing it to nine by the end of 2025. In addition, we will benefit from Boeing 777X program, with first delivery scheduled in late 2025. To summarize the OEM business, we'll be resilient driver that will continue to grow for years, driven by large wide-body aircraft order backlog and complex supply chains with long lead time to make production changes. The ramp up of wide-body build rates will take years to reach the peak level. The strong outlook for OEM was manifested in the quarter by huge wide-body orders of 127 787s and 72 Airbus A350s. This was on top of the already 150 Boeing 787s and 64 Airbus A350s during the first part of the year, accumulating to more than 300 wide-body orders this year. These large backlogs on Boeing 787s and Airbus A350s drive production build rates increases with our products on board. Part of our growth strategy is to convince airlines not only to secure healthier climate for their pilots and crew, but also to offer humidification and wellness levels for their premium passengers in first and business class. This is an emerging market segment. Today, we have 90% penetration on flight deck on Boeing 787 and similar selection rate on new A350 operators. In total, we have flight deck humidifiers installed in more than 1,000 aircraft in service at more than 50 airlines. This is a huge asset when we start to convince airlines to mitigate humidifiers into the passenger cabin. On this slide, we see two airlines that already operate A350 aircraft with humidification in business class. China Southern Airlines since 2019, and Turkish Airlines since 2022. In addition to these two, four other airlines will start operating either A350-1000 or 777X with cabin humidification during 2025 and 2026. As mentioned previously, OEM demand will grow airlines, and the airlines have been placing wide-body orders with urgency, as Boeing and Airbus have pushed out wide-body deliveries toward the end of the decade. Accordingly, airlines adopt their fleet planning that include use of older aircraft that a few years ago were doomed to be parked on the ground. As a consequence, many airlines will pursue large cabin interior retrofit projects that are likely to overbridge normal economic cycles. I am convinced that this trend will lead to retrofit orders for cabin humidification system, as airlines want to harmonize fleets that have the same cabin experience on all their different aircraft types. Under these strong conditions, I expect that we will win airline awards. Even if it's hard to predict lead times, we're soon in 2024, close to 2025 and 2026, when more airlines will start operating aircraft equipped with humidification in premium class. In other words, cabin projects must soon start to align airline fleets. Demand for anti-condensation system is still low and continues to underperform. We continue to see growing airline interest considering the sustainability offers. We have outstanding leads and quotation for fleet installation and trials, but decisions drag in time. Our anti-condensation strategy is unchanged. We need to obtain OEM availability for visibility and large volumes. We can only accomplish this via retrofit programs with customers and large buyers of new aircraft. We have an ongoing trial with a major low-cost carrier airline. We also work with two of our largest customers, Jet2 and Transavia. Both are in transition from all Boeing fleet to introduce new Airbus A320 family aircraft. Both airlines have previously bought our anti-condensation system line fitted in their new Boeings. This is not yet possible at Airbus. Instead, we will have to convince them to retrofit at first C-check. We will, in parallel, together with them and other airlines, try to convince Airbus that it should be possible to install our green tech system in new aircraft before delivery. We remain convinced that Airbus and Boeing shall enable line-fit of CTT's anti-condensation system. The private jet market is an untapped market, and it has own cyclical behavior with low correlation to normal economic cycles. In this market, Airbus Corporate Jets leads the way by promoting humidification system together with and as part of their green aircraft. The growth strategy in private jet aims to convince other manufacturers to follow suit and thereby unlock the market. If looking at the private jet numbers, trailing 12-month sales have been ranging from SEK 10 million-SEK 30 million and is currently at SEK 22 million. We forecast that deliveries in the next quarters will be lower than previously anticipated due to delays in the completion projects, putting growth on hold for a few quarters and then regain momentum. More importantly, we start to see a positive industry impact driven by ACJ's endorsement of our humidification. As stated before, we need support from the OEMs to obtain a higher market penetration. This is top priority for CTT. I would like to give you a more detailed update on the ACJ TwoTwenty project. CTT has successfully and in strong partnership with Airbus Corporate Jets that promotes our humidification as part of the cabin climate when selling the aircraft. It is well received from the market and the customers. It is the de facto standard on sold aircraft from aircraft number two. The OEM program has not delivered as expected. Completion ramp-up is slow, and sales of aircraft is weak. I'm, though, optimistic. We have a strong partnership with Airbus Corporate Jets, and I'm convinced that ACJ can turn this around, starting with the just released good news that they have sold two more aircraft. This model is the future. Our growth strategy in private jet aims to convince other manufacturers to follow suit and hereby unlock the market. Those who follow us know that we are making efforts to break through in the market for large cabin, long-range business jets. This is a 50-100 jets market per year, compared to 10-20 VIP aircraft. On a large cabin business jet aircraft, humidification system must be efficient to make the cabin climate comfortable, and at the same time, the system must moisture protect the aircraft. Many business jets OEMs have been hesitant to introduce humidification due to previous experience with other systems on smaller aircraft, with bad performance and severe condensation issues. We have a large fleet of systems in service, and the technology is proven in more than 100 VIP aircraft, with industry-best performance and high reliability. CTT is the only vendor with an anti-condensation system that moisture protect the business jet. We have proven our capabilities further with a successful system in service on two Bombardier Global 7500. We have a strong reference in the ACJ TwoTwenty program. Airbus Corporate Jets is in front, running the market with promoting and endorsing our humidification system to obtain a healthy climate for long-haul flights. We must enter into similar agreements with other business jet manufacturers, such as Bombardier, Dassault, and Gulfstream. We make progress, and I'm optimistic that we'll get there, but it's hard to estimate when. If summarizing, I repeat our positive view where we are in the beginning of a multi-year growth period. We have the strongest business environment in years, and several of our growth drivers will remain in force even if interest rates stay high for longer, with likely negative impact on consumer spending and travel demand. CTT is in a fortunate market position with an installed base that will remain in service, even if airlines will be forced to lower their seat capacity in case of a deep economic downturn. Another resilient driver is our OEM business that will continue to grow for years. We are also in a position where OEM business will start to drive retrofit deals. In private jet, we make step-by-step progress. It takes time to get our products installed by the OEMs. But once we are on board, we will have a scalable platform for years. With that said, I hand it over to you all 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 Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Good morning. My first one is just on the comment you made, Dear Henrik, on the penetration. You said 90% in the Dreamliner, and then you said, if I interpreted you correctly, similar selection at A350 operators. Could you just explain that, when in terms of penetration for the A350? Is it like the same number of humidifiers, but then you can fit even more humidifiers on the A350 compared to the 787, so the penetration is lower? Or could you just help explain that comment? Yes, of course. Good morning, Karl. Now, what I said was that on flight deck, we have similar selection numbers by new airlines. And to give some more background, and if you look at A350 selection rate, I'll go back a little bit. And I mean, Airbus, they were two years behind 787. They had a strict focus on efficient ramp-up, and they actually had other issues like weight and stuff like that. So the first airlines didn't really select many options where we were one included. When we then look at airlines that come in later in the delivery program, and that's where we see selection rates on, especially flight decks being extremely high and in line with Boeing, whereas the old airlines still stick to their initial selection. That's a work that we have to do to get those old airlines to start selecting humidifiers. I hope that helps explaining what I've stated and answer your question, Karl. Yes, understood. Thank you. So, on the-- that's on the flight deck. And, is it possible to, or do you have an insight into and would be willing to share the penetration on the crew rest modules, for example, or? Because, because you gave the details on the selection rates for cabin, but, what about the crew rest? No, but I don't—I will not give you the numbers 'cause I don't have them. But when we look at new customers, they, many of them select flight deck and crew rest. In most cases, they mirror the selection they have made on the 787. And among these A350 operators, we have a high selection rate, and flight deck is more or less a de facto standard. And examples of new A350 customers are Air France, Turkish, Emirates, Etihad, Ethiopian, Japan Airlines, French bee, and also the big three in China, Air China, China Eastern, and China Southern. And it varies a little bit between airline to airline, but the selection rates are looking good. Understood. And just on the comment you made there, that destocking had happened faster than anticipated, and how this then would mean that you would be closer to tracking underlying demand there. But on the OEM side, how are you experiencing this kind of ramp-up, that when you listen to Boeing at least, they seem to be making a bit more headway in terms of air production issues that they've had? Yeah, no, I have the same view, both listening to them, when they released their Q3 report. But, I mean, they're actually putting quite high pressure on their whole supply chain, making sure that we are ready to follow their ramp up. And, I think they've been unsure, first half of the year, but the longer we've gone into this year, they are more confident and now they're really pushing. And, I think that also means that they have cut down on their inventory levels to the level that they want to have, and now they're placing orders to us again. And, yeah, Boeing seems to be really strong on the 787 program. They are past all their problems, and as you heard, yesterday, they had no comments actually on problems on the 787. They were more discussing 737 and problems there. Understood. On the private jet side, do you expect that it will mainly be the ACJ TwoTwenty platform that will drive private jets for you going forward? Or how do you foresee the other platforms that you have talked a bit about before, such as, well, either the larger ones from the BBJ family, but also like the potential within the Embraer and the Gulfstream? I mean, the first comment I would like to make is that the market is a little bit slower than we anticipated, and that is on our current market. It takes longer for the completion centers for ACJ and for BBJ to sign contracts with end customers. This is longer time frames than we're used to, and that's why I said that we expect that the next few quarters will be a little bit weaker than we thought before. And it's also lack of green aircraft from the OEMs, and this goes back to ACJ and BBJ. They must fight for production slots with the airlines. And if we listen to the market, the airlines, I mean, they have a huge demand, and they're quite upset with Boeing and Airbus not getting their aircraft on time. So ACJ and BBJ are, they are fighting for the same aircraft. So that's one step. And I think so ACJ will not only will not be alone, BBJ will be equally important customer for us, and we really hope that we can have a similar setup with them going forward in the near future. And then, as I said, we are working on getting the other OEMs, especially Bombardier and Dassault and Gulfstream, to make humidification available as a line-fit option. And as I said, timing is the hard part here, but with the ACJ leading the market, I'm convinced that the rest of them will follow. All right, thanks. I have a couple more. I'll try my luck here, but you recently had the news out with that you are out in the market now with the humidification retrofit potential for the Dreamliner. Just in terms of timing, if things go well for you, when do you think that this could start to have a notable impact for you? Because I would guess that this is an opportunity that airliners take when they bring their airlines in for service for a longer period of time. Yeah, but I think there is a connection between the upgrades and the introduction of new aircraft on the market. So if this aircraft and both 777X and A350-1000 with humidification in the premium cabin start operating 2025 and 2026, that is the time when the airlines need to have the fleet harmonization in place, and that means that it will have to start next year. If that really will happen, I don't know, but that's the logic we see on the market. All right. So, to understand the retrofit opportunity, does it also mean that you now have the ability and the approval from Boeing to have them have cabin humidifiers installed at the line? No, we talked about the retrofit opportunity. Yeah, yeah. We have put our humidification system on board on BBJ 787s. So we have a solution, and that solution can be used for airline retrofit. But of course, there is still some work to do with Boeing before it can happen. Yeah. But the solution is there, and it's been approved by Boeing in those VIP aircraft. Okay, understood here. Just one follow-up then. What would need to happen, or what could be the timing if you are—I mean, given that the platform has been running for a couple of years, but can you still get the approval and go ahead to offer humidifiers as a, well, either as an SFE or BFE at the production line for new B787s? We're working with Boeing on that topic, and we're not through yet. But that's a very important target for CTT to make that happen. But there it's a lot tougher to give you a straight answer on timing. It's all up to Boeing, actually. All right. All right, thanks. Then just on the competitive dynamics, we've talked about this before during this year, but has there been any changes or updates worth mentioning regarding the copycat in the U.S.? We have a strong position there. I would like to point out that, I mean, this is a granted PMA. It's not a copy because it's a different product with different performance and reliability. It's based on a commodity material that is not developed for this application. This commodity material is actually used for buildings that do not have specified high requirements on air quality and smell. So it's not a copy, it's a granted PMA, and that's what we are fighting. So what we're doing is that we continue to have contact with the airlines and our customers through our distribution streams, and to explain these differences between the PMA and our OEM product. All right, good. That's encouraging to hear. Just one thing. I know you don't disclose this, but just when we think about profitability, the aftermarket business for you is, of course, very profitable, and as system sales grow, that could have a negative impact, but it has a mixed impact. But within the system sales, have you seen any kind of changes in profitability in your system sales business over the past couple of years now, when you get a bit more volumes in the business as well? I don't know if you want to add to this, Markus, but I can start. I mean, all our OEM business is very long-term and under long-term contract, so pricing is fixed with the OEMs. We also, in most of the cases, have fixed pricing towards our supply chain. So, from that point of view, price and cost is fixed. But then, of course, if we can ramp up production, we have scalable production, and we will benefit from that. That's given. I don't know if you see anything more that you want to add there, Markus. Yeah, I agree, Henrik. And one extra comment, just adding on that, is that we are right now, or this year, or and last year, benefiting a lot from the U.S. SEK currency rate. And that could change to be more negative next year. We don't know that, but you have to consider the exchange rate as well. Understood. Good. Thank you for that. And, just one final to you, to you, Markus. Yes. Now, when working capital seems to have, if we look on a year-to-date basis and so on, it seems to have normalized a bit. But do you see any kind of need to? Or put it this way, do you think that working capital can come down further, or are you kind of satisfied with the current level? I think we are at a good level right now, but still, we have a high inventory level, so we continue to work with inventory. So maybe we can see some inventory reductions in the future as well, but I think we are on a good level now. Okay. Thank you. That is all for me. Thank you. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. We have two- There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. We have two written questions from the chat. I will start with the first one to Henrik. In the world we live in today, we have a lot of geopolitical tensions. We have the war in Ukraine and the conflict in Gaza. How do you think that will affect air traffic? And can we see any disruptions to the CTT business? ... Okay, that's a tricky question. But we've been thinking about it, at least, I mean, we have already seen effects on air traffic from the war in Ukraine, where all the European, American airlines have to fly around Russia, which of course adds quite a bit of flight time, and also then cost to them, compared to competition that can fly over it. So that's something that's happening, but it's not affecting CTT. The conflict in Gaza, if it stays on the level where it is today, we don't see that it really affects air traffic. But if it will escalate, which I will not judge if it will or not, but then, of course, it will will affect air traffic big time. If that will hit CTT, it's more unlikely, and that comes back to the comments we've given before, that, that, our, our growth drivers are actually the use of the wide-body aircraft, and, and they are likely to still fly, maybe other routes, but they will not be parked. And also, the long-term OEM ramp-up will not be affected but by this, because the long-term demand for wide-body aircraft is, is huge, and OEM, or Boeing and, and Airbus needs to produce these aircraft to satisfy the demand, long-term demand from the airlines. So yes, it will have effects on air traffic. It will most likely not ripple down on CTT because our growth drivers are different. The second question is, before the war in Ukraine, you had growing business in Russia. So the question is, have CTT terminated all businesses in Russia? Yes. All business in Russia is terminated, and that was done already in February last year. That was all questions from the chat function. Thanks, Markus. I'll just do a short closing remark, and then we can move on. Our OEM business will continue to grow for years, driven by the large order backlog for wide-body aircraft. Airline fleet planning include older aircraft with planned large cabin interior refurbishment projects, harmonizing their fleets to have the same customer cabin experience. The private jet market is untapped, and other OEMs will follow Airbus Corporate Jets and promote the humidification system as part of the cabin climate system. The aftermarket will continue to grow, tracking the system population size, driven by new system deliveries by Airbus, Boeing, and also other private jet OEMs. CTT is building a momentum to continue to deliver growth in 2024 and beyond. With that said, thank you for listening, and we're looking forward to talking to you again in the beginning of 2024. Have a great Friday!