Hello, and welcome to the Dometic Q3 2021 analyst call. For the first part of this call, all participants will be in listen-only mode, and afterwards, there'll be a short question -and -answer session. Please also try to limit the number of questions to two. Today, I am pleased to present Juan Vargues, President and Chief Executive Officer, Stefan Fristedt, Chief Financial Officer, Rikard Tunedal, Head of Investor Relations. Speakers, please begin. Hi. Good morning, everybody. This is Juan Vargues speaking, and welcome to the third quarter report for Dometic in 2021. Without any delay, I will move over to the presentation material, starting with the highlights for the quarter. In regards to the market situation, we continue to see a very strong demand. We see because ourselves, we also see a record high backlog for the period. At the same time as we also report constraints in the supply chain that are continuing during the quarter. Looking at performance, we have a nice milestone. We just passed for the first time, SEK 20 billion in 12 months rolling revenue. We achieved a 25% sales growth totally, of which 11% organically. We continue to see a high M&A activity. In the quarter, we consolidated six acquisitions, and then we announced another two additional acquisitions. EBIT ended up at 14.2% versus 15.5% last year. One of the reasons for that is really timing in offsetting the cost increases primarily coming from freight and raw material by new pricing. I think we did a fantastic job in Q1 and Q2, where we were always ahead of the cost increases. In Q3, we were a little bit late, and we have implemented new price increases to reduce that gap and eliminate that gap. I'm also very happy to communicate another milestone. For the first time in our history, we also passed the innovation index of 25% by reaching 26% in comparison to a 21% mark last year. We continue to reduce complexity, and by that, our cost. Last but not least, we are also very happy on the job that we are doing from an ESG perspective, reducing the CO2 emissions by 17% in comparison to the situation in 2020. If we move over to the financials for the quarter. We ended up 24% in total growth, of which 11% organically. We had a negative impact of 2% coming from FX. On top of that, we also added 15% in M&A. EBIT, before items affecting comparability, ended up at SEK 785 million or 14% up. EBIT margin, I already mentioned previously, 14.2% versus 15.5% one year ago. EBITDA, SEK 987 million or 14% up. An operating cash flow of SEK 346 million versus SEK 1,043 million last year, very much driven by the high inventory levels that we see just now. Also, as a consequence of the longer lead times that we see on freights, on sea, especially. Leverage down to 1.5x versus 2.8x one year ago. A nice EPS improvement to SEK 1.50 in comparison to SEK 0.95 one year ago. Moving over to the year-to-date numbers, 30% up totally, of which 5% FX, 8% M&A, then 30% organic. EBIT almost SEK 2.5 billion or 68% up. An EBIT margin of 15.5%, which is a very nice improvement versus what we performed last year at 12.3%. EBITDA passed the SEK 3 billion for the first time or 53% up. A good operating cash flow considering obviously the inventory. Looking at our sales growth, very pleasing to see that the organic growth continues and is complemented as well with M&A. We have very nice growth in all the segments. When comparing with last year, I already mentioned previously, 11% organic growth, but also when comparing with 2019, the same period, 2019, we are up organically 13%. Looking at our application areas, all-time high in all areas, but climate affected by now the recovery of the volumes that we lost in connection with one of the factory moves in America one year in [Owingsville]. We are working hard to get to the same levels as we had one year ago in that area. Other than that, again, all-time high all over. On the sales channels, very nice development as well. Service and aftermarket up 19%, OEM sales up 23%, and distribution a strong 50%. Which is also leading us to how the sales channels are evolving. What we see here is obviously the consequence of a major transformation of the company towards less OEM orientation. We are 12 months all in numbers. We are just now at 48% of service and aftermarket plus distribution, in comparison to a 39% that we are coming from a few years ago. This is very important for us as a part of our main strategy to becoming less dependent on the OEM side. Something is going to lead to margin expansion and reduce cyclicality over time. On the EBIT side, we see obviously a good performance on the sales growth. At the same time as we also see improvements on the tariffs like -for -like. On the other side, we also see a negative mix influence coming from our OEM, where we have the lowest margins. We also have a negative FX impact in the quarter. We are investing in a number of areas to build up both e-commerce and the new vertical segments. As I mentioned previously, we also had some timing in offsetting the cost increases that we will see improving in the coming months. On top of that, we also need to keep in mind that we are comparing obviously with a very low quarter in Q3 2020 when looking at cost. Just to give you some flavor, Q3 2020 was 14% down in SG&A versus Q3 2019. Moving at what is going on in the markets. I think that you all are very familiar with raw material prices. You see how some of the commodities are affecting us, did develop over time with the steel prices at extremely high levels in comparison to we have seen historically. The same is valid for aluminum, and the same is valid with plastics. We could perceive a stabilization of the cost increases in May, June, but then as coming back from vacation, the cost increases started to climb again. The same is valid for freight cost, where we have seen a massive increase during the last 18 months, even there. Again, we saw a stabilization this spring, but came back again after holidays. At this point, we don't see any mitigation. We see Q3 still going through the roof. This is obviously what is leading to this timing difference between cost increases and price increases. If we look at the different segments, Americas, 9% up organically, driven by power and control and other applications. We see a very strong sales in all the OEM vertical segments. We see as well a good evolution in distribution and service and aftermarket, which is also supported by the new acquisitions, Valterra and Zamp Solar. EBIT, SEK 60 million in comparison to SEK 79 million last year. A margin iteration down to 3.5% coming from 6.3%. Very much driven again by timing, offsetting the cost increases and raw materials, also the delays and inefficiency caused by the delays that we see in the supply chain. On top of that, we also suffer from FX negative impact in the quarter. Moving over to EMEA. Very nice organic growth, 10%, driven by climate and power and control. Here we saw RV OEM come in very strong in the quarter, and it is clear that the OEM suppliers are preparing themselves already now for 2022. CPV OEM was impacted by a stop of deliveries by our customers simply because they are lacking components from other suppliers. We are happy to see that Front Runner and Büttner are now part of the Dometic Group. At the same time as we also announced the acquisition of Cadac, that should be completed in Q4. EBIT -wise, SEK 243 million versus SEK 218 million last year, or 14% in EBIT versus 14.4%. A little bit of the same effects are impacting our numbers, meaning the timing on the pricing. We have the supply chain constraints. We have the FX effects negative in the quarter. On top of that, in the quarter, we also have some M&A transaction cost. Moving over to APAC. Fantastic organic growth, we need to keep in mind that Q3 last year was impacted heavily by the pandemic in both Australia and New Zealand. Still underlying, we see a very strong demand. We see also that all the sales channels are showing very strong growth, and we have a record high backlog. Very strong EBIT margin, 24.5% versus 16.2%, or SEK 126 million versus SEK 45 last year. Here we have also a positive impact of geographical mix between Pacific and Asia, where Pacific is growing much faster than Asia. Basically the same negative effects in the quarter as we have for the other segments. If we move over to global, 6% organic growth driven by food and beverage and power and control. Even here, backlog at all-time high. Hospitality also starting to move to positives. We saw really stabilization in Q2. Now we saw for the first time positive growth in the last 18 months. We also see a very strong demand on our Dometic outdoor residential offering, driven very much by, on one side, organically, our new residential products, also clearly by a very nice growth in Twin Eagles, the Twin Eagles acquisition. EBIT, SEK 354 million in comparison to SEK 347 last year, 22.5% versus 24.5% last year. The same in this situation is really about timing, is the supply chain constraints. Here we are lacking semiconductors for marine operation. Of course, marine has very high margins for us. Then we have also a sales mix with more OEM sales than we have on our service and aftermarket sales. If we look at the long-term strategic approach at Dometic, we see really that we are kind of walking our talk. Important for us to move more sales into distribution and service and aftermarket, 48% on 12-month rolling number in comparison to 39% in the same quarter 2017. Already mentioned eight acquisitions, and then implementing just now our B2C platform for e-commerce in Europe after the implementation in both the U.S. and Australia earlier this year. Innovation, I already commented early before. Very strong pipeline of new product launches coming for the remainder 2021 and 2022. We keep on working on the complexity reduction, and SKUs are down 59% versus 2018, which is much higher than what we had as original target, 40%. We keep investing in our social media efforts, and we see a steady increase up 12% versus the same period last year, and now moving more and more into Instagram and LinkedIn. Another area where we can see the progress that we are doing strategically is really the number of stores where you can find Dometic products nowadays. We are today, after Q3, in 4,300 stores worldwide, increased our presence by 42%. Of course, Igloo will have a massive impact in those numbers. If we look at e-tailers, a little bit of the same. We have 54% higher presence today than we had at the end of last year. Our e-commerce sales is also growing from very small numbers, though. We see a strong growth of 66% after implementation of the new platforms. Again, we are working just now, rolling it out in both. Coming back to acquisitions, very intensive period for us, obviously. As a consequence of that, we are working intensively on the integration of all these companies, starting with our branding. What you see already now is that we have implemented branding in, I would say, six of the eight acquisitions that we have completed. Remaining is Valterra, that will be double-branded in a few months from now. Other than that, we are very much advanced in this area. Which is also something very important since we want to build up a strong outdoor consumer-driven Dometic brand worldwide. Another two acquisitions that were announced in the quarter, Cadac, a South African barbecue company turning SEK 70 million in sales with a strong presence across Europe. As well as Igloo, that we communicated mid-September, an iconic U.S. brand, which is the major company in the world, global leader in terms of passive coolers. We expect also Igloo to join us in Q4 this year. A lot of acquisitions, what we are doing is really to develop our outdoor vehicle-based activity concept, which is really a series of outdoor self-standing products forming a new outdoor category. We have already put together a relevant product portfolio, and we will continue to develop this portfolio both organically and through additional acquisitions. This is going to have a major impact in Dometic's future, since, again, we are moving from being a sub-supplier to the OEMs into more of an outdoor lifestyle-based company. If we move over to innovation, again, a new milestone for us, reaching 26%. Just a couple of samples of the products that we launched during the quarter. We are entering the heater market in EMEA with our first combined heater using separate burners for air and water heating, leading to high performance and higher energy efficiency. This is also completing the system together with a new series of AC that we are launching at the beginning of next year. We look at the aftermarket side, this is a sample of one of the aftermarket products that we are launching. It's a hand wave contactless toilet flush switch. Ideal for retrofit and very easy to install for marine applications. Even in the marine area, we are launching a new series of air conditioners for smaller boats as a continuation of the product launch that we had about one year ago for the bigger yachts. In the same way, this is also reducing energy heavily for the same applications and having as well a higher sustainability degree by demanding less maintenance and higher lifetime or longer lifetime. Moving over to our restructuring program, a lot of preparation work is going on. We didn't have any impact in number of sites or employees this quarter, but we took another SEK 17 million in restructuring costs in the quarter, ending up at SEK 283, and we are running just now savings at a pace of SEK 150 million after Q3 this year, on annual basis, of course. From a sustainability perspective, we continue to drive these questions. We have seen a very positive evolution in terms of injuries. We are down 40% versus the same period last year. We, on the contrary, are not happy with our progress on female managers. We are standing still at 23%, even if we see progress at different levels in the organization. Still, totally speaking, we are not moving the needle, and we need to have even bigger efforts to get there. From an audit perspective, we are up to 81% in audits in low-cost countries, suppliers in low-cost countries, versus 78%, despite the fact that, again, it's still very difficult to travel in Asia and parts of Americas. Making progress. Very happy to communicate, obviously, that we have reduced emissions, CO2 emissions by 17%, that we added another site that is using renewable electricity, and we will continue that work. We also committed in the quarter to reduce our emissions by 50% in 2030. By that, Stefan, could you please give us some more insight? Yeah. Thank you, Juan. I'm starting off with the net sales and EBIT bridge. Currency continues to be negative to us, SEK 42 million on the EBIT level in the quarter, equivalent to - 0.5% on the EBIT margin. M&A, positive contribution, SEK 686 million in net sales, contributing with 15% of our total growth in the quarter, SEK 113 million in EBIT equivalent to a 16.5% EBIT margin, so contributing 0.3% on our overall EBIT margin. Coming into the last bucket, volume, price, mix, cost, and others, which is contributing with SEK 496 million in the quarter, but only SEK 24 million on the EBIT line. That means a negative contribution of 1.1% on our EBIT margin. What is behind this then? Organic sales growth is contributing positively. Less negative impact from U.S. trade tariffs. In absolute terms, they are almost on par, but as we have higher volumes, it's in relation to net sales going down. We have cost-saving activities, thinking about what Juan just talked about on our manufacturing footprint activities contributing positively. We have the timing in offsetting rising freight and raw material cost with price increases, which is contributing negatively with approximately - 0.4% units. We have the business mix in the legacy Dometic business. We have a higher amount of OEM business in the quarter, contributing with - 0.6% units. Sales and marketing investments in strategic areas, talking about D2C service and aftermarket and outdoor, - 0.4% units. We also need to keep in mind that we came into Q3 last year with a low cost base, and the activity level in general was obviously driven by the pandemic lower. Moving on to the next. Some more information around our acquisitions. I've already mentioned the contribution on net sales, which is 15% of our total growth. EBITDA margin is 20%, which is above the Dometic Group average of 15.9%, which is in line with what we have been communicating earlier. We have M&A transaction cost. The material M&A transaction cost, which is equivalent to SEK 6 million, has been booked as items affectability in the quarter. On top of that, we have SEK 5 million, which is included in the normal EBIT, which is related to the smaller acquisitions. I'm not going to go through the table on when the different acquisitions have been announced and from when they are included. It's for your information. Moving on to operating cash flow. We have a cash conversion of 34% in the quarter, which is obviously low compared to what we have seen in the third quarters historically. It's working capital driven. Inventories are on its way up. We also have a higher business volume, of course, which is driving the build-up of working capital as such. Going over to the details of DPO, DSO, and DIO. You can see DPO is increasing, but in the shorter moving graph, it's going down, which is very much driven about timing of purchases and where these purchases are actually happening as we have the highest DPO days in China. DSO, we are happy with that development. It's a stable development, and I feel that is well under control. DIO, as you see, is increasing with a quicker-moving graph on 130, but also the last 12-month rolling graph, 106, and it's of course driven by longer lead times. We have a lot of inventory on the ocean, and then we have some strategic decision where we are securing stock so that we can ship it when we are going into the high season in the beginning of next year. You can see total working capital, 87 days is obviously not anything that is extremely out of the picture looking historically. Moving over to CapEx and research and development. As expected, we are increasing in both areas, and still in relation to net sales, 1.7% on CapEx is still moving in the areas that you have seen historically, and investments is, as an example, driven by B2C investments and other miscellaneous IT investments. Moving over to R&D, 1.9% in relation to net sales. There is a clear connection, obviously, what we are spending here, and that we are driving our innovation index, which is now on 26%, as Juan mentioned. Its investments in driving our outdoor ambition in global platforms and also in the marine segment, to mention a couple. Moving over to the cash flow for the period. You can see what I mentioned before. We have change in working capital contributing negatively with SEK 474 million for the reasons I mentioned before. Investments in fixed assets is up compared to the same quarter last year. Looking on acquisitions, SEK 549 million related to Front Runner and Büttner, which was closed in the quarter. We also have a strong positive contribution from net cash flow from financing, and I will mention a little bit more about that on the next page. Moving over to our debt maturity profile and leverage. As you have seen, we did successfully issue a seven-year euro bond of EUR 300 million to 2% flat rate, which was received very successfully in the market. Now we have improved our maturity profile quite a bit here. Looking on leverage, 1.5x in the quarter, and it has been increasing slightly from Q2, driven by the two acquisitions that I mentioned before of Front Runner and Büttner. You know our target is to be around 0.5 x over a business cycle. With that, I'm handing over to you, Juan, to make some concluding summary. Thank you, Stefan. Summarizing store performance, despite the supply chain constraints and the freight and raw material price increases, we passed for the first time the SEK 20 billion mark. We see a record high order backlog for this period of the year. We also see the strong underlying demand on the markets and low inventory levels at the same time. The main question moving forward is obviously supply chain and what is going to happen in the months to come. Obviously, we believed six months ago that it was going to improve. We believed three months ago that it was going to improve, but just now nobody can say when it is going to improve. I think that we need to live with the situation and mitigate as much as we can the negative effects of that. We are happy about our strategic agenda and the progress that we are doing in that area. We see distribution aftermarket, service aftermarket, just now at 48% LTM. We are happy with the acquisitive journey that we are driving. We continue to improve our innovation index, standing just now at 26%, That's always a good tool to see how things will be improved moving forward. We keep working on reducing complexity, and we are down 59% in SKUs. That will also lead into savings stepwise. We will continue to drive our agenda to reach our financial targets. With that said, I would like to open for the Q&A session after Rick gives a reminder. Just a reminder, we will host a capital markets update in Stockholm, November 30. Please look at this link for registration and more details. Thank you. Thank you. If you have a question for the speakers, please press zero one on your telephone keypad. Please also try to limit the number of questions to two. Our first question is from Lucie Carrier of Morgan Stanley. Please go ahead. Good morning, gentlemen. I have two question. We go one at a time. Thank you for the data on raw material and freight. Perhaps could you help us or provide us with a breakdown of your cost base and how that relates to the increase to this number? I think it would be helpful for us to have maybe a bit more visibility around the breakdown of cost so we can forecast a little bit more accurately some of the potential headwind. Okay. The breakdown of the different costs, we were not envisioning to actually go into that level of detail. As I mentioned before, in the quarter itself, we have a negative effect of the arbitrage between rising freight cost and raw material cost, and our mitigating price increases of - 0.4%. If we look in the near term, the big driver in this is obviously transportation cost, which has been increasing. We're taking a jump up to the next level, basically, talking about the ocean freight from China to Europe and from China to U.S., in particular. On road transportation, which is more the outbound side of things, there is a cost increase as well, but not as significant as on the ocean freight. Another big cost driver in this is obviously electronics and where you have to operate on the spot market. There is single examples where you're seeing certain components. I would say that is the normal, but the extreme cases, we're looking at even 60 x compared to what it was before the pandemic. I don't say that is the general, but it's an extreme example. I think that's how I would like to summarize it. Thank you. Just maybe if I can have a quick follow-up on that question, if you cannot provide the breakdown of cost. Are you able to provide how much of your procurement and of your production is subjected to this long-distance freight that you are mentioning? What would you say, like 50%? 40%. 40%-50%. Yeah. Around 40%. Okay. Thank you. My second question was. Sorry, just to fill in. If we relate to the legacy Dometic, obviously, it's smaller on the new Dometic. If you look at the legacy Dometic, it's about 40%. You said, sorry, I got confused here. 40%. 40% on the new Dometic? Yeah. No, in total. The new Dometic is much more local companies- Okay where we have a lower impact. Okay. Understood. Thank you. My second question was around the backlog and the visibility you have regarding how firm this backlog is versus the OEMs or the dealer, because we seem to understand from Winnebago that they say that the dealers can cancel orders in the backlog without penalty at any time. How does that work for you? Do you see a risk maybe that the OEMs or the dealers are over-ordering to make sure that they will get the supply they need ultimately when they need them? We're breaking up a bit, Lucie. I think you need to repeat the question, please. Sure. My question was regarding the backlog, and I was just wondering, what's your visibility on how firm this backlog is? Because we understood this week from Winnebago that they were saying the dealers can cancel orders in the backlog at any time without penalty. I was just wondering how that works for you, whether you see any risk that dealers or even OEMs are over-ordering because there's so much supply chain constraint, and they want to make sure that they have the components or the equipment whenever they need it. I think the risk is there, and that's valid for all the industries, I would say. No matter you are talking about RV, marine industry, CPVs, all over the place. It is clear that all of us, including us, we are ordering just now in advance, because if you don't place the orders, you will not get the deliveries. If we are talking about electronics, we are talking about lead times of between 12 and 18 months. Of course, there is a risk. At the same time, what we can see is that the underlying demand is there. Of all the forecasts for the future, at this point, are positive. It is a delicate balancing act, obviously, between waiting and making sure that you are going to have the componentry in place. Just now, I think the entire world is trying to secure the deliveries for the coming quarters. We will need obviously to adapt our forecasting on a weekly basis, I would say. Thank you. I'll go back in the queue. Thank you. Thank you. Our next question is from Agnieszka Vilela of Nordea. Please go ahead. Thank you. First I would like to ask you about the headwinds to the margin that you mentioned for the quarter, including, obviously cost inflation, but also business mix, even to a larger extent. Yeah The sales investments. How should we think about these headwinds getting into Q4 and even H1? Will they still persist or will they ease, in your opinion? Thanks. If we are talking about the investments that we are doing in building up the segments, they will continue as far as we are optimistic about the future. It is clear. Of course, if the situation deteriorated moving forward and we saw that the economy is deteriorating, that the verticals are getting more pessimistic, then we will need to adapt our cost. At the same time, we need to build up our outdoor business. We are building up our e-commerce, so that will continue. Of course, on the timing that we have between cost and pricing, I believe that we have proven now for couple of years that we are doing a good job in that area. This time we really had a delay of a number of weeks simply because our estimation back in May, June was that cost was stabilizing and then came back again. We will do anything we can to eliminate that gap in the coming quarters. We have FX, difficult to evaluate as well. We have seen the currencies moving back and forth during the last 12 months. The comparatives is getting somewhat easier going forward. Yeah. Yeah. Lastly, maybe on business mix too. We have the sales mix. Yeah. Sorry, Agnieszka. What we didn't mention yet is obviously the sales mix and of course as you all know, our lowest margins all over is in the RV OEM side. We see very strong growth just now on the RV OEM side. You could raise the question, could you do less? There is a link between the OEM side and our service and aftermarket side over time. What we are doing as we speak is that we are really looking at every single piece of the OEM side and starting to analyze, okay, how much aftermarket is each of these areas bringing? Should we be even more careful in where to invest more from a product data perspective within OEM and where we should invest less. OEM is having a major impact in our numbers in Q3. All right. Perfect. My second question is on the acquisition of Igloo. I calculate that it will also be a drag on your margin of some one percentage point or even maybe a bit more than that, at least initially before the synergies kick in. Yes. You said that you will close the transaction in Q4. When should we start consolidating that in the model? Do you know already when it will be in your book, so to say? It's obviously not totally in our control, but the best estimate we have right now is that from November. November and December. Okay it will impact Q4. You also need to keep in mind the seasonality of Igloo, because Igloo's historical sales pattern means that approximately 14% of their yearly sales is happening in Q4. That's obviously something that you need to take into consideration. Also historically, in the fourth quarter, they have been making losses. That's something that you need to factor in when you evaluate this. That's of course something that we have been aware of, and it's a normal seasonal pattern that they have. Yeah, that's very helpful. Thank you. Then if I may only, I'm a bit curious, and I don't think I asked that question when you had the conference call about this acquisition. Were there any competing bids for Igloo? Absolutely. Somebody else had wanted to buy? Yeah. Absolutely. Okay. Lastly, maybe on the also acquisition capacity after that, how do you feel about doing acquisitions in the future given the fact that you have so many companies to integrate now and your leverage is going up a bit? What should we think about that in the near future? If we are talking about the integration perspective, what we see is that the vast majority of the companies that we have integrated are local. Of course, that we have local management in place. We cannot be sitting in a headquarters integrating those kind of companies. That has to be in every single segment. Of course, if you're integrating a company in Sweden, it has nothing to do with a company in Italy. From that perspective, I see no roadblocks whatsoever to keep on our journey. Of course, we have Igloo. Igloo is a major bite, and that will be my task, together with Stefan and together with a team, to get it done. Of course, that you should not expect another Igloo in the coming six months. Let's put it that way. On the contrary, we are not stopping our acquisitive journey simply because we believe, and what we have seen historically, is that we are pretty good at de-leveraging. Historically, we have been between 0.5x and 0.7x. At the prices that we are paying for the standard company, we are talking about 0.1x-0.2x. Again, don't expect a transformative acquisition in the coming months, or perhaps not even in the coming year, but you should expect that we will keep working on the smaller acquisitions. Okay, Agnieszka. Great. Thank you so much. Yeah, great. Thank you. Our next question is from Rizk Maidi of Jefferies. Please go ahead. Yes. Good morning, gentlemen. Two questions to hear. I'll start with the 1st one. Juan, interesting comments on the backlog earlier. I think it all comes down to retail demand. I think one of the main questions that we're getting from investors is how much of COVID boost the entire RV industry has benefited from, and as now economies are opening up and global travel slowly coming back. Do you see any changes in retail demand on both sides of the Atlantic? If you look at the U.S., we see- dealership footfalls sort of a little bit slowing down. We have some internal data on that. In Europe, clearly Germany, you see demand coming down, but that is also due to supply chain constraints. Any comments on retail demand and the boost from COVID? No, when we are talking to our customers and when we are talking even to our aftermarket customers just now, the issue is not lower demand, it's simply lack of supply. That's what is really stopping even higher volumes. If you ask me, "Do you see anything in front of you?" My main concern just now is really inflation, because it is clear that our customers are passing prices, it is clear that we are passing prices to our customers, and it is clear that our suppliers are passing prices to us. At somewhere, sooner or later, the end consumer is going to pay. To me, that's my main concern, which is no different to the car industry or the truck industry or any other industry. Nothing keeps me awake, but there is anything that I reflect about is, where are we going to be in eight, nine months if this continues? From a demand perspective, I don't see it. Just now, it's really, as I mentioned before, we are just now in some cases stopping deliveries simply because our customers cannot take deliveries from us since they are missing deliveries from other people. That has a negative impact on the top line and our margins as well, that we cannot deliver at the pace that we would like to deliver. Understood. Perhaps just if you look at that price to cost equation, I think you gave us the headwind, which is 40 basis points in Q3. Yeah. Given the price increases that you're putting through, how should we think about this item in Q4, and more importantly as well, 2022, because these cost inflation headwinds are carrying over now into next year's EBIT bridge? No, absolutely. As Juan mentioned before, we have been responding with strong price increases to mitigate this last jump here. Just to give you a flavor of what we have been doing this year, it is a range between 5% and 20%, depending on which product, which market, and so on that you're talking about. It's clearly so that we are going to see an increasing impact of the price increases in Q4 and in the beginning of next year. Depending on what is happening with the cost side here, you take a decision based on something, and then the next day, that assumption has changed. What we can see now, that effect is going to be somewhat less. It's going to depend on how the costs are moving here. It's a dramatic situation out there. Okay. Our commitment is really that we will mitigate this gap, that we have done it historically, that in this case, we lost a number of weeks and that we will recover that. I think the organization, one of the issues is obviously that you have never experienced this kind of situation historically. Of course, you're increasing prices to be ahead, but then you have a cost which is increasing even faster. It is very difficult to say, "Okay, now we do it again." Because obviously it takes a lot of energy to pass prices, to increase prices to customers once a month. You can imagine the kind of discussions that we have on one side towards our customers, on the other side towards our suppliers. It is there where you have the time gap in this case. Again, historically, we feel confident that we have done it many times before and that we will do it this time as well. Okay. Thank you. Yes, great stuff. Thank you very much. Thank you. Thank you. Our next question is from Fredrik Moregård of Pareto Securities. Please go ahead. Thank you very much. Good morning, everyone. Just a follow-up question, first off, on the previous speaker. Your order backlog is clearly very strong, continues to be strong from previous quarters. Could you please tell us a little bit about the pricing situation in the order backlog? Are you able to raise prices on current orders, or is there sort of a backlog of orders with older prices that you need to work through before you can realize new prices and compensate on that side? No, it is both. On one side, obviously, we have a backlog with high cost. At the same time, we increased prices months ago. At the same time, we are also looking, depending on the customer, or depending on the product, we are also going back and reviewing the backlog and going back to customers. It's both. Then we implemented new price increases as late as the first of October again. We implemented new price increases first of September again. I think that we will see that gap coming down. The question is: Is it going to be totally in Q4, or we will see that also in Q1? That depends very much on how the cost increases look like moving forward. We have seen a stabilization of the cost increases in the last couple of weeks. Hopefully, it will stay there. We will be able to catch up much faster. Okay. That's very helpful. Secondly, on the restructuring program, you've been using some delays on that- Yeah surprising given travel restrictions and so on. Could you just provide us with an update on how far behind you are on the original plan and cost savings related to that? Yeah. We are two to three quarters behind our original plan. As we mentioned, we have out of the SEK 750 million that we announced, we are just now running at SEK 283 on cost. Out of the SEK 400 million in savings that we announced on an annual basis, we are running at a going rate of SEK 150. We are about 35% of the total plan. We have a number, obviously, of bigger plans that will be affected moving forward, which doesn't mean that we're not working. We are working on preparation, we are working on the product side, we are working on the supplier side. As you just said, it's difficult to move factories when you are not allowed to travel into one country. Okay. Thank you very much. Thank you. Thank you. Our next question is from Johan Eliason from Kepler Cheuvreux. Please go ahead. Yes, hello. Just a few questions. I think it's good that you show on the acquisitions you've done so far that they are supportive to the margin versus group. Obviously, this will be the last quarter they will do that, I suppose, when Igloo comes in and dilutes it. If you look at these smaller acquisitions, if you look at the whole year, because obviously, there's a seasonality pattern to their earnings profile as well, would you say that they support your 16%-17% margin target already today? The answer is yes. Good. No doubt. On pricing, are you seeing a different ability to push through pricing in your different channels, OEM versus service and aftermarket and distribution? Yes. It is clear that some of these channels are a little bit tougher. You are entering into tougher negotiations. It is back and forth. No kind of doubts. So that's- Sorry, just wanted to comment that the seasons are kind of different for different channels as well. If you are into distribution or retail, normally you are discussing prices by now for beginning of Q2, so to say. If you are on the OEM side, you are normally discussing prices in the first half of the year. Now, of course, we are in a totally different situation where you discuss prices every day. That was what has changed, so to say. Just now, price-wise, it's a totally different pattern than we are used to. That is understood. I think also historically, we have seen that you every now and then sort of lag cost inflation in the pricing. Correct. I think it's a fairly normal pattern we see in consumer durables type of companies. Yeah wondering, as your channel mix is changing, your ambition is to increase distribution in aftermarket- Absolutely than reduce the OEM. Do you think this will improve or make your pricing actions worse going forward? I can say the following: the less dependent we are on the OEM side, the easier it's going to be You also need to mention that you have some large counterparts also on the distribution side, obviously. I mean, we are talking about now with Igloo, with the Walmarts of the world and so on. Yeah, still, if you look at the OEM side, in principle, you have 20 customers in every continent. That's it. Okay. Well, thanks. Yeah. Thank you very much. Thank you. Our next question is from Karri Rinta of Handelsbanken. Please go ahead. Yeah, thanks for taking my question. Sorry about going back to the pricing in the U.S., because if I look at the RV OEMs and the RV retailers in the U.S., they are and have enjoyed record high margins for quite a few quarters in a row. For example, Camping World Holdings, they have doubled their gross margins from the sale of new vehicles. Haven't you not been a bit passive or late with your price increases? Who is actually taking those pricing decisions? Is it the local organization, or is it sort of at least overseen by Stefan and you, Juan? I think you have two phases. You have one phase which has been very much in the segments. You have a second phase where Stefan and myself are very much involved, I would say on weekly basis. No doubts about that. Your first part of the question, this is what we have said also earlier in the call, that we had a feeling that we were very well on par and mitigating the cost increases up to some time in Q2. When the next level came, then obviously, as Juan said before, we reacted a little bit late, but that has been corrected now. I think you have another factor you need to keep in mind, Karri, and it's obviously what kind of inventories do companies like Camping World. Of course, if they are carrying a lot of old inventory, they don't have the cost increases. If they pass the prices, they will have a positive effect. That's another factor to consider. Sure. No, I'm just thinking that you keep referring back to costs, but I was given that you might sort of I'm not saying that you aren't in that business for the long term, but since you maybe want to de-emphasize the OEM business, maybe you could have moved a bit more sort of opportunistically with pricing, but yeah. Yeah. That's a good point. At the same time, we also need to keep in mind that you need to plan for those kind of moves. I think, Karri, that is very much we were a few weeks late in taking another round simply because we saw price stabilization, and that's what we need to recover. Is it a little bit more in Americas than in other places? The answer is yes. I do believe that we were a little bit slower in Americas than we were in other places. All right. Fair enough. Freight cost. Just a very quick one on freight cost. What kind of contract structures do you have? When will we see the full impact from these recent increases? Is there any difference between Europe and Americas when it comes to your freight cost exposure? Yeah. We have twice as many containers going from Asia to the U.S. than going from Asia to Europe. That's another factor deteriorating profitability in Americas. We don't have long-term contracts. We have been thinking back and forth about contracts. We believe that contracts in the long term has more downside than upside. That's why, in our opinion, we have been doing a pretty good job historically in passing prices. The problem is obviously that when you're sitting on contracts, you will always have a delay. You have normally much longer delay than when you are passing the prices immediately. Okay. Thank you. Our last question is from Stephanie Vincent of J.P. Morgan. Please go ahead. Hi. Thank you so much for answering all the questions on pricing. I just actually have one on CapEx, given that we're going into, I guess, a new taxonomy for things like green bonds, et cetera. Just looking forward for your CapEx for the end of this year and 2022, do you have a number that you're willing to share externally about what percent of CapEx is going towards sustainability projects, et cetera? I realize everything is going into making things more environmentally efficient, if you have some number that's very explicitly allocated to sustainability, that's helpful. I don't have an exact number for you right here. What we can say, you can see when we're reporting the sustainability KPIs here, we are ahead of our plans on reducing the CO2 footprint. That's of course also requiring CapEx investments. If we are taking some examples, we are investing in our Chinese factories in solar panels and other measures to improve. We are also then moving to green energy, which is maybe not always coming up in the CapEx. It's coming through the OpEx line or cost of goods sold, obviously. Then you also have CapEx related investments in R&D and basically in all our new product launches that we are presenting now, there is a clear sustainability target, increasing energy efficiency, material usage, et cetera. I think your question is triggering something by us that we should probably- Yeah make sure that we have that number because it's obviously an important number. Today, I cannot give you an explicit number more than giving you these comments here. We will be prepared for the capital market update. Yeah. That's a very relevant question. Yeah. Thank you. Just on your net debt leverage, arguably it's been below your 2.5x through the business cycle, even in a pretty weak, I guess, demand environment, let's say, going into last year as we recover from the pandemic. What are your views on capital allocation? You've obviously been putting it towards bolt-on acquisitions. Is there some plan, I guess, to be more aggressive with the cash in terms of investment cycle or the shareholders? That would be useful as well. It's actually, as you know, as we mentioned before, we are going to close Igloo during the fourth quarter here, and that will mean that leverage is going to go up to approximately around 2.8 x. Filling in with what Juan said before, that we are maybe not going to do another transformational acquisition within the coming 12 months, but we are certainly going to continue to work with the smaller and medium-sized acquisitions here. With the things that is already decided, we are going to take as the leverage is going to go up and, as we have said, around 2.5x, and that can vary over time. Going significantly above 3 x is, of course, something you need to have respect for and need to have a clear plan if you would consider doing that. The target is around 2.5 x. That's great. Okay. Thank you very much. Thank you. There'll be no further questions at this time. Please go ahead, speakers. Well, thank you very much everybody for your attention. We appreciate your interest in Dometic, and we will keep working in delivering our strategic agenda and to reach our financial targets. Thank you very much for today, everybody.