Good day. Welcome to the Elanders AB conference call. At this time, I would like to turn the conference over to Magnus Nilsson. Please go ahead. Thank you. Welcome, everyone. Together with me on this phone conference, I also have Andréas Wikner, Elanders CFO. I will now go directly to slide number five in our presentation and talk about our performance in the third quarter of 2021. The shortage of semiconductors created lots of disturbances in the production for several of our customers, and this created big fluctuations in their demands, which was changing from 1 week to another. These big fluctuations makes it almost impossible for us to adjust our cost structure accordingly, and it's also driving lots of additionally salary costs and was putting pressure on our margins, and then especially in the Supply Chain Solutions area. The negative impact was especially impacting our results in July and August, when lots of our customers decided to have extra closing of their manufacturing and also lots of changes in their shift pattern. We could see in the second half of September, a recovery to much more normalized demand, and also the production was stabilizing at our customers. This together with that we are negotiating with several customers to find solutions to decrease the negative effects of the fluctuations created by the semiconductor shortage makes us expect that we will see lower negative impact in the fourth quarter, despite some continued disturbance when it comes to shortage of semiconductors. We should also have in our minds that last year in Q3, did we still have positive effects from the PPE business, and the majority of our customers also showed a very strong recovery from the negative COVID-19 impact, resulting in demands that was actually higher than normal, which also resulted in a optimized utilization of our capacity. If we then go to slide six and look at the numbers, can we see that we despite all these disturbances, showed an organic growth by 3%. The growth comes from the business area Supply Chain Solutions, and the drivers behind the growth was mainly increased prices for purchase of freight to our customers, and also an increased share of buy and sell activities for our electronics customers in Asia. We could also see a very strong growth for fashion lifestyle in Europe. The semiconductor shortage in the third quarter put a high pressure on our margins, and in Q3, resulted this with an EBITDA margin of 4.4% compared to 6.8% the year before. If we look at our accumulated numbers, are we still well ahead of last year with an EBITDA result of SEK 413 million compared to SEK 342 the last year. We also continue to receive lots of new requests from both existing and new customers, and then especially when it comes to e-commerce solutions for the fashion lifestyle segment. To meet the increased demand from fashion lifestyle, are we now exploring different options to increase our capacity. If we go to slide seven, you can see that we continue to have a very strong financial position and our adjusted net debt EBITDA exclusive IFRS 16 is now at 1.67. If we go to slide eight, to look at our two different business areas during the second quarter, you can see that Supply Chain Solutions managed to show growth despite all the problems regarding our customers in stable demands. The problem with the semiconductor was driving lots of costs, which was hurting their margins. Also last year, they had the PPE business, which was helping the result with very strong margins. If we look at Print & Packaging Solutions, we can also see a high impact from the semiconductor shortage, which resulted in much lower volumes of manuals for our automotive and industrial clients. Their sales went down in the quarter, that was mainly a result of less trading of freight for their subscription box business in U.S. This should, over time, actually result in improved margins. If we go to slide 9 to look at our sales by customer segments in the quarter, if we look at our sales to automotive, you can see the negative impact on our sales compared to last year as a result of the semiconductor shortage, which also affected our margins negatively. Positive is that the majority of our customers still see a very strong underlying demand, and we think they will try to catch up as soon as they have enough semiconductors. We are also continuing to develop new services in automotive area for electric cars, and we have now secured 2 new important projects relating to storing, handling, and assembly of battery cells. If we look at the electronics area, we can see that we had a very strong growth compared to last year. This growth comes mainly from what I mentioned before, an increased volume of buy and sell in Asia. Also our new service offering, Renewed Tech, is also included now in electronics. Some of our customers were suffering from the lack of semiconductors also in the electronics area, which resulted in less production in Asia and also lower quantities of products coming to Europe, which also put some pressure on our margins. We then go to slide number 10 and look at fashion and lifestyle, you can see that we are in line with last year despite our growth of 30% in Europe, but that was leveled out by decreased buy and sell of transportations in U.S. We continued to see a very strong growth from our customers, especially when it comes to sales via e-commerce channels, but also a stable recovery of the retail area. If we look at healthcare, life and science, we had a huge impact last year on sales because of the PPE deliveries in Q2 and Q3. Underlying demand continues to look good, and we have acquired some very interesting new customers that will start later this year. If we then go to slide 11 and look at Industrial, we can see that their sales also was affected negatively compared to last year. This was also because of the lack of semiconductors that we could see in automotive. If you then look at other sales, you can see there is a growth in that area, and that is mainly driven by the acquisition of the printing company Schätzl that is specialized in producing online print, which is one of the few growing areas in print. Our own companies was also having a strong underlying organic growth in this area. That was that. Then if we go to slide 12 and look how things will be going forward. As I mentioned before, we continue to see a very strong underlying demand in all our customer segments, which is very positive. This should result in a very positive result development as soon as the semiconductor availability is stabilizing. We continue to receive lots of interesting requests from both existing and new customers. We are also very pleased to see that we continue to grow within e-commerce service for both existing and new customers in fashion and lifestyle. We continue to see that our global footprint is a strong enabler to gain new customers. Our new site in North Germany that we started up this year is actually already filled up with new customers, and we are now exploring different ways to increase our capacity to meet up the strong demand, both in Germany but also outside Germany. We continue, as I mentioned before, to have a very strong financial position, which enable us to increase the number of acquisitions. We also want to continue to grow in the lifecycle management area, which will help both us and our customers to reduce carbon dioxide emissions. Two of our latest acquisitions, Azalea and ReuseIT, have strengthened our position in this area. If we look forward, we are carefully optimistic, even if the ongoing COVID-19 pandemic continues to affect the global supply chain negatively, especially when it comes to production and shipping from Asia, and that combined with the lack of semiconductors. As I mentioned before, we can see now that the semiconductor is start to stabilize. We can also see that Asia is opening up again and shipping starts to be going in a more normal direction. So far, after a tough third quarter, we are still optimistic that it will be better going forward. I think the important thing is that all our companies have a very strong underlying demand, which is promising for the future. Thank you very much. I will now open up for questions. Thank you. If you wish to ask a question at this time, please press star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment. A voice prompt on your telephone will tell you when your line is open. Please state your name before posing your question. We will now take our first caller. Your line is open. Please go ahead. Hi, it's Carl Sjöberg from Nordea. A couple of questions from my side. Firstly, on margins in the quarter, you obviously mentioned there were several reasons. Could you perhaps help us bridge the margin, meaning if you could help us with the effect from, for instance, buy and sell component issues, et cetera? Thank you. Yes. Hi, Carl. I think if you look at our EBITA, that was SEK 126 million this year compared to SEK 190 million last year. If I make a very rough bridge, I think SEK 20 million of that is the PPE business, the contribution from the PPE business last year. Around SEK 34 million is connected to the semiconductor problems in Supply Chain Solutions, and roughly SEK 8 million in the Print & Packaging Solutions division is connected to less manuals because of the semiconductors. It's SEK 20 million PPE, and roughly SEK 42 million are connected to the semiconductor issue. Perfect. Thank you. How much buy and sell volumes did you take on in this quarter? You guided for a bit of a margin dilutive effect from this, and also how important is it to take those volumes in order, I guess, to be able to deliver on more profitable volumes as well? I think the buy and sell activities in Asia increased with around SEK 80 million in turnover in the third quarter. As I think we have said before, it's rather low margins in this business, but it's still a very important business for us to get other services where we have much higher margins, like factory logistics for electronics. There we could see also a downtrend because of the lack of semiconductors. We think that the increase in buy and sell is that our customers want to secure that they have semiconductors and other electronic components that have increased their buffers, which affect our buy and sell. Unfortunately, the production is still much slower than before, so we get less added value. We still need to do this buy and sell, and it's important part, but of course in a quarter like this, it hurts the margin. It drives sales, but not the margin. Thank you. Also, you also stated that you saw improvements at the end of the quarter. Could you perhaps elaborate a bit on the improvements and the magnitude of them and then also which segments you see improvements in? Or is it across the board? I must say it was across all areas. As I mentioned, July and August was really tough, and the first two weeks in September was also very weak, especially when it comes to automotive, but also other customers like electronics. In the last two weeks of September, almost all our customers was running normal shift patterns. The production flow was optimal. I can say in the second half of September, we were back on the same levels like the year before. It was running very stable. When it comes to the semiconductor issue, there is lots of signals all the time. If you look at, there's a company, IDC, that is following this globally. Now they are estimating that you should have normalized levels in the second half of 2022 and even over capacity in 2023. We think it will now be step by step improving to reach normal levels through the summer next year. We could see it in September as well. There was no sudden shift changes from our customers, which help us optimize our production, and we can then go down in the number of temp workers on additional shifts. Second half of September, very stable. Okay, perfect. Both in Print & Packaging. Yeah. Good? No, sorry. Yeah, I'm ready. Thank you. Okay. The final one from my side is regarding Print & Packaging Solutions and then your photo books businesses. We have seen, of course, data from the IDC indicating a fairly soft market. Have you seen the same in the start of Q4? Is it too early to draw any conclusions? Q4 is important for the photo book business, right? We can see absolutely a softer demand in the photo product. We have lots of other online printing business that we are growing, and especially now with the acquisition of Schätzl. We think we will have a very strong fourth quarter in print, but absolutely softer when it comes to photo books and photo products. That is less important for us now than it was before because we are overall very strong in online print. Everyone is hoping that the fourth quarter will come back, and of course, people have had some vacations this summer, so hopefully they will create Christmas gifts as normal in the photo business. It is still too early to say if it will be like that. We are not so afraid of the impact for us because we have expanded into new other areas when it comes to online print. Perfect. Thank you. We will take our next question from Alexander Vilval from Erik Penser Bank. Please go ahead. Hello, Alexander Vilval here, Erik Penser Bank. I would like to just ask a question regarding the situation with the semiconductors. Can you describe a little bit how your variable cost base looks when it compares to the, say, volatility in, let's say, daily volumes with your customers? If there is a threshold where if they push on the gas pedal regarding the production levels for a week at a time, and then the volumes come down for a few days and then they come back with volumes again. At what sort of volatility level can you match those swings with your cost base? How agile are you able to be? Does it make sense, that kind of question? Yeah. No, I think it makes lots of sense. In normal times, when the production volumes goes up and down for our customers, for example, automotive, if they go down from 100% to 90% or 80%, it's a more constant thing. We know it's for, okay, the coming four weeks, they will run 80%. It's very easy for us to adjust because we have a huge amount of temporary workers. We can actually adjust, so we go down the number of workers. This is lots of actually employee costs, with the semiconductor is totally abnormal, the thing that happens is that we get the forecast from the customer. Next week we run these car models, all of them run three shifts. We book up all the temp workers for that week, suddenly later in the week before, they will say, "No, we cut down. We go down from three shifts to one shift in this model, we go up to four shifts in another model," that means we will have two shifts, too many people that week. For the additional shifts for the other model, we need to then take in extra personnel. It actually comes down to lots of salary costs. We don't have this in our SLAs because this has never happened in the history that the car- Yeah. Manufacturers are changing from week to week. I must say it's a total abnormal situation. Now we are entering lots of discussions with our customers. We cannot continue like this. I think together with the semiconductor will be more stabilized, and it should also drive costs for our customers. Hopefully they will decide, "Okay, it's better we run constantly 80% than run 120% one week and 60% another week." I think this is really extraordinary times for everyone, and we have a huge flexibility with all our temps, but we cannot balance it so quickly. Impossible for us. Yeah. You're basically on a weekly, That's the way it is. Weekly level and day up. Yeah, it changes on weekly level. Go on. Yeah. Normally, we need to book for two weeks of capacity. We have a very high flexibility. It's not about employee people terminate employee because we have these temp workers that we use to balance normal fluctuations. The situation today, especially in Q3, was totally abnormal. Actually in Q1 and Q2, they also had problem with semiconductors, but then it was much more normal, more smooth. I think also that our customer used the opportunity in July and August to push out the holidays for their workers. They pushed them to take out holidays, so that was also making it much, much worse in July, August. Even in Q4, there will be disturbance. We think it will be on a more stable level. Okay. Also, you mentioned. Was that enough? Yeah. Yes, absolutely. Great. Thanks. You mentioned a couple of minutes ago regarding the semiconductor levels, and I think you quoted some source regarding the possibility of a normal level in the later half of this year and perhaps overcapacity regarding semiconductors next year. Would you just care to repeat where you got that? Where it was. That was IDC. Okay. They follow IT and technology, and it was really hard to find, but they had a report in 20th September where they predict the normalization to the summer of 2022 and actually even overcapacity in 2023 of semiconductors. Okay. All right. Thank you very much. They try to collect the data. Yeah. Thank you. Great. Thank you. We will now take our next question from Adrian Gilani from ABG. Please go ahead. Hello, this is Adrian Gilani from ABG. I'd like to start off with a question on, well, you say you've opened up some negotiations with customers for transferring over some of the increased costs that you've seen. First of all, could you elaborate a bit on specifically which industries you've been looking to do this? Also, will this have an effect already in Q4, or are we going to have to wait to see effects from this? It's mainly customers in the automotive and the electronics area. When it comes to electronics, it's more about that we have a huge capacity for them in Europe, but less products is coming in, now we are standing with overcapacity. There, we're hoping to see some result of the negotiations already in Q4. For the automotive part, it's harder to say because we're also discussing both what has happened, what is happening in the future, and how does it look for next year. It's hard to say, but there's lots of negotiation going on, and I think that together with the semiconductor stabilizing, I think we will still have an impact on Q4. My hope is that we will be back to more normal levels in starting in Q1. If the cost of compensation from customers also together with more stabilization of the semiconductor. Okay. You already touched a bit on the photo book business for Q4, if we assume that demand does remain strong in Q4, are you confident that you're going to be able to deliver on the demanded quantities or are there certain logistics issues that we have to take into account here? No, we have a very good, strong capacity, especially now when we added the company Schätzl that we have acquired now that is 100% specialized on online print. That together with our existing big facility in Germany makes us very strong. We have a very high flexibility. We also have added some new customers in the photo book and photo business as well. It's not just our own brands. We are now actually serving several other brands as well. From a production perspective, we are now in good shape. This year, we are not so afraid of the COVID. Last year it was high pressure for us to manage the Christmas volumes and then at the same time be afraid of outbreaks of COVID in our production. That looks much more stable now, actually. Okay. You also mentioned some irregularities in the demand patterns from your customers. I just want to know how good is your visibility here? How long before does the customer have to give you notice if they'd like to cancel a delivery or reduce the size of a certain delivery? How long do you actually see these demand patterns forward? As I said before, I hope to stabilize. We often have in our contract that they need to fulfill different forecasts they give us. That is based more on how the world worked before. If they change shift patterns all the time, but in the end, they still reach 80% or 90% of promised volumes, then we cannot claim according to the contract, because when we made this contract, no one realized that an issue like this semiconductor could actually happen. This is the things we discussed with our customers, and I think this is something also to take with us for the future, to have in our contract, to also to be able to claim extra money to cover additional cost when these strange things happen. I think that's a lesson to learn there from this COVID-19 and all this semiconductor thing as well. Okay, just a final question from my side. Obviously, the supply chain issues are stealing all the headlines, you also mentioned a product mix effect from an increased share of freight forwarding businesses affecting margins. Is it possible to quantify how large of an effect this has had on your operating results and in contrast to the supply chain issues then? Yeah, I think the transportation part has been driving lots of additional sales. It's hard to say the numbers. I will invite Andréas. Maybe you have an estimation of how much sales. I think I have here. Yeah, I have here. There was a growth from Air & Sea of actually almost EUR 17 million in Q3, additional sales to around SEK 180 million, which increased prices, which we could just send to our customers. We are now also improving our margins on these increased prices on Air & Sea. That in Q3, that was mainly EUR 17 million just streaming through, just going through. You also have the effect from the subscription box business also in the U.S. on the other way. Yeah, the other way around, where we are now trading much less freight for our subscription box business in the U.S. That was a negative effect of SEK 80 million. Not negative, but less turnover, but that will improve our margins over time. It's actually a positive thing. Okay. Thank you for your answers. That was all from me. Yeah. Thank you. As a reminder to ask a question, please press star one. We will now take our next question. Caller, your line is open. Please go ahead. Hello. This is a question from Thomas Nilsson at Analysguiden. Regarding acquisitions going forward, could you elaborate a bit about what pace you are looking at in terms of how much sales acquisitions are expected to add in the coming years? Also, in what business areas you are currently most interested in doing acquisitions? Okay. Yeah. When it comes to acquisitions, we have two tracks that we are following there. One is to add more in what we call life cycle management, like the Renewed Tech, where we buy companies that do take-backs of IT equipment, they refresh it. And they sell it on the market as secondhand, which is very good for the environment. Then we added two companies that, like I mentioned before, Azalea and ReuseIT. We're looking for more companies in that area from a global basis. Then you talk about normally a lot of small, medium-sized companies with the sales of around maybe SEK 100 million, SEK 200 million. Another area we're also looking a lot is for when it comes to fashion lifestyle. We can see when it comes to e-commerce and fashion lifestyle, it's not slowing down. We have a tremendous amount of RFQs coming into us, both regarding local business in Europe, but also we have lots of interest from customers that want us to serve them globally. Normally we start with them in Europe. Then they want us to serve them in U.S., and then later on in Asia. We're also looking for capacity in that area. Then, of course, then we can talk about bigger numbers because then we talk about specialized supply chain companies for fashion lifestyles, and I think then we can talk about turnover, everything from maybe SEK 200 million-SEK 2 billion. We are following two tracks there. Medium size to get more added value, more advanced services like tech management. We really have a strong belief in the fashion lifestyle area, and we need to get more muscles there, and we want to be one of the few global players in that area. Yes, it could be both small but also big if we find the right target. Okay. Thank you. Thank you. As there are no further questions at this time, I'd like to turn the call back to your speakers for any additional or closing remarks. Okay. Thank you everyone for listening in to our conference call. Thank you. Bye-bye. Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.