Hello, welcome to the Elanders AB conference call. My name is George, I'll be your coordinator for today's event. Please note, this conference is being recorded. For the duration of the call, your lines will be in the listen-only mode. However, you have the option to ask questions towards the end of presentation. This can be done by pressing star one on your telephone keypad to ask your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I'd like to hand the call over to your host today, Mr. Magnus Nilsson, to begin today's conference. Please go ahead. Thank you, George. Welcome everyone to the Elanders conference call. Together with me here, I also have Åsa Vilsson, the Group CFO. I am also having Florian Beck here, that will take over as CEO for the Elanders Group, 1st of September. Now I will go directly to slide number five in our presentation and talk about the second quarter. In the second quarter, we could see that the positive trend with improved demand continued. We could show an organic growth of 3%. If you adjust for FX, the organic growth was 2%. Organic growth came mainly from Asia, but also Europe and North America showed growth, which was a very positive indication for us, and which makes things look better when we go into the second half of the year. Also adjusted, EBITA results continues to improve. It's increased to SEK 181 million compared to SEK 167 the year before. This was an improvement with 8%, and our adjusted EBITA margin improved to 6.2% compared to 5.5% the year before. In the quarter, we also managed to renegotiate a large lease agreement in the U.S., which combined with the opportunity to exit two other lease agreements in the U.K. in the beginning of the next year, will give us the possibility to lower our cost base in 2027 with around SEK 80 million. If we go to slide number six and look at our cash conversion, we can see that we show a very strong cash conversion of 113%, which resulted in us freeing up SEK 92 million from our working capital, which helped us to lower our net debt, excluding IFRS 16 with SEK 19 million, despite that we made a dividend of SEK 24 million. We also had a negative currency effect of SEK 56 million on the net debt in the quarter. If we go to slide number seven, look at Supply Chain Solutions, we can show a strong organic growth of 4%. If we adjust for FX, it was still positive with 3%. Asia continues to be the main driver, but as mentioned before, very positive in the quarter was also that both Europe and North America could show organic growth. If you look at the results, we can show continued positive development with both improved EBITA margin and EBITA results. Our adjusted EBITA margin came in at 7% compared to 5.8% last year. Adjusted EBITA result was SEK 166 million compared to SEK 144, which was actually an improvement with 15%. If we then go to slide number eight to look at Print & Packaging Solutions, you can see that we had a challenging quarter, which resulted in a negative organic growth of 3%. This had a negative effect on our adjusted EBITA margin, which came in at 4.2% compared to 5.4% last year. The negative growth comes mainly from our German operations, that has a very high exposure towards the German car manufacturers, which now that all of them are struggling with their sales and that of course, results in lower volumes of manuals. On top of that, they're also doing cost-saving programs that affect the number of pages in the manuals, which have an extra negative effect for us. On the other hand, we could see continued growth in online print and also our publisher segment is growing. This should, over time, be able to compensate for the decreased manual volumes. If we then go to slide number nine to look at the development of our different customer segments in the quarter, I will comment organic growth by customer segment excluding FX. If we start to look at electronics, the picture continues overall to be very positive, and in the quarter, we could see an organic growth of 5%. We've got a stable demand in both Asia and Europe. On the other hand, we could also see in the second quarter that our customers' laptop volumes are affected by the memory shortage. This creates some fluctuations in the demand which affected us actually both in Asia and Europe. Fashion was stable in the quarter, and organic growth was unchanged. We could see again more positive signs of recovery both in Europe and North America in the end of the quarter. Very positive in the quarter was that others showed a very strong organic growth of 9%, and that is partly because of recovering demand from FMCG customers in the U.K. and continued organic growth when it comes to online print. If we then look at automotive, it's a very mixed picture for us, with an organic growth of 4% for Supply Chain. On the other hand, a negative organic growth of 14% for print, and consolidated organic sales was in line with last year. Still very positive that we managed to grow in the Supply Chain despite a very challenging market. Industrial showed a negative growth of 7%. Here, EU was in line with last year, but U.K. had a negative growth for us. When it comes to healthcare, we continue to see stable demand, and we could show organic growth of 2%. We can then go to slide number 10 and look at things will be going forward. I must say that the positive start of the first half year continues to make us careful optimistics when it comes to rest of the year, especially when we see the continued organic growth and improved EBITA results in the Supply Chain Solutions that is our absolute biggest area. We also continue to have lots of interest and requests in the pipeline from both existing and new potential customers. We should, of course, don't forget that the world around us continues to be very challenging for both us and our customers. When it comes to our markets, can we see a continued improvement in demand in Germany, which is our absolute biggest market. After a tough year in the U.K., could we see some recovery in the second quarter, especially in the lifecycle management segment, but also in the FMCG segment. This combined with continued growth in Southeast Asia, gives a very good momentum going forward. Even if North America still is a bit challenging with rather switching demand for us. Positive is that the churn rate at least is extremely low now in North America, and again, that the new sales pipeline is picking up in speed again. We're also starting to see an improvement with the high utilization of our warehouses, which over time will lower our overcapacity and the successful renegotiation of a major rental contract, as I mentioned before, an ability to exit two other agreements in the beginning of next year, will help us even further to optimize our utilization. We will still have capacity for organic growth. That was everything from me, and I hand over to the operator for questions. Yes, thank you very much, Mr. Nilsson. Ladies and gentlemen, once again, as a reminder, if you have any questions, please press star one and just make sure that your line is unmuted prior to your question or query. Our very first question today is going to be from Gustav Berneblad following from Nordea. Please go ahead, Gustav, your line is open. Yeah, thank you very much for taking my questions. It's Gustav from Nordea. Hi, Gustav. Hello. I thought maybe just to start off here, if you can just help us dissect the lease contract renegotiations here. Maybe we can just start with Americas here or North America. Is it possible to quantify this? Also if we should see a positive effect already in Q3 for this region? This was a huge facility that we don't even utilize anymore. We actually had a contract running to 2031. We have managed to negotiate, we will exit the contract latest in December this year, which means we don't have any costs with it starting 2027. We don't know yet if we will get any benefits this year, we know that next year it will give us a saving around $3 million in U.S. Perfect. Will there be any. Of course, that will, of course, improve the results and the margin in U.S. because there we have suffered a lot because of overcapacity. Yeah, that's perfect. Then if we move to the U.K. there, I guess, there were additional lease contracts there. You mentioned GBP 80 million starting 2027. Is that from 1st of January, we should expect those savings to come through fully or? No. The first quarter is the saving from U.S., the yearly $3 million. Then for U.K., that is actually a possible saving of around GBP 4 million or GBP 5 million. That will start in Q2. We have two contracts that we can exit, because the contract is running out, it's perfect opportunity for us. If we don't fill it up, we just exit them, then we have a saving of GBP 4 million or GBP 5 million starting in Q2. If we are lucky, sales are driving, then we fill them up, but then it will give us a saving anyway because it's also empty space. That is how it looks like. Yeah. Okay. Sorry. That's around SEK 18 million in savings, and yearly is around SEK 95 million, you can say. Yep. That is not what I said, that saving. Yeah. Got it. Then just on electronics there, you comment on memory prices affecting your sales somewhat still. You comment 5% positive organic growth. Can you just elaborate a bit on the demand situation in that then and what you see here going forward? Yeah. I think we still show a nice growth, 5%, but our customers could sell much more if they didn't have memory shortage. Still good growth for us, but I think our growth could easily be simply 8% like in Q1 in electronics, if it hadn't been for the memory shortage. Of course, it affects our customers and then it affects us. How it looks going forward is hard to predict. We think there will be some challenges to come in quarters, but they work really hard to find memories, of course. The good thing is the underlying demand for personal computers, like laptops, is really strong. It's more a shortage. It's a bit like when we had the semiconductor shortage in the automotive industry a couple of years ago. It, of course, will affect us, but we could have grown much better in electronics. Perfect. When you just look at the overall business you have, not just electronics, but overall, have you experienced any trend shifts during the quarter here in terms of business? No, I think overall it's very good. I think especially in our Germany, that is still our biggest market, is flourishing. We are even growing automotive, even if it's challenging time for customers. Of course, we are getting some new projects. We are doing well. We can also see fashion in Europe is now start to look better. We are improving earnings. Our customers start to look better. On the industrial segment, also good in Germany. We can see now that power tools, heat pumps, things like that is going better. If you look at U.K., that has been really challenging for us the last two years. We had a really nice growth in lifecycle management. That is very important for us, where we're doing good earnings. Even into FMCG, we could see growth. We got some new customers. That's overall pretty good signs in Europe. In Asia, continue to be good for us. Southeast Asia, Thailand is growing. Also Mexico is doing well for us. China overall more stable, even if the world continues to be a bit up and down. That's perfect. If we just jump to the print business that you also mentioned here. Can you just elaborate a bit more on the review you have there, and potentially even cost savings in that part? Yeah. As you know, we have been expecting car manuals step by step going down. That's why we have made this agreement with Thalia, the publishing. We are growing online prints. We have a good plan to bridge it. We couldn't predict the brutal effect that the market has on the German car industry now. In print, we work with all the German brands. Overall, the volumes is going down quicker than we expected. With the cost pressure they have, they are now making the manuals very quickly, less pages, which is less value for us. We know we will grow and bridge with online print and publishers, but we can now see it will take some time. We are now looking through our biggest facility in Germany very carefully, as there could be that we will do some actions, some restructuring, to more quick to make our suits more in the right size, if I say it like that. Over time, still good growth, online print publishers. Our other printing companies was really doing well in the second quarter, the German one is our biggest one, that's why it affected our numbers. We are looking through it now. I cannot say any numbers about it, we go from everything carefully, every customer, all the costs we have, doing analysis. No, that's perfect. Very clear. I think that was all for me. Thank you, Gustav. Thank you for your question, sir. Ladies and gentlemen, once again, for questions, please press star one. We'll go to Markus Almerud of DNB Carnegie. Please go ahead, your line is open. Yes. Hi. Markus here from DNB Carnegie. Can you hear me? Yes, Markus. Hi, Markus. Hi. Perfect. Well, let me start with some follow-up questions on, maybe on the leases, I'll start there. The SEK 80 million in savings or SEK 80 million-SEK 95 million, you said SEK 95 million in annualized. Is that just the savings from the contract per se? Or do you also include the savings that you will make from filling up and from capacity utilization overall? I would guess that's not included in the SEK 80 million-SEK 95 million, right? No. It's just the pure savings. That's a pure saving. With all the rental costs, the taxes you pay, and we still have some utilization costs. We have some people taking care of the facility. No, it's actually pure cost. Okay, perfect. Can you say anything about the balance sheet effects on you exiting these? I think I can give that to you, Åsa. Yes. You discontinue all the expenses, we reevaluated the IFRS effects. I think we lowered the liability with around SEK 78 million, that kicks in right away now, because we know that the contract will end this year. Okay. Was it included in these numbers? Yes Q2? Yes. In Q2. Okay. Yeah. In the net debt, including IFRS 16 Yeah Was reduced with that amount, yeah. Yeah. Okay. Perfect. The trends we've seen, both Asia and Europe are I mean, Asia is strong, and Europe is turning and it's positive. You talk about Germany being positive. Can you talk a little bit about trends, how they have progressed throughout the quarter and what you've seen? In the summary, you expressed some confidence about the whole et cetera. Can you just elaborate a little bit on the movement throughout the timeframe? Yeah. I think the good trend for us is that if you look at the numbers country by country, like U.K. and Germany, there's still almost no growth in consumption, but still we can see growth. I think it's a combination there. We have been very successful in gaining new customers, especially in Germany. The last year, we've made a big restructuring, but we have been really good in gaining new customers in the fashion segment. In the U.K., that also is a big market for us. We could really now see a lift-off in lifecycle management. It would not show that in the report, but they actually had a growth of over 20% in the second quarter. That was really impressive in lifecycle management. Also FMCG, even if U.K. shows now some growth, I think we could see we were gaining some really new customers. I think Europe overall in Supply Chain, we are in good shape. Also in Sweden, we are not so big there, we gained also some new customers in Supply Chain. We're looking at several projects in more eastern part of Europe. Things are happening, that overall good for us. Asia, there we have our plans. Thailand, that was a very successful greenfield operation for us. They are doing really well. We are getting more volumes. We are now in discussions about Vietnam, about Malaysia. China is still good for us. As I said, South America, Mexico. For us, it's more North America has been really up and down the last year. Every quarter we see now the pipeline looks better, then it slows down. I think it's been lots about the trade war as well that's made for customers, especially in fashion, very hard to handle U.S. The good thing now if you look at North America, U.S. and Canada, is the churn rate is almost gone. We're calculating lots of projects. It feels like our customers start to navigate around all these challenges with the customer duties and things like that. Even if you cannot see maybe so much growth in the market, for us, it looks like we are in a good position. Also all the savings we did in Supply Chain last year also helps our margins to grow. Second half of the year is always our most important part of the year. Which I will hand over to Florian also to take care of. No, I must say it looks overall good for us. It's challenging times. You never know. The memory shortage, who knows? With all things, we should do even better. We hope it doesn't get worse because that could affect us negatively. Maybe a follow-up on the U.K. and then on the U.S. If I look at life science and FMCG in the U.K., how big a part of the business are those two segments? You mean how big FMCG is in U.K.? Life science and FMCG. Life science is Just give me a second here. Life science is around GBP 30 million. FMCG? FMCG, 44. FMCG, what could that be? That should be around GBP 25 million, roughly, in the U.K. Okay. GBP 25 million, GBP 30 million. Yeah. For last year, right? Or in the quarter? No. It's for yearly. Yeah. Okay. On the U.S., and particularly in fashion, because fashion's been difficult, but it's good to hear that the churn rate is almost gone. You phrase fashion as still challenging. Is it mostly that Oh, I lost you. Accelerating, the churn was gone. Can you just explain a little bit? I missed some of the words, I think I captured it. No, I think in North America, for a while, we had problem with the churn rate was really high, then it was low, the trade war things, it went up again. Now it's stable, so that is very low. It's a good base. The good signal with that one is also that we can see that the pricing now is stabilizing. For a while, there was a competitor that was extremely aggressive. It was offering 20% or 30% lower price than market price because of empty space. Hopefully that now is stabilizing, that they don't need that anymore, utilization is going up. We can also see that we have more SKUs now than we have had in a couple of quarters. We are calculating the offers and prices on several customers. We can also see that some of our existing customers even show some growth. I must say, it's really hard to say. I've said this before, it's been changing quarter-by-quarter in North America. For the moment, it looks better again. We also are working hard to sell more in the lifestyle segment as well. A good thing for us the last quarters, we have managed to gain more customers in cosmetics and other products. We are also trying to open up other verticals more to compensate for fashion. We don't think there is a big boom in fashion in America, new verticals is important for us, especially in omni-channel that we are good at. We're also looking at other areas as well. Yeah. If you look at the churn rate, because the churn rate has been high, when did this start? Is it quite recent that it started to almost disappear? Has that been going on for a while? No, it's pretty recent. We saw the good trend in Q1, in Q2 there was almost no churn. Even in Q4, Q3, Q4 was hard for customers to leave. Last year in Q2, Q3, we had a high churn rate. It's been much more stable this year. It looks better. Perfect. Then finally, maybe, if you can talk a little bit about the timing of the print and packaging review. When do you expect to see the results of that? When will the review be done? The plan is to have it done in Q3. Okay. After analyzing it carefully to go through it, and so then if we need to do actions, it will be in Q3. Okay, perfect. That's all from me. Thank you very much. Thank you very much, Markus. Thank you. Thank you, sir. Ladies and gentlemen, as a final reminder, if you have any questions or follow-up questions, please press star one. We'll pause for just one, give you a chance to signal. Mr. Nilsson, we have no further questions at this time. We shall call back over to you for any additional or closing remarks. Thank you. Thank you, all. That was my 69th quarter report and the last one for Elanders. I want to thank everyone that has been listening to me during the years, and it feels really good to hand over to Florian and Åsa, so I feel confident that we will have a good future. Thank you, everyone, and have a great summer. Thank you. Thank you very much, sir. Ladies and gentlemen, that concludes today's conference. Thank you. You may disconnect. Have a good day and goodbye.