Welcome to the Embellence Group Q1 2023 conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Olle Svensk and CFO Karin Lidén. Please go ahead. Thank you. Welcome to Embellence Group's Q1 2023 presentation. My name is Olle Svensk, and today, presenting with me is Karin Lidén, who is CFO for the group. Embellence Group. Yes, as you know, we acquire, own, and develop strong brands in wallpaper, textiles, rugs, other interior decoration categories. And we have a certain focus on premium and even luxury brands in these categories. Moving on to the highlights for Q1 then. We still see, as we did in Q4, somewhat cautious consumer demand, especially in the Nordics. It was better than Q4, but still I would say that consumer market is a little bit fragile. Moving on to Europe and Continental Europe. We had a pretty stable development with an increased share of projects. Hospitality projects kind of compensated a bit lower demand from consumer. In the quarter, again, no shipment to Russia. Altogether, that was minus SEK 1.7 million. Overall, Europe fairly stable, I would say. Moving on to rest of the world, where U.S. is the dominant country in that region for us. Overall, we grew 60%, more importantly, the underlying organic growth was actually 10%. It's mainly coming from U.S., also the steps that we have talked about end of last year to increase our focus on Middle East is starting to show. We can start to see that in our books as well. Net sales amounted to SEK 197.5 million, which is 7% better than last year and organic minus. Still, we have not been able to achieve our organic growth, but compared to Q4, where we reported -16, it is still in the right direction, I would argue. EBITDA and adjusted EBITDA, same level, 27.1. We have not no anything there in our adjustments. SEK 27.1 million. The cost-saving program that we implemented end of last year, especially in the Nordic region, it has started to kick in as of January and generates the result as we spoke about before. We continue to see strong growth in our own e-commerce channel, that we have with Boråstapeter, Pappelina, Cole & Son, and also with Artscape. Inflationary pressure on input material, it remains on a high level versus last year. I mean, especially compared to Q1 last year. We do see that hopefully it's not being pushed up any further. We are on this plateau as I've discussed or spoke about before. Over to you, Karin. Thank you, Olle. Looking a bit closer to the numbers, we have net sales reported to SEK 197.5 million, which is, as Olle said, an increase of 7% compared to last year. However, the growth was supported by the fact that the acquisition of Artscape happened early March 2022. Organic growth negative 3.1%, and we were supported by the currencies by 1.7%. The EBITDA was SEK 27.1 million, which represents a margin of 13.7%, and we don't have any normalization items this quarter. The margin decrease compared to prior year is mainly due to higher costs for input materials, underutilization of production units, but also increased market activities in a few companies. The operating cash flow was low in the quarter, SEK 2.2 million, and the main reason for this is that sales picked up quite late in the quarter in March. We ended the quarter with a higher accounts receivable than we started the quarter following the very low sales in Q4 last year. If we move on to see the quarterly performance, you can see that the net sales is increasing compared to the second half of last year, and also the EBITA level is increasing compared to the last quarters last year. The net debt to EBITDA was 2.2 end of quarter one. The net debt ended at SEK 237 million compared to SEK 257 million one year ago. The rolling twelve EBITDA is a bit lower following the recent performance. It's SEK 109.7 million versus SEK 115.8 one year ago. Compared to previous quarter, the net debt to EBITDA was 2.1. If we move into the regions, we have our largest markets, the Nordics. They had a sales of SEK 82.4 million. The consumer demand in the region North continued to be cautious. The constant growth is 6.8% in the Nordics. The adjusted EBITDA was SEK 11 million, or 13% of sales. We have the same picture in all our regions concerning the somewhat lower EBITDA margin, which is mainly due to the lower sales, increased cost in input materials compared to Q1 last year. Also, some savings are seen in region Nordics, thanks to the cost saving programs, which is satisfactory to see. The Nordics represents 42% of sales and has a share of premium which is 30%. Continuing with our next region, Europe, we have a stable sales trends with increased share of projects. The reported net sales was SEK 64.6 million, that is flat compared to last year. We have a bit of a mixed picture in the various European market. We have the strongest growth in UK, Switzerland, and Austria, we see some negative development in, for example, France. We should also remember, as Olle said earlier, that in January and February last year, we had some sales to Russia of around SEK 1.7 million, which dampens or which we don't have this year. The adjusted EBITDA was SEK 10.1 million or 16% of sales, and the margin is suffering from the same factor as in Nordics. Sales mix higher costs for input material and increased market activities. Europe represents 33% of our sales and has an 83% share of premium in their sales. Continuing with the rest of world, that is our market that shows the best growth, and the underlying growth of this quarter was 10%. Total net sales amounted to SEK 50.5 million, and it's mainly due to the acquisition of Artscape. The organic growth in rest of world is mainly coming from the US and in the Middle East. Same picture for the EBITDA for the region as the other segments. Rest of world represents 25% of the sales for the group and has a 92% share of premium. Summarizing a bit and looking at our financial targets, we maintain our targets of growing net sales to SEK 1.2 billion. We want to keep an EBITDA margin above 50% over a business cycle. The leverage should be below 2.5 times of EBITDA, and we aim to have a dividend between 30% and 50% of net profit every year. This year, we will pay a dividend of SEK 0.8 per share, which corresponds to just above 30% of total net profit for 2022. Over to you, Olle, to summarize. Yes. Thank you. Summarizing then. Demand gradually recovering, but consumer demands remains challenging or fragile, especially in Northern Europe. Solid growth, though, we see from, as I mentioned before, our own e-commerce channel in hospitality and also in rest of the world. We have then, we will continue to have a focus on keeping the costs on the right level and the program that we implemented at the last year, is kicking in, as I mentioned before. Pressure on input material remains on a high level versus last year. And especially for our production that we have in the Nordics, in Falun and in Borås. Obviously, the Swedish, Swedish Crown weak is not helping either. Focus on 2023. Yeah, it is on keeping profitability on a healthy level, on our cash flow, and to build and have a resilient balance sheet. Of course, and clearly, focus on the growth zones that I mentioned here before and capture the potential growth you can see there. To summarize, and I've talked about this before. For us, this is not a sprint, this is a marathon. We're building a high quality company that is fueled by passion, professionalism, and the love of building strong brands. Thank you so much for listening. Now over to see if there are any questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Philip Ekengren from ABG Sundal Collier. Please go ahead. Hi, Olle and Karin. Thanks for the presentation. Thanks for taking my question. I have a few questions, but would you like to start by expanding on the strength in the UK, Switzerland, and Austria? Is that mainly connected to hospitality or is it driven by consumers? In Switzerland, Austria, it is driven by hospitality. In U.K., I would say it's actually in both areas that is developing more or less on the same level. Perfect. Thank you very much. If we look at rest of world and more specifically the U.S. and Artscape, you show very, very strong organic growth there. Would you like to give some color on that? Any deviations from normal seasonality or anything else that could explain that growth? I mean, as you know, we reported 60% up as January, February last year, Artscape was not part of it. When we look at the underlying organic growth, this is coming from our wallpaper business. It's Cole & Son and Boråstapeter, and actually a bit of Pappelina rugs as well. Okay, cool. If we move on, down the P&L, you say that input costs have started to level off. Do you have any outlook on the coming year? Anything you can say about that? I mean, it's our guess, which is, you know, as almost as good as anyone else. We don't see the input material having as this steep increases as it had last year. What we haven't seen that, but what we could expect is maybe a small decline, but it's a little bit too early to mention that. If I also make comments. From the moment that we see the input materials, plateauing or even declining, it takes a couple of months before, you know, we use the input materials and in our production, and we actually sell the finished product. It is very important to see them leveling out, but it might be some time before we see it in the P&L. Just a small reminder. Yeah. We expect to see a lag of a quarter or so, a few months. Is that correct? That could be. That could be a good assumption. Yeah. Perfect. Thank you. Finally from me, the price increases that you talk about and that are planned for the coming months, can you give any specific dates or kind of some indication of how large these will be and across which brands and anything on that? All the price increases have been implemented already during, yeah, January until first of April was the last one, and it's been between 3%-5%, and it will gradually have effect across the brands. They have all been implemented. Perfect. Thank you very much, guys. That was all for me. Thanks. Thank you. If we don't have any further- There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing remarks. Sorry, I was a bit too quick there. We have received a written question, which I turn to Olle. Mm-hmm. Could you please give an update on Artscape performance after the acquisition? Earnout was fully written down and the EBITDA seemingly down since 2021. Yes. I. The Artscape performance until summer was more or less in line with our expectations. Since then the sell out and therefore our sell in has been on a lower level. It's not performing as it did in 2021 or beginning of 2022. Needless to say, we are working in many ways how to improve that, but it's a correct observation that sales is not performing as we expected, basically. I believe that was the one and only question. Okay. Thank you very much for listening and, hope to hear from you soon again.