Hello everyone, warm welcome to Engcon's presentation of the Q1 2023. My name is Krister Blomgren, I'm the CEO here at Engcon. With me today, I have our CFO, Jens Blom. Together, we will take you through the highlights of the quarter, We will move on to the Q&A session after that. Let's start with a big overview then, We're still active on 60 markets, Have now started up our subsidiary in Norway. It was a good short term for us that we get the margin there that we've been giving to the distributor. Long term, we will also have a good opportunity to increase the value per unit and take market share. If we take a look on the net sales split per region, we can see that the rest of the world have been catching up with the Nordic, as we said earlier in the last report that we'll see that. The Nordics are now on 49% this quarter compared to the full year where they were on 53%. Europe is on 34% and was on full year 32%. Americas is on 10% and was on 9% on full year. Asia, 7% and was on 6% on full year. Good growth in all regions actually, even though the Nordics are losing comparing to the rest of the world, they had a big growth as we will see later on also then in the presentation. If we're taking a closer look on the main highlights from the Q1. Net sales and profitability was on a record high levels with strong contributions generated from all regions. Improved production capacity with a strong order book provided favorable conditions for high net sales. The price increases introduced during 2022 has now reached full effect. Combined with stabilizing material cost, the quarter shows a strong gross margin. Looking ahead, macroeconomic uncertainties regarding inflation, interest rates, combined with shorter lead times are now making our customers more cautious in their purchasing behavior. Until now, we have focused on our end customer sustainability. Now we take the next step and commit to Science Based Targets initiative with focus on ourselves and our suppliers. Engcon commits to lower emissions for Scope 1 and 2 with 42% until 2030. Scope 1 includes direct emission from Engcon's own operations. Scope 2 include indirect emissions from purchased electricity and heating. For scope 3, that includes indirect emissions generated in the value chain. Engcon's ambition is to measure and reduce these emissions then. If we're moving on to a little bit statistics and see how the quarter have been for us, how we've been performing. The net sale was by far the strongest in the company's history, even with the favorable currency effects excluded. The increase was 48% organic growth. That's really a fantastic number for us. During the Q1, economic uncertainties and shortened lead times has provided lower incentives for customers to place orders. This resulted in a decrease of 33% of the order intake. The gross margin amounts to 45.6%. We can now enjoy the benefits of the price increases introduced during 2022. The margin is further strengthened by stabilized material costs and favorable currency effects. It's a really good gross margin level for us to be on 45.6%. A record high EBIT margin on 28.7% was reached because of the strong net sales and the high gross margin, can be seen as an example of how our business model can perform during periods and generate high margins during those positive periods. During the last quarters, we have made strategic investments in the sales organization on growth markets to provide conditions for future growth. We also have cost for ERP implementation this quarter, it's on SEK 9 million that had reduced the EBIT in the quarter. All in all, the record high net sales and profitability resulted in a ROCE level above our financial targets on 63%. This is also a record high level. This is much explained by our capital efficient business model with assembly and low investments in machinery. We will now go over to business and financial development. I will continue a couple slides, then I will hand it over to Jens Blom. If you start looking on our sales and order intake then. The net sales reached record high levels. Q1 was our strongest quarter ever. The strong order book and improved supply chain generated high contributions from all regions. The organic order intake showed a decline of 33% compared to last year. In 2022, the order intake was characterized by pre-buy effects. Dealers had high incentives to place orders to secure tiltrotators to be able to deliver complete excavators to the end customers. This partly resulted in the dealers building stock carried over to 2023 that needs to be sold before new orders are placed. In combination with a gloomier economic outlook and a slow development in the construction sector, many of the dealers show a cautious purchasing behavior before signs of stabilization can appear. Looking ahead, the lead times and order book are now back on normal levels. This in combination with uncertain economic outlook give less guidance for the future or for the coming quarters. Having that said, it will be even more important for us to keep up the high activity level we have with exhibitions, demo days, and the close interactions we're having with our end customers. Looking at our market regions, we can conclude the following. In the Q1, the stars were aligned, the strong order book and high production capacity generated an impressive net sales increase in all regions. It is, however, clear that the order intake has not matched the high deliveries and that more uncertain times lies ahead of us, as we have mentioned earlier in the presentation. The Nordic region increased net sales from high levels on all markets. Looking ahead, the high penetration rate as well as our strong market share make us dependent on the cyclic excavator sales. The order intake is negatively impacted by fewer construction projects started as well as dealers having stock. On the positive side, in the Nordic, we can conclude with the new subsidiary in Norway, we can now market the full Engcon system, and it's pleasing to see how the market has started the year strong there. We also have possibility to further penetrate the market in Denmark. We also see OEM reports indicating that the machine sales will remain stable during 2023 in Europe, and we don't see that it should be any difference in the Nordic countries. The price increase results are full effect during 2023. During 2022, the dealers avoided increase by heavy pre-ordering in Q4 2021 and Q1 2022. As you can see there on the picture, you see the drop of order intake on 38%, but we're having growth on 20% in net sales. To have 20% growth on a fully mature market is really, really good. If we're moving over then to the European region, it showed great revenue growth across the board. Regarding the ordering intake, the picture is not as clear as in the Nordic region. We can see that Q1 2022 was characterized by heavy order intake from some individual OEMs. We see the same tendency as in the Nordic region with dealers being more cautious due to stock levels and slowdown in the construction sector. On the positive side, like the previous mention regarding the Nordic, the OEMs indicates machine sales will be stable for 2023, and we still have a lot to further penetrate in all Europe. Looking into the European order intake, it is down 39%, as I mentioned, was also a little bit special with the bigger orders for the OEMs last year in Q1. Net sales are fantastic growth on 92%, that's really positive that Europe growing in that way. Moving over to the American region, we're having an impressive net sales growth. The order intake is on high historic levels, flat development in Q1 2023. During CONEXPO, it was clear that the interest for our products is increasing as well as the knowledge about the tiltrotator system with its benefits. We now also have more boots on the ground in North America with a higher geographical presence to further strengthen our position on that market. There you can see, as we said, it's a flat on the order intake, but it was on a high level, but we're also having really impressive growth of net sales, 113%. The American market are hotter than the European market if you're looking on business perspective in that way. If you're moving over to Asia or Oceania region, we're having a strong net sales development. Order intake is increasing, but the dependence on a few OEM companies in mainly then Korea and Japan is making the comparison between quarters hard to compare, since it's also lower levels in Asia/Oceania. We can see increase in order intake in 16% and a good growth on about 50% on net sales there. I will hand it over to Jens that will guide you through the financials. Thank you, Krister. We start with an overview of the EBIT and EBIT margin. We have a record high EBIT in Q1, increasing from SEK 91 million to SEK 198 million. It's an improvement by 118%. The EBIT margin is 28.7%, compared to 20.4%. The record high result has been driven partly by high net sales, price increase, combined with lower disruption in the supply chain and a strong order book at the beginning of the year. The strong result also showed the strengths in our business model with scalable production and with relative low fixed cost. We can turn to the profit and loss. The net sales goes from SEK 447 million to SEK 691 million. The gross margin goes from 40.3% to 45.6%. If we look further down, we can see that the selling expenses is SEK 76 million compared to SEK 54 million. This is due to high activity on the market with exhibitions like CONEXPO. We also have an expansion in the sales organization which put more boots on the ground. Further down notable is the R&D. It's SEK 8 million compared to SEK 6 million last year. If you take in consideration what we have invested in the balance sheet, we are on the total of SEK 16 million for the quarter, which is approximately 2.3% of net sales. Most of this expenses is related to the 3rd generation of the tiltrotator. If we turn to the bottom line, we once again can state a very strong result, SEK 119 million pre-IPO compared to SEK 96 million. On the rolling 12 months, we ends up being SEK 534 million with a margin of 24.5%. We can turn and look a little bit on the capital structure. As you can see, we're tying up more capital. We have 34.7% of the net sales compared to 32.1%. The main reason for that is that we have higher inventory in our more distant growth markets, and the high activity at the end of Q1 gives a high level of accounts receivable. The operating cash flow is SEK 5 million compared to last year, which was also SEK 5 million. We can go to the return on capital employed. As Krister mentioned, we are on a roll on 63%. It's the 1st time we reach above 60%. This is a confirmation of our strong business model with a capital efficient production, and we have also strong profitability. The very strong start of 2023 creates good conditions to meet the upcoming quarters. With that said, I now hand over to Krister, who will take us through the financial targets, and he will also summarize the Q1. Thank you, Jens. If you're then looking on our financial targets and our performance in Q1, we have a really good performance. We're exceeding all the financial targets. If we're looking on the growth target where our goal is to exceed the growth in existing market through organic growth with 19% on business cycle. We're having 48% net sales organic growth. That's a really, really good number for us to be able to grow that fast. Again, shows with our business model with assembling that we can scale up fast. Profitability, we have an EBIT margin excess of 20% measured over business cycle. Here, we're also having a record high EBIT margin on 28.7%. That also shows that our business model with centralized parts and able to just move on with sales people and support and technical people in the sales companies, it's possible for us to have high EBIT margins during positive periods. Capital efficiency, our goal is to have a ROCE to exceed 40% measured over a business cycle. As Jens mentioned, we have a record high ROCE on 63%. If you're looking on the capital structure, our 4th financial target, our goal is to have the equity to asset ratio to be above 35%, and we are on 48%. Really strong quarter from Engcon, where we're delivering on all financial targets. Now to the summary and outlook. In the Q1, the strong order book, high margins, the shorter lead times generated record high net sales and profitability. As we mentioned, the proof of what can be achieved with our business model when everything works as it should. Looking ahead, the order book is now lower, yet good levels. It will give less guidance for the coming quarters. The order intake will be partly dependent on development on the construction sector and excavator sales. Right now, we can see the fewer construction projects are initiated, which lowers the demand for excavators. We are now more depending on our efforts to sell. We could also see a strong electrification trend at CONEXPO. As you can see on the picture, John Deere showed their prototype electric excavator together with our Engcon tiltrotator. That was the main piece in their inside booth. They also showed their new machines as a main piece on the outside booth together with Engcon. Doosan or nowadays DEVELON showed their prototype for fully autonomic excavator together with an Engcon tiltrotator. This is exactly what we have talked about our Generation 3. It will be prepared for it. It's really good that we can see that the way I'm thinking in same way as us. We are linked in that way to see how the future will look like. Oh, sorry. Our capital business model enable quick adaptations to new market conditions if needed. We also working with sustainability forms the basis of our business and long-term growth. We constantly work closely with our end customer and partners to develop innovative, productive, and sustainable solutions. By doing so, we can make a difference. With science-based targets, we get clear roadmap that reduce our own and the supply chain greenhouse gas emissions and contributes to the global climate transition. However, the benefits the tiltrotator system offers our customers are more relevant than ever. If we're moving on to the next picture there. In a time of increasing uncertainty, it's good to remind ourselves of the strong benefits of Engcon's products. To me, it's clear that the case for our tiltrotator system is stronger than ever. When inflation and interest rates are high, the positive impact on our end customer profitability is clear. The tiltrotator can increase the productivity and efficiency within an average 25%. We reduce our end customers' investment needs. A tilt rotator equipped machine together with hydraulic tools can replace 2.2 other machines since it makes the machine to a tool carrier that can serve many purposes. We also save fuel. A more efficient machine needs less fuel. A 30 metric ton machine saves 6,000 liter fuel per year with a tilt rotator on it. Not to mention the impressive CO2 saving of 130,000 kilos CO2 for the lifetime of that excavator. This is on top of the significant increased safety levels by reducing the need to leave the cab and reduce the need of people around the machine. Most of the accidents are occurring when you're leaving the cab to go in and out to switch tools and so on, and you don't need to do it because you can do everything from the inside. Also to reduce the need of people around the machine, you save money, but you also reduce the risk of dropping something on somebody or anything like that. Having an Engcon as partner, our end customer offered great tools to improve profitability and safety with less impact on the environment. This is how we change the world of digging. We will finish up with a picture where we're bragging a little bit about ourselves. At the event IPO of the Year, when the business magazine Affärsvärlden handed out its annual awards during the ceremony in Stockholm, Engcon was awarded 2 prizes, the Jury's Grand Prize and the prize for quality in the billionaire class. Thank you for listening to us and our presentation of our Q1 report. We will now open up for questions that can be asked in the telephone conference. Operator, please go ahead with the 1st question. The next question comes from Agnieszka Vilela from Nordea. Please go ahead. Thank you. Hi, Krister and Jens. Thank you for taking my questions. My 1st question is, Krister, on your comment that you would expect somewhat lower order intake in the coming quarters. Could you just give us a bit more color on that? Do you mean also sequentially from the about SEK 400 million level that you achieved in Q1? Also, if there is any kind of difference between the regions? Thanks. As we said, the guidance is harder to do right now than since our order book is short, and we more have the normal way of ordering it when they're achieving the machine, they're ordering it, they want to be delivered within 2 to 4 weeks. It will be short in time, and we see that if we going into regions, then we can see that the Nordic region are having more stock in with the dealers than the other regions. It might be especially the Nordic regions that still will be hurting a little bit more in the Q2. The other regions we expect to be picking up again a little bit when you're getting more and more clarity regarding inflation, interest rates, and these type of things then. The positive thing that we have seen is that the reports, I think, from the OEMs and so on with stable number of machines coming out. It's hard to give you a really good guidance regarding the order intake, the guidance is more maybe we will not be on this SEK 700 million level order intake as we had in net sales. As we said, it's not matching. Mm. right now then. Yeah. All right. Understand. Just to follow up on that, do you still have a bit, so to say, elevated order book, or is it now coming lower? As a result, do you expect that sales already in Q2 or maybe in Q3 will be more in line with the order intake, or will it still be above? Yeah, that's a good question. It's hard to predict, as I said, but we still have a good order book, as we mentioned here earlier. We hope and believe that the more stabilized inflation and interest rates will be, it will be picking up. Also the Nordic region, the order intake will pick up when the stock with the dealers are start disappearing. We hope also for a positive effect after CONEXPO, that we will have an increased order intake in U.S. there. We, we're having a good stock in U.S. We can deliver fast there also. Right now it's really short time for us from order to deliver, and that makes the prediction of. Yeah Each quarter very, very hard for us. Yeah. I think I will try to rephrase. I think my point was like if we assume that your orders in Q2 are stable quarter-on-quarter, so at about SEK 400 million level, do you believe that your sales in Q2 will be higher than that? Could it be, you know, SEK 500 or SEK 550 because you have some order stock that you could still deliver to? Or is it shortened that much that it doesn't really matter? What you will deliver in Q2 would be just the orders you got basically in Q1, maybe something from Q4. No, I mean, you can't say that we will deliver what we're having in order intake exactly in Q2 because since we also can take orders, and we can deliver those orders directly. Yeah in Q2. The expectation, I would say, is to be able to deliver more than what we're having in the order book since we're having this. We have the components, we have the people, and we can deliver in short time as we have done for 30 years. It's just been during these pandemic years with the supply chain problems, we've been having a long order book. Of course, they are more hesitant to place orders. They will not place any stock orders or anything like that. It will be more units definitely sold to end customer and so on. That would be the difference where we will see. We can definitely deliver more than what we're having in the order book right now. Okay. Perfect. Before I jump back to the queue, 1 question on your margin performance in the quarter, obviously, fantastic margin of 29%. Maybe, Jens, if you could or Krister, if you could comment on what were the main margin drivers. Was it the production volumes, pricing or lower material cost? What was the most important for the margin development in the quarter? Oh, I can start, and. Yeah continue, Jens, then. I think the biggest was on the cost of material, that we made an increase where we got the full effect, especially to the Nordic region on the price increases. The prices, as we mentioned, have stabilized on the material, on the components, even maybe start dropping on some and so on. Of course, helped of the high net sales then. I don't know if you want to add anything extra into that, Jens. No, that's correct. I good. Okay, perfect. I will get back to the queue. Thank you. Okay. Thank you, Agnieszka. The next question comes from Kenneth Toll from Carnegie. Please go ahead. Yeah. Thank you. To follow up on Agnieszka's question on very high margins, you have increased prices quite a lot last year and a little bit in the beginning of this year, and now you have very high margins. Do you think you will be able to keep the prices on the market when raw material prices start to come down a little bit? Do you expect competitors to start lowering prices, or do you expect your customers to be a bit upset with your very high margins now that it's very official how much money you are making? Hard to comment on if they will be upset with it. As we see, we generate a lot of value to the customers. If you're looking on the things that we ended up talking about, not when we were bragging, but with the 25% more pro-productivity and fewer and less machines, it is still a really short payoff time for buying a tiltrotator. I think on the products like the tiltrotator and hydraulic tools, we add a lot of extra value where it might be price pressure is more on the mechanical tools like buckets and so on, where we will see if the steel price starts going down, that we need to adapt to that. On the tiltrotator and on hydraulic tools and so on, I think they see the benefit with it and they see the value added into it. Okay. You don't think that your competitors try to take share by lowering prices and getting more business that way? They might do it, but I don't think so. If we're trying to be humble then, we are the one that are the market leader, and we are the one that are making profit. The other ones are having a little bit smaller margins than what we're having, so they probably welcome this. Okay. Great. Another question is on the legal process with the Rototilt. They in the beginning of this year, they increased the claims in the process. Can you talk a little bit where the process stands and where you are seeing it going forward? We've been having the 1st hearings and so on regarding it all in court, and so that was in end of March, and the verdict or so will be the 15th of May. From that. I don't think it will be an end to it then. If we win, they will probably move it forward. If we lose, we will move forward with it. We also in the same time are running it towards the European patent. I think it's planned to be this autumn sometime where we will meet up regarding that, regarding in the European patent. I think unfortunately, this will be something that will be keep going on for the at least rest of 2023, at least then. You haven't had any reactions from your customers due to this or, any other, impact on your business, other than this legal process? No, not at all. actually, nobody's asking about it. They ask why they have sued us. We try to explain what it is regarding sensors and stuff like that. Mm. There haven't been any customers that have been talking about that. I don't think it's that known, at least not outside Sweden then. Okay. Thank you. That's all for me. You're welcome, Kenneth. The next question comes from Agnieszka Vilela from Nordea. Please go ahead. Thank you. I have 3 follow-ups. My 1st question is on CONEXPO, if you could comment on what the impression was there from customers, and also do you expect a stronger orders momentum in Americas on the back of this event in the coming quarters? Orders in Q1 were a bit subdued in Americas. If you could tell us what do you expect going forward? It was a really good show for us. We had a good booth with 3 machines in it, 2 for testing for customers and 1 showing demo what you could do with all the tools we're having and so on. We had a good crowd in our booth all the time. We actually got comments from other that they thought we had one of the best booths with a lot of activities. They wanted to place us between just beside them to make sure that they get more attention also. A lot of positive comments. There were a lot of tiltrotators on CONEXPO. We could also see that the customers have learned a lot compared to the questions 3 years ago. They are on much higher level where they understand the benefits of it. They still maybe some of them need to think about it a little bit, but they much more the question. It's not, even though I love to be a magician, they understand now that how we do it, they understand that it will last. They're not question about that everybody will break it or anything like that. I think we've been reach a lot of levels higher up, and we could also see now bigger interest coming from new regions that haven't been that strong for us in North America, like Texas and the southern part of North America. A lot of positive impact, I think. As I mentioned with John Deere that we're having both on their inside booth, they were on the centerpiece with the electric machine, Engcon tiltrotator, and also on the outside booth they had. They were also the centerpiece, the new machine, the first one they produced by themselves. It was also an Engcon on that one. We also were on the DEVELON machine that they showed and have live demos with their fully autonomic excavator, was an Engcon tiltrotator on that. There were also a lot of other tiltrotators there. Never heard of those type of brands. Again, as I said, regarding bauma, I think it's positive that people more and more think about Engcon or tiltrotators, and that will increase the penetration. It's more fight about winning that war to get everybody to join this revolution with changing the world of digging. We should not fight against each other. We should fight against those that doesn't have it. Yeah, sure. Perfect. Then just to follow up on that, do you think that your order intake now as a result of that event and more awareness of the product will sequentially improve in Americas? That's my beliefs, at least. I mean, we had more than double up in leads compared to last CONEXPO. It have to pay off, otherwise we will be disappointed. Perfect. Thank you. A question on cash flow, which was relatively weak in Q1 despite strong EBIT that you booked. Obviously there is the working capital dynamics here. Do you expect the working capital to be released in the coming quarters? Maybe also, Jens, if you could comment on quite high tax payments in Q1. Yeah. Our belief is that we will strengthen the cash flow, the coming quarters and, when we get paid by accounts receivables. That's my belief. On the tax there, we had a couple of year with high profitability, now in the Q1 we need to pay taxes for that's something we have to do and proud of. But, yeah, that's my comment on that. Yeah, you can also see accounts payable that are pretty low, that will be also an effect that we will trying to lower down the stock a little bit since we don't need to have that safety stock as we've been having now with the supply chains been in turbulence mode, and now it's more stable. We can also lower down the safety stock we're having. I think they're both accounts payable, accounts receivable, sorry, for us and the stock will help us the coming quarters then in the cash flow level. Yeah. sorry, follow up on tax only. The tax paid out in Q1, that was on some deferred tax that or should we expect a high tax level in your cash flows going forward? In some way it will follow a good result, of course. Some of it's will buy, but not as much as the Q1 because we had a high tax debt, so we need to pay in the Q1. It will be more smooth, I think. Underlying P&L tax is about 21% or is it a higher rate for your group? We have been on 21%, and I think it's a good approximation to account. Okay. So... Okay. Perfect. The last 1 for me, just if you could give us the update on the status on your, kind of, organic investments in the business, both in terms of recruiting talent and also in terms of capacity expansions in your factories. Just tell us what's happening, what do you plan, and how much will it cost. Thanks. We are still building up our sales organization even if we have made the biggest steps regarding that right now then. We have some investments that we will do and finalize here in Q2 or Q3, both people and also in U.S., as we talked about bigger warehouse and so on that we need. To increase the production capacity, we had the meeting here last week regarding our building in Poland, and now we will go out and get the quotes for that. Hopefully we'll start building that after the summer. If it will be done by the end of the year, we don't know, but hopefully it will be done by the end of the year. Rough estimates are still on the level that we talked about for that earlier, around 40 million SEK then for the extension in Poland, including machines. Okay. that we need. Yeah. Perfect. Thank you. You're welcome. As a reminder, if you wish to ask a question, please dial * 5 on your telephone keypad. Okay. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thank you everyone for good questions. If you have any further questions, please don't hesitate to reach out to any of us. We are more than happy to try to help you. Thank you for listening in today, and we hope to see you all soon again. Thank you very much from Engcon. Bye-bye. This concludes the call. You may now disconnect.