Hello everyone and welcome back to ABG Investor Days. My name is Adrian Gilani and I'm an equity analyst here at ABG, responsible for covering Ferronordic, and our next presentation will be given by Ferronordic's CFO, Erik Danemar. He will hold a roughly 20-minute presentation and then hopefully we will have time for some Q&A afterwards, and with that being said, I'll hand the word over to you. Thank you very much, Adrian. I'll jump straight into it, give you an overview of the business, more who we are and what we do than the latest results. But I'm very open to speak about that as well. My name is Erik Danemar. I'm the Group CFO and Head of Investor Relations at Ferronordic. Ferronordic was founded in 2010, initially a very big dealer for Volvo Construction Equipment in Russia, but we exited Russia following the full-scale invasion in 2022. We exited at the end of that year. We kept our business in Kazakhstan that's still running. We entered Kazakhstan in 2019. There we do Volvo Construction Equipment as we did in Russia and also Mecalac, that's a French-UK producer of backhoe loaders. Germany we entered in 2020, January, just before COVID broke out in February/March. So that was a challenging period for more than one reason. But there we do Volvo Trucks, so not construction equipment that is done by someone else. The proceeds we got from our sale of Russia in 2022, we used to invest in a business in the U.S. called the Rudd Equipment Company. And we did so at the end of November in 2023. So that's what the business looks like at the moment in the U.S. It's all or parts of nine states in the Midwest. And there we do, again, Volvo Construction Equipment, but also Hitachi, Link-Belt, Bergmann, and Sandvik, a close partner there as well. Very briefly, profile, what this is meant to illustrate for you, give you an overview: SEK 3.4 billion, that's nine months. So I mean, if we just annualize that, it's around 4.5. Number of outlets, number of employees, about 360 of those employees are in the U.S., 370 in Germany, and the rest in Kazakhstan or in global group positions. Revenue-wise here, 61, one-third, and one-twentieth. This one we think should be bigger. Germany has been weak lately, notably on the top line from the new sales of equipment. Sorry, flip back quickly. This one is important as well. Aftermarket is really the core of our business. This is as an engine. But to have this, you need to have that sale of new equipment and trucks in our core markets. Other revenue, mainly rental income. The third pie points towards a relatively diversified portfolio of customers. We are a cyclical business. There is no escape from that. We prosper with the cycle. This part of the business is more stable. The aftermarket, also known as service and parts. Business model, relatively straightforward. We sell trucks and construction equipment. We create, build a population with our customers. We maintain a very close relationship with our customers. Our task is to make sure that these machines work all the time, always operational, zero downtime. Service and parts are what we provide to ensure that's the case. We also do complete or partial rebuilds. We bring in new used equipment to our area and we take old used out. Ideally, we bring in old Volvo or Hitachi equipment that we're dealers of and we take out competitor equipment. So we build that population that we will service going forward with our parts. Used is also a business that feeds this economic cycle. Core strategic objectives, we want to be the leaders in our market where we operate, the key service provider, not necessarily the biggest. We won't be that in Germany. MAN and Mercedes are too big there, but we want to be the best, and that's our objective. Service and parts absorption, very important. What does that mean? It means that our objective is that the gross profit from our service and parts business, the aftermarket business, should cover our fixed costs, so in theory, it shouldn't matter if we don't sell a single new machine or used; we should still be able to cover our costs, so that's a measure of resilience, if you will. We're not there yet, but we were and we're working hard to get back to that position. Expansion into business-related areas, this is all about when you build an infrastructure. I said 40 outlets across our markets. How can we leverage that? How can we get better return on that infrastructure, the organization, the expertise we have? So, bringing on more brands, they cannot compete with our existing brands, but brands that are complementary to our customers. Sustainable transport services, we constantly work to get closer to our customers. One way of doing that is to provide the transport services for which they acquire our equipment, whether it's construction equipment or trucks for them. We had large-scale such business before where customers paid us per ton and per kilometer. This is something we want to build again. At this point, it's a fairly nascent stage, but we are working on that, especially in Germany with our fleet of electric trucks. Industry-leading digital service and sales platforms, this I think is something that all companies need to strive towards. But in our case, it's a lot about being able to provide preventive maintenance, not only reactive. So all machines are in a way big Internet of Things equipment. They send signals constantly. We process these signals and the objective is to make sure that they don't break down, that we're there before that happens so that our customers can use them again without downtime. And then geographic expansion is also a key objective that we stick to. After our expansion to the U.S., we have some digestion to do, but we are continuing to look for new opportunities. We believe that there are scale benefits that we can exploit. Core pillars to get to this point, I would probably start from there. The customer centricity, very central to us and in partnership with Volvo, our partner. Get as close to the customer as possible, understand them, make sure that they can be productive. Their efficiency is our success. Speaking of partners, building on strong brands, we want to work with premium brands, and that's what we're doing because that's the way we can deliver that efficiency to customers that need their machines to operate 24 hours basically. Operational excellence. This is a lot about the aftermarket service that we provide. It should be there constantly and high quality, again, achieving those objectives of high uptime. For all these, we need a great team in Ferronordic. That's something. The recruitment cycle is something we spend a lot of time on. HR does. Building on strong brands, don't need to list them all, but here are our close partners: construction equipment, Volvo, Volvo Trucks, Renault Trucks, and Hitachi, Sandvik, we work closely with in the U.S. A few words on sustainability. I think different companies have different inroads to this, but I think this is very central to us. And there are really a few things we can do to support sustainability. And I would point to that side of the slide, helping our customers to decarbonize, not least in Germany where we are now together with Volvo Trucks promoting electric transport, but also operational efficiency. You can fit that into it as well because if you look at fuel consumption where we're not electric but working on diesel still, very efficient products that we're working with. So that also contributes to reducing carbon footprint. Contributing to a circular economy, that's almost all we do. The rebuild I told you about, the maintenance, make sure that everything lasts longer, that there is more residual value when a customer decides to sell a used equipment or continue to use it. Building the infrastructure, that's more external, but the infrastructure that the world needs to become more sustainable is also something that we contribute to. On the social side, health and safety for our staff, but for our customer staff as well, of course. The equipment that we provide, the trucks we provide should deliver the maximum possible safety to our customers. Training and development we spend a lot of time on as well with our staff and in fact also with our customers. We have simulators and different equipment for them so that they can get as real an experience as possible before they start using the big equipment and then we guide them when they do. That's on sustainability. I wanted to mention key industry trends that we believe are very relevant to us. Green transition, again, going electric, especially on the truck side. Ambitious plans for our strategic partner and for us in that context, and it is a chicken and egg with providing the charging infrastructure in Europe, in Germany in our case, and getting the trucks out there. But we see this happening and we see growing interest from our customers, so we think this is a very exciting development. Infrastructure investments, here I would probably especially point to the U.S., but also Kazakhstan actually, even if it's a very small part of our portfolio. Big government infrastructure programs and that needs a lot of equipment that we can provide. Equipment as a service, a large part of our U.S. sales offered is delivered as a rental business. Customers rent our equipment and then they have the option to buy it out. That's really how the market works. It provides more flexibility for our customers, but they have to pay for it, of course. We charge for the depreciation and we charge for the funding costs and we charge for non-utilization. But this is an integral part and everything from that short-term hire that some of our customers need, they need additional capacity to the sustainable transport solutions or contracting services that I mentioned where we actually own the equipment and hire the operators and run the maintenance. In that case, it's full equipment as a service you can say or outsourced to us basically. This is an important trend that we need to be part of because the balance sheet is moving in the value chain in our industry. With this one, I really just want to put U.S. on the map where we are. You will see the states again where we are partially or most of them in full. The dealer for VCE and again Hitachi, Sandvik and some other brands. We started in December last year and we are very excited about the U.S. market. We've seen very, very positive developments there and continue to see great opportunities. I won't dwell on the details of this, but I mentioned infrastructure as infrastructure investment as one theme, and two of these huge programs, the Infrastructure Investment and Jobs Act, that's one of them. That's a bipartisan, so it's one that should stand the test of politics. We will see, but we believe that this is something that is very fundamental and needed in the U.S. We believe that it will be quite resilient even through political cycles. Similar with the Inflation Reduction Act as well. An estimate there of spend in our areas. I think you can sort of swing on both sides of that, but it's really meaningful investments that will help to drive demand in our area. A breakdown of the different areas and here again, it sort of links into that second slide pie chart I had with different sectors that we serve. So you will see, I mean, roads and bridges, energy and power. These are all sectors that we serve. And in this context, they're somewhat less cyclical given that this is government investments being put in place, potentially even countercyclical if it's a government investment program. Germany, this is where we are in Germany, 20 sites at the moment. One of the questions I get a lot are, are you done with the infrastructure in Germany? I think the core infrastructure or network is now in place. Will we look at optimizing if two workshops are potentially cannibalizing each other? Absolutely. If there is an area where we miss something, sure we will. But the main investment cycle is done in Germany. Germany is struggling at the moment. This one shows the gray staples, the market and the red line utilization. But even with this said, so we are seeing a German economy that is again struggling. But what is encouraging, I think, is that we have seen somewhat uptick in order intake. That's positive. Lately, we discussed that in our third quarter, but also our aftermarket business, service and parts continue to grow in the third quarter year- on- year, 8% we saw there. So that's a positive development. In Germany, core strategy, expand and improve the dealer network in our sales area. That is again, as I mentioned, something that I think we put the basic frame in place. Will we tweak it? Yes, we will. We will continue to optimize, but that's done. Take full control of service and parts sales in our area. Not done yet. We have further to go. Access to mechanics is a limiting factor at this time. We need to hire more mechanics. We could sell more if we had more mechanics. Grow market share and population. There is definitely more to do there as well and more upside for us to do. Increase in efficiency, that's something we worked hard on this year. We built too much costs into a strong sales year in 2023. We have rolled that back. In In Q3, we believe we saved on an annual basis, SEK 60 million. So that's on an annual pace of operating costs that we saved, making us more resilient for a Germany that still looks fragile going forward. This one, again, the only thing I want to stress here is that this is a very important area for us, the shift to electric. These are the trends. This happens to be the McKinsey Institute, but strong consensus that this is coming. Are they right on the timing? Precisely, probably not, but it is coming and we definitely want to be there well positioned and knowing this industry when it does materialize. We expect a fleet of 100 electric trucks by the end of this year in our rental, electric rental portfolio. Kazakhstan, again, 5% of our revenue stream, so it's not that big, but we do see a lot of potential in the economy. It's a very big country geographically. It's seeing a lot of investments from China and Turkey. And there is a lot of mining industry and that needs our construction equipment. But again, a smaller and in a lot of ways challenging market. So upside, but also some challenges. This is how we're spread in Kazakhstan to reach our customers. Again, being there where the customers are is key to success and to provide that uptime. In construction equipment, this understates the picture. We work a lot with mobile workshops, which is basically a van kitted with all the parts, the acute spare parts and equipment we need to fix the trucks. So in closing, not going in maybe to Q3, although again, very happy to take questions on that. We believe that we have a robust and scalable business model. We have capacity to do more with our current central management structure and we want to do more, so we believe we can leverage this model into new both products and markets. Strong brand portfolio. We definitely enjoy strong relationships with all our partners and that is really a key and strategic resource for us. Sustainability, integrated part of our business model. I spoke about that. I really think all of what we do contributes one way or another. At the very least, if you look at the efficiency we provide compared to some of the alternatives there are, so we really squeeze those and with the move to electric, are able to decarbonize completely to some extent. I mentioned the three trends, which we believe is very exciting for us and that will stimulate our business case and our business going forward, and that is that electrification. It is the infrastructure investments that we see in our segments and being part of that shared asset model that we believe will become more important going forward. We see potential for organic growth in all our markets. Some want different areas of growth. Aftermarket is core in all of them, seeing that part grow. And again, that's the one that is more resilient and recurring as a revenue stream. We will continue to look for smaller bolt-on acquisitions, as we call it, closer to our area, but also strategically, as mentioned, geographic expansion of our business portfolio remains a core objective. And we believe that we have a good management to deliver on these objectives. I will run through this, but just mentioning that we reset our strategic objectives five years forward. And they are ambitious, but we believe when we look at our business potential that we can get there. We want to double our revenue over five years. We want to reach and be above 6% in terms of EBIT margin. There is a lot of revenue growth, as you can see from there, coming into that and driving scaling economies. And in the long term, we want to reach a debt level which is less than three times net debt to EBITDA. And with that, I believe I used up my time, so I will hand over for questions. Yes, thank you for that presentation and perfectly on time. So we have some time for a couple of questions. I guess first of all, you mentioned the expansion opportunities in the U.S. and Volvo has actually quite clearly stated they want to consolidate their dealership network in the U.S. I guess, is there anything concrete you can say about how you are sort of working with Volvo in order to manifest that expansion? I think it is, I mean, hard to discuss anything concrete. I think what you said is correct. They are working towards a more consolidated picture. I think it makes it easier for them in terms of their marketing strategy, their positioning strategy, brand messaging. Partly with this also, as I'm saying, shared balance sheet, shared asset model, they are in need of dealers with a balance sheet that can take on more investments on their behalf. So we entered the U.S. There are. I know at least two other bigger dealers that also are partners to Volvo that are working in other parts of the U.S. So what I can say about, I mean, we have a very close dialogue with VC in this case, VTC in Germany, so Volvo Trucks, I mean. And in the U.S., we have that dialogue and not only in the U.S., but we look at opportunities there. And there needs to be a three-way match. It needs to fit us, our interests and our economic cycle, so to say, where we are in our maturity and how we have managed to integrate the previous acquisitions. It needs to fit Volvo and it needs to fit someone that is on the way out. Yeah. And also, I guess, coming into the U.S. market, obviously Volvo is considered a premium brand, but they are also a bit of a challenger on the U.S. market compared to some of the local brands. How has that been competing against the local brands and how have you sort of managed to go about that? Yeah, no, I think that's fair. I mean, like in Germany, we compete with MAN and Mercedes. In the U.S., Caterpillar, of course, is a market leader. John Deere, quite strong. But I think, I mean, we have a loyal customer base. We have customers that are our ambassadors. They're very happy with the products that we use. And they are very loyal. And I also think, I mean, how to put it, the incumbent leaders are quite responsible in how they manage their strategy and pricing policy. So I think there is a relatively good dynamics. And I think, again, we have potential to take market share in various products where Volvo is particularly strong. Yeah. And then also a final question from my end. You mentioned on the U.S. market, the government investment programs being a large part of sort of what's going to drive the demand. In light of the recent U.S. election, there's been some speculation about rather cutting government spending. Has this sort of changed your view in any way on the market or are you equally as optimistic as you were before? I think, I mean, maybe uncertainty has increased a little bit, but we believe, as I said, when we looked at these, that these are programs that, I mean, A, were arrived at on a bipartisan basis. So these were joint developments. And B, are fundamentally needed for the U.S. economy. And C, if you want to sort of boost and how do we say, hypercharge the U.S. economy, these are programs that you want to advance. They're not only a direct injection of stimulus into the economy, but they also provide a framework to build further growth on. So I think it's very rational for the U.S. to continue with those investments. So we feel relatively confident, but yeah. And although I did say a final question, I'll try to squeeze one more in regarding the margin target of 6% that you recently introduced at the Capital Markets Day. Can you talk a bit about what needs to happen between today and eventually reaching that 6% target? What is going to be the main drivers of that? Yeah, absolutely. I mean, I think the main driver is actually in the first target. That's the top line. When we look at gross profit, for example, we don't have so aggressive expectations there. It's more about driving the top line and getting the benefit of economies of scale. I would say that is the main driver. And then within this, it's very important to stress that we do see a solid and continuous growth opportunities for the aftermarket. And that's where the margins are a bit more significant. Maybe lastly on that, I mean, we define this as we don't include outright acquisitions. So it is organic growth, but within that organic growth, for example, we allow ourselves to take on other brands on our network, as I mentioned before. That's a way to increase utilization and return on invested capital. And that can also shift margins around a little bit, given that some products come with higher margins. And similarly, within our area, we also allow for investments and expansion within an adjacent too, we say. So there is a part of that, of course, that we already have some plans for. Perfect. And with that being said, we used up our time. So I'd just like to once again thank you for your presentation and for answering all my questions. Thank you very much. Thank you. Thank you.