Welcome to the Fractal Gaming Group Q2 2022 presentation. Afterwards, there will be a question and answer session. Today, I'm pleased to present CEO Hannes Wallin and CFO Karin Ingemarson. Please begin your meeting. Hello, everyone, and welcome to today's presentation of our quarter report. We can move to next slide, please. We will start with some highlights from our Q2 report. Our net sales in Q2 decreased by 8% year-over-year to SEK 95.4 million, and by 21% in U.S. dollars. EBITDA decreased year-over-year to SEK -3 million. The high prices of graphics cards that we have now seen in the last 12-15 months has continued to hamper the demand for gaming components that are usually purchased at the same time, such as gaming cases. The high prices of graphics cards have caused gamers to wait and postpone their upgrades of their PCs, which have had a negative effect on our product categories, as well as the whole PC component industry in the last 12-15 months. The graphics card prices have continuously normalized in the first half of 2022, and this trend is expected to continue in the second half. Both NVIDIA and AMD are launching new graphics card series in Q3 and Q4, which customers are now waiting for. Due to many gamers having waited with their upgrades in the last 12-15 months, it is believed that there is a strong and pent-up demand for upgrades among gamers, which can lead to a strong sales comeback in the second half of this year. We expect to return to growth in the second half of this year, and this is because of the likely improved market sentiment and pent-up demand, but also because we're launching several new products expected to positively contribute to growth. Our product margin was negatively affected by nearly 8 percentage points in the second quarter by extraordinarily high freight prices. Our underlying product margin, however, remains strong, and we have seen a positive development lately. The freight prices have dropped significantly during Q2, something that will positively impact our product margins later in 2022 and into 2023 if it continues. Next slide, please. We see an increasing number of PC gamers worldwide, even post-COVID reopenings. The total number of active gamers worldwide is expected to increase by 10% year-over-year in 2022. Esports events, which were largely canceled during the pandemic, is now back and expanding. Several larger hardware releases are expected in Q3 and Q4, mainly graphics cards, which will drive needs to upgrade in our customer base. The Twitch viewership hours are still at historically high numbers, about twice the numbers of the pre-pandemic levels of 2019. Next slide, please. During Q2, we have launched several new products. The biggest and most important launch was that of the Pop Series. The Pop Series consists of a total of 20 models in various sizes, colors, and feature sets, all with a competitive price tag. The launch was widely positively received by the market, and initial sales reports have been positive and above expectations. We expect Pop to reach customers we haven't reached before and positively contribute to our revenue growth. Next slide, please. During Q2, we also launched the Meshify 2 RGB cases, as well as the Anode Bronze power supply. With that, I'll turn it over to you, Karin. Next slide, please. Thank you, Hannes. The graph at the top shows the development in net sales. Net sales in the quarter decreased by 8% to SEK 95 million compared to Q2 2021. We also measure our sales in U.S. dollar as we sell exclusively in dollars regardless of the end market, and the organic decrease in dollars in Q2 was 21%. Year to date, sales declined by 22% in SEK and by 31% organically. Sales in Q1 2021 was strong with a growth of 29% due to low inventory levels in the sales channels. In the second quarter of 2022, the market factors negatively affected sales in the entire industry. It is not company specific. Rising inflation and increasing interest rates and lower consumer confidence after Russia's invasion of Ukraine have dampened demand, and this has led to generally high stock levels in the sales channels. This means that many distributors have been restricted with purchases during the quarter. The availability and prices of graphics cards improved during the quarter, but prices remained higher than normal. However, we are expecting gradual improvements during the second half of 2022. We see continued strong underlying demand for our products, and with increasing availability and lower prices of graphics cards, we expect a strong sales development in the near future. In Q2, the logistical situation and lead times improved compared to Q1, where Q1 was difficult due to the Chinese New Year. The logistical situation has improved, and we believe the improvement will continue during 2022, but at a slow pace and with continued uncertainty. In the graph at the bottom, you can see our quarterly development in sales out to end customers that our distributors and resellers report to us measured in U.S. dollars. Sales out is an important measure that shows the underlying commercial development. In Q2, sales out decreased by 11% organically compared to Q2 last year. As said before, relatively high prices of graphics cards and the macroeconomic situation are the main reasons for the decrease in sales out. However, we believe there is a pent-up demand in the market, which we expect to have a positive effect on our sales when the situations normalize. Moving on to the next slide and segment development. We can see that we had the strongest sales in Americas with 42% of total net sales, followed by EU with 31% and APAC and other with 27%. Sales of cases increased by 5% year-over-year. Americas increased by 18%, and APAC and other by 87%. The main reason for the increase in APAC has to do with high stock levels in the sales channels last year, and it's not unusual that the sales fluctuates. Sales of cases in EU decreased by 32%, mainly as a result of the market situation with low levels of consumer confidence across Europe. Sales of other products decreased by 50% in total. The main decrease was in EU due to high inventory levels in the sales channels. Cases accounts for 87% of the total net sales in Q2 and was 76% last year. The change in product mix affected the product margin positively in Q2 2022. Moving on to the next slide and product margin development. In Q2, the product margin was 31%, which is 1.9 percentage points lower than last year. The change versus last year was mainly driven by extraordinarily high freight costs. However, favorable product mix and the U.S. tariff exemption had a positive effect on the margin. Let's look at the details on how we get to 1.9 percentage points in change versus Q2 last year. Freight cost continued to be at a very high level in Q2 and affected the product margin negatively by approximately 8 percentage points. In the beginning of the year, freight prices were at historically high levels, and much of what we purchased during that period are now sold out from stock in Q2 and affect the income statement. However, shipping prices have gradually decreased during the second quarter, and this will be visible in the income statement when we sell out from stock. We assume freight cost will improve in Q3. Fractal's income statement is only affected by freight cost to the U.S. and to our regional inventory there, and freight to the rest of the world is handled by resellers and distributors. We have product mix, which improved the product margin by approximately 3 percentage points in the quarter, driven by a higher share of cases sold compared to other categories. Even the mix within the case category was beneficial with increased sales of cases with higher margins. The product mix and margin structure indicate that Fractal continues to develop products with good margins. U.S. tariffs exemption improved the product margin by approximately 3 percentage points compared to last year. As said before, it was decided that Fractal received a renewed tariff exemption for computer cases. The exemption applies retroactively from the twelfth of October 2021 through December 31, 2022. Positive currency effect increased the product margin by approximately 1 percentage point. As said before, we sell exclusively in U.S. dollar, and our product purchases are also in U.S. dollar. The currency effect comes mainly from selling out from stock with higher FX rate than we bought the stock for. Sales discounts affected product margin negatively by approximately 1 percentage point, which was due to campaigns related to high inventory levels in the sales channels. However, stock levels are expected to normalize in line with increased demand. Let's have a look at the next slide and earnings. Q2 EBITDA was SEK 3 million-, and the margin was 3%- compared to SEK 2 million and 1.9% in Q2 last year. Year to date, EBITDA was SEK 8 million, and the margin was 3.9%, which is SEK 5 million and 0.7 percentage points lower compared to the same period last year. Last year had items affecting comparability of approximate SEK 21 million and was related to the IPO. The decrease in EBITDA is mainly due to lower sales volumes and lower product margin and particularly high freight costs, but also higher warehouse costs due to high inventory. During 2022, we continued to execute on our strategic growth agenda to create profitable growth in the coming years. We have chosen to pursue our growth-promoting initiatives even during a turbulent period when external factors dampen demand to take advantage of the great opportunities we see in the market in the near future. Moving on to the next slide. Operating cash flow was affected by lower EBITDA. The change in net working capital was related to increased inventory, which was on a high level in Q2. We are taking actions to normalize the inventory level, and we can see the effect already in the beginning of Q3. Investing activities was SEK 9.9 million and was related to development of new products. The overdraft facility was SEK 132 million in Q2 and was mainly related to purchases of products in stock. A part of the inventory was paid for in 2021, which will have a positive effect on our cash flow when we sell out from stock. Moving on to the next slide and the income statement. As previously presented, we had a net sales decrease of 8% related to a soft market, continued high prices on graphics cards, as well as lower consumer confidence. We only sell in U.S. dollar regardless the end markets, and the same goes for purchases of products that is also 100% in dollars, which gives a certain currency hedging. Fractal is in many ways a dollar company with 100% in dollars down to product margin. OpEx and personnel costs are approximately 42% denominated in dollars. Fractal's reporting currency is SEK, and the numbers are affected by fluctuating exchange rates in currencies other than SEK. Q2 had an average U.S. dollar SEK rate of 9.8 compared to 8.4 last year, which is positive on our results. The underlying product margin was favorable due to a higher share of high-margin cases, but also U.S. tariffs exemption and FX. However, extraordinary high freight costs to the U.S. impacted the margin negative in Q2. Other external expenses are higher than last year, mainly affected by higher warehouse costs due to the high inventory. Personnel costs were in line with plan, but higher than last year due to investment in more people. The financial net is affected by interest expenses related to the overdraft facility and FX translation effects. With that, we move to the next slide, and I hand over to Hannes again. Thank you, Karin. A brief summary of the quarter report and outlook. Our net sales continues to be negatively impacted by the high prices of graphics cards, leading to a soft demand in the market. We have, though, as we mentioned before, seen graphics card prices normalize recently, and we expect an improved demand in the second half of this year. The return of demand will also be driven by the new generations of graphics cards that are being launched from NVIDIA and AMD later this year. We have launched several new products in the quarter with positive reviews and many more expected the rest of the year and into 2023. Our underlying product margin is improving but was negatively affected in the quarter by extraordinarily higher freight prices. With freight prices now starting to normalize, we see opportunities for stronger product margins ahead. We also want to repeat again that we believe that the current headwinds and weak market is short term, and we remain positive regarding our mid to long-term outlooks. There is a pent-up demand in the market, and gaming activity remains very strong despite economies reopening after COVID and worries from inflation and recession. Historically, gaming in general has proven to be very recession resilient. Next slide, please. With that, we have finished our presentation and open up for any questions. Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from Simon Granath at ABG. Your line is now open. Thank you, operator. Good morning, Hannes and Karin. Initially, I know you touched upon this subject in the report, but could you verbally help us understand how you are thinking about demand going into H2? While most signs are looking positive in terms of improved GPU situation, weaker consumer confidence might hurt demand despite the fact there is a pent-up demand for gaming PCs. For example, what are recent comments that you are receiving from your retailers, particularly now after the summer? Thank you. Yeah, I mean, we have seen this softer demand in gaming components now in the last 12-15 months, roughly, and we know by several surveys we made among customers, end users that there is a pent-up demand once the graphics cards become more reasonably priced. And they have become that now, but we also have new graphics card releases around the corner from both NVIDIA and AMD. They're expected towards the end of Q3 and in Q4. And the customers know this, so the existing and older graphics card series needs to become even more cheaper to really spur the demand. We believe that this pent-up demand is a really positive upwards factor for the gaming industry. Of course, the current macroeconomic uncertainties with inflation and possible recession around the corner has some kind of effect on even the gaming consumers. Historically, gaming has been very recession resilient and have done much better than most industries in harder times. We have seen also now, for example, in July, we saw that the Twitch viewership hours were about the same as July in 2021 and about double the level that they were before the pandemic. The inrush of new gamers during the pandemic seems to be staying on very well. Yeah, overall, we remain positive that we can return to growth in the second half. Had we not had any macroeconomic uncertainties at all, of course, the return to growth would be even stronger. I think that makes a lot of sense. Thank you so much. Another headwind in the Q2 results was some releases in terms of inventory levels among your resellers. How would you say that current inventory levels are looking from them for them when you're talking to them? Yeah, we saw that especially in Q2 that a lot of them had very high inventories. Not so much actually of our products, but a lot from competitors that had been maybe more careless about pushing in more inventory, which led the resellers and distributors to in general have high inventory and to put a stop on new purchases. Not completely, but to keep it lower. We see that sales channels inventory have now normalized. They have sold out quite a bit in Q2. It's probably a bit higher than normal, but it's less severe overstock than it was in Q2. Okay. Thank you. Can you talk a little bit further on the tailwinds and headwinds on the gross margins going into H2? Also why did the gross margin on other sales decline so sharply, quarter-over-quarter? Was it due to geographical effects or anything else that I'm missing out? You mean the other product groups outside from cases or what do you refer to? Yes, exactly. I mean, I think that is mainly because of a product mix of certain models in between those categories that we have sold more of certain models with a bit lower margin than others. Okay. I don't know, Simon, if you asked also generally when it comes to gross margin going forward. I don't know if that was your question as well. Yes, please. Yeah. Yeah, I mean, as I said before, we have had headwinds regarding freight costs, which affected Q2 by 8 percentage points versus last year. Already in Q3, we will see improvements to that. We can see that the prices are decreasing a lot and have decreased a lot since January when we had all-time high prices of 20,000 per container, and we are now down under 6,000. That is very good. We sold out much of what we bought then in Q2. That's positive. We believe that the product mix will continue to be good as it is now. We are selling, as I said, 87% cases of our total sales. We will have a high number even going forward. Also selling high margin cases. U.S. tariffs that will continue the rest of the year, and we expect a new exemption in 2023. That is of course nothing we can say anything about now, but that is our belief. Currency we can't say anything about, but I mean, we have a strong product mix that will help us going forward with the product margin. Exactly. That's well put, Karin. I think in general, the product margin we feel very comfortable with. We had now in Q2 a big hit by the freights, as we have discussed here. The underlying product margin, as we showed on one of the slides there, is very strong when the freight prices start to normalize, which we are seeing. We also see that we have a very low risk for inflationary pressure on our COGS. We have seen rather the opposite that we have opportunities for cost reductions with our suppliers because of dropping steel and plastic prices, as well as more favorable dollar to Chinese renminbi lately. We're working with our suppliers to negotiate down our costs, and at least we see a very small and almost negligible risk for increasing costs on our COGS. As a product margin-wise, we feel very comfortable and, as long as the demand returns as we forecast, I think we should be in a very good position. Thank you for clarifying that through a very detailed answer. I just have two more questions. One of them is that during the IPO process, we talked a bit about your plans of expanding into APAC further. How would you say that those initiatives are progressing so far, and has any recent market developments impacted this strategic move? Yeah, yeah. That's a good question. I mean, we are fairly strong in APAC, and we have seen a good development in the last year, especially in our traditionally strong markets, Japan, Korea, and Australia. We do, however, have quite small market shares in China, and we have as a project there to start building up a local organization. We have not prioritized that so much in the last year because of the lower sales that we've experienced and instead prioritized other initiatives that we have seen a faster ROI on, such as going into new product categories and others. China remains an important growth initiative for us in the coming years and is definitely something that we will work hard on. Thank you. I'm looking forward on following that up in the future. Finally, I know that I've been asking about this in earlier presentations, but how would you say the prices have developed during the quarter, both for you and for your competitors? How do you project prices to move on an overall level moving forward? Our prices to end consumers, you mean, right? Exactly. We increased our prices last year by about 10%, roughly, which was reflecting the increased COGS we had from our suppliers by end of 2020 or 2021. Right now, with the reduced steel and plastic prices, which is important for our products and also the improved currency, we don't think that we will need to raise prices even further, and we don't foresee our competitors doing that either. I just wanted to circle back to the previous question about the different regions. What is important to understand there also that there is a quite big difference between the regions' performance currently. If you look at sales of cases, we had actually an increase in the Americas and in the U.S. compared to Q2 last year, and a very big increase in Asia, whereas E.U. declined. The consumer confidence and sentiment is definitely stronger in Asia and U.S. than in Europe. Thank you so much. That was all for me. I'll return the word over to you guys. Thank you Simon. Thank you. As a reminder, if you wish to ask a question, please press zero one on your telephone keypad. There will now be a brief pause while questions are being registered. We have no further questions on the phone line, so I'll hand back over to the speakers. Okay. Well, I will thank everyone for listening in today, and I wish you a nice day. Thank you.