Welcome to the Fractal Gaming Group Q3 Report 2022 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. Please go ahead. Hello everyone, and welcome to today's presentation of our quarter report. We will start with some highlights from our Q3 report. We're happy to report a strong net sales increase by 54% in Swedish krona and 26% in U.S. dollars. As seen in these numbers, the current very strong U.S. dollar is increasing our sales measured in Swedish krona. We both buy and sell all our products in U.S. dollars, so our product margin is not that exposed to dollar swings, but it can be affected due to products being purchased and put in inventory at a certain exchange rate and that are sold at a different rate later. Our operating costs are partly denominated in dollars, which means that a stronger dollar increases our costs. A stronger dollar also increases the consumer prices of our products in all non-U.S. markets, which can soften demand. All in all, however, a strong U.S dollars is net positive for us. Our sales out revenue has increased by 7% year-over-year. The difference between the sales out increase of 7% and revenue increase of 26% is explained by channel stock dynamics where our sales channel last year had too much stock following everyday demand. Year-over-year we have turned a loss into profit and our EBITDA increased at SEK 12.5 million compared to -3 last year. After having seen a relatively weak to none of these gaming hardware in the last 12-18 months, we are now in Q3 and we see an increased demand in the markets. The graphic card's prices have normalized, the new hardware has been released as often which has stimulated demand. We still believe that there is a pent-up demand in the market, and we're especially satisfied to see the return to growth considering the challenging environment for consumers with high inflation and interest rates. Our product margin is strong in the quarter, which is driven by positive currency effects, lower tariffs, and lower shipping costs. In terms of the general market development for the gaming industry, we see a continued strong interest for gaming in general and the user base is expected to grow in coming years. The gaming industry has proven to be relatively recession-resilient in the past, and we believe it's likely that gaming will continue to be strong in coming years despite macroeconomic headwinds. However, a lower consumer confidence will surely have some kind of downward effect. New graphics cards and CPUs have launched in Q3 and Q4, and it's expected to increase upgrade demand for our audiences. We have launched several new case products during the quarter, and we will continue to launch more in Q4. We are confident that our new products will strengthen our product lineup and allow us to reach a wider customer base and stimulate further growth into 2023 and coming years. Yes. Moving on to the financials. The graph at the top shows the development in net sales. Net sales in the quarter increased by 54% to SEK 131 million compared to Q3 2021. We also measure our sales in U.S. dollar as we sell exclusively in dollars regardless of the end markets, and the organic increase in dollars in Q3 was 26%. Year to date, sales declined by 4% in SEK and by 18% organically. The decline year to date is due to strong comparison numbers in Q1 2021 with a growth of 29% driven by low inventory levels in the sales channels and refill. In the third quarter of 2022, the demand of our products increased, which is due among other things to increased availability and lower prices of graphic cards and successful launches of new products. We can also see that the stock levels in the sales channels were on a lower and more balanced level compared to Q3 last year. The logistical situation has improved, and we believe the improvement will continue during 2022 and in 2023, but at a slow pace and with continued uncertainty. However, we had a continued challenging macro environment and weak consumer confidence affected by high inflation, increasing interest rates, and Russia's invasion of Ukraine. 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 dollars. Sales out is an important measure that shows the underlying consumer demand and commercial development. In Q3, sales out increased by 7% organically compared to Q3 last year. The difference between sales out and net sales has to do with the channel stock dynamics. I said before, we had a significant growth in Q3, and we believe there is a pent-up demand in the market that will support sales also moving forward. Moving on to the next slide and segment development, we can see that we have the strongest sales in E.U. With 50% of total net sales, followed by Americas with 35% and APAC and other with 15%. Sales of cases increased by 63% year-over-year with a 100% increase in E.U., 56% in Americas and 38% in APAC and other. The main reason for the increase in E.U. Has to do with increased demand, but also normal stock levels in the sales channels. Sales of other products increased by 21% in total with 65% increase in E.U. However, decrease in Americas by 45% and in APAC and other by 14%. Cases accounts for 83% of total net sales in Q3 and was 78% last year. Moving on to the next slide and product margin development. In Q3, the product margin was 38%, which is 7 percentage points higher than last year. The increased product margin was mainly driven by favorable currency effect and tariff exemption. Let's have a look at the details on how we get to the 7 percentage points improved product margin versus Q3 last year. Positive currency effect increased the product margin by approximately 6 percentage points. I said before, we sell exclusively in dollars, and our product purchases are also in dollars. The currency effect comes mainly from selling out from stock with higher FX rate than we bought the stock for. U.S. tariffs exemption improved the product margin by approximately 2 percentage points compared to last year. I said before, it was decided that Fractal received a renewed tariff exemption for computer cases. The exemption applies retroactively from 12th of October, 2021 through December 31st, 2022. The tariff exemption will continue to have a positive effect on the product margin also during the fourth quarter compared to the previous year. We have good hopes of being granted a renewed exemption from 1st January, 2023, given the current high inflation situation. However, it is difficult to assess, and the visibility in the process is low. 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. Freight cost improved product margin by 1 percentage point due to lower share of sales to the U.S. and lower freight prices. Freight prices have continued to decrease during the third quarter, which will improve product margin when we sell out from stock. Higher share of cases sold, but the mix within the case category and increased sales of lower margin products affected the product margin negatively by approximately 1 percentage point. 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. Let's have a look at the next slide in earnings. Q3 EBITDA was SEK 12 million, and the margin was 10% compared to minus SEK 3 million and -3% in Q3 last year. Year to date, EBITDA was SEK 21 million, and the margin was 6%, which is SEK 11 million and 3 percentage points higher compared to the same period last year. Last year had items affecting comparability of approximately SEK 21 million and was related to the IPO. The increase in EBITDA was mainly due to higher sales volumes and higher product margin. Moving on to the next slide and operating cash flow. Um, and operating cash flow was positively impacted by higher EBITDA. During the third quarter, we have taken actions to normalize the inventory level, and it was reduced by SEK 25 million to SEK 160 million. We will continue to focus on the inventory level going forward to ensure additional improvements. Accounts receivable increased by SEK 22 million due to increased sales in the quarter. Investing activities was SEK 6 million and was related to development of new products. The overdraft facility amounted to SEK 124 million and was mainly related to purchases of products in stock. During Q3, Fractal signed an additional agreement with the bank and increased the overdraft facility by SEK 20 million to increase flexibility in conjunction with product purchases and launches of new products. The additional SEK 20 million is short term and will only be used four to five months. The total credit facility currently amounts to SEK 180 million. Moving on to the next slide and the income statement. As previously presented, we had a net sales increase by 54%, mainly due to improved availability and lower prices on graphics cards, as well as healthy stock levels at the sales channels. During the year, we have continued to execute on our strategic growth agenda to create profitable growth in the coming years. We have increased our marketing activities, kept a high focus and pace in product development, and increased the number of launches. The gaming industry is more resilient to downturns in the market, but weaker consumer confidence will still affect the industry to a certain extent. As said before, 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. Q3 had an average U.S. dollar SEK rate of 10.6 compared to 8.7 last year, which is positive on our results. As said earlier in the presentation, positive currency effect as well as tariff exemption and lower freight cost to the U.S. improved the product margin by 6 percentage points in Q3. However, product mix and sales discount slightly decreased the margin. Other external costs are higher than last year, mainly due to higher warehouse costs and rework costs. Personnel costs mainly increased due to higher variable salaries versus Q3 2021. The financial net is affected by interest expenses related to the overdraft facility and FX translation effects. With that, I hand over to Hannes again. Thank you, Karin. A brief summary of the quarterly report and outlook. We have a strong net sales growth in the quarter, which is driven by increased sales out by 7%, lower prices of graphics cards, and new hardware releases, as well as channel stock dynamics. We are overall very satisfied to have returned to growth, but we're of course humble for the macroeconomic challenges leading to lower consumer confidence. Our product margin improved significantly in the quarter on the back of lower freight costs, removed tariffs, and positive FX effects. We have released many new products in Q3 and are releasing more products in Q4 and into 2023, which will further stimulate our growth this and coming years. With this, we have come to the end of the presentation and can open up for 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 Simon Granath from ABGSC. Please go ahead. Operator, good morning, Hannes and Karin, and congrats on the solid Q3 results. Initially, could you comment on how your operational momentum has progressed during the quarter, especially given that GPU prices have continued to decline, please? Yeah. We have seen that the momentum has gotten stronger along the quarter. The graphics cards have, as you said, dropped in pricing. There's also been a little bit wait and see effect in the market given that NVIDIA and AMD cards are now getting out in the market in October, November 1st. We have seen a slow increase momentum over the quarter. As we mentioned before, we have seen an increased sales out of the quarter by 7%, and we expect the sales out to be in high single digits increases also in the fourth quarter. Thank you so much. Speaking around the latest GPU versions from NVIDIA, it feels like they are quite richly priced, but at the same time performance looks good. Do you fear that the former could hamper the anticipated pent-up demand for building PCs? It's hard to say, but our analysis of it is that, yes, the new NVIDIA cards, they have a massive performance increase compared to the previous generation, about double as fast, 100% increase. AMD's new graphics card seems to be really potent and are more cheaply priced, which will likely push NVIDIA to go down a bit in price. We also see that the previous graphics card generation is still very strong in performance and have dropped in prices considerably. With the new NVIDIA graphics cards out, we think that this wait-and-see effect have stopped those that think that the new graphics cards from NVIDIA are too expensive, they can buy the old one. It shouldn't affect the underlying pent-up demand, because if you want to buy a gaming PC today, you can do it in a not too expensive way. Maybe you don't buy the absolute newest NVIDIA flagship card, but you can buy one from the previous generation for a decent price. Thank you. That makes a lot of sense. Could you talk a little bit about the historical seasonality, particularly between Q1 and Q4, please? Yeah. I mean, in the last two years, in 2021 and a bit in 2022, it's been unusual seasonality shifts because of the pandemic-driven sales surge that we first had and then the lower demand because of the graphics card. It's been hard to compare in the previous years. Before that, we typically have a relatively even sales in Q3 and Q4 and slightly lower in Q1 and Q2 being the slowest quarter. We typically say that the second half of the year has a bit more of the sales, about 55% of annual sales, and the first half, about 45%. Great for clearing that out. I know that I mentioned this before, but thanks again for bridging out the gross margin development in the quarter. Given the current pipeline and your current inventory levels, is there anything worth highlighting around the product mix and FX effect on your gross margins in Q4 ending, going into Q1 as well? Right. No. We can go back to the slide about product margin. We have, of course, an FX effect right now that is helping us at the moment with a strong dollar and where we have purchased some inventory at a lower rate. Also we have this negative effect of shipping costs that is hampering our margin. We also see that there is a possibility going into the next year of getting a lower COGS by negotiating with our suppliers because of the lower steel and plastics prices, as well as stronger U.S. dollar against Chinese renminbi. That is, of course, something that we don't know the outcome of yet. Thanks. Anything around the product mix going forward? We believe that the products mix will be heavy on the case side. We are still continuing to sell power supplies and water coolers, but we see a stronger momentum on the case side. We believe that will be a fairly high part of our sales. Until we enter other new categories, of course. Perfect. Just two more questions from me, if I may. Yesterday, you launched your latest product, Ridge. What segment would you say that fits into in the market? Also, could you talk a little bit on the unit economics on this as well? It's a little bit mixed target group. Partly, you have those that are having a PC in the living room and using it as a so-called HTPC, home theater PC, where they combine gaming and watching movies. The primary market and target group for this product is regular desktop gaming. With this product, you have a very slim and small. It uses less space on your desk, basically. It grows vertically, but it's very thin base. For people with smaller desks and not that much desk space, and of course, that appreciates the design and look, we think this can be successful. It's actually a successor to a fairly old product from us that we've had for quite many years called the Node 202, which has been a solid seller. The initial sentiment of this product has been very positive. We have seen very positive consumer comments as well as editorial comments. Very interesting. You can also see that in numbers, that inventory levels have come down in Q3. I think you mentioned that you work on reducing the level even further. Do you mean that in absolute terms or in percentage of sales that you also anticipate sales to improve further going forward? It's both in absolute terms and in relative terms. We see good opportunities for us to reduce our inventory in absolute terms quite a bit into 2023, even on the back of increasing sales. Of course, if sales increases rapidly, then, in relative, absolute terms and inventory will rise again. We have some way to go before we bottom out and have what we would call optimal inventory level. Thanks for having my questions, and congrats again on the Q3 results. Thank you, Simon. There are no more questions at this time, so I hand the conference back to the speakers. Well, thank you everyone for the call today. Hope you have a nice day. Thank you.