Welcome to the HANZA Q1 report. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer 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 Erik Stenfors, and CFO Lars Åkerblom. Please go ahead. Thank you. Good morning, and thank you for joining this presentation of HANZA's first quarter 2024. So my name is Erik Stenfors, I'm the CEO of HANZA, and I will be happy to do this presentation together, as usual, with our CFO, Lars Åkerblom. Now, our industry has experienced a slowdown in the economy this year, and this has reduced growth and margins. Hence, the topic today is, of course, how this slowdown has and will affect HANZA. We have a lot of experienced people in our group, and I would say that we have a very good picture of the development, and we will be really glad to share this with you. To do this in an orderly way, we will have an agenda consisting of three parts. First, we will present the development by words. Next, it will be presented by figures, and then we will draw some conclusions and for the future, and also there will be a Q&A session at the end. Please use that for any questions you may have and also if you'd like us to clarify something that we have said. Okay, let's have a look at the start of this year. For us, the main event was the acquisition of Orbit One, which we finalized in beginning of January. It was also a main event in our industry. It was probably a few who predicted this, as others have been trying to buy this company for a long time without success. But it's an important and valuable acquisition for a number of reasons. First of all, this is a delivery on our strategy, HANZA 2025. As you might know, we are now trying to expand our existing activities, so it means in the existing scope, existing geographies. But more than that, it's also a delivery on our business model, and I would say our general strategy. We based HANZA on increasing customer value, and this acquisition really is a booster. I've been having many meetings with customers, both with Orbit One and old HANZA customers, and it's clear that the Orbit One customers appreciate being part of a new and stronger concept, whereas the old HANZA customers appreciate that we have strengthened the electronics part. It also adds expertise to the group, beyond electronics manufacturing. We are able now to strengthen several key positions in HANZA, such as sourcing, automation, ERP system. We have Monitor and so forth. And this, this is the difference between buy and build. We do expand the number of our factories also organically, but when we do that, we need to add competence. If you do an acquisition, if you do the right acquisition, you will also get competence. We also got hold of a very nice customer base, and it's sales of SEK 1 billion, and interestingly enough, there was no overlap. So completely new customers and also some new markets where we can apply our concept. And of course, there will be more synergies. Always when you transform a contract manufacturing to the HANZA concept, there will be new synergies. And last, but for sure, not least, we have a perfect fit on the corporate cultures. This is very important. It makes the integration without any friction, and it's no coincidence. We spend a lot of time when we buy a company on HR due diligence to make sure that the culture is in line with our culture. And this is also a recommendation we have for other companies regarding acquiring, that please do not only check just the legal situation and the financial situation and the tax situation, do check on the corporate culture as well. So let's say this was the good start of the year, but then we also have the economic slowdown. And we talked about this at our Capital Markets Day, and we also announced this in our Q4 report that there will be a slowdown. This has affected us in two ways, or let's say it's an imbalance times two. First, we have some sectors which are still growing, like security, defense, and energy, and then we have other sectors which are then declining, like mining and part of the industrial sector, creating an imbalance. But it's also imbalance in our manufacturing clusters. We have been talking about this also before, that when we have a large manufacturing cluster, we have a much greater resilience to economic fluctuations, and I think Lars will come back to this when we look at the numbers. And on top of this, we had a strike in Finland. Some of our customers stopped their factories, and there was a challenge with this. On a positive note, however, when we talk to the customers, we hear several of them talking about that there could be an upturn in the latter half of this year. And that would, of course, mean that the volumes will bounce back and also the margins. Now, we have been in this business, actually, we started HANZA almost 16 years ago with the Lehman crash. We know that you cannot rest on assumed economic upturns. It's a forecast. Now, au contraire, in uncertain times, you need to act swiftly and decisively, and that's exactly what we have done with a number of activities. So first of all, we launched, in the beginning of this year, a combined integration and efficiency program. We had already an integration program prepared, but we also added this to efficiency. This is quite important. We need to rightsize the cost base due to the downturn in demand, but you also have to add sales. And here's something really interesting. Listen to this. You want to take new shares on a smaller market. If you are a traditional contract manufacturer, well, you cannot take market shares just on offering high quality or delivery accuracy. Everybody's offering this. So in the end, it will be a price issue when you have too much capacity. And here is the advantage of HANZA. We are not only offering manufacturing, but also manufacturing solutions, so how to streamline our customer supply chain. And if you've been following us, you know that that's the reason why we've been able to grow constantly for 15 years, that in the downturns there comes new opportunities that we can use. And I would be even braver. I would be brave enough to say that in this year you should expect new deals to be announced from HANZA. And with that, I will leave over to Lars. He will, of course, talk about the figures, but he will start with something which is very important, not to be forgotten, even though we discuss financials, and that is sustainability. Thank you, Erik. Yes, sustainability work. We are continuing to work with the sustainability and in line with the CSRD that we will report in the future. So we are working with the double materiality analysis, and also mapping the scope one and scope two, and starting up with the scope three that is ongoing. But maybe most important is that we are continuously working with our customers to find out what we can do from a sustainability view, to support our customers in their work with sustainability. I'm also glad to be able to report that the work-related injuries, which always is a central issue in a company like HANZA, is going down. We have, in the hazardous waste, actually an increase, that is due in the electronic side, that is due to the fact that we actually emptied the production hall in Orbit One, that led to temporary higher volume of hazardous waste. We expect that to go down going forward. You can go to the next slide, Erik, and go into the financials. What we report today is an increase of sales with 18%, of course, driven by the acquisition of Orbit. So if we adjust for the acquisition and also for currency, we actually see a decrease of 6%, and that is connected with the downturn in economy on some of the customers' industries that we have, that Erik spoke about. We are now on a rolling twelve of SEK 4.3 billion and compared to SEK 4.1 billion for the full year in 2023. We reached approximately 5.3% in EBITA margin in quarter one, and that is SEK 67 million compared to SEK 88 million in 2023. In 2023, we actually also had an energy subsidy of SEK 6 million when you make that comparison. We have two main activities that had an impact on the P&L. We had the efficiency program that we initiated mainly in connection with Orbit One, and that had a negative effect of SEK 20 million. And for that efficiency program, we will start seeing cost reductions in Q2 and Q3, but in Q4, we will then have the full financial impact on that efficiency program. We also revalued the estimated remaining purchase price connected with Orbit One, and that led to have a positive one-time cost of also SEK 20 million. So the total effect of the one-time cost is zero. But again, remember that we last year had SEK 6 million in a type of one-time income connected with the electricity subsidy. And that led to the bottom line, that we had an earnings per share of 77 öre, SEK 0.77, compared to almost double last year. You can move to the next slide, Erik. We see this imbalance, and also the maturity and the size of the segments have an impact in HANZA in Q1. We see that the main markets, which mainly are the large clusters, are doing well. We have 7% in margin. And if we look into the comparable units, we are actually on 8.2% compared to 8.8%. So combine that with the decrease in volumes of 6%, it's actually quite strong, and we can see that HANZA, the business model that HANZA have is quite strong when we see downturn in economy. Other markets are lower. We have an operating margin of 3.3%, and if we take the comparable units, we also see that the decrease is not so high, so we reach 4.9% compared to 6.4%. So again, it's quite obvious that the developed manufacturing clusters are not as affected as the non-developed manufacturing clusters and the smaller ones. And that's the reason for us wanting to larger the smaller clusters, and that's what we also have done in Central Europe with the acquisition of Orbit One. You can move to the next slide, Erik. We have a cash flow that we are not satisfied with. We see it as temporary and connected with an increase of working capital, and part of that is due to the ramp-up of the MIG project with MLE. We have CapEx of SEK 58 million compared to depreciation of SEK 43 million, and the reason for the CapEx to be a little bit higher than the depreciation is that we are finalizing the production hall in Tartu, and we have invested in machines to fill that production hall. The net debt is, of course, increasing with the acquisition of Orbit One, both the net debt that was in Orbit One, but also for the acquisition, the purchase price. We still have SEK 40 million in debt that we see as the remaining, estimated remaining purchase price. As we have said before, this is only to be paid if Orbit One is having a profitability in line or even better than it was in 2023. This debt will, of course, be revalued in the coming quarters as well. The net debt compared to the EBITDA pro forma, if we add the EBITDA in Orbit One, is 1.9x, so well below our financial goal of 2.5x. We have a strong financial position due to profit-making business and, of course, also the new share issue we did in Q4 and finalized in Q1, when the main shareholder of HANZA, Färna Invest, invested SEK 40 million in the second part of the share issue. We have a strong balance sheet with an equity ratio of 39% and a net debt to equity ratio of 0.6x. So this financial position gives us the possibility to continue to do acquisitions, but also take on new MIG projects like the MLE MIG project that we signed in the summer of last year. You can move to the next slide, Erik. And in the beginning of this quarter, the board decided to increase, update, and revise the financial targets, and actually increase them regarding to sales to SEK 6.5 billion compared to SEK 5 billion, and also sharpen the profit target to 8% for the full year of 2025. Remembering these financial targets that this part of the business model for HANZA is to continue to do acquisition and bring in MIG projects. By that, I hand back to you, Erik, to summarize and do the outlook. Thank you, Lars. And, let's see what key takeaway we have from the first quarter. First of all, we made a really valuable acquisition. We have started with an activity program quite early on, and we have a very strong financial position, as Lars pointed out. And I would say, maybe summary is that, despite this sluggish market, we end this quarter with a better position for 2025 than when we entered the quarter. And that's also why the Board of Directors have decided to increase our financial targets for next year. So we stay fully committed to HANZA 2025, and if we look at some years ahead, what we will do now and later, first things are still to work with the strategy HANZA 2025, which is all about creating this solid platform, making it possible for the next move. We have an advantage in the organization of HANZA. It's modular, scalable, meaning that it's easy for us to add an acquisition, but it's also easy for us to do geographic expansion. And that's what we said we're going to do beyond 2025, and that's why we're working to prepare that next step. But with that, I open the floor for any questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Fredrik Nilsson from Redeye. Please go ahead. Thank you. Hi. I want to start with the reasoning behind your expectations of a rebound in volumes already during the autumn. You touched upon it, but it would be nice to hear more about your discussions with customers and so on, because that's quite soon, so it would be interesting to hear your explanations there. Thank you, Fredrik. It's a very good question. I'm just referring to what we hear when we meet the customers, that many of those expect that now we are destocking due to a very aggressive 2023, and it will bounce back by later 2024. As I said, I cannot say I don't trust it, but we don't rely on it. It can be later than that. Our strategy is that we need to continue to grow and accelerate, even though the volumes might not come back. But again, what we hear from our customer is that some of them are quite confident that it will bounce back later this year. Was that an answer to your question? Yeah, yeah, yeah, I think so. Thanks. And then, it looks like it was mainly other markets as well as Orbit One, which you kind of talked about earlier during the quarter as well, that had a softer demand. I mean, why is that? Are there certain sectors that are lowering demand? Yeah, there are certain sectors and, and there are certain companies within those sectors, and I mentioned mining as such an example. But I wouldn't say that it's complete sectors. It's more a number of companies declining volumes at the same time that causes this. Okay, I see. And one last question from me. You keep your financial targets, but I mean, is a slightly stronger market likely necessary for you to reach those targets, or is it something you believe you can do even in a softer market environment? I mean, if there will be a complete crash, then all bets are off. But in this market, like we have today, we are fully committed to the financial targets. And if it's a strong economy, of course, it's easier, but without it, we will still manage. And was that the kind of information you were looking for? Yeah, that's helpful. Thank you very much. That's all from me. Thank you, Fredrik. The next question comes from Anders Roslund from Pareto Securities. Please go ahead. Okay, good morning. Yes, I'm a little bit curious about your new business, and especially then the Mitsubishi business. When do you see an effect of that business coming on board? So the Mitsubishi deal you're referring to is the one we announced last summer. It's an example of what we call a MIG, so selling manufacturing solutions. We exchange over 40 suppliers for HANZA, a big advantage for the customer and a huge order for us. We said already at that time, during the summer, that it will take one year before it's ramped up. So and we are following that plan, meaning that after the summer, we should be in full swing with that order. But maybe you were looking for more about the future and other opportunities also. Yeah, if you have anything about the defense sector or any other new businesses coming on board, and we're happy to hear that as well. Yeah, defense sector is interesting, and that's very much about electronics and advanced electronics. Therefore, we're really happy to have Orbit One on board. And I think that is a demand that will just increase. But on top of that, we are aiming for more MIG solutions, more deals like the Mitsubishi and the previous one. We have done a couple of those in the history. So I would expect that we are able to announce some more streamlining project for customers during this year. Okay, if I look at your acquired growth, that's SEK 243 million. And if I take that 4 x, it's like SEK 970 million on a sort of a 12-month, which is quite more than 10% below the SEK 1.1 billion. It seems that the volume drop has been quite severe in the Orbit One business. Is that by any means your own choices, or is it just the market downturn? I think you cannot measure that on one quarter, Anders. No. It's not been severe. There is a challenge on the profitability side, though, that if you are a standalone contract manufacturer, it's hard to cope with the fluctuation of the economy, and that's why we have the cluster concept. But I wouldn't say that you can measure and say that there's a more dramatic downturn in Orbit One than HANZA. It was 6% for us standalone, which is quite much. Yeah, but it is, this is the organic downturn of 6%. That's on your old HANZA business because the acquired business comes in as acquired business. So that's why, I mean, the SEK 243 million, if I take that 4 x, it's SEK 970 million versus SEK 1.1 billion. So are there any sort of seasonal effects or anything else that... So I'm talking specifically now about the Orbit One. Mm-hmm. Yeah, I understand that, and my answer is that you cannot really measure it on a quarter. Depends so much on deliveries and circumstances and components and stuff. So I wouldn't dare to take it times four and say that this is the downturn. That's not the truth, simply. No, no, I'm asking you, it's more, are there any seasonality that it starts slower in the beginning of the year and coming up more during the remainder of the year or anything else that we should know about? No more circumstances, and now we also have this, we are consolidating. So to expand a bit on the answer, what we try to do is to make sure that we have harbors for different kind of ships in HANZA, so they should not be exactly the same, and that's something we need to do. In addition, to just cutting the Polish activities from the Swedish activity in the acquisition, we also have to form it within our clusters. And that means also that some customers are transferred between the factories, and we try to optimize where we have specialties and special competence. And all this makes a quite strange quarter. So, I cannot give you any numbers, but I wouldn't refer-- I wouldn't use it as a reference for organic. Mm ... growth. Overall, do you see any trend during the quarter that is getting weaker or improving or flattish, and this destocking? I guess you had some sort of contact with your clients when that may cease. Yeah, and that's the response we get, that it will be, if you want to, our customer's prediction. In summary, it is that the second quarter will be similar to the first quarter, and then it will be better for the second half of the year. Mm-hmm. Of course, can be true. But again, we would rather act on the current situation than hope for an upturn in the economy. Yeah. Just finally, I have a question regarding the cash flow situation. What do you expect? I mean, it was rather weak now in the beginning of the year, and you have still some heavy investments to do. What is the expected progress of the working capital here? I can answer that. As I said, the quarter one, we were not satisfied with the working capital development. We expect that to be improved the coming quarters. And of course, when you see a drop in volumes, you expect the working capital and to decrease. And it takes sometimes a little time to take the working capital down. But that's something that we work, of course, extremely hard with and expect to have a positive development during 2024 and by that, see a stronger cash flow. Regarding CapEx, we also, of course, adjust the CapEx to the volumes. So when the volumes were growing and were growing, we saw an increase of CapEx in 2023. If we don't see that continues to increase on volumes, the CapEx will go down. What we have announced is this investment in the new facility, a new production hall in Sweden. But the production hall that we are taking as an investment in Cluster Baltic is finalized more or less. Otherwise, we do not see an increase of CapEx. Okay, that's excellent. And then the imbalance in production, partly responsible for the margin decline, is that something we have to expect to remain until volumes are coming back, or could you do something for this imbalance? I think that one, maybe Lars would like to answer, but the one thing is what we touched upon before, that the bigger size, the better resilience towards fluctuations. And one thing that is under construction right now is the Central Europe cluster. So that was one of the smaller and not mature clusters, which by the acquisition, more demand, comes up to a new level. So that is something that will improve the situation rather directly. Other than that, we are focusing on streamlining the administration and improving the production and efficiency across our clusters, and it should enhance our profitability in the coming quarters. You don't want to estimate your savings from the SEK 20 million charge you've done here, the 50 staff leaving the company? Or could you just use an appropriate yearly salary for the 50 staff and take that away? No, what we announced was that we have entered into discussions or negotiations about 50 people, as a maximum, leaving in Sweden. But I'd like to emphasize that this work with reducing employees, reducing cost, or increasing employees, that's part of normal business enhancement. We do that every quarter, all the time, when the volumes are fluctuating. Of course, we do that in other parts, outside this Ronneby factory, where we need to negotiate with the union. So I don't want to sort of look into what cost savings we have, but the reason for doing this and other cost adjustments is, of course, to reach back to the good profitability and reach the financial goal of 8% in 2025. Mm. Yeah, that comes to my last question then. You remain with your 25 forecast of SEK 6.5 billion and 8% margin. And you have said previously that you expect an acquisition to be part of that SEK 6.5 billion. What we have said is that we have a growth of about 50% organic, 50% acquisition historically, and we think that's a good mix. So, yes, of course, there should be some acquisition included in this, but we also have, we expect organic growth. And as you maybe saw on the release, we're also building a new factory in Sweden, which is based on new demands. Okay. Yeah, thank you very much. Mm-hmm. Thank you. Thank you, Anders. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Okay, so if there are no further questions, we will finish here and hope that you will continue to follow our company. We have many new activities coming up. Thank you.