Hello, Welcome to the Haldex Audiocast with Teleconference Q3 2021. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present CEO, Jean-Luc Desire and CFO, Lottie Saks. Please begin your meeting. Thank you, moderator. Welcome everyone to this investor conference call for the third quarter of 2021. I am Jean-Luc Desire, the President and CEO of Haldex. With me, I have our CFO, Lottie Saks. On the agenda today, I will come back first to my 100 days that I've spent inside Haldex. I will give an overview of the sales evolution for Q3. Lottie will share the latest Q3 results. I will finish up with the business and strategy update before opening up for a Q&A session. If we move now to the slide number three. I joined Haldex as a CEO mid of June. My first priority has been to getting to know all internal and external stakeholders. I have to say that I've been pretty impressed by the level of passion and dedication of all our team members worldwide. I've also been impressed by the value of the name of Haldex among our customers. That's a good asset moving forward. Second priority has been for me to focus on some structural operational improvements inside the company with two particular decisions. The first one is to add two members to the group management team, two members related to sales and purchasing. Why? Because we want to focus on the top line and growth moving forward, as well, to focus on our operational efficiency resourcing. At the same time, our business is very much regional. As such, to drive accountability with a clear ownership of the P&L by a regional leader is something which we've implemented. Third priority during my first 100 days has been to focus on the strategy with the team. We've been working on an update of the strategy, and it's been presented to the board at the beginning of October, and it's been accepted. If we're moving now to the next slide five, with the sales overview for Q3. What are the key highlights? As you can see, we've been growing our business by 26% from Q3 2020- Q3 2021. If we look at this from a regional perspective, we can see that the Americas has seen a growth of 26%, Europe 38%, and Asia has a negative growth of -7%. If we look at this 26% growth year-over-year from a product line perspective on top of the slide, we can see a 13% increase on the truck side, 14% on the trailer, and 22% in aftermarket. Let us now move on to the next slide, so slide six, which is the year-to-date situation. The comments are more or less the same. We see a 21% year-over-year increase from year-to-date 2020 to year-to-date 2021, and the same pattern that on the quarter. In terms of region, at the bottom right of the graph, we can see a 20% increase for America, 30% for Europe, and -3% for Asia. Product line-wise, we see a +40% for truck, 35% for trailer, and +16% in terms of aftermarket. This is the global situation year-to-date 2021. If we move on now to slide seven and look at the situation in the Americas, what we can see is a 24% year-over-year increase for Q3. This has to be compared for an OE market, which has been increasing of 9% between Q3 2020 and Q3 2021. What we can see here with those facts is that we have had a pretty strong outperformance of the market. The other remarkable aspect is the pretty strong increase we have on the trailer side, with a growth of 70% year-over-year. On the aftermarket as well, we see a growth of 90%. Those elements focus on trailer and focus on aftermarket are pillars of the strategy moving forward. If we go now to the next slide number eight, let's have a look at Europe. The net sales evolution from Q3 2020- Q3 2021 is an increase of 36%, knowing that the market grew from 4% between the same period. Same comment like for America, the pretty strong outperformance on the OE side. In terms of aftermarket as well, we have a quite remarkable 44% year-over-year increase. Like for Americas, growth in aftermarket focus on the trailer are pillars of the future strategy, and we are happy to see those results being already there today. Let's move now to the slide number nine with a focus on APAC. The situation is a bit different with a sales evolution of -4% between Q3 2020 and Q3 2021. At the same time, we have to recognize that the market fell down quite significantly, with a 37% decrease during the same period. In terms of outperformance, the message is a bit different. What we're going to do moving forward for that region is really focus on the component cost to make sure that we can gain market share moving forward. Having said that, I'm going to turn now the floor to Lottie, and to share the financial performance of Q3. Lottie, please. Thank you. Moving to slide 11. Organic sales increased by 26% as a result of continued market recovery and gain on market share. Specifically, we saw high growth in the trailer segment in Europe. Gross margin decreased by 1.7 percentage points compared to previous year, negatively impacted by lower aftermarket share, increased raw material prices, and higher price costs. Compared to previous quarter, gross margin decreased 1.3 percentage points, despite successful mitigations raw material surcharges. Largely, this was driven by further increased freight costs during the quarter. Transportation capacity and costs remain a challenge. Long-term savings program continue to be effective, and positive contributions from these programs were SEK 21 million in the quarter. In the third quarter, many COVID-19 restrictions were released and business activities start to get back to a more normal level. As a result of this, we start to see increased spend and a negative reverse effect of last year's short-term savings program. Increased activity led to an effect of SEK 18 million, leading to a net saving of SEK 3 million in the quarter. Adjusted operating margin reached 8.3%, which is a strong improvement from previous year's 6%. We managed to increase operating margin compared to previous quarter's 7.2%, despite the lower gross margin level. Non-recurring items were SEK 4 million in the quarter, and we had a very small but positive currency effect of SEK 1 million. Our cash flow was negatively impacted by an increase in working capital, primarily reduced accounts payable. Operating cash flow amounted to SEK 26 million. We had a strong net income and earnings per share of SEK 1.11. Moving to slide 12. Adjusted EBIT in Q3 was SEK 100 million, which was a strong improvement compared to 2020, SEK 68 million. The increased organic sales of 26% resulted in an EBIT increase of SEK 73 million. We saw a negative impact of the segment mix as aftermarket share decreased to 52% compared to 54% previous year. I want to point out that as Jean-Luc said, we have healthy growth in the aftermarket segment. Last year during the COVID, we had a very high aftermarket share. Material price increases were mitigated in the third quarter, while the increased freight costs have a negative impact of SEK 36 million. As said, we saw a further increase freight cost during the quarter, while previous price increases and efforts to balance exposures in the value chain did not fully mitigate costs. For coming quarters, additional efforts have been taken, but we want to point out that visibility is low. Long-term savings amounted to SEK 21 million, and the reverse effect of the short-term savings programs were SEK 18 million. Moving to slide 13. Looking at the year-to-date numbers, adjusted EBIT was SEK 297 million compared to previous year, SEK 96 million. The year-to-date organic sales increase of 21% resulted in an EBIT increase of SEK 206 million. Again, also on a year-to-date basis, we have a negative impact of segment mix. Material price increases have been mitigated to a large extent, especially in the third quarter. Again, the freight costs are not mitigated in full, and on a year-to-date basis, the negative impact is SEK 68 million. Cost reduction from the structural savings programs amount to SEK 133 million. The net effect considering the short-term savings programs reverse effect is SEK 118 million. One-time costs are positive with SEK 20 million as a result of the prior sale of the building in San Francisco. Moving to slide 14. I think by now our Long-Term Savings Program are well known, and we can just say that they continue to have effect. The execution of the Footprint Programs and the Cost Base Adjustment One are done, and we are realizing the values out of those. The Cost-Based Adjustment 2 Program is still ongoing, and we have some minor activities still to be executed within that program. Moving to slide 15. As said, in the quarter, we have a gross saving of SEK 21 million from the Structured Savings Program, and year-to-date, the saving is SEK 133 million year-over-year. Again, we have a reverse effect of the Short-Term Savings Program of SEK 18 million in the quarter and year-to-date, SEK 15 million. Total net saving in the quarter is SEK 3 million, and year-to-date, SEK 118 million. We repeat what we said in the last quarter, that for the total year, we estimate the long-term savings program to generate SEK 160 million gross year-over-year savings. We continue to focus on processes and way of work to gain efficiency. In addition to the prior initiatives, our CEO have accelerated this work by introducing operational excellence program. Moving to slide 16. Looking at the quarterly financials in perspective, we are pleased to see that revenues almost on the levels of pre-COVID. The gradual recovery has been stable and is partly driven by outperformance of the OEM market. When it comes to profitability level, it's evident that our savings initiatives prove to be effective, and that we can deliver a profitability that is on a very good level put into historical perspective. Like most other companies in the industry, we do experience temporary challenges within supply chain, with raw material situation and increased freight cost. Despite this, we deliver a good profitability level for the quarter, which gives us comfort and energy to accelerate our efforts to drive further profitability and growth. Moving to slide 18. Inventory value was reduced by SEK 49 million in the quarter compared to quarter two. This is a result of ongoing inventory reduction initiatives throughout the production plants and distribution centers. Also, inventory efficiency increased, and number of days inventory on hand was reduced to 90 compared to 102 in prior quarter. We are very pleased to see that the actions start to show results. Working capital increased compared to quarter two, and was substantially higher compared to previous year. Compared to quarter two, the increase was SEK 155 million and was largely attributed to decrease in accounts payable as we have paid those off. In Q3 2020, Haldex took strong measures improving cash flow from working capital to mitigate the impact of the pandemic. We would like to point out that the cash flow in that historical quarter was quite extraordinary. Cash conversion days of 88 is consistent with prior quarter. Compared to Q3 prior year, there is an improvement from 98 days. As stated in last quarter, to manage inventory and working capital in general, in a more efficient way is a very high focus area for us in order to improve cash generation. Moving to slide 19. Cash flow showed some improvement compared to previous quarter and was positive with SEK 26 million. As said, compared to prior year, it's a substantial decrease. Again, you can see also from historical perspective that last year's Q3 was quite extraordinary. Financial liabilities was down SEK 164 million as a result of increased interest rates. Net debt, excluding IFRS 16, increased by SEK 50 million from previous quarter to SEK 1,155 million. This is an increase compared to previous year, SEK 1,196. During the quarter, we have put new financing in place, securing the finance up until April 2023. Back to you, Jean-Luc. Thank you, Lottie, for the financial update. Let's move to the slide 21 and to give a business update. As you know, we're working on our current business, OE, aftermarket, and to win market shares. At the same time, we are focusing on the next generation of products, EMB and EBS. On EMB, we're continuing the development as we see potential interest rising in all regions, and we're coordinating to have a platform approach across the regions. As already mentioned in the last quarter, we have signed an agreement with major European OE to showcase this technology on one of their medium truck in the next year. That's for EMB. On EBS, and as shown on the picture on the right side, we're going to launch the new generation of EBS at the Solutrans show in France in November, and we're going to start the deliveries of this new generation in February 2022. We're very excited about this product line because beyond the breaking possibilities of this platform, it's the brain of the trailer, gathering all the data of the trailer and which will give opportunity to create new digital services. In terms of business to date as well, we have a focus on the operation side of it, and we have reinforced our cooperation with the ANAND Group in India, so that we can have a higher footprint in terms of operations out of India to secure our cost competitiveness in the world. Let us move now to the slide 2022. In terms of strategy, we presented the updated strategy to the board at the beginning of October. Three pillars of this strategy. The first one is to reinforce our current good business model. We have a business model based on OE, 50% of the business, 50% of the market and across the regions. The Haldex name is well-known, and we want to continue to leverage that and to accelerate initiatives to reinforce this good business model. As mentioned in the slide before on the business updates, we want to focus on two new exciting products, EMB and EBS, which are perfectly aligned with two mega trends of the market. The first one is electrification. EMB is perfectly a good answer to the electrification of trucks and bus by providing savings in terms of energy and to have a lower complexity of the system. The EBS, as mentioned before, is a perfect platform to develop new digital services in the transportation world. We want to focus on those two new exciting products to generate revenues moving forward. The third pillar of this strategy is sustainability. We've reviewed the organization with the creation of a specific team to drive sustainability throughout the organization. That's the three pillars, and I'm going to be looking forward to presenting more details about strategy to the financial market in Q4. Let's go now to slide 23. If we summarize the situation, we are playing in markets and segments which are recovering, and which are coming back to levels which are pre-COVID. In those markets, we have the chance to outperformance the market quite significantly globally, and especially in Europe and the Americas. We're also pleased to see an aftermarket growth in all regions, as we want to balance the growth between OE and aftermarket in a balanced way to protect our margin. In terms of outlook, we expect to continue to grow our top line according to the market evolution. That's the first point. The second point, as mentioned by Lottie before, we are experiencing an extreme volatility in terms of supply chain. We have some significant increases in terms of freight cost that we will not be able to pass on completely. We have also some potential disruption, especially on the semiconductor, that will happen in Q4. We will continue to watch the situation very carefully. Having said that, I will end this presentation that Lottie and myself have just done and open up for a Q&A session. Thank you. If you would like 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. There will now be a brief pause while questions are being registered. We have a question from Kenneth Toll from Carnegie. Please go ahead. Your line is open. Yeah, thank you. First on the Electromechanical Brake order that you got from a global truck producer in Europe, when do you think that order will result in commercial shipments or production orders? Actually, what we're talking about here is Sorry. It's an order, not for serial production, but it's for an electric truck, which is a demo truck, compiling all the innovation that this OE wants to showcase to its customers. These customers have decided to equip this truck with our technology. It's a contract for that particular design. It's not yet a serial contract for a serial production. Okay. Good. Understood. Also you announced one or two quarters ago that you have this joint venture in China, with Fast for disc brakes. Do you have any progress to report there? Have you together been visiting customers and are there any interests? Yes. The Fast JV is a JV between the Fast Group and ourselves and to focus on the disc brake in China, Korea, Japan, in all of Southeast Asia. This JV has been set up. The staffing of this JV has been done. What they're currently doing is visiting customers to gain some interest from the customers and to have some orders. Can we report to customer visits have been happening? We are hopefully going to announce some customer agreements soon. Can we do that today? Not yet. As you know because of the COVID situation, personally, I've not been able to travel to China yet, but as soon as it is going to be possible, I will do it. Great. Then also you talked about these cost increases for freight and so on, which all the companies are doing, I think. Also, in the last quarter, you said that you were able to increase prices to your OEM customers from July 1st. Yeah. I guess there might be a new opportunity to increase prices from January 1st. Yes. Do you think you will be able to increase prices a bit also in January? Yes. As you mentioned, we've been able to pass on some price increases on the 1st of July, and this is the main reason of the quarter-over-quarter margin improvement between Q2 and Q3. As you know, we have two sets of increases. One comes from the raw material, so that's one set of increases, and the other increase is related to freight. On the RMS side, with the OE, we have a type of mechanism of contracts, which makes it quite automatic to update the pricing of that. As you mentioned, we're going to have a new round of increases on the 1st of January of that. Beyond that, what we're doing now is to pass on some of, not completely, but some of the freight increases we're experiencing. The freight situation is really new and this requires negotiation with our customers because it's not a contractual automatic update. The situation has been so exceptional on the freight side that we have decided to negotiate with our customers to pass on some of those freight increases. This is what we're doing in Q4 as well, not even waiting for Q1 next year. Is it going to be 100% passed on to our customers? No, but we're going to pass on some of it. Okay, good. Yeah, that's all of my questions. Thank you. Thank you. Thank you. The next question comes from Mats Malmquist from Kepler Cheuvreux. Please go ahead. Your line is open. Yeah. Hi, thank you. A couple of questions. First, looking at the aftermarket area, pretty strong growth. I was just wondering about the reasons, or it's demand related reasons, I understand that. Have you implemented price increases that maybe sort of triggered some pre-buy purchases from customers also? Could you say something about that? Yeah. Have we implemented price increases in the aftermarket? Yes, absolutely. In both Europe and Americas to pass on the raw material price increase. We indeed have been doing that. Do we believe that we have a pre-buy effect that would lower our expectation for Q4 and Q1? No, that's not our perception. That is not. No. That's also impact that you don't see any sort of excess inventories among customers either? No. No, we don't see that. Actually, what we can say as well is a little bit like for the OE markets, we're going to pass on some additional price increases in the aftermarket in the weeks to come related to freight increases. Okay. Yeah. Great. That was my question actually. I was a bit late into the call and I was just wondering also, you talked about the savings program that you have implemented and just if you could say something about how much of that is still to be expected to filter down the P&L? Yes. What we have said is that the program is running now, and the Q3 savings, we're looking at that progressing into Q4 as well, and that the full year savings, the gross savings, will be in the area of SEK 160 million. Oh, great. The final one on, you have more than the aftermarket, and I guess what is the impact of the semi shortages and so on for the two other business areas, trailer and truck production? Are they sort of impacted to similar extent and, or do you see any differences? Yes, we do see an impact, and we do expect shortage in quarter four. Is that very material? No, we don't expect that. We are looking into shortage for a few weeks in terms of delivery. About the end users, customers that pull heavy trailers and heavy trucks, do you see any sort of difference there? Are they affected to similar extent? The demand side. No. We have seen that up until now as well, but we don't expect any difference sort of in that demand pattern. Just a kind of one on the semi impact in your internal production. Have you experienced the same sort of problems in the third quarter, or is this more of a fourth quarter issue? No, we do see that the shortage is increasing, so to speak, in the fourth quarter. Not that material, or is it sort of? Yes. Yeah. Okay. Thanks a lot. Thank you. Just a reminder that if you would like to ask a question, please press zero one on your telephone keypad. We have no further questions, so I will pass back to the speakers. Okay. Thank you very much for the time and for having taken the time to listen to us for these Q3 results, and we're looking forward to presenting the strategy to all of you and to presenting the Q4 results next time. Thank you very much, and have a good day.