Welcome to the HMS Networks Q2 Presentation for 2025. Now I will hand the conference over to CEO, Staffan you, operator. Good morning, everybody. Welcome to this HMS Networks Q2 report. We follow the standard format we normally do. So I will start with a short business update from this eventful quarter, and then Joakim will give a financial summary and allow you a deep dive into the numbers, and then we finish up with a Q and A at the end. But let me start with a very quick overview of the mixed picture we are seeing in the quarter two. And remember that we made a big acquisition in April 24, so this also now means that the Red Lion acquisition is part of our organic growth after twelve months. So we see a mixed picture both on net sales, where we're more or less flat, but behind this is also some currency changes and things. We also made an acquisition in last fall in Germany. So we are more or less flat, but we need to look a little bit under the hood here to see the details, and Joakim will be back on that. Order intake, a little bit the same. We have some organic growth, but it's a bit strange to report plus 8% organic growth, but 6% in total. And this is related to currency effects. And here, we also have some impact from M and As, but we also need to show a little bit more details on this, and we'll come back to it later. We see a good development of the EBIT, so we are proving a little bit. Adjusted EBIT margin is 21.4%, slightly under our long term target of twenty five percent, but an improvement since last year. The highlights of the quarter, at least in my book, is our very good cash flow. Cash flow of SEK $2.00 1 for the quarter, very good improvement. And this also is a good result of that we manage the company, we manage our inventory and all the cash flow items. And we have also a fairly high debt in the company, it was very nice to see that we are maintaining a strong cash flow. And this results in a growing EPS of SEK 2.52. I think for the year to date numbers, the first six months, they look a little bit different because there we have some acquisition effect in quarter one from Red Lion. So I think I will not move into these details. They are mostly old data. Oops, too many clicks here. From January 1, we operate in three divisions. We have a largest division, IDS, Industrial Data Solutions, representing 46% of our business, focusing on industrial automation, but going towards customers for machine building, system integrators, end users. And we have a mix of direct sales, distribution sales and e commerce. Then we have our well, actually, original business with Anybus, Industrial Network Technology, INT, representing some 30%. And here, we also go for industrial automation, but primarily focus on device manufacturers and direct sales in our design win model. And finally, have 24% of revenue from new industries, which is a combination of companies or business we have where we see good potential, but they need to grow for the future before they can be their own divisions. And we have building automation and vehicle communication here. So let me just see if I can click right this time. So for the business update, a few highlights. We will be back on the order intake. We see good growth, but there's also a currency effect, and we need to look on the bridge to really understand this. And net sales is behind last year. There are some we see quite not perfect market, quite weak market and uncertain market conditions. We also have some smaller things that is affecting our shipments in June here. We are changing ERP system in the acquired Red Lion to be fully integrated into our systems. A lot of work and this delayed some invoicing, but it also is an important tool to make sure that we can improve our business, improve our margins and operations for the Red Lion business. We also continue to invest in our production facility in York. The ambition here is that our manufacturing facility in Sweden and in U. S, they'll be sister factories and we can quite easily change products depending on volume and customers between these two as a complement to our network of EMS partners in Southeast Asia, Eastern Europe and North America. Look on divisions, the IDS division, stable development on order intake, and we have some delivery issues there. We're also seeing that some of the larger project orders are not coming in quarter two. We reported this in quarter one, that's good. But we also believe that this is one trend in the market that there's a big uncertainty. So small projects are executed, but large projects are delayed and more wait and see for these investments. INT division, here we have talked a lot about inventory correction the last couple of years. This is now more in balance. And of course, the German automotive business is not great, but still we see some positive signals from that market. It will take time before it's improving, but we see some good signs there. New Industries, our smallest division, experienced some hesitant market in building automation and some headwinds in this. It's a smaller business, but there we see some both in order invoicing that is not great, a mixed picture, I would say. Let me just this is a crowded picture, but let's try to just dive into understanding the flows. Tariff is a big topic and our expectation was that we should have more data on this and it's still quite uncertain. But if we look on the four elements related to U. S. First, we have manufacturing in EU, in Europe, and this represents some 15% of group revenues, and this is finished goods. We expect this to be tariffs of 10% going forward, who knows, but that is at least our assumptions. And number two, we manufacture in The U. S. Sorry, we manufacture also in Europe, sell to ship to U. S, but it's the end destination is Canada and Mexico. And here, we can do some activities to make sure we don't get tariffs on this because it's not designated for U. S. This is less than 5% of our group sales. We estimate this to be 10% of tariffs as well, but we have different activities there to try to mitigate that potential cost. Number three, China and Asia. We buy some components from China and Asia to our U. S. Manufacturing. And here, we expect higher tariffs. And this, who knows, but 20% is our guess, but we're also seeing some indirect cost here for U. S. Suppliers that they are American companies, we buy from them, but they have part of their raw material from China. So we also see some side effects of this. And finally, number four, we are doing some products in The U. S, and we ship to China. This is a very small piece of our business, it's less than 05%. So this will not really impact us. So our tariff strategy in this uncertain world is first, short term, increase making sure that we can increase prices to our customers to more or less cover this. We decided to not make price increases on the order book, but we have made price increases on all new orders coming in the last couple of months. Mid term, of course, we have manufacturing capacity around the world and the idea is also to make sure we invest more in U. S. And build more capacity in U. S. To mitigate this. We expect this tariff problem to remain for the foreseeable future, but it's only our speculation. All right. With that, I would like to move over to Joakim for a financial update. Alright. Thank you for that, Stefan. And let's dive into the order intake, which I think might need some explanation. It's a bit of a tricky quarter with a lot of currency effects, and we also have an acquisition that is with peak systems that we need to account for. Maybe we start on the bottom left on that graph, and let's try to understand the percentages. So what we report is is a plus 6%, 860,000,000, and organically, this is actually 8%. And, what might not be super intuitive is that the the FX effect is actually larger than the acquisition effect, and that's why we have this big organic growth. The 87,000,000 in FX effects is, of course, the normal order intake effect for the orders received in the quarter, but it's also from a recalculation of the order book, which impacts with minus 41,000,000. So if you then go to the upper left graph and you look on the trend series, you see that the 816 is a bit of a drop compared to previous quarters. And it's maybe not as drastic as it looks, giving them the currency effects here. So if you add back that 41,000,000 first, and then you also account for the high the high, currency effects on the the orders in the quarter, that will look a bit more solid, that development. Still, it's a bit down compared to, to the trend we've been seeing in q four and q one. And the main reason we see here is that those big product orders that we have received over q four and q one that has been very strong, we don't see the same pace of that in in q two. One reason could probably be the tariffs, and then we believe that we received a lot of those orders also in, in the previous quarters. So I think maybe that clarifies a little bit. On the positive side, we can see that Europe is improving. It comes from fairly low levels, but we see a continued improvement in the pace in in Europe. And, I mean, that's that's a significant market for us, so that's very important that we we see this development. I'll come back to it when we look in the INT numbers. It's even more clear. And we can also note that APAC and especially China is is developing extremely well, and we're more than 30% up in in this region. And and China for INT is becoming a really strong market. A bit surprising that it's going so well, but we we're happy to see that. And if we then move over to, to sales, we don't see exactly the same situation. We see a more steady curve on the sales development. We reached 843,000,000, which is pretty much flat in relationship to, to previous year. Organically, we're minus 5%. And here, also see that organic development is about the same as the FX effect, and then the acquisition of Peak pretty much makes up for that drop. And here, we're also meeting a pretty good comp in in q two. A lot of the businesses were doing quite well. We still had some order book to deliver out from for for the INT part, and also IDS had a pretty good quarter. And we we also see the effect of the the go live from our ERP system. We went live in June 1, where we have been running a bit slow the first couple of weeks in in The US, which is normal. We had the same situation two years ago when we made a change in the big manufacturing site in Sweden. And, this is something that we're gonna get back on. We're back to a decent pace already, and we will recoup on this in in the second half. So that's not a big worry, but the q two numbers is a bit, lower because of this. We also we're we're seeing some component shortages for for some of the switch products. So that's also something that we, expect to solve in the second half and make up. It's not a huge volume, but that could have been a bit better on the sales side. So looking at the book to bill, we're at 1.01. And with a normal sales level, I think we would actually have been, lower than one in book to bill. And going forward, we think that sales and orders would probably go pretty much hand in hand. As you've seen, we've been building some order book now for the last three quarters, and we expect to be able to to utilize that. Now let's let's have a look on the different divisions. If we start with, IDS, starting with order intake, we see organically, we're we're down 2% to 282,000,000. Sorry. Reported down 2%. Organically, we're plus 10%. So you see it's a pretty big difference here, and and we have the majority of the sales here in The US and in The US dollars. And, that's, of course, why this gap is becoming so big. So all in all, I think you the the base business is doing quite okay. And, again, remember, you see here in in q four and q one, the the product orders that we received that is pushing that up a little bit. So it's it's maybe a little bit better than what it looks like at the first glance. On the on the sales side, we are weak. We're down 14% reported. We're down 7% organic. And as I said, some of this we cost ourselves, And that is also the main reason why the EBIT adjusted EBIT is not so good, 65,000,017 percent margin, which is lower than what we should be. And again, we think this will be corrected over the coming quarters in in the year. Then I and T, the most positive development within the divisions. We have an order intake that is up 5% reported and 15% organic. And I, I mentioned before the the continued recovery in in Europe as the main explanation. And we also see that some of the larger accounts that have been placing very few orders for a long time are now starting to to place more orders again, meaning that this inventory reduction period is coming to an end, and, this is extremely important for us to be able to, continue to show a good development here. Also on the deliveries, we are, yeah, we reported minus 1%, 269, but organic, we're actually plus 6%. So we're starting to see the the trend in the right development. And, of course, the the currency situation makes it a bit difficult to compare. But all in all, this is this is doing fairly well. We do 75,000,000 in in adjusted EBIT, solid margin of of, 27.9. And, again, you see especially the development in in APAC and and China that is really strong with China is almost at double levels compared to q two twenty twenty four, which in itself maybe wasn't the best quarter. But still, this is, this is an interesting market still for for this assortment, and, we see that we are still highly competitive in, in that region. Then going over to new industries, where we've been facing a bit of a more tough quarter. So with the order intake side and I should also say that this is pro form a numbers, including now the peak system numbers, all the way, also the comparables. So you see that we are reporting 11 down on orders, 4% down on sales. And organic, this is only 4% down on on orders and flat in, in sales. Here, we've been seeing a bit more hesitation, and we kind of been seeing a bit of a especially on the building automation side, we've been seeing a a trend shift from April. We're a little bit surprised that it's been being that big, and we we don't have any good reason other than the tariffs, so that is causes some hesitation in the market. And we have to wait and see if this comes back. This is, again, a little bit strange. And also on the vehicle side, we are seeing a bit of a tougher market at the moment with the German car industry as a as a main driver. And, I mean, all in all, we do flat in in sales, so we hope that this will improve when clarity comes on the on the tariff side. And also should mention on the order side that we we did have some pre tariff orders in q one on the vehicle, business that is causing q one to be a bit higher and, q two to be a bit weaker. So if you maybe took some $1,015,000,000 and change from q one to q two, maybe you got a better pace, and then you would be flattish on the order intake as well. So let's look at the profitability out of all this. And, we do an adjusted EBIT of 181,000,000, 21.4%. And I think overall, if you consider that we are down 5% in organic sales to still be able to improve the margin over q two last year, we we need to be fairly happy with that, with what we have. It is not our best quarter, especially not on the delivery side, and that is maybe the main reason why we are a couple of percentage points from our our EBIT target. We also have a tough situation on the gross margin, 61.8 versus 61.9, and then you say, okay. That's not a big change. But we have been as you might have seen, we have been a bit higher in between those period. Q two last year was also, for various reasons, a tough, a tough quarter on the gross margin side. We see a bit lower margins than what we normally would would expect. And two main reasons for this. One is the the tariffs, where we've been seeing tariff costs coming in in the quarter. And as Stefan mentioned, we did not increase prices on on, the order books. So we just increased prices for new orders, which caused a bit of a delay in in getting that gross margin effect to to balance out. So we're not too concerned about this because we'll we're gonna get that back from probably from q three onwards already on the the tariff impact. But then we also have the currency situation where we do have some some impact on the on the cost of goods sold as well. And this is, of course, also something that probably will continue a little bit even if the euro has come up towards the the last couple of weeks that might help a little bit. If we if we look on the on the OpEx, we see, again, an organic reduction of a little bit 1% compared to to last q two. And you might also have seen that we are slightly down compared to the first quarter this year. So we are keeping OpEx pretty tight, and we really wanna see that Europe really comes back in a stronger pace before we we have a couple of initiatives lined up that we would like to do, but we'll we're holding those for a little bit. And then on the I also wanna just point out that for what it's worth, the the net r and d is also impacting the quarter by 10,000,000 compared to second quarter twenty twenty four. So the comparison is fairly okay when you compare it to to the same quarter last year. EPS, small improvement to $2.52. Net financials, a bit softer than the last time. And here we have the currency to thank for that. Also, the the interest pays the interests are, of course, a bit lower than it was one year ago. Let's look at the cash flow, that we really like, 201,000,000. Second time, we're above 200. And we have the the decent results to thank for that, but but, also the reduction that we have on the inventory side that we've been we've been talking about this before that we should continue to reduce inventory. And now we made a good reduction here in the second quarter, and we think there is a little bit more to take over the last two quarters for the year as well. We also see that receivables are coming down, so we're doing a good work in collecting, which is, extremely important when we run with a high high leverage. So a bit more focus on this than than we normally have, and it's good to see the the results. And then go over to, to the the debt situation and the the leverage. We were having just over 2,800,000,000.0 in net debt at the moment, out of which about 2.4 is interest bearing. And we see a reduction pretty pretty given given the the the strong cash flow that we're coming down in in interest bearing debt. And it also means that we're reducing leverage, which we kinda like on these levels. We said that we're gonna move to around 2.5 at the end of the year, which we still think is a good admission. And you see net debt divided by adjusted EBITDA is reported 2.97 and adjusted for pro form a from the acquisitions and pre IFRS '16, 2.92. And here we have the 2.92 is actually down from three point o five. 2.97 is seven is down from 3.1 in q one twenty twenty five. So we see a continued reduction. Good to see, and this makes us quite comfortable with the that we're gonna be able to reduce this as we want. Then to sum up before we let let you ask your questions, three things that we would like to highlight. All in all, decent organic order intake in a pretty challenging environment. We still have to say 8% organic order intake growth. The base business is developing developing quite solid after all. We maintain a book to bill of over one in constant currency, so we're we're happy with that. And then maybe the most important thing for us to see that the I and t division continues to to recover. Europe seems to seems to be coming back slowly. Also, big customers are placing orders. We see good development in APAC and and China. And and finally, I think the cash flow, we're it's very important to see that in these circumstances and continue with doing what we should on the inventory side and converting good to the cash. So with that, operator, would you open up for some questions? The next question comes from Victor Hogberg from Danske Bank. Please go ahead. Good morning. So just thinking about your customers being a bit hesitant, tariffs and geopolitics aside. You mentioned some regulations. Could you go into to that, just what you're referring to? And also, you seem to be and you continue to be cautiously optimistic on full year. Is that more tilted to Q4 with Q3 just slightly better? Or what do you see in terms of phasing? Third question, gross margin and mix. So FX aside, what kind of mix impact do you see from recovering any of us deliveries and negative gross margin effects do you say for the rest of the year? Thank you. Do you want to start? I didn't get this with regulations. Victor, what was that? What do you mean with the regulations? If I didn't misread, I think you mentioned regulations as one thing that holds your customer back in you you say I'm I'm clear oh, sorry. My bad. Missed the missed that you talked about tariff regulations. Okay. Just regulation. So let's skip that question. Sorry about that. My bad. And let's go to the gross margin instead maybe and the phasing of the recovery that you're seeing for rest of the year. Thank you. Alright. That seems to be my territory. So I'll take that one. So what what we so what you might have seen, Victor, was that the the order intake was quite good on the IT side in in the quarter. The sales was not that strong. So the the mix effect is not that big in the quarter. And when we come down to these levels, the gap towards the peak and the the rely on margins are not so big. So we don't have a huge, huge effect actually on the, on the mix as such. Looking forward, when we see those those order intake is converting to, to sales, there might be a bit of a push down on the on the gross margin. On the other side, as we mentioned, we think that the fact that we don't have an upside on the tariff price increases, but we have the full downside, that will probably more than compensate for that. And now but we don't know how the future will play out. But since the euro has come up a little bit compared to where we were in the quarter, we think that could also maybe help a little bit. So I think we're quite positive towards seeing better gross margins than what we deliver in the second quarter looking forward, if I put it like that. And then you had the last question that I sorry. I forgot that one now. Can you just repeat that? Yeah. The basis of your remaining cautiously optimistic and the phasing of it, have tended towards, q four, maybe end of q four, I would assume. I I think it's I think a lot comes down to at least what we believe that we need to get some clarity on how these tariffs will play out. And, hopefully, we'll get that fairly soon, and I think that will probably ease up some decisions when we get that clarity. So I think the fact the clarity is probably more important than if it's gonna be eight or 10 or 12 for for Europe to The US, but we need to know what's go I think that goes for a lot of companies. So I think once we we have that clarity, we probably believe that there will be a small uptick throughout the year. Thanks, The next question comes from Erik Larson from SEB. I have a couple of questions. So we could continue on the gross margin side here. Is it possible to quantify the impact from the tariffs on the gross margin? Like are we talking up to a percentage point? Or is it less? It's about a percentage point, yes. Okay. Thanks. And then I'm just curious if there were any material differences in order intake comparing like April to June, for instance. It's been a pretty, pretty stable trend throughout the quarter. So no big differences. All right. And then the final one on OpEx. I saw you had a small organic decline in OpEx. So I'm just curious about the balance here because I assume your plan is to increase costs as demand returns. But just would there be a more pessimistic scenario? Can you sort of hold on to this level or even take it down further, if you must? You want to take that one, Stefan, or should I? I think what we've done here, we started this new organization in three divisions here from first January. Part of this was also to become more efficient and more customer focused. So I think what we see in the reductions we're doing that's an effect of this new organization. If things continue as it goes, we would be a little bit hesitant to add new cost. But at the same time, we just started this new organization. So we are also a little reluctant to cut more at the moment. So we think we have a good organization. We need to get more traction on this. So I would expect this to be more on this level going forward. However, of course, if we see a significant drop, there's always cost to take out. But it's always a balance about short term versus long term. So right now, we have no plans of other costing changes. We rather that we are waiting for an uptick and then ease a bit of the holdbacks we have. The next question comes from Gustav Birneblad from Nordea. Please go ahead. Yes, good morning. It's Gustav Birneblad from Nordea. I thought I'd just build a bit more on sort of what Erik was asking here regarding April to June. I mean would you say that you saw a drastic change in the communication with customer from Liberation Day then? Or how would you describe sort of the overall communication with the customers? Yes. I think that's that is the beginning of this period. It's been a lot of uncertainty, and it just seemed to continue this uncertainty. Some customers maybe get used to it, but we think the tariffs is creating a situation where smaller projects are continuing as normal, but larger projects are on hold due to this uncertainty. So we think that Liberation Day was a starting point for an increased uncertainty. But from that level, it's just been pretty much the same, I think. Okay, perfect. And then regarding sort of the price increases that you have implemented, should we expect them to fully come through in Q3? Or should we expect sort of a mismatch also, slightly here early into q three as well? Or I think almost everything should should balance out in q three. There might be a little bit of a a gap left, but, in all materiality, yeah, in q three. Okay. That's clear. And then just the last one here. I mean, regarding sort of your comment on preordering related to the vehicle business, As you say, SEK 10,000,000 to SEK 15,000,000 here in Q1 that maybe we should have pushed into Q2 instead. But is that all the preordering you have noted in Q1? Or have you gotten sort of more perspective now in Q2 that there might have been more preordering elsewhere as well in q one? Or Not that we know of. And and then we of course, we're not interviewing every customer exactly for what they have done, but it's I think it's pretty the the big difference if you look in pace. If you take INT, it's it's improving. If you take IDS, there we have a couple of pretty big, product order orders. And if I take them out, I think the the business developing about in the same way. So I think there is no big reason for suspecting it from our perspective. I think it's also important to add that many of these customers, they have come from last couple of quarters with quite high inventory themselves. So even if it would make sense from a cost point of view to make some preordering, I think a lot of these customers have also, okay, we are not wanting to build up more inventory at the moment. So we had a few customers and distributors in this vehicle communication. But beyond that, we haven't seen so much of that effect. I think it's a reluctance of customers to build inventory. That's the background there. Yes, perfect. That's very clear. Sorry, and just one last one here. You also comment on the investments you're making in the production facilities in New York and Pennsylvania sort of scheduled to roll out here in H2. Did you say anything regarding the impact on the you say it will be positive here going forward, but did it impact Q2 margins specifically? Maybe I can take that one. So we've been some of the investments are in place. And, as you might remember, Gustaf, we've been seeing a bit of an improvement in the rely on gross margin partly from this, but also partly from from pricing and and other things. And going forward, we we think that we will probably not see the effects in this year. We're probably gonna need the rest of the year to get everything in place. And then from q one onwards, we we will see. We did not say I kinda saw that question coming. We did not say how big the margin would improve, and I think we're gonna hold that for a bit to promise too much. But, of course, we see a bit of an improvement, but we'll we'll come back when we know a bit more how everything has, has worked out for us. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments. Thank you, operator, and thanks, everyone, for attending this quarter two. We will work hard in the coming quarters to make sure that we get back on growth, but let's also hope that the market uncertainty become a little bit more clear going forward. And both me and Joakim would like to wish you a very nice summer and look forward to be back here for the next quarter. Thank you. Goodbye.