Welcome to the Inwido Q2 2023 report presentation. For the first part of the conference, 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 CEO Henrik Hjalmarsson and CFO Peter Welin. Please go ahead. Good morning, everybody, and welcome to this presentation of Inwido's second quarter 2023 results. My name is Henrik Hjalmarsson. I am the President and CEO, and with me, I have Peter Welin, CFO and Deputy CEO. We will spend the coming 20 minutes or so going through the highlights of the second quarter, after which time there will be plenty of time for questions and answers. First, for those of you who are new to us, Inwido is a leading window group in Europe, with a clear market leader position in the Nordic region and a strong and very recently, even more so, rapidly growing presence in the U.K. and Ireland, and I'll come back to that shortly. We have net sales of SEK 9.4 billion the last twelve months, with a return on operating capital of 16.8% and roughly 4,300 employees at the end of the quarter in the geographies you see marked in dark blue on the right-hand side of the screen. Our production locations are in the white dots on that same map, and we market and sell all the fantastic brands that you can see on the bottom part of the screen. First, before we get into the second quarter results, a few words on the announcement as of yesterday, with the largest acquisition to date for Inwido of Sidey Group in Scotland. Sidey is Scotland's largest window and door company, a market leader in the big and growing market of renovation and social housing, with sales of approximately SEK 800 million in the last 12 months and an operational EBIT of approximately 15%. This means, as I said, that Sidey is the largest acquisition to date for Inwido and a really important step in a continued growth in business area, Western Europe in general, and obviously in the U.K. geography in specific. Sidey is in a strong growth phase, the prospects for continued growth are really good, largely thanks to the fact that the Scottish geography has come quite far in terms of starting to make reality of the energy renovation ambitions that we have shared within the European Union. Legislations around energy efficiency of buildings, properties, and residential homes has also increased and will continue to increase. We acquire, in step one, 70% of the shares at a multiple of just below 6x operating EBIT, and the current majority shareholders as well as management will then hold on to the remaining 30% for a period of at least 3.5 years. Summarizing the second quarter then, I think overall, in summary, it's a robust result and margin in what has been quite a challenging market, where we see a continued weak new build activity, particularly in Sweden and in Finland, where we have the largest new build exposure and consumers that are a bit more hesitant, given interest rates increases as well as obviously ongoing inflation. This means that the sales and the order intake have softened a bit, obviously with reducing market volumes, but we are still in the quarter doing a pretty healthy job of defending margins, thanks to continued good cost control and also a full impact of continuous price increases that we've done through 2022 and into 2023 to mitigate the input material inflation, with particular impact than in Eastern Europe, which I'll come back to. We've seen a continued higher competition in the e-commerce space, as I think is the case for many other e-commerce players, which has required considerable investments in marketing and sales. At the same time, we've also entered a new market in the Netherlands, which has then impacted margins in the business area, in the quarter negatively. It's really pleasing to see new incentives popping up with regards to energy efficiency of buildings, and latest one in Sweden, which I'll come back to in a little bit. Looking at the numbers for the second quarter, sales decreased by 9%, or organically by 13% to SEK 2.263 billion. Operating EBITDA, down 36 million to SEK 261 million. As I said, operating EBITDA margin, fairly stable, down only 0.4%age points to 11.6%. Order intake down 21%, which means that the order backlog decreased by 41% to SEK 1.575 million, against what I would say, very high comparables from last year, which was a period of unusually long delivery time. Continued strong cash flow from the business, at SEK 430 million in the quarter, up from SEK 350 million last year, really enabling the strong balance sheet with a net debt versus operating EBITDA of 0.7 or excluding IFRS than 0.4. This is obviously a key strategic element for us as we continue to pursue inorganic growth opportunities. If we summarize then the development of the first six months, we've seen a sales decrease of 4% to just shy of SEK 4.4 billion. Organically, that's 11% down, with an operating EBITDA that's down by SEK 47 million to SEK 430 million, which means then an operating EBITDA margin of 9.9%. The earnings per share slightly down from last year at 5.26 SEK per share. We look then at the business areas, starting with business area Scandinavia, where we, as I mentioned earlier, saw a weaker industry market in particularly Sweden. Sales in the quarter was 12% down to just shy of 1.2 billion SEK, with an operating EBITDA margin of 14.3%. As you can see in the ring chart on the right-hand side, we do have some fairly considerable industry market and new build market exposure in Scandinavia, and that's obviously been one of the key contributors to the softer sales. However, with a strong position and a clear majority sales to the consumer market, that has then mitigated part of that, particularly with the development in Denmark. It's really pleasing that in a period of lower activity, we've taken some strong strategic decisions, supported by the board, to continue to invest for long-term profitable growth, most notably then with a SEK 100 million investment in Elitfönster's facilities in Vetlanda, to combine up a one-site factory footprint, with improved capacity, improved profitability, and a more sustainable production footprint. The order backlog at the end of the quarter, 47% down year-over-year. If we look then at Eastern Europe, we saw obviously, thanks to, as I mentioned, continued good work with mitigating input, cost material inflation with price increases, strengthening margins. Sales down 3% to SEK 569 million, with an operating EBITDA margin considerably up year-over-year at 13%. The price increase activities that we've taken throughout the year, in particularly in the long lead time channels, have now taken full effect, and that's bolstered our margins in the quarter. We've seen, and as you can see in the ring chart on the right-hand side, Eastern Europe is where we have the largest exposure to the industry and new build market, and we have seen the weak industry market affecting sales as well as the order intake, whilst the consumer market is actually holding up a bit better. The order backlog at the end of the quarter, down 47% year-over-year. Looking at the business area, E-commerce, where it's really pleasing to see the entry into a new market. Sales grew 1% to 271 million SEK. We launched sparkozijnen.nl in the Netherlands, which will become our eighth market and the twelfth brand in the e-commerce business. The margin, however, as I mentioned, slightly down year-over-year, 3.9%, largely due to then market investments and sales investments to really fight a landscape that is characterized by tougher competition than we saw a year ago, and obviously, costs linked to launching a new market. The order backlog at the end of the quarter, 8% down, but we're obviously continuing to prepare this business for long-term considerable growth. Lastly, then Western Europe, we saw a strong development in Ireland in the quarter. Sales down 8% to SEK 227 million, with an operating EBITDA margin down by 3.1% each points to 6.8%. The Western Europe quarter was really characterized by a considerably lower consumer activity in the U.K., following even higher inflationary pressures that we've seen in some other markets, and also then higher interest rate increases, causing more cautious consumers. However, partly that was then mitigated by strong development in the Irish market with both higher sales and profits. The order backlog at the end of the quarter, -3%. Obviously for Western Europe, the acquisition of Sidey is completely transformative and gearing us for a considerable long-term growth potential. A few words then on one of the really important strategic drivers for us, which is our sustainability work. I'm personally really happy that thanks to the ongoing focus we have and the large battery of activities, we see a continued positive trend with fewer accidents in the business, impacting our employees. In general, in the quarter, we've seen a drop in production volumes across the board, and with a lagging work in terms of pulling down the base load of our impact on the environment around us, it takes time to compensate for the lower volumes to, in order to continue to reduce the impact per unit on things like energy efficiency as well as waste. We're working very hard, making sure that we can continue the positive trend per unit, despite operating with slightly lower units. With that, I'm going to hand over to Peter, who's going to take you through some of the numbers. Peter, please. Thank you, Henrik. We start with this picture showing the income statements. To the left, we can see the income statement for the second quarter, this year as well as last year. In the middle, the year-to-date figures, January to June, and then to the right, rolling 12 months. If we start with a quarter, sales was down 9%, organically, it's down by 13%. The lower volume has a negative impact on gross margin, as well as the operating EBITDA margin and the EBITDA margin. However, the gross margin was improved in the quarter from 24.9 to 26.7, thanks to higher prices, and during last year and the beginning of this year, our sales prices. We've also implemented cost savings within the group, and we also have a positive mix impact. The EBITDA margin was down by 0.4%, from 12% to 11.6%, showing that we are able or more or less able to defend our margin despite the lower volume. EBITDA has then been reduced by 12%, or SEK 36 million, from SEK 297 million to SEK 261 million. The Swedish companies have received electricity benefits in the quarter from the Swedish government due to high costs during last year. These benefits have been booked as positive restructuring costs, meaning below operating EBITDA and has then impacted EBITDA. Due to the reason that the benefits are related to last year. These benefits have then offset restructuring costs as well as acquisitions costs in the quarter, and the total net impact is a slightly positive restructuring cost compared to last, compared in the quarter, and thereby, the EBITDA is higher than the operating EBITDA. Further on income statement, we can see that profit after tax has been reduced by 9% from SEK 250 million to SEK 196 million, and the earnings per share is down by 8% from SEK 3.66 to SEK 3.36. Looking at year to date, January to June, sales is down by 4%. Organically, it's down by 11%. The gross margin has been improved. It was improvement in Q2 as well as in Q1. Operating EBITDA has been reduced by SEK 47 million, from SEK 477 million down to SEK 430 million, a reduction by 10%. Further on income statement, we can see the profit after tax is down by 8%. Also earnings per share is also down by 8% from SEK 5.74 to SEK 5.26. Rolling twelve months, sales is now on a level of SEK 9,357 million. The operating EBITDA is SEK 1,042 million, equals a margin of 11.1%. The earnings per share is SEK 13.26. This page is showing the sales development and the order intake for the second quarter from 2018 until 2023. To the left, we can see the sales development, and to the right, we can see the order intake. If you start with sales, the sales in the quarter, SEK 2,263 million, is the second highest in sales ever for Inwido in the second quarter. Reported sales is down by 9%, organically, it's down by 13%. Scandinavia, minus 70%, Eastern Europe, minus 11%, E-commerce, minus 2%, and Western Europe was minus 13% compared to last year. The order intake has also a negative growth of 21% in the quarter. Negative, especially within the industry markets, and then especially within Scandinavia and Eastern Europe, where we have a higher degree of industry sales within those segments. If we exclude the acquisitions, the order take is down by 20% compared to last year. The total order take for Scandinavia was -23%, Eastern Europe had -33%, E-commerce was +18%, Western Europe was also +4%. The order take for the second quarter this year is higher compared to the level of 2018 until 2022. With a lower order intake, but relative high sales compared to last year, the backlog has decreased in the quarter and is today 41% lower compared to end of June last year. However, in 2022, and also in 2021, the order intake in the second quarter was quite high, especially in the second quarter of 2022. At that time, Inwido was not able to increase the capacity so rapidly, and thereby the order backlog grew and the delivery times were just prolonged. Today, the order backlog is on a more normal level, still higher compared to the level of 2018, 2020, and the delivery times are back on a normal level. The backlog end of the quarter is SEK 1,575 million. This page is showing the return on operating capital, and we are above the target of 15%. Today or end of June, we are on 16.8%. Return operating capital is defined as EBITDA rolling 12 months in relations to operating capital, the average latest four quarters. Compared to December 2022, return operating capital has been reduced by 1.5% units, from 18.3% to 16.8%. The main impact is, of course, the lower results. The lower result or the lower EBITDA has reduced return operating capital by 0.9%. The rest of the reduction, the 0.6%, comes from higher operating capital. Operating capital has been increased by SEK 300 million compared to December due to IFRS 16. IFRS 16 has increased by about SEK 50 million due to prolonged agreements and also due to inflations. We also have an higher working capital. We also have a negative currency impact, CapEx, as well as full implementation of the acquisitions. 16.8% is still above the target of 15%. This page is showing net debt and net debt in relation to operating EBITDA, including as well as excluding IFRS 16. The net debt has increased during 2023, which is normal due to seasonality and a dividend payment in May. Excluding IFRS 16, the net debt end of June was SEK 580 million, compared to SEK 861 million last year, a reduction by SEK 353 million. At the same time, IFRS 16 debt has increased. It's today SEK 476 million. It was SEK 396 million last year. It has been increased due to prolonged agreement and inflations. The net debt in relation to EBITDA is now on 0.7, including IFRS 16, was 1.0 last year, and 0.4, excluding the IFRS 16, was 0.7 last year. Inwido has a positive cash flow generations in the quarter, and the cash flow is actually higher this quarter compared to last year. As Henrik informed, we concluded the acquisition of Sidey Group yesterday evening, and if we'd have included Sidey Group within these calculations, the net debt versus EBITDA would be increased by about 0.4-0.5, still far below the target of 2.5. In summary, the second quarter, as mentioned, obviously characterized by softer markets and declining market volumes. However, we feel we've been able to defend margins, thanks to good cost control and full impact from price increases, which proves the resilience of the business model. We're continuing to invest for growth, both in business area e-commerce, but also, for example, with the important investment we're making in Sweden for Alingsås. We see continued good long-term growth opportunities with increasing energy efficiency requirements for buildings, which will increase in the coming years, very much fueled by the ambitions of the European Union. Last but not least, after the end of the quarter, then the acquisition of Sidey Group in Scotland, being a one key part of continuing the growth towards the 20 billion SEK sales target, and obviously accelerating growth in the UK considerably. We now- With that, we open up for questions. Operator, please. 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 Sofia Sörling from Carnegie. Please go ahead. Thank you. Sofia here from Carnegie. Hi, Peter and Henrik. Thank you for the presentation. I have a couple of questions here. Let's start with Scandinavia. You mentioned this order intake decline of 21% in Scandinavia. Could you give us some detail on if you see any acceleration in by the end of the quarter, or if you see similar seasonality or more normal seasonality now during this Q2 quarter? That's my first question. Yeah, I think the pattern is fairly normal, I would say. It's in line with what we'd expect. In terms of the pattern, we would take in terms of, in line with what we normally expect. Okay. Great. Also Eastern Europe, you mentioned you talked a little bit about this strong profitability. I noticed that you have much higher gross margin, and you mentioned that some, this was partly due to the high consumer sales compared to industry sales. Is this the only reason for this high margin beat in Eastern Europe, or is this something else also explaining this high profitability? Yeah, the main driver of the profitability improvement in Eastern Europe year-over-year, I think it's also fair to say that, I mean, we've been quite clear pointing out that in terms of the order backlog, the comparable is very high. In terms specifically of the margin for Eastern Europe, the comparable is actually on the low side, but the big driver of the margin improvement is price and the full impact of price increases following the considerable input material inflation we saw last year. Okay. Okay, I see. E-commerce. You mentioned this jump in profitability here due to further market investment. Could you say, give us some more detail of what type of investments have you done here? You enter Netherlands, as you mentioned, but, I mean, is it investments in order to expand the interface of your website? What tangible investments have you done that actually dampen the margin in e-commerce? Yes. There are a few things. One clear one is obviously cost associated with the entry into the Netherlands, which just, you know, entering a new geography does carry some costs. That's one part. Mm-hmm. One part is costs for expanding the omni-channel proposition. Mm-hmm. Notably, investments in showrooms. One that, just as one in Copenhagen, for example, a new one in Copenhagen, and actually one, which is just about to open in Stockholm as well, just as examples. Okay. Then there are also costs associated with brand building, brand activity, so above the line marketing. There are also what I would characterize as higher cost of doing business in the sense of increasing cost in the current environment for lead generation and for lead conversion. All right. Okay, thank you. This positive order intake in e-commerce, what is the main driver behind this, if you measured year-over-year? Also, like, could you give us some details on which country is the strongest in e-commerce? Yeah, actually, it has been a little bit of the, of a mix, but what we've seen, over the past month has been, improving trend actually in the Swedish market. Okay ... development in Denmark. Mm-hmm ... with a more hesitant development in Norway. You know, given we should still remember that e-commerce is a small part of the total window market. The development for e-commerce is not really a good indicator of the overall market development, but I think more a consequence of how successful we've been in implementation and partly competitor activity. That's the way it's looked recently. All right. Okay. Yeah, I have many questions, but I will just end with one here and don't stop the line. On this acquisition that you announced yesterday, can we expect you to make any continuing acquisitions in 2023, or will the strategy be to hold back a little bit now, or what should we expect? I mean, obviously, closing the second quarter with 0.4 net debt versus EBITDA, excluding IFRS 16. Mm-hmm ... and then adding 0.4 or 0.5, as Peter mentioned. Mm-hmm ... getting us to just shy of one, we would see that there's room for continued acquisition. Mm-hmm without, you know. obviously, the exact nature of that and the size, et cetera. Okay. I think it's also fair, you know, given our experience in the timing of this, to be a little bit cautious in terms of when it will happen. I'm not gonna promise anything more in 2023, but we're definitely working on, and we see considerable potential in continuing, consolidating the market. We will do more. Yeah We're working along that way. Okay. Thank you so much. Thank you. The next question comes from Rasmus Engberg, from Handelsbanken. Please go ahead. Hi, guys. I had a couple of questions regarding the acquisition. Can you first start by explaining how did this business perform, you know, in the last two years? Has it been growing consistently or what's been going on there? Yes, it's. Hi, Rasmus. Yeah, Sidey is a growing business. It's got a, a really good track record in terms of building a, a strong position, particularly than in the, in the renovation of social housing or, you know, which is then the equivalent of Swedish Allmännytta, basically. Have built a very strong position there and growing there but also growing in the other channels. It comes of a, of a healthy trajectory, and a not insignificant part of that is a clear ambition, as well as legislation around the energy efficiency of buildings in the Scottish geography. What type of product is it? Is it only wood or predominantly wood, or is it plastic, or what type of product do they do? it's a mix, actually, of both aluminum, PVC, and, timber, and alu-clad timber or alu-clad wood. The majority is PVC. Mm-hmm A fair amount of wood-based products and aluminum-based product as well. Just maybe for Peter, this 30% stake, that management and old owners will hold, will that be treated as a minority or is there some sort of earn out debt structure in it instead? It's gonna be treated as minority. We are going to consolidate the full result. It's a call put on remaining 30%. The value of the call/put will then be booked as interest-bearing debt in our balance sheets. Thereby, we will take in the full income statement and then reduce, the earnings per share by 30% of the net result from Sidey. Very good. Just back to a previous question. With regards to the profitability in Eastern Europe, I'm not sure, has it ever been this high? Is this kind of like a one-off, or do you think this level is in any way sustainable? It has been this high before, absolutely. I, as I said, I was a bit honest before, and also saying that, you know, obviously, almost a 5% each point improvement looks fantastic, but we should remember that the input material inflation started to hit in Q2 last year, and we were lagging with price increases during last year. The margin in Eastern Europe last year was a bit of a disappointment, to be honest. The number is good, and the team in Eastern Europe have done a fantastic job, but it has been better, and last year's number was a little bit of a disappointment. The comparable is a bit easier in that sense. Great. Very good. I'll get back to you guys. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. Okay, we have received some questions. We saw the first questions comes from LBV Asset Management. They're asking from which month we are going to consolidate the acquisition, the Sidey Group. This is going to be from July. From July, the Sidey Group will be consolidated. The second question was regarding the minority shareholders or shareholder, if they're going to stay for a long time, how the condition is for regarding the minority shareholders. First of all, there are many shareholders because it's all shareholders, two of them, together with the management, holding remaining 30%. We have a call put on remaining 30%, and that is going to be exercised in 3.5 years from today, and they are going to stay until this 3.5 years. The value of the call put in the future is going to be based on the future results. We have received four questions from Goldman Sachs. The first question is regarding competition on e-commerce. The question says, "I don't remember you mentioned high competition for e-commerce in recent calls. Are there new entrants here? Same competitors ramping up marketing questions? A fair point, and the reality is that there were not any new competitors, but what has happened is that as for other actors in the e-commerce space, the overall market activity is down, which means that although as such, the competitive situation remains the same, competitive pressures in terms of fighting for business increases with less business to fight for, in a sense. That's what we mean with that, but it's a good clarification. We're not facing new competitors or new entrants, but just a more hesitant market, which is saying increase the competitive pressure in that market space. Second question from Goldman Sachs is: So far, how are customers reacting to your marketing in your new entrants on the Netherlands compared to other regions? In all honesty, I think it's a little bit too early to say because it's a quite new initiative still, and it does take a bit of time to set up and evaluate the reliable lead generation. I'd like to take a rain check on that question and come back to that after the next quarter. Hopefully, give a little bit better answer then. The third question from Goldman Sachs is: Did price increases affect Eastern Europe sales more than other regions? No, I would not say so. I think it's important to remember that given the fairly high industry exposure that we have in Eastern Europe, the lead time for imposing or implementing, rather, price increases is longer. It's more a consequence of a time lag than it is of taking. We're absolutely not taking any exorbitant price increases in Eastern Europe that we're not doing anywhere else. It's just taken us longer to get full impact from it in Eastern Europe. The last question from Goldman Sachs is: What market share does Sidey have in Scotland? Do they only sell in Scotland? Sidey, it's really hard to give any good the market data in the U.K. geography in general, the Scottish geography, in particular, is not reliable enough to give any really good indication of market shares. We know that it's the largest local player, and There was a second question to that, sorry about that. Do they only sell in Scotland? Yes, the sales, they sell almost exclusively, for intents and purposes, only in Scotland, yes. We have a question from Richard Berg. He's wondering, as you are generating increasingly strong free cash flows, do you see good opportunities also in the future to deploy those at high rates or returns? I'm thinking of M&A, internal investments, or even share purchases. we see opportunities over the strategic period, and then most notably, to get us towards that 2030 target of SEK 20 billion of sales, to generate good returns on the cash that we generate and on the balance sheet group that we have, both in terms of internal investments, like, for example, the one we've approved and initiated in Elitfönster over the past quarter, but obviously also with strong acquisitions at decent multiples, like with Sidey now that we just completed. That was the last questions. No, no further questions. We will hand back to the operator if there are any further questions on that side. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. We thank you.