Hello everyone, welcome to this conference call regarding Lagercrantz Group's first quarter. My name is Peter Thysell, and I'm the group CFO. I would ask everyone to take a few minutes to wait, and we'll see if we can connect Jörgen into this call. Okay. Hello, Jörgen. Yeah. I thought I was on the call. Okay. I think everybody can hear you, so we can start the call. Okay. I was on page number four here. Did the rest of the people not see? Okay. No. Should I start over then? Yes. Yes, please. Okay. All right. Okay. We'll do it again, no problem. Welcome to the Lagercrantz interim call for the Q1 report. My name is Jörgen Wigh, and I'm the CEO of the group. Together with me on the call here is also Peter Thysell, our CFO, that just was on here as well. Unfortunately, we had some technical issues starting up here. I was speaking on my own, I think, here on my side. I hope that it isn't too inconvenient for you. We will do it over again and start from the beginning. We have uploaded our presentation here on our website, and you can download it from there and look at it. I will try to, sort of, make sure that I mention when I change into the next page, so that everybody can be aligned with that. We normally put these presentations for about 45 minutes. We will start with some introduction to the group and then move on right to the figures and what we reported here this morning. We'll start with page number two then, with a short introduction to the Lagercrantz Group. I mean, Lagercrantz Group, we are a business to business tech group, so all what we're doing is selling business to business technologies to other companies. We try to do that with some 60 or close to 70 really subsidiaries working under their own brand name from their own location and building a very strong position in their respective niches that they're working in. We have organized our companies into the five divisions you can see there, Electrify, Control, TecSec, Niche Products, and International. We are very fond of working with decentralization and management by objectives. Each of the companies are seen as a profit center, where we are sort of working in building each of the profit centers in creating a strong company in each of them, providing good growth and good profitability in each of the companies in their respective niches. Our revenues are now exceeding some SEK 5.8 billion, and we are about 2,000 employees, as you can see there. Acquisitions is of course a central part of our business model. We are making five to eight acquisitions per year. It's our ambition and that we've lived up to here in the last few years. Growing the group both organically and through acquisitions along the way. We've been on the stock exchange since 2001. From 1976, we were on the stock exchange as part of the Bergman & Beving Group, but we were then spun off in 2001. Being our own company since then, and on the large cap segment here since January of this year. We've been growing nice and steadily along the way. Over to the right, you can see where we have our companies and our footholds, and you can see that we are in the Nordics and in Northern Europe mostly. We also have some footholds where you can see all the way out over to the right there, you can see we are in China, we are in India, we are in the U.S., where we have some footholds for some of our companies and building from there when other companies want to join in those or have ambitions in those geographies, we use them as hubs to create growth in new markets for new companies within the group. That's how we work with that. That's a small introduction to the group. We will move on then and look at the number we posted here this morning, and that we can see on page three, that we closed another strong quarter. You can see a very strong trend in our numbers for some years now really, but it's been an increasing pace here in the last year or so with good both good organic growth and also some good acquisition that has been contributing very well to us. Therefore we are approaching SEK 800 million here now in profit after financial items. That is an ambition we have. We have a platform or a strategy or an ambition to reach the SEK 1 billion here within a couple of years. We said five years to start with, but we are well on the way already after only 15 months, as I mentioned in my words in the report here. It's been a great year, and this new quarter was really from that trend here going forward as well. It looks very good for us. Looking a little bit on page four, you can see the business conditions that we commented on in the report. We posted some strong revenue growth of 23% in Q1 and a good 9% organic growth, which is very good for us. Some of that is of course price, the most part of it is really price, but that's also good organic growth to be able to compensate and raise prices when we see disruptions in the supply chain and raw material prices picking up. It's also good to be able to balance that with some good organic growth and for our customers. On top of that, we had another 11% through acquisitions and a small part was also currency, 2%. What we saw in the quarter was a continued good broad-based growth and demand continuing in our main markets in the Nordics and in Northern Europe. We feel that the market has continued to be very strong, that we don't see any sort of really clear signs of decline. We think it's been picking up quite nicely for us during these quarters. We, of course, look at what everyone is writing around it, what's gonna happen in the fall and the interest rates and inflation rates going up. Of course, we are cautious. We are also sort of preparing ourselves for if something worse would be ahead of us. So far so good, and I think it's been picking up quite nicely here also in May and June. We have a strong order book, as we also commented on in our report, when we're now approaching moving further really. What we also concluded is that we have been doing some quite good proactive management with price adjustments has balanced the rising raw material prices and freight costs that we've seen. Component shortages cause longer lead times, of course. We have also seen some increased need for increase in our safety stocks in some instances, which has also affected our cash flows, which I'll comment on later on. We also see, of course, the increased uncertainty due to the geopolitical turbulence and new waves of COVID-19. I don't think anyone knows what's ahead of us. As I said, so far so good. Of course, we are also preparing ourselves with. We have been used to doing these things when things have gone for the worse. We're sort of addressing that with plan Bs, working quite tight with customers, focusing on cost and cash flows. Those type of measures we have put in place in a couple of instances before, especially in the 2008-2009 financial crisis. That's where we did it the most maybe. Of course, we have all those tools ready to be used if that will be needed here, going forward. Looking at the Q1 figures then, I already mentioned the net revenues was up then 23%. I'm on page five now. To the SEK 1.6 billion almost. Organic growth was 9%, as already mentioned. The EBITA was up 25% to SEK 265 million. That was a strengthening of the EBITA margin to 16.6% as opposed to 16.3% the same for the last year. A strong quarter, picking up good with the EBITA margins along the way as well. Profit after financial items increased by 29% to SEK 232 million. Cash flow from operations was really the weak point. That was SEK 2 million as opposed to 141 last year. This is a temporary thing, I would say. This is not a new strategy or so, but we have felt that in some instances we have needed to put up some extra safety stock. We also had some COVID-19 related things when it comes to how much taxes we pay. That was a big payout here during the quarter. We see some buildup of inventory, but also the accounts receivables were high since we have been growing and increasing accounts receivables. A lot of things affected the cash flows negatively, but I don't think that we're pretty sure that this is not something to expect from us. This is a temporary thing that we will fix here in the coming quarters. Profit after tax then increased by 29% to SEK 179 million, and earnings per share is at SEK 3.3 per share then, as opposed to SEK 2.80 for the full fiscal year last year. Return on equity stayed at an all-time high. We have it at 20%, as opposed to 25% for last year, and equity ratio is at 33%-34%, as opposed to 36% from last year. We will have our annual shareholders meeting here on August 30th. There the board will propose a dividend of SEK 1.30 per share, as opposed to SEK 1 last year. Also an increase in dividend along the way here. Looking at page number six, to have some comments by division, I think we continue to have five very strong divisions. Especially, Niche Products are doing it very well. Also the others are doing it very well. I think where we see the greatest growth is really in the TecSec division, where they have been making some acquisitions lately. They made the CW Lundberg last year. They made the ARAS Security here this winter, and they also made the PcP Corporation now, which has not affected the numbers yet. The one growing the most is the TecSec division in terms of the top line and also in the. The biggest one is the Niche Products. We can see down to the left there in the EBITA that we see the good EBITA levels in all divisions. We can also see that the International division, which has structurally somewhat lower margins. You can see that from the trend there that is picking up quite nicely, and they're posting yet another quarter at the 14.4%, which is very good given what they have been used to. The restructure they made some years back now, some time back really has paid off very well. The number of companies are doing quite well at the moment. It's good to see International at the 14.4% there. Five divisions very strong. To add to that, we have some comments on page seven as well. In the Electrify division, I mean, the revenues were up some 5%, but the EBITA was slightly down to SEK 65 million, but still on a very good level and doing it very well. We view it as a very stable first quarter. Last year was a very strong quarter. We also see that the electrification of society is driving demand for these companies that we have. I think we're positioned very well within the electrification and what's happening in society. We also see that some lead times have gone up and we also see lead time in investment approvals processes and rising material costs effect on some of the projects they've been running. Therefore, we see slightly lower EBITA this year than last year. Some companies are also doing it very well. The cable harnesses businesses are doing it very well, and 3D performed very well with deliveries to the telecom and the 5G infrastructure during the quarter. A stable good quarter, I think, for Electrify, even though not fully living up to last year. The Control division, the revenues were up some 15%, and EBITA was up 18%, so a very strong quarter. The EBITA margin was at 14.9%, and some good organic sales growth of 6%. We continue to see a good positive business climate for many of the companies, but we also have some project-related businesses, especially Precimeter and those that have been seen some slowdown during the quarter as well. Particularly, Radonova and Direktronik and Precimeter and GasIQ provided a very, an improved profits for the quarter. The recent acquisition, the one we made here this winter in, I think it was in November or so, Elnova, yeah, it says there. Elnova delivered according to plan. It's a Control division positive good quarter. Within the TecSec division, revenues were up the most, maybe 52%, and EBITA was up 33%. A very strong quarter, and EBITA, the EBITA margin was at 17%. They posted a very strong Q1 with some 13% organic sales growth. The largest unit, CW Lundberg, Orcon, ISG Nordic, and Friatec, reported strong sales growth. Some of these companies are also struggling to compensate for higher raw material costs, so some of them also have a negative impact on their margins. The margin contraction in TecSec is more attributed to those companies than to the PcP coming on board. The PcP posted a strong June, and that company we also acquired in June, so 95% of the company we acquired. That is the largest acquisitions we've made so far within Bolgatanga, adding some SEK 423 million with an EBITA of SEK 57 million. It's a strong bigger acquisition for us. I will comment on that later on here in the presentation. They had a good start within Bolga accounts the first month they were with us. The PCP acquisition. We move on. On page eight, you can see the Niche Products division. Revenues were up 30% there, and EBITA was up 33%, and an EBITA margin of 20.6%. Very strong EBITA margin in that division, with some 12% organic sales growth. We saw some improvement in demand and earnings in most businesses, particularly PcP with a product working very well for them in the U.S. and posted some good orders and good deliveries into the U.S. market, and then also benefiting from a strong dollar, which is also affecting them in a positive way. Isodrän and Dorotea and Kondator and a number of other companies in that market continue to show strong performance. Tormek, that has been a very strong engine for the Niche Products, had some increased sales during the pandemic, though a weaker start to the new financial year. Everything was very strong in the Niche Products division, except maybe for Tormek. Still doing it very well, but not fully living up to last year. Within the International division, we have some revenues picking up 18% with some EBITA at 41% and the EBITA margin of 14.4%. A strong quarter margin-wise, with some 12% organic sales growth. We saw some strong development for many of the businesses, especially within the marine businesses, which is then the lead around the IC Group in Denmark. We have a cluster of more marine-related businesses within the International division, and they saw a strong market, all of them basically during the quarter here. That was a strong part of the business for us. Other companies did it well as well. The Arctic companies in Denmark, Norway, Sweden and Poland did it well, and also the MSP in Denmark. Good improvement on many fronts with also the International division. That was a lot around the Q1 report. Looking forward, I think the strategy that we're still working with is the Lagercrantz towards the SEK 1 billion. To go over that a little bit to give you an update. Jörgen, hi, this is Mark Buckle from ABG. I think some people on the call have their lines open, so perhaps if we could ask everyone to mute themselves, that would really help. Peter, can you mute everyone once again? Okay. Maybe it's better. We'll try and move on. Hope that works. I mean, the program that we put together a year ago, or really 15 months ago, was the Lagercrantz towards the SEK 1 billion. We concluded back then that we had a profit after financial items just above SEK 500 million, and we felt that we should go for the one billion here in. We said we would do that within five years really. We have had that sort of trajectory of growing some 15% per year, and then we would double the profits in five years. We said we would do it within five years. Now we've been working with this program for 15 months, and we are approaching SEK 800 million. We're basically well before our time plan here, which is really great. What we said here is that we should build on what was the platform then? Well, what was built on the success we've had for many years and continue our journey. Peter? I can't hear you, Peter. Are you on the line or? I'm on the line. Please try star four again. It's star four to mute everyone, or? I thought it was star six. Star four? Star four. Okay. Now I hope everyone can hear me, and I muted everyone. To continue on page number nine with our strategy and the Lagercrantz towards SEK 1 billion then. We have some key themes in this program, and that was the first and maybe most important ones that was to clarify the strategies and the financial goals and to be very clear on where we would like to be and where we would like to go. Do that also by reorganizing ourselves into the five divisions with some clear growth ambitions, finding more sustainable tech areas and customer segments that we can go for, where we find some structural underlying growth in those markets. That we've been doing here with the reorganization into the five divisions. I will cover that shortly here. We also decided to increase our capacity within M&A, and we will focus on sustainability. I will try to cover them in the slides to come here. First and foremost is then the division and financial goals. What we would like to build with Lagercrantz is really a strong group, a sustainable supplier of value-adding technologies and companies providing those type of technologies and build those companies, with establishing and developing market-leading positions in several expansive niches. We have used this core with all the arrows here to illustrate that, where we see each of the profit centers as one of the arrows here, and that they will be very sort of lethal and sharp and doing what they're doing very well and through that build a very strong group with a number of companies providing good cash flows and profits and build from there. We put up some financial goals then. The EBT should grow more than 15% per year, and at least one-third of that should grow organically and the rest through five to eight acquisitions per year. We should do this in a very profitable way with having a return on equity of more than 25%. That was a clarification regarding our goals. We did a reorganization into the five divisions. 15 months down the road, I feel very encouraged that this has been very good for us. It's in creating some good dynamics when we talk about where we should be internally. When we talk to the M&A community, we feel that we can better address where we would like to be, what companies we're looking for, and be more targeted to finding the right companies. We've also increased some resources regarding M&A in these divisions. That means that we also can run more sort of M&A processes simultaneously. An important thing here is also in addressing these customer segments or these product segments about finding areas where we see the underlying structural growth, and that we do in these companies now. We also have an ambition to have good organic growth in our companies. Due to that, we are focusing on the right thing along the way. A clear ambition here has also been for us strategically to grow the part of proprietary products. Here you can see that we have increased the share of proprietary products for many years now. In the last quarter, it was 70% still. With the acquisitions we just made here, this will pick up, and we will probably be at the 75% in a year or so, I assume. We have been very targeted to finding those companies when we do an M&A. Through that, we should be able to, yeah, reach the 75%. The 75% means that we are having more proprietary products where we own the product rights. That means that we can both price our products more independently and go for the markets where we would like to be, and go for exports more than we have. It means that our ambition is that that should push our margins, but it should also go to push our topline organic growth when going for more proprietary products along the way. Therefore, it's been a very strategic, key strategic ambition for us. We are about to deliver on that as well along the way here. Looking a little bit at acquisitions, as said earlier, we have increased our resources around this, and we are driving many processes simultaneously, looking at a number of companies that potentially can be part of Lagercrantz. We concluded the PcP here lately, and Fiegro is also here just a couple of weeks ago. Since a year ago, we've closed seven acquisitions, adding close to SEK 1 billion in revenues, with some good margins and good profitability. This is a very important sort of engine for us. We said that 10% of our top line should come from acquisitions, and the 975 is well above that now. Of course, it was important for us to close the PcP acquisition. Here is a fact sheet around that on page 14. The PcP Corporation, you can see there. They are a Danish leading designer and producer of high-quality bespoke safety solutions with grating, treads, and handrails. It might seem a bit bulky, these products, but they have a lot of patents, and they also have a lot of very niche-oriented solutions doing quite a lot of customization of their products, and addressing a different market really where short lead times and delivery times are very important to the customers, and thereby created a very strong company. They have some revenues of DKK 425 million and a profitable working capital exceeding 60%. It's a profitable good company we feel. They are addressing some key end markets with mainly related to infrastructure that might be within industry production, such as food, pharmaceutical, or petrochemical production, or it might be within energy, power generation and transformer stations of this type of equipment used, and with also some fire protection gratings as well as a key product. They're also working quite a lot within construction, of course, but in the infrastructure part of that, with railway installations, roads and bridges and water treatment plants and those type of installations. They have a very broad-based sort of customer base and working in many countries. They are working in 30 different markets worldwide, and they have wholly owned subsidiaries in Norway, Sweden, the Netherlands, Belgium, Germany, and the United Kingdom. It's a stronger and maybe bigger company than we normally. We also feel that this is also a good acquisition when it comes to the price we paid. We paid 6.1x EBITA for this company, and that could add to our group as well in a very good fashion. The management team have the ambition to drive this company to 15%. They're currently at the 13.5% or so. You can see that from the fact sheet down to the right there, you can see the numbers they've been posting. They have been doing quite a lot with both production costs and also with pricing here lately. We see a good opportunity for them to strengthen their margins a little bit to the 15% or above which we have the ambition for. They will be part of the TecSec division starting from June onwards here they will add to our numbers along the way. Very important acquisition for us with PCP. The second acquisition we posted here during the here lately is the Stegborgs. Stegborgs is a very much smaller company, but a good add-on to the Control division. They are a market leader within this, especially in Stockholm, but will grow outside Stockholm as well in the other parts of Sweden. They are making some leading hardware and control systems for the renovation of elevators. And they have some SEK 60 million in sales with some good profits, adding to also the Control division. To round off my presentation here, we closed, I think, a very strong quarter, the best we've ever had. We feel that the order book is strong. We feel that we have just closed a very strong acquisition for us with the PcP, and are looking forward to the coming quarters, even though we're also realizing that we might be heading for tougher times, and we are prepared in our companies to take measures if necessary along the way. So far so good, we would say. I usually round off with the financial overview. You can see the sort of good trajectory we have here with the increase in sales and EBITA and EBT and the return on equity now at the 28%, which is above the 25%, which is our target. The EBT growth should be 16% then. You can see that we have been well above that here for the last couple of periods here. The earnings per share growth has been very good as well at the 34% here now in the moving 12 months figure that you can see there. With that, I will round off. I don't know, Peter, if you will unmute everyone and maybe you would add something. Otherwise, we will open up for questions. Yeah, maybe that's. Okay, sorry. Can you hear me? Hi, can you hear me? Can you hear me? I think you guys can hear me, but I can't hear you guys. It's Victor Hansen from Equity Research. You again, Peter? Victor, can you hear me? Victor, can you hear me? Hello, everyone. Jörgen, can you hear me now? This is Peter.