Welcome to Lifco Q4 report for 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions- and- answer session, participants are able to ask questions by dialing pound five on their telephone keypad. Now, I will hand the conference over to CEO Per Waldemarson and CFO Therése Hoffman. Please go ahead. Thank you. Good morning, everyone, and welcome to our Q4 conference call. We can directly move into page number two in our Investor Presentation, and just on a very high level, look at the group's financial performance, where we had a net sales growth in the quarter of 7%. We had an EBITA growth of 13%, obviously leading to better margins. And if we then look at the full year numbers, we grow sales with 13.5% and EBITA with 21.5%. If you look at the quarter, specifically, we had an organic decline in sales of around 5%. We will come back a little bit later to the reasons behind that. We had a positive effect from foreign exchange of 2.5%, and acquisition contributed with 10% in the quarter. If you look at the full year numbers, the organic sales development was flat, and we had a positive effect from foreign exchange of 4%, acquisition helped with 10%, and we had a slight negative effect from a divestment that took place in Q1 2022, or -1%. I can also already here just mention we publish on a yearly basis the organic EBITA development and the EBITA development organically was +6% for the year, which is basically in line with our strategy of always focusing on the profitability and profits in our companies. So despite a flat year in organic sales, we are still developing our profit with 6% organically. Just a short comment on the cash flow. We had strong cash flow in the Q4 2022, also a good cash flow in this quarter. On the full year basis, we have a big improvement of 45%, mainly related to weaker cash flow in 2022 due to the material supply situation and the inventory situation. That is now gradually reversing in the right direction for us. And with that, we can go into page number three and look a little bit more specifically on the different business areas. If we start with Dental, it's both a solid quarter and a solid year for Dental. I would say back to normality after a period of time where we had the COVID and mixed effects happening due to external factors that are now being stabilized for us. So the quarter is developing strongly as we want it to do, and the same for the full year numbers. Basically, a combination of organic growth helped by acquisition, and also we have foreign exchange contribution in this business area. If we then go further down to Demolition & Tools, we have a decline in sales in the quarter, and that is basically the third quarter in a row with slight negative organic development, and we basically are facing weaker market conditions. We do have in Q4 some positive effects from what we call special orders that have slightly higher profitability than normal orders. So that's helping us in the quarter, which also helps the margin development in the quarter. But overall, we can say now also on the more high-level perspective that we had a period of time with very strong organic growth in this business area in 2021, 2022, and in the early part of 2023, and now we are seeing more of a weaker market conditions that we are currently in. But despite that, we end the year with 16% growth in profits, partly thanks to strong you know focus on profitability organically, but also helped by acquisitions. And in the third area, Systems Solutions, we have a very strong full year development, where basically all areas organic development was positive, acquisition helped, and also foreign exchange. In the quarter, specifically, we have more of a, I would say, more mixed market conditions. We have many companies doing very well. We have a few and some companies having a little bit more challenging market conditions due to the business cycle that are currently entering into. Also, here, it's important to highlight that this is an area we also have very high organic growth in 2021 and 2022. So with that, we can go into page four. And this is now a slide that we normally only look at year-end. So now we have summarized another year in Lifco. We follow the development of Lifco's growth in profits since the IPO, and you can see that 2023 was another very strong year for us, 22% EBITA growth, constituting of 12% coming from acquisitions. So that's basically in line with our average of this period since the IPO. We have been growing our company profit-wise from acquisition with average 12%, and we do the same in 2023. When it comes to organic development, we are in 2023 growing 6%, which is slightly lower than the average, but we're also coming out of a period with extraordinary high organic growth in 2021 and 2022, as you can see in this slide, where we grew 21% in 2021 and 11% in 2022. This year, we only grow 6%. And, we had also, if you look at the very left column here on this page, we can then conclude that the average of Lifco has then been 12% acquisition growth, 8% on average every year, 8% organic growth on average, and then we have been helped through the weak Swedish krona, you can say, during this, this long time period. Yes, and with that, we can go to page number five and continue looking at some long-term development trends. We have been growing with a CAGR, EBITA with 22% since the IPO. We have been growing earnings per share with 19%. We have basically reduced our net debt to EBITDA, which means that we had very strong cash flow generation during the period, and, so we grow our interest bearing net debt with 17%. The operating cash flow has on average been growing with 21%, and once again, we can remind everyone we had some problems with cash flow during the raw material crisis, supply chain crisis in 2021, 2022, and now 2023, we are back to normality again, which is very pleasing to see. We've been growing our dividend with 70%. Can also here just mention that the recommended dividend from the board to the shareholder meeting is a dividend of SEK 2.10 for 2024 dividend, which would then be decided in annual meeting in April. On the bottom part of this page, there's a lot of data here, but we also put in the data for acquisition spend. As you can see here, we don't put a CAGR on that because that's a more, it should be a more volatile number, could go a little bit up and down between the years. But during the last year, we spent, we actually spent SEK 3.7 million, and then the enterprise value of the acquired companies that we acquired were [SEK 4.3 million] The difference there is obviously that we have some options agreement for future payments that will come in the next five to 15 years on these companies. And then we have the estimated impact on EBIT of the acquired entities of SEK 659 million. Obviously, not everything coming in in 2023, some of course coming in 2024, which you can see further information in our note in the annual report about acquisitions. And then we can quickly go into page number six, and this is another way of looking at cash flow. We have now broken out the cash flow, the free cash flow per share, where we actually also deduct CapEx. And the only thing that remains after that is then before dividend and acquisition. And if we look at this from the time of the IPO, the average growth of Lifco operational cash flow after CapEx has been 26%, so that's also a solid number. And you can see here also, 2023 was a good comeback year in cash flow. If you look then at page seven, when we are looking at our net debt and financial position, we have, during the last three years, been on a very stable level, basically meaning that we have used our cash flow generation and spent that on acquisition and paying our annual dividend. So we're on a stable level. We sit at 1.7x net debt to EBITDA, including all the IFRS 16 leasing items and also the future option agreements. If you look at purely the interest bearing net debt, we are at 1.1x EBITDA. So once again, we take a clue that there is plenty of financial room to continue looking for excellent acquisition when opportunities arise, which is a constant work within Lifco, trying to find these great companies to buy. And then on page number eight is once again an even longer-term perspective on Lifco. And we have been growing our earnings both from very strong organic development in profits and also helped by acquisitions during the last decade. And as you can see also at the bottom of this page, we have been growing our margin every year since the IPO, and this is not a coincidence. We strive for always improving our margin in our existing companies, and our appetite for very high-quality companies has basically increased. However, I would like to also here be, you know, put a statement out that we are not, you know, necessarily, you know, in acquisitions, going to always have a higher margin on the acquisitions. Now, we're on a level where we think there's companies that could be good enough for Lifco, also with slightly lower margins, so the outcome here can be quite could be a little bit different in the next coming years. However, we have a preference for very high-quality companies, so we still strive for that. And then we can look on page nine. There's not much to say when it comes to capital employed. We have, you know, very solid numbers, both in including the goodwill, at 22.6%. And also now, where we see a little bit release in our working capital, we are now getting our numbers back up when it comes to return on capital, excluding goodwill, sitting at 139% at the year-end. Which is also an explanation of why we have been able or constantly able to generate very strong cash flow, both in years with also in years with very strong organic growth, we have been able to do normally high cash generation. And then we can move all the way down to page 19 and just briefly look at the long-term development of Dental. As many of you know, we have been following, we had some turbulence in the Dental area for the first time in many years during the COVID and the years following COVID. And now in 2023, we have more of a normal year, which is pleasing to see. So the profit growth is back, and also the margin is coming back to what we think is more normal levels. And then we can look at the same similar graph on page 21, where we have the Demolition & Tools area, which has been, once again, the area with the highest organic growth historically. It's also the area where we have the highest cyclical exposure. As we mentioned earlier on in this call, we are now facing some slightly weaker market conditions, which is impacting the organic development on sales in this co. But we have also a very strong group of companies that are able to, to generate good profits over time, with some cyclicality, of course, between quarters, in that, but still sitting at a very good level in this area. Page 23, we all have just look at the same graph for System Solutions. And here, this is the area where we had the biggest change of our business since the IPO. If you look back to 2013, it was a fairly low-margin business, partly because of operational issues that were fixed over the years. So many of the companies we had back then, they are doing much better organically right now. so and that's thanks to, to great management in all these subsidiaries doing excellent work. And then we have, as you also know, been, you know, constantly looking for better margin businesses with high differentiating factors. And the portfolio we have today, if you would do a pro forma back to 2013, 2014, would be way, way much higher margin than we had back then. So there's a portfolio that has a high margin generation, also historically pro forma. And with that, we can move back all the way to page 32 and just look a little bit about the acquisition. We had a solid and good acquisition year. We looked a little bit at the EBITA generation before, but we actually had 18 transactions made during last year. And we found a great group of companies in different areas, just like we want to do in Lifco, for once again, reasonable valuation and very strong margin characteristics. So we are happy about that, and we, of course, continue to work very hard doing acquisitions. But as I always mention in these calls, the timing of acquisition is always unpredictable, and we only buy companies when we feel we have a good company for a reasonable valuation that we would like to own forever in Lifco, and therefore, the timing should be a bit volatile when it comes to acquisition making. But the activity level remains very high, and of course, increases every year. So that was my final comment. So with that, I can open up for any questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Carl Ragnerstam from Nordea. Please go ahead. Carl Ragnerstam, Nordea, your line is now unmuted. Please go ahead. The next question comes from Zino Engdalen Ricciuti from Handelsbanken. Please go ahead. Yes, good morning, and thanks for taking our questions. Just to start off in Demolition & Tools, could you give some more background to the special orders and their impact on EBITA and margins? Yes, we don't give specifically any information around that, but we can say it was big enough to make a mentioning. We have these orders from time to time, and sometimes they are more in the immaterial level. In this area, in this quarter, it was a little bit higher than normal, and therefore, we mentioned that. But, it is not, you know, super significant, but it has some impact on this. So you should be-- it's more of a highlight for reminder of next year that the margins held up, maybe a little bit better than they would have been otherwise without these orders. So this, I mean, if these orders would have been postponed one quarter, you've had that effect in this quarter instead, so with that. But, you know, we're not talking about enormous amount of effect, but normally in the range of, let's say, it can be ranging from EUR 2 million, EUR 3 million, EUR 4 million profit impact in when we start commenting these type of things. Okay. And sticking to Demolition & Tools, could you talk just in general about the mix? And I guess that is more of the low-margin product that has declined, and also maybe how you view the environment ahead, in terms of product mix. Yes. For Demolition Tools specifically, we have seen, it's basically a reversal effect, where we saw the highest, strongest organic growth was in the areas where we have the indirect sales channel, so where we're selling through distributors, and that's mainly related to or distributors or OEM, I should say, where we had, you know, a combination of very strong markets and also inventory buildups in our customer level. And now we see them in the last, I would say, three quarters now, a reversal effect, both due to market conditions and then partly due to probably stocking effects or destocking effects of this. So this is mainly related to our attachment business, which goes into truck cranes, excavators, and forest machinery, basically. These areas are where we saw the strongest organic growth in 2021, 2022, and early 2023, and here is also where we see the sort of reversal effect now in that area. Then the next question would be, so what's the exposure area? It's you know, partly it's construction, but it's also infrastructure, material handling, and recycling other areas in that where we're exposed. And of course, forestry equipment. Okay, thanks. Just lastly, ending on Dental, which is performing pretty well, how do you see the underlying demand for 2024? Well, first of all, we don't, you know, we are not better than anyone else in forecasting markets. But in general, I can say that in Dental, it's typically a very low-growth, stable market. So that's the general statement, always for that. So we're talking about- Okay ... you know, low single digit growth historically, in this area. We don't at this point in time see any other situation than that. Okay, thanks. I'll get back in line. Thank you. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Thank you. Good morning. My first one is on Systems Solutions. You mentioned that some areas saw a bit of weakening in their markets, but in the report, when you go through the segments, you say that most showed a good sales trend. I was just curious if it's possible to say, which end markets or anything like that, where you see a bit of a weaker market condition? Yeah, that's a good reflection, Karl. You know, we have a large number of companies, and the clustering into the division areas is, you know, sometimes helpful. And in this quarter, it's actually maybe not so helpful because there's a lot of things happening within each subdivision. So there are specific companies that are growing a lot, and there are specific companies that are declining a bit. So the aggregated picture here is maybe not so easy to say, and we will not go into individual companies in this area. It's not something we historically have done, but basically, it's in a high level, you can say maybe it's not the most relevant part to look at, you know, subdivisions. Maybe it's better to look at the companies that are, you know, more CapEx oriented to the end customer, are having a little bit more difficult time, in general, just like we saw, you know, in the aftermath of COVID in 2020. So it's the same effect, you know, the higher interest rates, you know, are impacting, some decisions, you know, especially and also products that are more, I would say, indirect. Could be, for example, within environment technology or other areas where you're able to a little bit wait and buy something later. Whereas the companies will have more, you know, input material into a normal production chain, maybe are holding up quite well in this area. So it's a lot of different things, if you go further down. So it's difficult to give a sort of a general statement, but I think that's the type of economical environment we're in. We have a lot of, you know, companies also being supported by, or some companies being supported by, by positive, you know, trends or general market trends that are growing very strongly. Whereas others might still be having the same good exposure, but having more problems with interest rates and CapEx decisions and so forth. That's more the explanation it is. And I think that in this area, it's very diversified, you have to keep in mind. It's almost a Lifco in itself, you can say, in that area. Understood. And then on Dental, I believe the comment you made about, for example, the Chinese headwinds, that, you know, were resolved quite some time ago, and yet Dental profitability still keeps on going up. You, is there anything in particular here worth highlighting, just how we should think about Dental in 2024? Or it's just, you know, stable volumes, and you continue to do as you've always done in terms of pricing and so on. Yeah, I think it's pretty much business as usual, but, you know, the exact margin and the exact organic EBITA growth can, of course, vary between quarters in a way. It's not, you know, it's not always super stable. You have the calendar effects and different things coming into play. The only thing that we maybe could say that, you know, if you're referring to the prosthetics business suffering in 2022 after the China lockdown there early on, they are fully back and have a very good momentum right now. So they're actually growing also a little bit from previous levels, but it's not so significant, and these type of trends are not... So in Dental, it's you know, I would look at it as a stable, you know, low growth area if you look back the last 10 years. So we don't see much difference. Of course, any given quarter, things can be a little bit more or less. Understood. And then on M&A, which, you know, yeah, we talked about this before, but full year, a kind of aggregate margin of what you've acquired at around 30%, very impressive. But is there any segment or division between Dental, Demolition, and Systems in particular, where you feel that, let's say, some more of the high-margin companies acquired this year have been grouped into just how we should consider the M&A effects, going into 2024? That's a good question. I have to actually just be careful here, so I don't jump too quickly into conclusion. But I would say my, my immediate reaction is that we had a, you know, we had a very strong year, if you look at that perspective, pretty much across the board. You can say all the companies we acquired were very high margin, except for maybe two, and I'm not going to go into details here in this call, but maybe two, they were more sort of linked to one of our existing business. There, from time to time, we, we sometimes make, you know, more add-on type of acquisition, where we, we could enter in a little bit lower margin position. When we do, you know, and we do in all areas, we do fully, I would say, independent acquisitions that are, you know, really new sub-segments, even within our business areas. And when we do that, we tend to be very careful and only acquire companies with very proven and strong margin track record. It's a way of actually limiting our risk also, having a very solid financial history in companies. And the only time we might compromise on that is on the, you know, exceptional, more of add-on deals that are typically smaller in size as well. But I would say if I look at this year, it was a year that, you know, all areas were a little bit helped by good margins in acquisitions. But I think it was the record year when it comes to margin. So I wouldn't, you know, forecast that we every year will have this type of margin on acquisition that we are getting. Understood. Thank you. Thank you. The next question comes from [Ingvar Junklist[from [Salvia GmbH] Please go ahead. Hi, Per, and congratulations to a fantastic result there. It's very interesting to see what you paid for your acquisitions in total and, and compare it to the profits, because your cash flow effect was SEK 3.7 billion you paid, and you acquired SEK 659 million in rolling 12-month profits. So that indicates a, an EV/ EBITA multiple of, like, 5.6 or something like that. That's fantastic. That's 17.8% yield on your investment. Yes. Hello, Ingvar. Thank you. But I think you have to look at the full enterprise value. You know, we, the SEK 3.7 billion is not, we also have some future debt of the difference between the SEK 4.3 billion and the SEK 3.7 billion. But even with that, it's That adds SEK 600 million then. Yes. Yeah. Yes. But that still, that still puts you at a multiple of about 6x. Yes, it's 6.6x. Yes. Yes. Yes. That's a fantastic acquisition, but- As you know, it's always a challenge, and every deal is unique, and there's always hard work behind this. I mean, it's not just buying a company in a normal process that gets this result. We have to find the right type of sellers that appreciate Lifco model and the right- Yes ... companies that we've. I understand. Yes. Thank you. As a shareholder, I'm a little bit dependent on the dividend, and I think you're a little bit too cautious. You got very strong balance sheet, and you continuously increase profits and cash flow by over 20%, but the dividend, the shareholders are disappointed with a 16.6% increase. Yes. In- We've looked at—we think it's a good balanced dividend payout ratio in this. And we also want to be able to continue doing acquisitions in the future. In total, this is the recommendation from the board. Yes. Yes, but your debt level is super low, but in reality, 1.1x. And if you take in all the debt, it's 1.8x. So there's easily room to increase dividends more than 16%. Yes. Thank you for that input. We will take that into the full picture. Thank you. Well, congratulations to the great results. Thank you. The next question comes from Robert Redin from Carnegie. Please go ahead. Morning. Hi. So I also did have to take a look at those EVs. There's a new line in that graph, and I calculated that you've paid on average in the last three years an EV with a 6.3x. And in 2015 to 2020, so the prior six years, 7x. And in the prior period, the EBITA margin on average of the acquired entities, I think, was about 22%, and in the last 3 years, 29% or 30%. So, so is it so that when times are good and we're in some kind of cyclical peak years, you get a 10% discount on your acquisitions for buying higher margin businesses than in the past? Thank you, Robert. No, I think you cannot draw that conclusion. Every deal is unique, every situation is unique. Here, we are just mentioning, you know, a one-year, you know, estimated EBITA earnings. When we look at a company, we look at the financial history of the last 10 years, and we not value them on, on, you know, last quarter or last year's earnings. So every company is unique. Some companies that we acquired are cyclical, some companies are super stable, it's all different. So we cannot jump to that conclusion. So I guess the question that you're also asking is, so has the market changed? I actually don't think it has changed significantly. And we have also companies here that are performing, you know, very well in 2021, 2022, 2022, 2023. But when we acquire a company, we also look at their performance in 2017, 2018, 2019, and the multiple, and the what we pay should also be justifiable based on those earnings. Maybe not, of course, on these levels that we're referring to here, but it should also be a company that we're happy to own, even if the profit for some reason will be on the low, the earnings to have backed up. So we are very long-term perspective and risk-averse in acquisition making. And I think it's a little bit dangerous to jump to conclusion, look at one-year earnings, and the multiple, because every company is unique and has different characteristics, and we value them very differently also, based on that. All right, yeah. Basically, basically, the market is not significantly easier for us to buy companies now than it was one or two, or three, or four years ago. It's very stable over this 10-year period, I would say. But our activity level is significantly higher now than it was only five, six years ago, and it's increasing every year. We have to increase our activity level with you know, if we grow EBITA with 12%, 12% per year, we have to at least increase our activity with 12% per year, if we grow from acquisition. So that's, that's what we do. Yes, because you would imagine in good times, and especially buying higher margin business than in the past, that you'd pay more. But, that capacity from Lifco side must have been increasing maybe faster than at the 12% per year pace. You must have a stronger setup now than in the past. Yes, we have a significantly stronger setup than we had at the time of IPO. We had basically zero acquisition set up, and, and now we have a well-functioning, not a huge team, but a very well-functioning team. Yes. And a lot of, a lot of, operation group managers also contributing in this work. It's not only the acquisition team itself. Yes. But, you know, the outcome of acquisition. Sorry, sorry to interrupt here, but the outcome of acquisition is always unpredictable. It's always difficult to buy great companies at reasonable valuation. It's always a challenge, so we, we, we are constantly battling with this. We have done that for the last 10 years, and we continue to battle with that. It's never easy. Of course, of course. But, but you continue to scale that organization. You don't see that growing, that the capability is becoming harder and harder? No, I think we've said, you know, many times before that, you know, we want to grow Lifco from acquisition, not too quickly, obviously, not too slow either, but growing it in a reasonable amount of growth rate is very important because that's how we build our organic organization. Because taking care of all these great companies we acquire is based on a, you know, purely a channel of Lifco people growing up as managing directors and gradually stepping into the chairman of the board positions. And that, we don't want to stress that process. But we have a significantly high number of people involved from the operation side that are gradually moving up in that, in that, in those roles. But that's happening every year a little bit. It's not... There, I think it's very wise to grow step by step and not to grow too much in one year, because then you will have a different type of risk control and way of handling your business. So we do that, you know, intentionally, very gradually, phasing up people. And the bigger we are, the more opportunities we have with great people in the portfolio. That's something people also forget sometimes. Okay, perfect. Thanks so much. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Thank you very much for listening, and I wish everyone a good Friday and eventually a nice weekend. Thank you.