Good day, and thank you for standing by. Welcome to the MEKO AB First Quarter Report 2023 Call and Webcast. At this time, all participants are in listen-only mode. After speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, you can please press star one and one again. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Pehr Oscarson; President and CEO. Please go ahead, sir. Thank you. Good morning, and welcome to the presentation of the First Quarter 2023. I'm here together with our CFO; Åsa Källenius, and we will guide you through the results. We often say that MEKO's business model is resilient, that we benefit from a strong underlying demand in good times and in bad. As we know, there is some macroeconomic turbulence around us which also affects MEKO. I would still say that the first quarter is another sign of our resilience. To be more specific, we have a solid organic growth, a stable underlying EBIT in the quarter. We are also improving our cash flow, which enable us to strengthen our financial position going forward. There is solid market development in most markets, and we take several important steps with new launches and successful concepts. During the quarter, we also updated our financial targets. This is to better reflect our track record in terms of value creation and the strategy going forward. As I touched upon, we do face a complex environment. The market situations in Denmark and Norway are still challenging. In addition, we are affected by the currency headwind in Sweden and Norway. We're taking action to handle the situation, and in some, we intensify our efforts to increase profitability in Denmark, Sweden, and Norway, which we will come back to in a few minutes. First, let's look closer to the key figures for the first quarter, and we turn to page three. Please, Åsa, I hand over to you. Thank you, Pehr. As Pehr touched upon, we have a solid organic growth of 6% in the quarter. EBIT is slightly improving, adjusted EBIT is stable. We are also pleased to see a better cash flow, this is a sign of a strong business model. Looking at the margins, EBIT and adjusted EBIT margins are slightly lower compared to the first quarter last year. This is mainly explained by currency effects and challenging market conditions in Denmark and Norway. As mentioned, we are taking actions to improve profitability. We will get back on that. Let's have a closer look at the EBIT development on page four EBIT development. The situation in Denmark and Norway is affecting adjusted EBIT in the other direction. In Sweden, we made a strategic marketing investment during the quarter that affects EBIT and really explain the negative develop in the quarter. We will come back on that one in a couple of minutes. We turn to page five and look at the gross margin development. Inflation in the supply chain continues in the quarter. We have adjusted prices as a response, and in order to handle a currency headwind. We can already see a positive effect, but the full effect will come later. The negative currency effect is clear, as you can see. The strategic acquisition of Koivunen is contributing to our stable EBIT development, but somehow lower margin in Finland is diluting the total gross margin. Going forward, the margin will improve thanks to increased synergies. This results in a gross margin of 44.7% in the quarter. Let's look a bit closer on the specific market. We turn to page seven to look at Denmark and the situation we have in Denmark. We have a very strong position in Denmark, and we are clear market leader. At the same time, competition is a bit more intense and the market slightly lower follow weaker consuming purchasing power. We grow organically in the quarter, but are facing a lower EBIT compared to the first quarter last year. As I just mentioned, we are taking actions to improve profitability. To be more specific, we are reducing the number of employees, we are adjusting prices and other fees, and we are reviewing marketing investments. We already see visible effects of these actions, and the situation in this quarter is improving compared to the last quarters. Turning to next page, Finland. The market in Finland is pending, but our business within Mekonomen and Koivunen has a positive development. Mekonomen is growing organically with a strong 12% in the quarter. Here we also are extracting synergies between Koivunen and Mekonomen according to plan. One example is the merging of the warehouses and the joint logistics operation. In sum, we are well positioned to leverage on our new position as a market leader in Finland. Moving over to Poland and the Baltics on page nine. Poland and the Baltics continue to deliver a robust organic growth and EBIT margin. We are especially pleased to see a positive development in the Baltic operation. Sales and gross margin are improving. We continue to extract synergies according to plan with full effect from 2024. Turning to Sweden and Norway on page 10. We deliver a solid organic growth of 9% in the quarter. Market conditions are improving in general. However, the EBIT margin is affected by currency headwind and inflation. As touched upon, we have raised prices as a response, but this has not yet had the full effect. Worth mentioning as an important market investment in Sweden during the quarter, Automässan. This takes place every three years and has a positive long-term return, even if it negatively affects EBIT this quarter. In term of profitability, we will improve margin in Sweden and Norway. We have finalized the first phase of actions in Norway to optimize our network of branches. Now we continue with intensified activities to further strengthen profitability. These activities include closing unprofitable branches and tuning of stock in both Norway and Sweden. Moving over to page 11. Sørensen og Balchen is a clear market leader within the retail segment, the segment that is affected by weaker consumer purchasing power. Organic growth was 1%, the margin was 12.6% in the quarter, a healthy margin compared to the competition, but lower than last year. The main explanation were weaker sales and lower volumes. Sørensen og Balchen will now increase focus on internal optimization and the B2B segment, where the market development is stronger. One good example of the new agreement is the new agreement with Norway's largest independent retailer in the auto after market. We will elaborate on this in just a bit. Let's look at our market footprint and important events during the quarter, turning to page 13 and leaving it to Pehr. Thank you, Åsa. Yeah, when we acquired Koivunen last year, we achieved two very important goals. We strengthened our position as the market leader in Northern Europe. We diversified the business and made it even more resilient against local market changes. We look at this page, we see that the net sales is evenly distributed across the three Scandinavian markets. Turning to market shares, there is a similar pattern. We have very strong position in Scandinavia and clear growth potential in Sweden, Poland, Finland, and the Baltics. Few can compete with our availability with branches and workshops and large network around the Baltic Sea. Moving over to page 14. In March, we updated our financial targets to better reflect our track record of value creation and long-term strategy. We had the pleasure to meet many of you at our Capital Markets Day, where we gave more information about MEKO's way forward. Our new growth target is to achieve at least 5% annual sales growth, excluding larger selective acquisitions. We will also grow adjusted EBIT with at least 10% every year. In addition, we clarified the dividend policy and kept the net debt target unchanged. We also took another important step during the quarter, a green one, and let's go over to page 15. MEKO's vision to enable mobility to meet the timeless demand of people to go from A to B with cars that works and that are safe. This is also a model for sustainability and circularity. We prolong the life of cars through service and repair. This is very often better for the climate than making new cars. During the quarter, we increased our efforts to reduce our climate footprint. We have now committed to set climate targets in line with the Science-Based Targets initiative. This is a framework for companies to limit global warming. For MEKO's, this is a milestone. Turning to page 16. Car Glass is a concept with commercial potential, but also potential to reduce the climate footprint. We handle approximately 1 million cars every year, only in Sweden. 15% of them have some Car Glass damages. Many can be fixed instead of being completely exchanged, which is very good for the climate. At the Gothenburg Automässan in January, we launched a new concept for Sweden, where 400 Swedish workshops will be able to offer Car Glass service and repair. We already have the same kind of concept in Denmark and Finland. Moving on to page 17. This is a good example how we leverage on our size and create synergies. We are now expanding the successful concept for heavy vehicles into Denmark. This concept has been growing in other markets. Last year we made the integration with a similar Finnish concept when we acquired Koivunen, and we see a clear potential for further growth moving forward. Finally, let's go to page number 18. As mentioned earlier, Sörensen og Balchen is the clear market leader in its segment and expanding within the business to business. One example of this is the newly announced agreement with Norway's largest independent aftermarket retailer, Miersbil. Miersbil chose Söderberg & Buksten thanks to its proven level of service, availability and concept development. The stores and the workshops within Miersbil will be rebranded to BilXtra, which is a very strong retail brand within Söderberg & Buksten. This is of course very welcome and will have a very positive impact on our Norwegian business going forward. That was our presentation for today. Thank you for listening and we are now open for questions. Thank you, sir. As a reminder to ask a question, you need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one from if you have any question or comment at this time. Thank you. We are now going to proceed with our first question. The question comes on the line of Mats Liss from Kepler Cheuvreux. Please ask your question. Yeah, hi. Thank you for taking my question. First, regarding the Finnish performance there, I mean, you indicate that you have been working with the integration process and so on, and, seems that you have come almost up. You improved the earnings anyway. What could we say during the remainder of the year? Are there more to come, or have you sort of reached the peak in the first quarter? I think the full effect from the synergies, that is from 2024. We still have some upside. Everything like it, like this of course, but there is some potential upside in the gross margin due to the purchasing synergies. We have the effect from merging the warehouses, which will come later this year also. What we also see this quarter is that the old business of Mekonomen has also improved quite strongly. Great. Then in Sweden, you mentioned Sweden, Norway, you mentioned that price increases have been implemented to balance the cost. Have this sort of supported you gradually during the quarter, or is it more, something that will support you going forward? A little bit of both. I think we can see some effects already in the quarter, but it's, there is price increases which will have more impact on the next quarters to come. Great. In Denmark, you mentioned that you have implemented cost efficient measures to balance the improve profitability. Is it sort of the same situation there that, it's more of a second and going forward impact to be expected? We, I think, we start to see some effects in Q1, but it will be improved more going forward because there has been activities throughout the quarter, so of course not everything is yet in the P&L. Okay. Then I looked at the financial net there, and you mentioned some, well, impact there besides the net interest. Could you just explain the impact there of the, well, bank balances? Is it only currency effects, or how should we see this impact? Yeah. Yeah. It's a revaluation of bank accounts in the quarter making that effect. Yeah, it's one time in this quarter, and now we do not know the development going forward, but it's only that, the site fee. It's mainly due to the currency. Yeah Development? Yeah. Okay, great. T hat's all from me. Thank you. Thank you. Thank you. Once again, ladies and gentlemen, if you do have any questions or comment, please press star one and one on your telephone and wait for your name to be announced. Once again, it's star one and one for any questions or comments. Thank you. We are now going to proceed with our next question. The question comes from the line of Stefan Stjernholm from Nordea. Please ask your question. Yeah, hi, this is Stefan at Nordea. A question on Finland. In the report you mentioned positive one-offs, given that you changed the obsolescence model, for inventory. Can you quantify that impact, please? no, we are not going to quantify that, and it will be some effects also in the coming quarters, so we make it gradually, and it has to do with the merger of the warehouses, Finland, Mekonomen Finland and Koivunen.quite a bitin Okay. It's not a large part of the improvement. It's minor. Yeah. It's part of the improvement. It's more or less minor, yes. Okay. You also mentioned this fair in Gothenburg, but I guess that's quite small numbers. It's a large fair. It has impacted our quarter rather much. It's a large amount. When you look at the variation on Sweden, Norway, and the EBIT from the beginning, I think we had -18 in development. I would say that most of that comes from the fair. Yeah. To add to that, we are expecting to have effects, positive effects the coming years through that market investment. It's only every third year, so yeah. If I interpret you're right, or trying to interpret, regarding the one of positive one-off in Finland and the negative we call that for the Gothenburg fair, the combined is slightly negative. Is that right? Yeah. Yeah. That's right. Okay, good. A follow-up on Mats' question regarding price increases and when do you expect the price increases to fully offset the higher sourcing costs, if you expect that to happen? Very difficult question because we don't know the development. As, as the trend is now, we should be in the end of the year, we should be, let's say, back on track regarding the gross margin. Assumption is made that it has slowed down the inflation from the suppliers, and that could, of course, change tomorrow, then it starts to increase again. Then, then we usually are a little bit lacking behind in order to increase the prices. We also need to be sure that we are every time have a good offer to the customers. Again, having that said, we still are the cheaper or the more pricey alternative on the market when you compare to the OES and so on. We believe that there is a good possibilities going forward. Sounds good. Okay. Thank you. Thank you. We are now going to proceed with our next question. I think we got follow-up question from Stefan. I'm not sure if your question has been answered, but I'll just reopen your line. Thank you. I have no further questions. Thank you. We are now going to proceed with our next question. The question comes from the line of Mats Liss from Kepler Cheuvreux. Please ask your question. Yeah. Hi. I have another one here on, you have the net debt pay with the target, I guess. You repeat the target or ambition to be within the two-three at the end of the year. How much of that improvement could you see in reducing our inventories and working capital? We have very good cash flow in our business model. Q1 is the most pressing quarter when it comes to cash flow. We will, as we plan, be back on track in the end of this year to be between two and three in leverage from own cash flow. Do you see any sort of opportunity to reduce inventories to reach that target also? Perhaps not in inventory right now because of the inflation, because the inflation lifts up the inventory value. We will keep it stable. I don't see that we will increase, and there will be some decrease in Finland, for example, where we merge the warehouses, Mekonomen Finland and Koivunen. I can't promise any decrease due to the higher purchasing prices. Yeah, I think we are decreasing the inventory in terms of items in stock. Yeah. Since the prices is going up, it's, the value is stable. Yeah. Okay. Thank you. Great. We have no further questions at this time. Actually, we just have another one registered. Please, one moment. Okay, we have the next question coming from the line of Andreas Lundberg from SEB. Please ask your question. Yes, thank you so much. Pehr, you mentioned, a deal in Norway with Sørensen. I might have missed that. Could you explain what it was? Uh. Mjosbil. Mjosbil. Oh, yeah. It's a independent local wholesaler, the biggest one, still independent, four something branches, stores, and they own some workshops, and they have also some independent or affiliated workshops connected to them. It's a large account which we just recently signed, taking over from one of our competitors. That is a very good move from, especially for us, but since we have this fluctuation with the retail market, which was very good during the pandemic, but now we're seeing the same challenges as we had before the pandemic. This is both strategically and, of course, business-wise, very good news. You will support those units with. Yeah. auto parts, basically, right? Yes. Okay. Now, how many units are we talking about or branches? We will do some merger. It's three branches and yeah. Actually, it's not important number because it's one of them is very, very small also. It's a large account with a good sales opportunity for us. Mm-hmm. We expect at least five-10, maybe up to 15 new affiliated workshop thanks to that. That's working for this at the moment. Okay, got it. Thank you so much. Thank you. We have no further questions at this time. I hand back the conference to you. Thank you. Okay. Thank you all for listening, and I wish you a great day. Thank you. Bye-bye. Bye. This concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you very much.