Welcome to the NCAB Group Q1 presentation for 2023. For the first part of the conference call, participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to the CEO, Peter Kruk, and CFO, Anders Forsén. Please go ahead. Thank you. Good morning, everyone. As described, it will be myself, Peter Kruk, and my colleague, Anders Forsén, who will be giving you the updates from our first quarter. Feeling very good after a very strong start of the year for us. We can see continued solid customer demand. We have good net sales in the quarter despite very tough comparables from 2022. Also good indication for us is that we see a positive order trend within the quarter. We are reporting record results in this quarter with very high margins and profitability. We have a record EBITDA and a record EBITDA margin and also a return on equity above 43%. Looking at our regions, we can see that Nordics and Europe have been the best performing regions in this quarter. We're also happy to see that China now start to show growth after a tough last year with the COVID restrictions. North America is somewhat weaker as we also saw in the fourth quarter. Cash flow continues to improve, both driven by the good EBITDA result, also a continued working capital decrease. We have a very active pipeline of M&A targets. Some figures around the first quarter. Our net sales amounted to 1,146 million SEK, which is just above last year. Our order book from 2022 is still supporting our net sales in the quarter. Our organic growth was -2% in Swedish krona. Order intake was at SEK 1,030 million, which is an increase from quarter four, still year-on-year, a decrease from prior year as we have customers still adapting to the shorter lead times. As I said before, very positive to see that now we start to see a positive order trend throughout this quarter. EBITDA amounted to SEK 184 million, which is an increase of 26%, and we have an EBITDA margin at record level of 16% compared to 12.8 in last year. Operating cash flow very strong at SEK 202 million compared to SEK 24 million in 2022. We have from NCAB, the board has suggested a dividend of SEK 1.10 per share, to be compared with SEK 0.60 prior year. Just some brief background around NCAB. We are a supplier of printed circuit boards. That is the product you see to the far left, which is the fundamentals of all electronics. Our customers will mount electronic components like semiconductors and microprocessors to create the intellectual modules in any electronic product. We are supplying printed circuit boards globally with a 100% outsourced production. Over the years, we've now built ourselves into a global company with a very well-diversified business, both geographically but also when in terms of industry. We are serving a lot of different industries with no specific reliance on any specific industry. We can also say that we have a very well-diversified customer portfolio, where there is no specific reliance on any significant larger accounts. Anders? Yes. Hello, Anders Forsén here. Just give you a small recap on the history of the company. The NCAB was founded in 1993. It started in Sweden and then expanded into the Nordic countries and then into further countries in Europe. 2012, we went over to USA with an acquisition of PD Circuits. 2018, we made the IPO. We have shown a constant growth in the last 10 years, 22% on average per year. Since the IPO, 2018, we have been growing about 25% per year. After the IPO, we also made a number of acquisitions, which has been a successful strategy for our growth, sorry, and our way to conduct new customers and to acquire new customers. Mm-hmm. As Peter said about the result, we are of course, happy to see that the revenue, even if it's not growing, it's tough comparables in 2022. We see a stable and good revenue. We are very proud of the EBITDA that increased 26% to SEK 184 million. As Peter said, we had a record high EBITDA margin of 16%. Also going into background behind the results, it's very much connected to continuously improved gross margin. I mean, we have been on a journey where we year by year improve our gross margin, showing that the customers really value our value add on what we are selling. The downturn we could see in 2020 and 2021 was due to acquisitions with lower margin. Now we are back again on a growth journey on the gross margin. We are proud to see the 33% LTM numbers for 2022-2023. Going into the results again, we said that SEK 1,141 is the SEK 1,146 is the revenue, little bit higher than last year, but it was tough comparables in 2022. We also had some revenue from our Russian activity that was closed down in February 2022. As Peter said as well, order intake is down a little bit compared to last year, but we see a positive trend month by month. We are in the situation where many customers, especially in the European segment, have placed orders with long lead times before. We are still delivering on those. I think we can see lead times are back to normal. We will see a more normal situation going forward. Going into the results, which we are very proud of for this quarter. It was a strong increase, and we can see that we have been able to utilize our scale in many areas. Of course, we can see that the revenue grew a lot since last quarter four, and then we have about the same costs. That gives us a positive impact. We also have been able to working with the purchase prices, and so on. Many areas where we can see advantages and sum up to a strong profit level. Also we see when the lead times is going down, we can reduce our inventory, and we don't need to have as much working capital as before. Still, we have a very strong cash flow connected to strong results, but also to reduced working capital. Of course, you can see that we almost doubled earnings per share. As Peter said, the dividend is suggested to 1.10 Swedish krona compared to 0.60 last year. Looking into the segments are performing here and starting with Nordics. One thing we've done now for this year now is we have fully integrated our acquisition in Elmatica, that the Elmatica business which has had business in both Nordics but also other regions that knew that business has now been integrated into the respective regions. That means that we will see that some business from Nordic has now been moved over to other segments, to segment Europe primarily. If you look at the adjusted order intake, we can then see that our order intake has decreased by 7% in Swedish krona and 16% in U.S. dollars. This is, as we mentioned, something that we see in all regions. It's largely related to the to the order lead times changing, but also to some extent where customers has had extra inventory that are now adjusting their inventory levels. This is something we're probably gonna see some effect from also potentially in the next quarter. Net sales increased by 5% in Swedish krona to SEK 261 million, but decreased 5% in U.S. dollars. We've seen particularly strong development on the sales side in Denmark and Norway. EBITDA has grown to SEK 56.2 million compared to SEK 43.1 last year. It's a combination of a number of things with driving efficiency in our cost structures, but also a positive product mix. I repeat, the margin was raised up to 21.5% compared to 14% in 2022. Looking at Europe, which has then been the recipient of some business from our Nordic segment, the sales has grown to 674 million SEK from 567 SEK or 631 SEK if one factors in the business from Nordic. Adjusted sales, net sales for comparable units, excluding these transfers and also acquisitions made, were flat in Swedish krona, but showed a decline in U.S. dollars by 12%. Our order intake was at 560 million SEK versus 567 SEK. We also here see an order intake for comparable units decreasing by 19% in Swedish krona and 28% in USD. In Europe, particularly, we saw a lot of these effects where customer placed orders in advance during 2021 and 2022, which impacts the order intake, but say you have a different stability in the sales numbers and deliveries. EBITDA increased to SEK 99.6 million compared to SEK 71.9. It's a margin increase now to 14.8% from prior year of 12.7%. Looking at North America, here we can see we saw also in Q4 a softness in the market, and I think it's been largely related to EMS market. We have a large share of our EMS business in the U.S., and they have been just similar to ourselves, been working on improving our net working capital, and we see that impacting orders and deliveries in the midterm. Our order intake decreased by 14% to SEK 170 million, and in U.S. dollars, a decrease of 23%. Net sales also went down by from 14% to SEK 159 million and by 23% in U.S. dollars. Still, we have a positive book-to-bill, which is positive for the coming year. We have an EBITDA that also did very well with increasing by 32% to SEK 26.2 million compared to SEK 19.7 million. The EBITDA margin went up from 10.7%- 16.5%. A good financial performance in North America. Then we have East, where we have seen increase in customer activities after the Chinese New Year and after China had dropped its COVID restrictions in late 2022. We also have here the effect of that we in 2022 Q1 still had Russia in the business for the first two months of the year. If we look upon comparable units, we can see that our order intake now shows a growth by 8% to SEK 62 million, but decrease in by 2% in U.S. dollars. Comparable unit sales was flat, but showed a decrease by 10% in U.S. dollars. We're here, we show now a positive book-to-bill of 118% and an EBITDA which decreased to 11.6% million SEK from 15.4, but an EBITDA margin which increased to 17.1% compared to 11.5%. Overall a strong performance. looking for innovative solutions in the PCB market. This could be a game-changer for them." A: "Absolutely. Speaking of NCAB Group, I was just reviewing their latest financial report. Their return on equity for Q1 2023 was 43.8%, which is quite strong." B: "Wow, that's an impressive figure. It shows their robust profitability and efficient use of shareholder funds. I remember Peter Kruk, their President and CEO, mentioning their focus on sustainable growth during the Capital Markets Day." A: "Indeed. And Anders Forsén, their CFO, highlighted their strong balance sheet and strategic acquisitions as key drivers. They've been actively consolidating the PCB trading market." B: "That's right. I recall Robert Redin from Carnegie discussing their acquisition strategy. They've successfully integrated several companies, like PD Circuits back in 2012, and more recently, they announced an acquisition in Italy." A: "Yes, they're definitely expanding their global footprint. Their order intake, however, has seen some fluctuations. In Swedish krona, it decrease I think we should be proud of the return on equity, almost 44% in the quarter. We have a net debt of 0.6. We have set our targets to not be more than two, so we have more headroom to finance more activities. We also have a strong solvency, and net working capital is going down to SEK 441 million. I mean, we are running a very lean business in that way from a working capital point of view. Our net working capital compared to last twelve months sales is down to 8%. If we include the liquidity we have included with loan commitments from our banks, we have more than SEK 1.1 billion in firepower for further growth activities. If we look upon last year, we identified or set financial targets for 2026 for the company, where we are aiming to be at revenue of SEK 8 billion and an EBITDA of at least SEK 1 billion, and at the same time remain within EBITDA, net debt over EBITDA of less than two, and that we would continue to sort of distribute available cash and that we would expect that to be around 50%. Overall, we are very well performing according to the projections to reach these targets. As per the proposal, our dividend this year is specifically very close to the 50% that we have outlined here. Looking forward, we are continuing based on our basic strategy, where it's about growing our market shares in all of our markets, but specific focus in continental Europe, U.S., and East. We're also working to continuously develop our relationships with our customers to both serve them with more technologies and more products and more services. We're also looking to expand to further geographies or strengthen our positions in real geographies where there is room for further improvement. As we looked at before, it's a very fragmented market in which we operate, and that means that there is also a lot of opportunities for consolidations through acquisition, which is also part of our strategy. With that, I believe we close our presentation and are open for questions. 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 Johan Skoglund from DNB Markets. Please go ahead. Good morning, congratulations on the very strong profitability. Happy to see that order intake has turned positive on a monthly basis. Are you able to give any more details about the magnitude of this? I think there you have, of course, in the quarter, you have some elements which is kind of calendar specifics with Chinese New Year, which partly affects some of these aspects. Even discarding that, we can see that there is clearly a positive trend where if you could say in the fourth quarter, you could say we had a or in the second half of last year, the order intake trend was more like softening as the lead time started to improve. We can see that that trend turned basically in January, We can see then since a positive increase in the orders. Okay. Very good to hear. Just a final question for me. How far along would you say the negative customer inventory adjustments are? Like, how much more could we expect or are they finished now? I think we can expect to see it at least during the coming quarter. I mean, we can see that overall underlying with our customer base, business is quite strong. We see a lot of activity with new projects and new business, but we also see individual customers going through different phases of their inventory, adjustments. I think the overall underlying market is stronger than what our order intake and also our sales numbers might reflect right now. Okay. Very good. Thank you. Please state your name and company. Please go ahead. Hi, Klas Danielsson, Nordea. Good morning. Morning. Sorry. A bit unclear with the operator there. No. Hi, thank you for taking my questions. Just to follow up a bit on starting with the order intake, there's, I think, been a lot of different things within that lately. I mean, you spoke on the inventory corrections, You also have the times and price adjustments that you spoke about now. Could you maybe help us unpack because it sounds like inventory corrections are maybe a bit still with us, but then could you maybe help us unpack what's left going forward? Also I'd be very curious to understand how much the pricing side has been impacting and if you're expecting that to kind of fully normalize in H2 again. I mean, it is, as you say, a quite complex situation, and I think that was made clear after our Q4 report as well. It's been difficult to understand, say, the underlying demand in the market. As I say, you have an aspect where there's one element where a number of customers have placed orders early and are adjusting their order patterns to the now much shorter lead times. That is one aspect that has an impact on our order intake. You can say that on order intake and on sales, you then also have the effect that customers may have excess inventory from the last two years, which they are now sort of working through. That will be really customer by customer, where they are in that process. I think we saw some of it starting already in quarter four, we've seen in quarter one, and I'm quite certain we will see effects of that in quarter two as well. Then we have the third aspect of pricing effects, where we started to see price downs, on the purchasing side or sort of for new projects during the latter part of last year. I think we have seen continued or sort of, continually say lower pricing in 2023 than what we saw in 2022, in the first quarter. It's a little bit hard. I think that primarily affects, say, new projects. Existing products running in production have been not affected so much. But maybe that is in the order of, say, 5%, on order intake right now, so. I think maybe you can say that pricing peaked in the beginning of 2022 due to the demand, et cetera, and how it was built up. When China slowed down, the factories got free capacity, they were more willing just to push down prices. We are comparing with the tough quarter 2022 from a price point of view. I think also you can see that we somewhat offset the pricing with our lower purchasing prices, which also improves our profitability. It is some kind of a mix there in some way. You can see that actually now as China is starting to pick up, we see indications that say in-ingoing commodity material for PCB manufacturer has actually started to move upwards in price again. I think this will be very much dependent on the way the Chinese economy picks up and that the loading or the utilization in the factories in Asia improve, then we will see more price stability again. All right. I guess on the back of that, you've been really the confident guy, I guess, in reaching sales growth for this year before and I guess it was still. Could you maybe kind of to be super clear, are you kind of expecting to reach organic sales growth again in H2 now? I mean, fundamentally, we still believe very much in our ability to grow, continuously organically, and we have a basic organic target for our growth, that we will be growing at a pace of around 10% per year, organically over a cycle. A little bit, of course, will depend upon how the global economy develops, but that we are very much still in a growth strategy is no change to that. A little bit how quickly our customers and the economy develops will of course do govern to what extent we will see that in the second quarter or if from when it starts. Okay. That's good. I was just on the margin side, clearly very outpacing our expectations, I guess, there. It sounds like you're more so on track with the synergy side now. Are you kind of expecting these levels to be more steady going forward and, or do you have still some more synergies to pick up or? I think it's a I think overall, we are continuously working on identifying and driving efficiency and synergies from our scale, even if we have not shown growth of growth. Sometimes the synergies come with a little bit of a lag of the growth, and the growth we've seen in the last few years have given us opportunities to drive further efficiencies. I think we've shown that in the quarter, we're doing that well. Then, of course, then there's also a mixture of product sales, which has been maybe somewhat favorable in the quarter. I think we've handled also this situation now with the price volatility somewhat well. Okay. Okay. Just lastly from me also, I mean, during COVID, you had a bit of an advantage, one might say, to your competitors with having boots on the ground in China and so forth. Now when China's opening up, I was just curious to understand how is kind of competition developed from here? Is it still decent or are you seeing an increased competitive behavior or so? I think we regard and actually see our customers appreciate that the values we provide, they are very strong regardless of COVID. I think when the COVID pandemic, sort of were in full bloom, I think it became maybe more obvious to customers. But even without COVID, the values we provide by being close to our factories as well as close to our customers, being able to work on securing quality, delivery, and sustainability in those factories is very important, and is not something that, say, is easily replaced anyway. Okay. Thank you very much. Thank you. Thank you. The next question comes from Anders Rudolfsson from DNB. Please go ahead. Yes, good morning. Congratulations to another strong report. I have a question regarding the slide that's on number 9, where we can see that the gross margin continues to grow pretty much every year and every quarter. I suppose this is kind of a high, new high level that we can see there. What do you see this trend, can we expect it to continue? Is it just because of these? Because the when you, so to speak, get new companies into your model, hopefully they of course will deliver. Can we see that the better gross margin coming from the new acquisitions you made, and what is kind of the target for you? I think we can see a positive journey both from acquired companies and from our older SAB companies. Of course, there might be a bigger opportunity to increase the gross margin in acquired companies because they are typically on a lower margin. Also I think we are in a situation. We have talked a lot about this price softening in Asia, and of course, due to our size and our presence in Asia, we are probably stronger in that negotiation part. I think we have done a very good job on that end to take a look at all our cost structure and being able to also raise the margin in general. Of course, there are always opportunities in the acquired companies to improve the gross margin. We have seen that in almost all cases. With our continued growth, we continue to get scaling effects, whether it is in procurement or product or whether it is in logistic solutions and other things. I think these things is also something that helps us to improve our gross margin over time. Okay. Thank you. The last one from me is that if you look into all the industries you're delivering to, is there any specific industry that goes very strong at the moment? I think we can see overall positive development in our industrial automation companies. You can of course also have pockets which maybe are not so big for us. We have a presence in aerospace and defense. Of course, that is an industry right now where the investments are increasing, and that is also something we are seeing. All right. Thanks a lot, and good luck. Thank you. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Robert Redin from Carnegie. Please go ahead. Morning. Could I ask on acquisitions? I mean, you say as before that the pipeline has about 40 companies in it. How are those discussions progressing? Can you say something about the pipeline and your outlook for doing acquisitions this year? Maybe one criticism could be that you're becoming underlevered almost, with the Swedish krona still being strong. Exactly. It's a risk, and we will try to solve that. I think, I mean, the market looks very good and I mean it always difficult to predict when things will happen. It takes a long time sometimes to do the discussions, but I would say that we've seen an increasing number of dialogues, we see increasing interest from more companies, and we do focus a lot on Europe and North America. And I would say the hottest market right now is Germany, where we have actually got some requests from other companies as well. There are many opportunities, but sometimes it is a long process, so it's difficult to predict. I would say we are in a good position, and we do have some good dialogues. I think we still have an overall discussion, as was mentioned before, that we believe that we will do maybe 2-5 acquisitions per year, that still remains. Yeah. How do you feel competition, has it been heating up? I mean, I've seen some of your competitors, you know, buying businesses in Sweden even, or is the competitive landscape for acquisitions similar, you think? It's, I think it's rather stable and have not changed a lot. Of course, we know that ICAPE, the French company, has done a few smaller acquisitions, and they did acquire Mønsted & Mannerstrøm in Sweden, which is a factor and a trader. I would say in the interesting cases we are looking into, we don't really see a challenge from them. Okay, sounds good. Thanks. Thank you. There are no more questions at this time, so I hand the conference back to the speakers. There are no more questions from the web either. I just want to remind you of our financial calendar. Our AGM is on May 9th, and our Q2 on July 21st. We also, for the first time, will invite to a Capital Markets Day on September 4th. Please book that in your calendar. Thank you so much. Thank you. Thank you.