Ladies and gentlemen, welcome to the NIBE Q2 2021 results presentation. Throughout the call, all participants will be in listen only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present Gerteric Lindquist, CEO, and Hans Backman, CFO. Please begin your meeting. Yes. Good morning, everyone out there. Good morning from Hans as well. Thank you for joining us. We're going to proceed as usual by going through the report fairly quickly and then allow for questions. We would also appreciate if we could be ready by noon, because then we have other engagements due to the report. With that, we're just going to dive into the slides that we have prepared for you. Although we are not so keen on bragging, I guess we are at least this time willing to state that it's a fairly strong first 6 months. It's important also to remember that we are comparing ourselves to a relatively weak period last year. It's important to be humble enough to admit that. We were right in the middle of the pandemic a year ago. Of course, the figures are very strong, but we've also had, of course, the tailwind when it comes to comparing ourselves to that period. What's very pleasing is that all 3 business areas are developing or have been developing very well and strong during this period. It's very obvious, as we mentioned so many before, that the sustainability trend is really helping us in all 3 business areas. Also, the COVID effect has had effect of, should I say, repairing and renovating your home, remaining pretty much at home where you live, rather than traveling. That has also been a tremendous help in installing heat pumps and installing wood burning Stoves or gas burning Stoves for that matter. There's been a number of factors in our favor. Of course, on top of that, we believe that our product and our assortment is of high caliber and we're well-positioned. All in all, the outer conditions have helped us, but we've also had a very strong own position. If we look at the growth, it's very pleasing naturally to see that the organic growth is back to a very pleasant level, which we're going to dig into in a while here. Also the results, of course, when we look at the result figures are very strong and also the margin improvement. One negative effect of the pandemic is, of course, that we haven't been able to sign that many on the dotted line when it comes to acquisitions. That doesn't mean that we don't have contact. It's just that there's been a hindrance that we haven't had any physical contact for quite some time. Of course, there are a number of acquisitions lined up. We just feel now that the world is opening up and we are ready. We're certainly ready when it comes from a financial point of view, and we're also ready when it comes to which company we would like to team up with. The figures themselves, the growth of the 16.3% the first 6 months, and that is quite a bit above 10% organic growth. The gross margin remains healthy, and I guess that's been one issue, of course, with all the price increases that we have received and all the shortages of products, has been a concern. So far, we've been able to handle it relatively well. We mentioned in the report, of course, that we have not been able to build up our inventory as we normally do during the first 6 months. That is, of course, a little bit of an issue as we move forward. When we have stop and go production, you all know or understand that productivity is not at its peak. Still, we've been able to remain at a fairly healthy gross margin. The operating profit is naturally considerably higher than last year, and you see a little star there, and that means that we talk now about all figures excluding the reevaluation of the additional considerations. That's something that we entered last year, really. Just to make that very clear, they stem from the fact that when we acquire companies, we typically acquire them in 1 or 2 or 3 tranches, suggesting that we pay 1 initial amount of money, and then eventually we pay the additional tranches based on performance. During the pandemic period, of course, there have been companies that have not performed 100%. When we were at the point of paying, of course, the amounts have come out slightly below what anticipated in the business plan. That has not been so obvious in the past. In that sense, the pandemic has caused us to pay a little bit less. We've been very civilized, we must say. We have not penalized our partners. To some degree, it has lowered the prices of the companies. That doesn't mean that the acquisitions as such have had any question marks. It's just that all companies have had a slower period. In this particular period, we talk about SEK 37 million. Of course, last year was a considerable amount for the full year. It was like SEK 363 million. All the figures that we talk about here, they are excluding those, just to make that very clear. The operating margin, considerably higher than last year. It's a major step. Of course, the net profit margin is also considerably higher than last year. We are very stubborn when we talk about the period, Q1 and Q2, but we also understand, actually, we have to comment also on the last quarter. That has been very strong again with the growth around the 25% mark, meaning that the organic growth is around the 24%. That is still including the negative effects of the currencies. We all know that both the dollar and the euro had totally different stands a year ago. There we are a little bit cautious in explaining how much is that. We think we have to combat currencies. We have to combat all difficulties in the market. It shouldn't be a benefit or a disadvantage. We just have to combat whatever happens. There again, we see that the gross margin is remaining fairly healthy compared to what it was a year ago. We are, of course, very cautious with costs, but what our suppliers are doing, we can't do anything about that. As we all know, there's been considerable price increases. The operating profit is, of course, up close to 75% compared to last year, and that's a considerable jump. There we have, of course, excluded the SEK 37 million. All in all, the second quarter came out very favorably, and we just like to mention once again that the second quarter last year was perhaps the most dramatic quarter that we have had or the world has had in many years. We are very pleased now to note, of course, that vaccines, they've been around now for at least half a year, and that we're pleasing to note that technology and advanced medicine can produce vaccines so fast compared to what it was just a few years ago. I'm old enough to have experienced the polio pandemic many years ago. My parents were petrified until we were getting the first shots. That took 20 years before they developed an effective vaccine for polio, that's a tremendous, should I say, step forward for mankind, if we are a bit philosophical. We typically would look at the bar charts, again, illustrating how our sales typically develop. We have our strongest quarter typically in the third and fourth quarter, that pattern is pretty much the same. Even 2020, you can see that it's slacking a little bit there during Q2 2020. This year, it's very pronounced, as it's always been. The third and fourth quarter, typically, if everything goes all right, it should be stronger without giving a forecast. That's just the pattern that you see here. On the result side, it's the same thing, even more pronounced. When volume is really assisting us, then of course, the profit goes up. Here again, we are calculating the profit in the bars you see, excluding the additional considerations. Nothing is suggesting that we would be on the wrong track as far as these graphs are concerned. Just a few comments about the business area. NIBE Climate Solutions, of course, has been very strong, and we particularly note that Europe is growing gangbusters almost when it comes to volume increase. North America is starting to move, but not as positively as in Europe. We've been waiting for this for many years. We started with heat pumps, as you all know, some 40 years ago, it's taken a long time. Now we are there with the larger countries in Europe really moving ahead, like Germany now really coming to a very strong growth. Netherlands, we talked about. Britain is just on the brink of starting. France has been growing for many years. We are in the European world seen in a very positive atmosphere. Of course, that is influencing the operating margin as well as the operating results in numbers. If we just have a quick look, it's been a good growth there of some 14% there the period. The operating margin the first six months has increased from 13.4%-15.6%. We all know how difficult it is to increase operating margin, even with a percentage unit, not to mention when you move it upwards like 3 percentage units. Hans is going to come in more to the Q2, but of course, that has continued growth-wise, even more pronounced than the full period here, and also the margin increase. On the Element side, we can say that there we have a feel or whatever we would like to call it, the thermostat for the whole economy. When the world accelerating, we notice that in all individual sectors. We now see that the world is coming back to an accelerating stage and practically all market segments are moving in the right direction. We are very positively positioned, both in Europe and North America, and also in Asia anymore. Of course, we have that tailwind from all the sectors. We are well-positioned with our products. As I mentioned on the climate solution, of course, Element we are supporting and the sustainability profile companies. One very obvious sector is also the semiconductor industry. That is a hindrance to many other companies, but there being a sub-supplier to the semiconductor manufacturers or the machinery industry. That is, of course, something very prosperous at the moment. An industry that we hadn't really paid full attention to until 5 or 6 years ago, but now that's a very major part of Element's business, and we foresee a good growth pattern for years to come. Again, with the volume development and with the cost control that we maintain and have maintained, of course, the operating margin has increased and the real numbers in operating profits. Just have a quick look at that. The sales growth is very impressive, if we dare to say it ourselves, with some organic growth here around 13%. The jump from 8.3 to 10.7 in operating margin. As you all know, we've been struggling for years to arrive at the 10%, and we took a little bit of a dive when we had the most difficult quarter last year due to the pandemic. I'm very proud now to be back on the right track again and having all these different market segments being very prosperous. Hans again, going to dig into more the second quarter, which is extraordinary when it comes to growth, particularly since Element, and for that matter, Stoves, they had relatively weak second quarters last year, whereas Climate Solutions maintained a, during those conditions, a pretty healthy margin after all. NIBE Stoves, when we look at the figures ourselves, we think, what a growth. That is, of course, a reflection of a good position in the market again, and also the trend of consumers spending more at home. That is also stating to us that a stove is important in a home. It brings comfort, it brings sort of security, and we like to relax. It's a piece of furniture. Many factors when it comes to a stove. We struggle and we fight, and we work so hard to continue developing even more effective Stoves and also being even more environmentally friendly, particularly when it comes to the particulates. Again, here, number-wise, when you look at Stoves, it's been a tremendous growth with some 42% organically in the period. In the second quarter, it's beyond 70, Hans is going to come back to that. Of course, with a decent margin compared to what we usually have in the first and second quarter. It's almost unruly high figures. Just a few other pie charts before we let Hans get in. How sales is distributed, that's pretty much like before, NIBE Climate Solutions around almost two-thirds, NIBE Element a little bit better than 25, NIBE Stoves slightly below 10%. When it comes to distribution of profits, it's again, NIBE Climate Solutions that's dominating with a little bit better than 70%, NIBE Element in 21, NIBE Stoves some 80. Some 8%, I'm sorry. Of course, we are going to see that pattern will change a little bit, particularly on NIBE Stoves having their best quarters during the second half of the year. The last graph or pie chart on my side before Hans steps in, it's how the sales is distributed. We can see that Europe has gained here. It's almost 46%, and Nordic some 24%, our home market. In North America, although it has grown in real numbers, Europe and Nordic have grown faster. Of course, we've also had some currency headwind there. So that's pretty much a quick overview at hand. I'll hand it over to you now to present the business areas more in detail and also the balance sheets. All right. Thank you, Eric. We will do the same procedure as last quarter, and it is actually amazing how quickly a quarter or a summer passes. It feels like yesterday that we were presenting Q1. Talking about Q1 and Q2, really, the pattern is very much the same in terms of development, with the exception that Eric mentioned, that the comparables for Q2 are quite different given that Q2 was such a weak quarter last year. That was, however, not fully the case for Climate Solutions, which managed to take care of that or come through the pandemic in a decent way. It is again mainland Europe and the Nordics that have been the drivers, with North America lately picking up, but not at all being where the European side is, so to speak. In terms of sales, we came in at SEK 9.5 billion, up 14% from last year that Gerteric Lindquist mentioned, which also contains a considerable amount of negative currency effect in there, and a small help from acquisitions on top. Such a good organic growth generates a good gross margin, up more than 2 units from last year. Of course, together with good cost control, landing in a margin as high as 16.6%, which on a 12-month rolling basis right now brings us up to SEK 16.4 billion in sales, which are just below SEK 20 billion for the business area alone. Taking a quick look at the quarter as such, it was of course a good quarter with the organic growth that we had. 20.6% and just a small help from acquisitions. Again, a negative currency effect there from the Swedish krona. Nevertheless, a very good growth, bringing us to a gross margin of 36%, which means that we've been able to cope with the supply of material fairly well, although it is a daily struggle, and we are, of course, facing price increases just like anyone else. Have also become better in trying to compensate ourselves for that through own price increases. In the quarter, we landed in a margin at 17.3%, up from the 13.6%. A very strong quarter for the business area. In terms of distribution of sales, it is just as Eric mentioned that Europe and the Nordics have gained more than North America, although North American total numbers also have grown. Where we now came in at 51% share for Europe, we were at 47% a year ago, and the Nordics jumped up the 1 percentage unit, you can say. The remainder there is North America, where we had 24% of sales a year ago. Coming to NIBE Element. They have shown a very strong demand in all markets and segments, really. Although it is the HVAC-related segments and the semiconductors that have been the strongest. The whole electrification that is going on, so to speak, is a good driver. Within automotive, there are numerous interesting projects in the direction of electrification. As I said, it's a general trend, you can say. Also here we've been, of course, fighting raw material price increases and just getting the deliveries into the factories. When we landed in sales here, we came in just below SEK 4.1 billion, which is up almost 15% from last year. This is the most global business area and the one that's most affected by the currencies. The underlying organic growth is, of course, even higher. Here, despite the challenges with material and also personnel, for that matter, getting people on board to manufacture everything, the gross margin jumped up to 23.4%. Also here, with the good cost control on the SG&A side, we came in at a margin at 10.7%, which for the last past 12 months then brings us up to 10.3%, up from the 9.1% that we landed in as a full year 2020. In Q2, if we take a look at that, this is where it becomes evident that the comparables to last year are relatively easy, so to speak. Landing in the sales there at close to SEK 2.1 billion, an increase of 25%. The underlying organic growth was even higher than that, given the currency again then. Last year, in the second quarter, we had a drop of 15%. Gross margin, again, healthy at 23.5% and a very healthy growth in the operating profit as such, up close to 90% and making it possible for us to land a margin which was 3.7 percentage units higher than last year. In terms of distribution of sales. There have also been slight movements, not so much that the picture is in a way fairly stable. Europe has gained a little, coming up to 33% of the total share, up from 30% last year, and North America is dropping 1 so to speak. Moving on to Stoves. As we said initially, this is where we're seeing really an unusually strong growth for the first half of the year. As most of you know, this is our most seasonal business, where most of sales and profit is generated in the second half. What we see here is really unprecedented for us in a way. It's been across the board in all companies and geographies. For the first half year, we were able to grow sales by 43%, again, affected slightly negatively by the Swedish currency. Also here, of course, it's been a struggle to get material on board and to be able to meet the demand. So far we've been able to manage that and also land in a decent gross profit. In general, an organic growth gives the best effect on the numbers. Here the gross margin came up to 36.9%, up more than three units. The profit as such, it's up 400%, but up from SEK 33 million to SEK 167, and an operating margin of 11.9%, which is higher than we landed in the whole last year. As Gerteric Lindquist indicated the quarter as such for Stoves, we fell off our chairs ourselves almost seeing organic growth rates here of 70%, and just a very small portion which was acquired. Last year, this was the business area where we had the largest negative effect. We lost some 18.5%. As a result of the good organic growth, gross margin jumped 10 percentage units and the operating profit jumped several thousand percent. It's amazing numbers anyway. Operating profit at 11.9%. Just a quick look at distribution of sales. It is really Europe that has gained here up, taking a larger share of the pie chart. The other ones with just minor movements, you can say. Of course, the business area, as we also indicated, is positively driven by the COVID effect, if one can say that, in the sense that people have spent a lot of time at home renovating their homes and houses. Coming quickly to the balance sheets, there are not so many movements here really. It is simply a consequence of the performance. The thing we did during the early part of Q2 was to issue another bond replacing two short-term loans that we took to replace two bonds that were up for replacement sort of 50 year ago during the pandemic, when it wasn't possible to issue bonds. The financing has just rolled on under very good conditions, you can say. We'll jump the liability side. It's purely a consequence, as I said, of the performance. No major movements. Looking at the cash flow, the operating activities have generated a very good cash flow, up from SEK 1.5 billion up to SEK 2.4 billion almost. Where we've had a change in working capital of close to SEK 1 billion negatively seen. That's not so much that we have been mismanaging working capital in any way. It's just that the drop last year was so much larger coming down from the 2019 level, where we had working capital of around 20%, which came down to 15%, and it's around the 15% mark where we have stayed. We've continued to invest in our current operations, slightly more than we have been over the last years, given the expansion plans that we have. Overall, a very healthy cash flow after all. Just looking at some key financial figures. We have a large portion of cash ready for the acquisitions that Eric mentioned and where we are in discussions with several parties, as always in a way. Interest-bearing liabilities have come down further. Net debt is at 1.1 and a healthy equity assets ratio. I think we're very well positioned for both many mid-sized acquisitions you can say and larger that would come across. Working capital, what I mentioned there was 15.5% last year, 15.6%. We landed in actually the full year at 12.9%. Of course, that generates good results on the numbers. It is also a very low number for us, reflecting actually the situation we are in with a very high demand and a need to meet that demand. Our stock levels are actually lower than what we think would be the ideal position to meet the demand for the fall. Last but not least, few more key figures, and then we open up for the Q&A. Return on capital employed, return on equity, both have come up quite substantially now. Return on equity is at 17.3%. It is an old target we have had to meet the 20%. Would we consider the revaluation considerations that we talked about? We would be close to 19% actually, and that is in a way the official number, but it is not something that we follow since it was not generated in the normal sense, you could say. Nevertheless, these are moving in the right direction as well. Like net profit has come up from EUR 45 to EUR 76 per share, and equity per share is also increasing. I think overall a very strong result. Thank you. Mm-hmm. All right. I guess we are ready for questions. About 28 minutes for those. Thank you. Please. The first question comes from the line of Carl Ragnerstam from Nordea. Please go ahead. Your line is open. Hi, it's Carl here from Nordea. A couple of questions from my side. Firstly, in terms of the organic growth in Climate Solutions, obviously quite impressive. Could you give some flavors on the current growth rates in some selected markets? I guess Germany is performing well, Netherlands, and so on, but could you give us some flavor on the by-market performance? Yeah. Well, of course, Netherlands, they've been growing tremendously over three or four years now, and they still grow very healthy. Germany now would be perhaps the quickest growing market. Some figures would indicate that they are up perhaps some 35%, 40% growth. That's even quicker than Netherlands at the moment. That's, of course, from relatively low levels. It's not like a mature market like Switzerland or Sweden. That would be totally different. If the Swedish market would grow 35%, that would be a tremendous growth. It's very pleasing to see that customers are really willing now to change. Of course, there are subsidies in place. When you talk about subsidies, there's a long history I can tell you about that. We are really trying to introduce heat pumps to combat the bad, should I say, results or the consequence of burning fossil fuels. Some argue that we get subsidies in real terms. Of course, the gas and oil are incorrectly priced because they are not priced according to the damage they do in the combustion. That's why heat pumps are compensated for that at the customer level. That's a philosophical question. Yeah, I guess so. You gave some flavor, but if you could elaborate a bit on it. On the U.S., you said that the development is still a bit slow, but you have seen a pickup. Is it correct? Yeah, that's true. Of course, we have the new administration in now, and as you all see, he has been busy doing other things in other parts of the world. Of course, that's a clear sign that they are now going to go in a more sustainable direction. There's no other way. It's just as we mentioned a few minutes ago here, why haven't we changed sooner in Europe? Why are we sitting now doing all the changes and talking about it? We should have changed from fossil fuels 25, 30 years ago. We've seen the signals. There's no way back. There's no way back for the U.S. either. It's just that consumers have to be educated, and I think that in Europe, at least, we've been educated every quarter, more or less, or four times an hour by all this, the floodings and all the fires and everything. That's not normal. That's a great concern to us. Of course, that has to come in other parts of the world as well, particularly in democracies. In other countries where there are dictatorship, more or less, of course they can continue to suppress people. In the long run, we can't accept floodings and fires and unreasonable temperatures and an increase of water when the Arctic ices are melting. We believe that we are well-positioned. Of course, we would have liked to seen quicker growth in North America, but we believe that we acquired those companies at a very good moment because once the market starts to move, everything going to be so much more expensive. It's just like in Germany, of course. We acquired a company there 11 years ago, several said, "Why did you do that? You have NIBE there now." On a combined level, and now we also have Waterkotte on board together with our ClimateMaster, and NIBE has been there for many years. It's a tremendous foothold we have. Once the flames are in front of your door, it's a little bit late to react. We feel that North America is going to go in this direction. It won't perhaps be so pronounced in the coming 1 quarter or 2 quarters or 3 quarters. They're certainly going in the same direction as Europe is going right now. Perfect. Very helpful. Just 2 more quick questions. On the cost inflations, or the raw material cost inflation, you obviously presented a quite good gross margin as you mentioned. Would you say that you managed to offset it through price increases or primarily through internal efficiencies? Have you seen the full impact of the price increases, or is it more to come? Well, it's difficult, Jimmy, and we don't know whether there are any manufacturers of steel or copper listening in to this call here. We wouldn't like to motivate them by saying, "Well, you can increase prices." We were not prepared for these price increases. We've been surprised, and we are surprised. The indications are that say some of the price increases will continue. We have to combat that by a combination of being more efficient internally and also increasing our prices. Increasing our prices, we are fairly cautious doing that, but of course, we've been forced to do that. That's exactly how we're going to react during the remainder part of the year. If we are hit with price increases, we have to some extent compensate ourselves by increasing our own prices. There are two factors there. What you can do internally and what you cannot compensate fully internally. Of course, you have to compensate yourself by price increases because we are not a bank. We are a producing unit that should produce profits in a reasonable manner. As Hans mentioned and I mentioned initially, it is a very cumbersome period. Perhaps we indicate that we've been able to go through this, and that's true, but of course, our productivity could have been better had it been those stop-and-go situations. Of course, the price increases in some materials like steel, as I just mentioned, that's unheard of. You can't just sit there and take that in the long run. Unfortunately, we don't think it's over, but perhaps we've passed the peak, if I dare to say that. It's difficult to say, but there are still indications of some components and shortages that we hope that the further we walk into the forest, as the saying goes, the closer you get to the other side. As far as shipments are concerned, of course, there's been a shortage of containers. That's an indication that they have to produce more containers. When there is a tremendous price increase of components or material, of course, that in a market economy, everyone with some kind of common sense will say, "That's the market for me," and they're going to increase production. Hopefully we go towards a situation where it's going to be more balanced, but we don't think they're going to be in the coming weeks or coming months here. It's going to be cumbersome for the remainder part of this year, we believe. I have one final one from my side. Sorry for that. You're taking up the whole questionnaire. Yeah. Okay, I get back in line. Let's take it off. No, take that one. I'm joking with you. Take that one. Yeah. I guess it might be a difficult question. In terms of the EU Renovation Wave and the Fit for 55, we have seen your trade association, European Heat Pump Association, saying that you need to quadruple the installed base in order to reach the EU target. What's your view on that? Could you sort of just give a view on your organic profile and how it might look like the coming three to five years? It might be a difficult question. No, I don't think it's difficult. There's more math. If we talk about every year, in the past, some 7 million or ±7 million boilers of all categories being sold. If you are to replace those, that's on an annual basis, and there are some 250 million dwellings or individual homes in Europe. If you're going to change that, and we talk about perhaps heat pumps today having a penetration in Europe of some 5%, 6%, I'm talking in broad numbers here now. They're going to be a phenomenal, of course, volume increase. Everything takes time, not only producing the heat pumps. You have to install them, and you have to have all sorts of logistics looking after this. We are very positive. As I've said now, or as I've said many times, we are disappointed that it hasn't gone quicker. Now we see the flames. Now we see the flooding in front of our doors. Now we say, "We have to do something. Oh, boy." We are a little bit too late, that's why everything has to go so quickly now. We understand that we have to increase our capacities like all our colleagues in this facility or this sector, we see no other solution. You cannot continue to use gas or oil or even coal. That's just one way. We have to replace what we've got out there, it's going to be a phenomenal challenge to do that as quickly as possible, also with the quality that's necessary because consumers don't like to have a faulty product in their utility room in the basement, neither do they want to have an installation as such that's not done professionally. The whole sector has to develop together. All right? Perfect. Thank you. Thank you. The next question comes from the line of Douglas Lindahl from Kepler Cheuvreux. Please go ahead. Hello to Gerteric Lindquist and Hans Backman. A few questions from my side as well. First of all, congratulations to a strong report. Coming back to margins, I wanted to, I guess it's a difficult question, but I wanted to give or see if there's some sort of possibility to answer if you can give some indication on by how much the underlying gross margins in NIBE Climate Solutions improves over time as your mix change and you sell more and more of your latest heat pumps. This is, of course, assuming that raw materials are stable and comparing it to your older products in NIBE Climate Solutions. That's my first question. Thanks. Yeah. That was a heck of a question. Thank you. I'm sorry for that. No, that was very good. Of course, we try to come up with products all the time that is less costly. That is a balancing act because we don't like to come out with products that are faulty or have a lower quality. As we indicate now, we are just on the brink of introducing new families of heat pumps that are based on different refrigerants, and particularly on going from the ones we have today to the propane ones. There, of course, there is a saving there and the refrigerant as such. Compressors, they are about the same. We can't say that they're going to be any gigantic leaps as far as being on the raw material side. Then, of course, we have the volume as such. That's always for the benefit. When you buy more seed, you buy more compressors, what have you, expansion valves, of course, volume means something. Perhaps more important is the productivity. When you can go for longer series, of course, the productivity will increase. That's very substantial. That's why the raw material shortages that we're talking about here, they will not only cost us cost increases, but also productivity decreases because there's been this stop and go, and that is cumbersome to solve. We've been fighting, and we are fighting now to have a healthy margin. The NIBE Climate Solutions, our legacy is between 13 and 15. 13 when the economy is struggling and in general, and around the 15 mark, when the economy is more, let's say, friendly to it. Where we are now is pretty much coming back to where we were a few years ago before we had all these difficult surroundings in the world with pandemic and stuff like that. Also demand. Demand is picking up now, we mentioned to Carl Ragnerstam some here. It's a totally different situation. When the Paris Agreement was signed, it was almost like no one understood what really was signed. Of course, the individuals that signed the dotted line, they understood what it meant, perhaps not everyone understood in general, what does it mean to us? It's a tremendous change we are standing in front of, we can't say as a society, we just have to move. Okay. I don't know whether I answered your question. No. I guess it's a difficult question to answer, but I guess you're constantly trying to lift gross margins by new product introduction as well. Every time. When you specify a new product, the cost effect is always there for the cost factor. Could we do that less expensive without compromising quality, without compromising on performance? Yeah. Just coming back a bit more to the short term, I see that you write in the report that you expect now that markets open up to have more marketing activities in Europe and North America. I guess a bit more detailed question for Hans, is it possible to give some sort of indication on by how much marketing costs will come up in the more short term? That's also a difficult question. We have, of course, made savings here in 2 areas, you can say. It's marketing costs and also traveling costs. Traveling is to some extent related to marketing. We're also looking at new ways to reach out to the customer. As I think you saw in our Q report there, we have this truck driving around Europe now in various locations, which is a very cost-efficient way, but also a good way to reach out to the customer and meeting them where they are rather than everyone coming to a huge exhibition. We're also contemplating new ways of doing this. Probably we will not come back to the old levels, neither on exhibition costs nor traveling, but of course, they will increase from where we are today. Of getting any numbers on that would be impossible. Will that already be seen in the next quarter, you think, or too early to say? Yeah. Okay. It's a little bit too early to say. If you look at those big exhibition fairs, like the Frankfurt or the Nordic, they are not fully back either with their whole activity. I think that the pandemic has given us perspective in that sense, that fairs, without criticizing the organizers of fairs, but that is an old way of marketing a product. That was before the digital era. You had to go somewhere to look at products. Now, any new product can be exposed in a 10th of a second, and you can really evaluate that product. The trailers that Hans was talking about, now you can be generous enough to go to Hamburg and say, "We are going to be in Hamburg for three days. Please come on board here in Store," rather than them traveling to Frankfurt. How many would travel to Frankfurt, and there they have to divide their time between us and at least 200 other exhibitors from tubing to valves or what have you. It is so inefficient. Traveling, as Hans just mentioned, I think we've been traveling so extensively, just to mention Hans and myself, we have not been so environmentally friendly. Right? When you look at it, out of 225 days, we've easily been gone for 100 days. Out of perhaps 50% of the working days. You really have to consider, was that so efficient? We really have to look ourselves in the mirror, and we will not come back to that, particularly not for regular business meetings, with companies already on board. It's different thing with acquisitions. There you have to have critical meetings. Yeah. As bad as the pandemic has been, it has also changed or will change the pattern of traveling and marketing products. Definitely. Yeah. It's clearly a new reality for everyone. On your remarks there, Gerteric Lindquist, on M&A, always interesting to hear. You mentioned it a bit, but what can you say about your M&A pipeline in terms of geographies and technologies you're most interested in? Are you looking at large acquisitions or bolt-on mainly, smaller ones? The whole caboodle, as you would say, everything. We always have minimum 10- 12 discussions going on. Of course, we have our wish list, you know, Christmas gifts. It's always like that. It hasn't slackened. It's just that some companies have just said, "We can't really participate now. You have to come back when things are more clear again." Fine. We accept that, of course. We expect that to accelerate. As far as technologies, we are not going to change. We have our 3, should I say, business areas. It's interesting to see for Element, for instance, how we've been able to enter now the semiconductor industry through 3 acquisitions than in North America, Heatron, BriskHeat and Therm-x, and how quickly that develops and how important it is to have your eyes open in such a field. The same thing with the Climate Solutions naturally. We are always looking at new twists on what we already have. Coupled with naturally geographic coverage, if there are also interesting people that we would like to bring on board, regarding specific businesses. When you get new management on board, they cross-fertilize our organization in such a nice fashion. There are all aspects on that. We are not saying now we're only going to expand in Europe, now we only expand in North America. We are large enough, we have a coverage and surveillance enough to be able to be in each respective market. We also are, of course, approached by M&A advisors in most instances when acquisitions are coming up. We don't feel that we're going to lose out, or it could be someone we don't like either. We wouldn't say that there could be such an instance, but in general, we are very generously invited. Yeah, please. No, I think we also have the financial strength here to look at both on acquisitions, as you mentioned, but also larger ones. We could take on board fairly large ones purely on our own, but if we would use our share, there's not much of a limit in a way. All doors open. Yeah, I don't think that we've been better positioned in many years than we are now, both from a cash point of view, from all the banks willing to help us and also using our shares, Hans is saying. We are ready. Okay. Thank you very much for those answers. Thank you. The next question comes from Pam Liu from Morgan Stanley. Please go ahead. Your line is open. Thank you very much. Question number 1, please. Could you please share with us how you think about capacity planning and CapEx investment? I know that your guidance has been equal or just over the depreciation rate for quite a while, so I am just wondering whether that is sufficient for you in order to meet the strong demand that you are seeing and hopefully will sustain. The number 2 question is thinking about the German market for Climate Solutions. I note that the local manufacturer Vaillant have said that their heat pump business grew by 50% last year. They doubled their capacity and expecting well over 50% growth this year. Could you please share with us, how do you think about your potential upside in this market? What are your plans, strategies to gain more market share? Again, what could be the bottlenecks, such as production or installation capacity, et cetera? Very similarly, finally, in the U.S., could you please give us some examples of the strategies, the initiatives your team has implemented in order to drive demand as the market has recovered? Thank you very much. Well, I'm surprised that you didn't have more questions. There's only three easy ones. Investment, of course, there we're going to see an increase in investments, not only in the heat pump production, but also in the other areas. Of course, we are increasing our production capacity, for instance, now with products for the semiconductor industry. That's a major feed for us. We've been alerting the market by suggesting that there'll be an increase in investment. The exact numbers, of course, we will not release, but it shouldn't be a surprise to the market. We've said that for several quarters. Exactly. The guidance has been there. In Germany, of course, we are in such a position that wherever the German market grows, we're going to participate at the same rate, at least. Because we have a very strong foothold in Germany with our three brands. We have the greatest respect for all our colleagues in the industry, but we are so well-positioned. We are respecting our competitors, but we have no anxiety whatsoever when it comes to that. In the U.S., of course, there we have very much focused on the geothermal side of it due to the fact that is the most economical way of also climatize your home, rather than using electricity just in a regular air-to-air situation or a regular Carrier or whatever you call it, air conditioning equipment. There we are very persistent when it comes to utilizing the ground source by, of course, having a tremendous saving on heating, but even more so when it comes to the cooling side of it. All right? Yep. Thank you very much. Thank you. You're welcome. We have three more questions. Is that right? Three more minutes. Thank you. The next question comes from the line of Gustav Österberg from Carnegie. Please go ahead. Your line is open. Morning, Gerteric and Hans. I just have a quick question. You talked about the strong foothold in Germany, and then you also mentioned that markets like France and the U.K. are seeing better momentum. Could you please tell us a little bit more about your foothold in these markets, perhaps compared to Germany and. In France, we are not so strong. There we have a subsidiary since 7 or 8 years, but we are not so strong there. In Britain, we feel we're well-positioned or better positioned. Of course, there haven't been any acquisitions to talk about in Britain. There you have to more rely on your own presence, building up an organization and growing organically. In France, we acquired a company some years ago, and that's what we're building our efforts around. There, of course, we have particularly 1 strong French manufacturer. That's also a focus area, naturally, for us. It is just that we concentrated then on the German-speaking countries many years ago, Austria and Switzerland and Germany, and of course, also neighbor Holland, since we've been active there for so many years. There, of course, we have our strongest footholds in the DACH countries and in Holland. Britain, we are strong. In France, we are relatively a bit weaker. We're more of a newcomer. Great. Thank you very much. Thank you. Thank you. you. The next question comes from the line of Karl Bokvist from ABG. Please go ahead. Your line is open. Thank you. Hello, Gerteric Lindquist. Hello, Hans. Hopefully, this will be quite quick. The first one, do you think that seasonality will be normal this year, i.e., Q1 smallest, Q2 a bit larger than Q3 and so on? Or has anything happened during this year that might have disturbed the normal seasonality pattern in terms of sales? The second one, just as you mentioned, the optimized refrigerant. Are you mainly talking about propane or any other forms that you've been able to successfully implement into your heat pump portfolio? Just finally, we talked a lot about Germany and those countries in terms of efforts made to accelerate demand. I was just thinking, you mentioned Eastern Europe. Have you seen any similar sort of government initiatives to promote these products? Thank you. Mm-hmm. Okay. The first question was quickly, again? Seasonality. Yeah, seasonality. Of course. I mean, we try to answer that question by saying that the first second quarter last year, they were so relatively weak, and now it's coming back. It's almost like the demand from last year spilling over to this year, and it continues a little bit. I don't think that it's going to see such a pronounced perhaps happen as we've seen in the past. On the stove side, for instance, of course, we expect growth, but with the tremendous growth now we've had, it's a question, will there be installation capacity to continue that for as pronounced as it's been in the past? It's very difficult to really predict. Climate Solutions came through Q2 last year relatively well. We expect that to continue, but we will be a little bit more humble about the tremendously strong development for NIBE Element themselves, whether that would be able to accelerate that again during three and four. I think we have to be more humble there without being negative. Refrigerants, of course, we are aiming at, just like EU suggested, that we should go towards 1 or 2 or 3. With the propane, you are down to a very low GWP. On the ground source heat pumps, you are looking at other refrigerants, bringing it down considerably. The present level is like 675 or 680 GWP, and I think that was a compromise. We are not satisfied with that. We are trying to arrive, in general, below that on all our products. Not necessarily for propane. That's one thing, but we have other refrigerants that would have a slightly higher GWP, but considerably lower than the 675. The final question you said about Germany and East Europe. Yeah, of course, Poland and Czech Republic, the whole Eastern corridor. It is old-fashioned perhaps to talk about Eastern corridor because that's like 30 years ago now since they came aboard. In our world, they're equal partners. If you talk about the Eastern corridor of Europe, they're as eager as we are to get going, and they're also subsidizing heat pumps. They are part of Europe, and they've also signed the Paris Agreement. There's no way back for them either. Understood. Thank you for that. Thank you. The final question comes from Emmanuel Cau from Danske Bank. Please go ahead. Your line is open. Thanks so much. Hello, Gerteric and Hans. I will not take too much of the time before your meeting. Just a quick question. You're talking about internal efficiency work combined with careful cost control. Are these margins sustainable ahead, you think? Could you give us some flavor of the different measures you have been doing recently? You mentioned, for example, less marketing costs, et cetera, but could you give us some more flavor of those efficiency measures? Well, I think that on the white collar side, you cannot naturally expand that as quickly as the volume goes up. There are so many other ways of marketing the product, and if you had 250 salesmen before, we don't necessarily believe that you should have 500 salesmen if you increase volume with 100%. They have also to be more efficient. They have also to use other tools of marketing and selling the product. That's one very blunt example how we look at that. Of course, the volume increase should not be followed by the same amount of increase in fixed costs. In production, you do it differently. There you look at productivity, you measure, and you go through investments, and you try to minimize the manual time. The same thing on the white collar side or fixed cost side. You cannot allow yourself to expand the fixed cost at the same rate as the volume increase. That's, of course, arm wrestling all the time. I think that's the best answer to that right now. I can just add on, it's not that we're driving, how do I put it, global projects on cost reduction that are steered from the headquarters. This is very much linked to the business model where our companies are very well aware of the targets they have. They're very target driven, you can say. Initiatives are taken on a company-by-company basis, knowing what they need to achieve. Just as Gerteric said, it very much links to the growth rates we have and not expanding our organization in the same pace. It's done on a very local level. Yeah, perfect. Thank you much. A very clear answer. Thank you for that. Thank you. Thank you. We have no further questions. I will pass back for any closing comments. Well, we'd just like to thank you all for participating and calling in and putting all these questions. Some questions, of course, from a tactical point of view, we didn't answer fully, but we'd like to be as transparent as possible. We always look forward to this session. It's always interesting to hear your questions, and we'll talk to each other no sooner than in November again. Absolutely. Another quarter will quickly go by. That's right. Thank you very much. Thank you.