Ladies and gentlemen, welcome to the NIBE Q1 2022 Results Presentation. Throughout the call, all participants will be in a 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. Thank you. Thank you. Good morning, everyone out there. Good morning. Thank you for joining us. As usual, it's a gorgeous day in Markaryd today, 17th of May. Sunshine, 20 degrees is forecasted, and we're gonna have our annual shareholders meeting in a little while this afternoon. The setting couldn't be any better. The way we're gonna present it is like usual. I start, and then Hans is gonna come in with all the financial details. Then we round up with a number of questions and hopefully some good answers as well. Unfortunately, we are a bit stressed today, so at latest we have to be finished by noon. I hope you understand that. Just to dig into report itself, you've read it, and we dare to have that headline saying a strong start to the year. Of course, to have a growth of some 28% be considered fairly strong, if we are not applauding ourselves too much. Of course, that is helped naturally by currencies and also price increases. Underneath, it's a very steady organic growth. Could have been much better, of course, had we been able to deliver. We are using some strong words, even the word chaos in report. I think that relying on semiconductors and relying on components using semiconductors, I think that word is fairly appropriate. We hope, however, that eventually they're gonna be cured, you know, sort of successively during the year that is remaining. We absolutely hope so. That's the message we get from our suppliers. Whether that is set in stone, we only know by the 31st of December. This increase in order intake, of course, in all three our business units, that is an indication that we are at a point in history, we can say, that we are going from fossil fuel into a more sustainable way of living, and that's affecting all our three business areas very positively. As a consequence of that, we are investing quite heavily in all three business areas. For those of you who are gonna visit Markaryd later on today, you're gonna recognize the tremendous change and the little village where we live. There are three major constructions are going up one a new heat pump factory, a new visitor center, and a new R&D lab. It's gonna be, you know, second to none in the world. It's a daring project, and it's not only in Markaryd. We are in Ljungby with CTC, and we're also investing in Germany. We are doubling capacity because we are fairly convinced now that there's a way that cannot be hindered, where we're all gonna need eventually oil and gas and go into heat pumps and all other sustainable ways of, should I say, solving the climate issue. Sadly enough, of course, we all know that we have this war in Ukraine that we also name very, very bad words because we think it's totally asinine for anyone who starts a war in these days. All the atrocities that we are seeing on TV and listening to and reading about absolutely are unheard of. That's why we have decided to withdraw totally from Russia. We have one major operation, you can say, with manufacturing and then smaller one with the sales office. We have assumed now that to write it down to zero in value is gonna be roughly SEK 114 million. Of course, that dampens the result the first quarter. We all know that underlying margin is much healthier than that. As I said, the organic growth is fairly decent. Of course, you foresee that once deliveries to us and to our sister companies gonna be up to par again are gonna be a continuous very good growth in the future. Our operating margin is somewhat lower, not dramatically much, if we just exclude SEK 114 million, which we think is of extraordinary kind, and that is that we are lagging when it comes to price increases. We've been hit by phenomenal price increases since actually last fall. No matter how fast you are, you're always gonna be a little behind. We are in good faith, believing that we're gonna close the gap as the months go by, during the rest of the year. Unfortunately, we haven't been able to really acquire any companies in the first quarter of any significant size anyway. We have always some small add-ons. We can assure you that we have a number of, should I say, very interesting negotiations going on. We hope we're gonna be able to present those within relatively short time. If we dig into the figures themselves, it's already mentioned a 28% in growth, and that is very much the true organic growth in combination with the currency and the price increases. It's only a little bit above 1% that's been acquired, as I explained before. The operating margin is down to 10.8%. If you would include the SEK 114 million, we would be at 12.1% versus the 12.7%. That's the gap that we have to close during the year, where at least should be able to, you know, have a similar margin for the full year as we had last year. That's our target anyway, if we are not too bold in giving such a forecast. We have the charts that we typically look at, and of course, we see now that net sales in the bar chart is really taking a little bit of a hit upwards. Of course, had we looked at the order intake, it would have been much steeper than that. That also gives substance to our saying in the report when we came out with the full year, that we are approaching SEK 40 billion. We know that that was questioned a little bit, perhaps, some years back when we passed SEK 20 billion, suggesting very boldly that we will arrive at SEK 40 billion. I believe, or we believe that all of you listening in now, plus our employees and the rest of the world, they realize that SEK 40 billion is truly an intermediate target. Looking at the other bar chart there with the results, of course, that takes a little bit of a dive, or at least not as good looking as the sales part of it. That is of course, again, hit by SEK 114 million there. There we are fairly positive about the future, but again, being very dependent on our suppliers. If you're just gonna have a quick look at the business area Climate Solutions. Of course, we see a very good growth in Europe, both in residential and commercial, and also a stirring interest in North America, but they are certainly behind Europe in that sense. I'm not saying that pejoratively, it's just that they are a little bit behind the development in Europe. Of course, the shortage of components is very, very sad. We apologize as many times a day as we can that we cannot fulfill our obligations because there are so many people, so many private individuals, so many house manufacturers, so many contractors that have put their faith in us, and we can't deliver. The only, shall I say, positive thing, if there's a consolation, is that we are not the only ones, but we want to be a little bit better than everyone else. That's why we are very sad that we can't deliver as we would have liked to. All three sectors or business areas are going through this massive capacity increase. As I already mentioned, and of course, Climate Solutions there we see a very strong demand for at least this decade coming about. Now we're talking about Europe and eventually also North America. With that in mind, we dare to enter this quite heavily. The margin, again, is slightly weaker than before. Even if we add back the SEK 114 million, we would have added some 0.3% or 0.4% in operating margin weaker than the year before. Again, that's a gap that we have to close, and everyone is very determined to do so, because we cannot operate as a bank. We are an operating company trying to sell products at a good performance and with a decent profitability. We're gonna continue to act like that. To write off the Russian, of course, operations, it's been a long, long haul for us. We must say that we've had pretty good operation the last couple of years there with the new management on board, English speaking. In that sense, it's sad that we just have to discontinue the thing. We try to treat all the employees in a very good manner. They all get their salaries, so nothing gonna taint our, should I say, name in Russia. We cannot live with the atrocities that are going on there. We're gonna do it in a very structured way, of course, with all the best legal advice that we possibly can bring it up. If you just have a quick look at the figures that represent pretty much what I said, where we had an operating margin of 11% only, but that is like really close to 13.1%, if we add back the SEK 114 million. We had a very solid growth there of product of the business area close to 30%. If we just jump very quickly over to stoves. There again, it's demonstrated how the pattern has changed. That has been, of course, very much explained by the pandemic until recently, but it's almost like we have forgotten the pandemic now. Now it's a new time. Now we are in the era with much higher energy prices, which we of course realize now that a lot of consumers they invest in a stove to reduce the effects or the negative effects of the higher electricity prices or whatever you use for heating your home. That's a positive sign also for the stove side, that the world is going in a more, shall I say, sustainable direction. Their stoves also gonna play an important role as a secondary heat source in the home. We are of course aware that we have to reduce the particles and the emissions. We would love to get rid of the odors. It's almost like the neighbor, of course, is the more angered at the odor, and the environmental institutions, they are pretty much aggravated by the particles. We feel very much obliged to solve those issues. That's why we spend quite some money now trying to come out with models that are much, much better when it comes to particle emission, and eventually also to solve the odor issue. Here again, we are expanding quite rapidly. In Britain, we are to open up a totally new factory here in midyear. That is one example. It's not only the Climate Solutions side, but all three sectors are expanding quite rapidly. The operating margin, again, just like with the Climate Solutions, we have not been able to close that gap, but we are in good pace when it comes to the coming months to do so. You look at the operating margin, slightly weaker than a year ago, despite the growth, illustrating how massive the price increases to us have been. If we then quickly jump over to the Elements, same pattern again, very healthy growth. Of course, helped by price increases and the weaker currency. The sustainability profile is certainly moving very quickly in the right direction. Also the semiconductor industry that we all know, where we are very much engaged in with our three subsidiaries in North America. Very interesting to see that development, but also understanding fully the time lag. You don't build a factory of that magnitude that quickly. There're gonna be some quarters still before the manufacturers are up at full speed. There again, this is an investment program. Your operating margin slightly below the year before, but still above the 10%, which we think is a healthy way of presenting ourselves. Just some pie charts before Hans kicks in here. It's pretty much the same as before when it comes to sales distribution or revenue distribution. When it comes to the EBIT side of it, of course, it's lacking a little bit of the Climate Solutions business at SEK 114 million. Other than that, the pie charts are fairly much identical as the previous year. The distribution of sales, where the Nordic countries, which we really consider the home market, some 23%, and the rest of Europe, some 47%, in North America, about 25%. Element, of course, has substantial sales outside Europe, but that is pretty much restricted to Element. Well, I'm sorry, Hans. I took a few more minutes than I should have. I think I hand over to you there, Hans. Thank you, Gerteric. No, no problem at all. We'll take a little deep dive into the numbers. A little bit of repetition, I guess, but leaving enough room for questions at the end, of course. Coming back to Climate Solutions, as Gerteric said, it's been a very strong growth here with the sustainability theme as a main driver. It really started in connection with the pandemic and has then been reinforced by the war, sadly enough. That has really triggered the need to shift over to more heat pumps and other products that we sell. However, this has also led to the write-down that Gerteric has mentioned a couple of times. Nevertheless, sales were up some close to 30%. A very little portion of that has been acquired. There's a portion of positive currency effect in that, but it's not too much. It really comes down to an organic growth, which then, of course, is a combination of more, I mean higher sales per piece, and then also of our price increases beginning to kick in. We've not yet been able to compensate fully on the gross margin level. As you can see, it's down from 35%- 32.6%, which then lands us in at an operating margin of 13% as opposed to 13.4% if we take away the write-down in Russia. There's a strong and very healthy underlying demand in the business area. If we look at the distribution of sales, it's fairly similar to what we had last year. Nordics being some 27%, Europe 51%, that was 50% last year, so very small movements. North America, stable at 19%. Coming over to stoves. It's an almost unusually strong demand for Q1. We did, however, have the same pattern last year as well, which was very much driven by the pandemic with renovation trend at home. That has continued in a way, but it's also been reinforced, as Gerteric said, by the ever-increasing energy prices, where people are more and more looking for alternatives. Also, unfortunately, reinforced by the war in the sense that people are also looking for safety. Meaning that they are looking for a system that is off grid, which has led to these high sales numbers. The growth here is 27.6%, up to SEK 900 million from SEK 705 million. No acquisitions. About a fifth of currency effect in there, and the rest then being organic growth in number of pieces and price increases on top. However, also here, there is a challenge in meeting the supply chain issues. The gross margin is a couple of units lower than where we would like it to be, but we have a very good cost control on the overhead side. We've been able to land in an operating margin, which is at least 11.5%, as opposed to 12% last year. It's not too long ago that the first and the second quarter always were, you know, around 7% or 5% even. It's a shift in that business in a way. In terms of distribution of sales, the Nordics have actually gained some compared to last year with 29% of that pie chart. They were 26 a year ago. Europe, being roughly the same, has gained a little, and North America falling a little bit behind. Moving on to Element. We see a strong growth in most segments, but of course, especially in the HVAC and semiconductor segments, just like in the two previous quarters, really. But also here, we have seen supply chain issues, although not as tough as within Climate Solutions, but nevertheless, being present, also influenced by the COVID cases that we've seen in different parts of Asia leading to supply chain issues from over there. Nevertheless, sales have increased by some 23.7%. A portion of that 1.7 is acquired. A little bit more help from currency here, it's roughly onr-third, but then the rest still a very good organic growth, and also here in terms of selling more pieces and also having price increases, which are beginning to kick in. Gross margin slightly down from 23.2%-23.8%, so we've not yet fully been able to compensate through price increases. We've been, just as Gerteric said, able to land the operating margin about 10%, which as many of you know, has been a goal from our side for a long time to keep the business area above that level. In terms of distribution of sales, it is our most global business area with a fairly small portion in the Nordics, 15%, then Europe, some 35, North America, slightly bigger, and then others, mostly being Asia, making up some 13%. A similar picture to previous quarters. If we then jump into the balance sheet, it is very much an evolution of our business, having total assets of SEK 43.4 million at the end of the year, we're now up to SEK 45.3 million. As you can see there, we're continuing to invest, so the tangible assets have come up, and so have the inventories, the non-financial current assets. That is, of course, a challenge, and we will see it on a couple of slides later here. That given these supply chain issues, we are doing everything to meet the production demands and needing to source products, which then has an effect on cash flow. You can see also that the cash on this picture is slightly lower than at year-end. On the equities and liability side, there are not many movements. We've been able to increase equity, long-term liabilities, and both the non-interest-bearing and interest-bearing are basically the same. There are not too many movements there. When jumping into the cash flow analysis, I guess this is where you see the challenges with the supply chain. We are paying much more to get the products into our production, both in terms of buying them and also transporting them. Cash flow from operations is slightly lower than compared to the first quarter of last year. Foremost, we have a larger negative effect on the change in working capital, very much coming from building inventory and also paying a higher price for the products. The operating cash flow is SEK -600 million as opposed to SEK +480 millionof last year. We've also continued to invest in our operations, as you can see on the line above there, SEK 478 million compared to SEK 236 million. That's also shown on the next slide, where we look into a couple of key financial figures. We've increased our pace in investing in our business. We hadn't really come to a start there in the first quarter of last year with SEK 236 million, but it eventually picked up. It's not that we are stepping up immensely from what we had just a quarter or so ago, but we are in a phase of investing. Nevertheless, interest-bearing liabilities in relation to equity has come down. Net debt to EBITDA is very healthy there at 1.1, and we've been able to even increase our equity/assets ratio further to land in above 50% now. A short view on the working capital, and it really does make sense to look at the working capital excluding cash in bank. As percentage of sales, we're up to just about 20% as opposed to 14% of last year. Where we came in at 17.4%. This is the situation we have where we're sourcing as good as we can to keep the production going, you can say. The 14 is in a way an ideal number, but falling below that is tough as well because then you have other sorts of issues. An ideal level for us is somewhere around 14%-15%, I would say. Then just coming into the very last picture there on the key financials. Return on capital employed is 14.1%. That is slightly up from last year, and that is then excluding this revaluation of additional purchase price considerations. Otherwise, or it's actually even higher, but this is to have it on a comparable level. Also return on equity has slightly increased up to 15.5%. Net profit per share is also slightly up. I think overall, we're doing quite okay in these very challenging times. You might have some questions now, questioning that. Unless you have anything to add, Gerteric. No, I'm fine. I'm ready for the questions. Let's go. Okay. We see that Viktor Trollsten is the first one out, right? Go ahead. Thank you. Our first question does come from Viktor Trollsten then from Danske Bank. Please go ahead. Your line is open. Yeah. Thank you, operator. Hi, Gerteric and Hans. Thank you for taking my questions. Just out of curiosity, a number of questions on the Q1 growth figures. I guess, you know, if we exclude currency from the growth figure, I guess we're looking at organic growth of, let's say, 21%. Is it possible to split that into volumes and also price? I.e., how much were volumes up year-over-year? That's my first. Thank you. Okay. Well, I mean, of course, we can split that, but there we have a little bit of a higher density. We can say that the organic, true organic growth is solid regardless of the price effect. That's why we haven't been able to keep the same margin. That is the organic growth is the major part of it. And, and- It's true, yeah. Just so I understand it quickly, and true organic, you mean volumes or? Yeah, exactly. Number of pieces being sold, yeah. Okay. We're talking about volumes up, let's say, 15% year-over-year, even in these times? Well, I mean, I understand your question, but we don't answer that very precisely. I guess, you know, something we. I appreciate the question. Yeah. I guess that we won't be more specific than we were in the previous answer there. Yeah. No, but I think that's helpful. Also, forgive me if you don't want to answer it explicitly, but just talk about capacity utilization in operations for the moment. You know, if we just assume that component shortage would ease tomorrow, how much would you be able to lift volumes from here? I.e., what level of capacity utilization are you running at for the moment? We assume that of course always gonna be a bottleneck, but we could increase it 50%. That would be at higher cost, you know. You would have to drive three shifts and stuff like that, and that's not ideal. That's something you should have in reserve. That's why we invest now because if you don't invest now and you arrive at the point where you couldn't even cope with the demand, even with overtime and driving during weekends, then we really have to now that famous screech. We try to be deliberate on the positive side here, even if the demand would kick in fully at, let's say in 18 or 24 months. It also takes, you know, like six quarters to erect a new building. Mm. I think that the timing is good in a sense. Of course, we would have liked to have the construction cost also low. That's a drawback. I mean, that again, the prices also are increasing, so we cannot be isolated from the price increases on the construction side. Okay, but I. I mean, you always dream of building or erecting new buildings when the economy is weak. When the economy is weak, your sort of daringness or your ability to go for that, you know, is a little bit lesser. It's like, "Well, I wonder what is gonna happen." Now we see that the future is bright, even if some very dark clouds in the short perspective with war and everything. We could certainly change for a different environment. We see all sorts of horrors now with temperatures already in May are exceeding all experiences in the past. We believe that's a signal enough, you know. It's this climate change cannot cure itself. We have to assist Mother Earth here. Yeah, no, I appreciate the clear answer. On the same topic, just my interpretation at least is that you have quite similar communication in regards to component shortage as you have been in Q4 where you mentioned that, you know, Q2 could be sort of the inflection point where things will materially normalize. Is that still the case, or would you say that, you know, things have worsened since the Q4 report? No, but we can't say that it has so much improved either from the fourth quarter compared to the third quarter. Of course, the message that would be conveyed, they're very honest and very transparent. We wouldn't convey a message to you guys out there saying, now we hope that things are gonna be better. I mean, that's exactly the messages we are getting from our suppliers. I mean, we don't hope that they will assume that they would lie to us. That the best way to convey the message to you is, well, we seem like we're gonna improve, but that means that we're gonna be, you know, fully up at speed in the fourth quarter. We can't predict that. We'd be very surprised with all the efforts being done if things wouldn't improve successively over the year here. That's the message we get, and that I give you in turn. Yeah, no, that's clear. Just, you know, finally, just to sort of understand the magnitude of the growth here, I guess you're running on the Q1 number at SEK 35 billion in sales. It sounds like more price is coming. It sounds like component shortage will, to some extent, ease. I guess we could be looking at your target of SEK 40 billion already this year from that perspective. Now, you're a bit aggressive perhaps, but of course there is a clear message, you know, already, and as I said in the report after the Q2 2021, demand is very strong. Could we had we been able to deliver, of course, your assumption would've been more correct, but we don't think that everything's gonna be cured. We've already lost a quarter now, you can say. This quarter is not at all where we wanted it to be, although it's relatively strong. I mean, it's not if you ask our customers, they're very disappointed. I mean, we are between a rock and a hard place. No, still impressive set of numbers, I suppose, given our challenging times. Thank you very much for taking the questions. Thank you. Thank you. you. Thank you. Thank you. To register for a question, it's zero one on your telephone keypad. Our next question comes from the line of Gustav Österberg from Carnegie. Please go ahead. Your line is open. Thank you, operator, and good morning to you, Eike Hansen. I have, firstly, a question on sort of delivery capacity. I mean, it's very positive to see the continued high demand levels, but the supply chain still seems to be quite constrained. I was wondering if you look one step further back in the supply chain, what are you seeing in terms of structural investment initiatives from your sub-suppliers? They all increase. I mean, it starts with the chips, you know, as we said, because it's not only for our own control boards that we need chips or semiconductors. Practically all our suppliers of micro-components, they also use chips, like if you take circulation pumps, if you take fans, but heavier, it's not like an ordinary fan anymore. It's like little computer-driven sucker. Excuse my language. The same thing with the other components. You know, of course, they do their utmost to increase their capacities in the true manufacturing side of it. Then at the very end, they're also dependent on the semiconductors for their components when they deliver to us. Of course, it's a reflection of how soon that industry gonna come out of become, if you may call it normal again. We all know that since we have an insight also from the NIBE Element side, it's a tremendous investment process going on, both in North America now and also in Europe, very surprisingly, and very nicely to know that the semiconductors are not being outsourced anymore, but we can also foresee a good future in Europe. We certainly believe that the supply chain's gonna be shorter. They have to be shorter in the future. Not only for political reason, but it's too sensitive. It's also from the sustainability point of view. It's not normal to ship, you know, a component like around the globe or half around the globe to use it here. To be sustainable, we have to supply components so that we can utilize technology that is a worldwide, should I say, utilization that is really flawed by this first production. That has to be more local. I think everyone has understood that now. We've been trying to withstand the outsourcing idea. We never believed in that, but we have not been able to home source the way we call it, or in-source enough. We've done that with certain components, and they're very, very successful. I think a lot of manufacturers are gonna do the same thing. They're gonna produce much more themselves and have much more produced in the vicinity of where they operate. Thank you very much. That's clear. Moving on to M&A, so that we see society opening up across the world now and have been for a couple of quarters, depending on the region, of course. Do you feel that there are still any restrictions in place on travel that limits sort of deal activity or do you have any comments on the development on M&A? I would say it's totally different now. Just, you know, as of yesterday, they opened up the airlines. You don't have to wear a mask when you report it anymore. In Europe and North America, it's totally. I'd say it's back to normal. In Asia, as we all know, there are some restrictions, but that's not a hindrance anymore for us. We shouldn't say too much, but we would be very surprised if you wouldn't see any acquisitions in the near future here now from our side. Got it. Thank you very much, and those were all questions from me. Thank you. Thank you. Thank you. Our next question comes from the line of Douglas Lindahl from DNB Markets. Please go ahead. Your line is open. Hello, Gerteric and Hans. Hopefully you can hear me. A few questions from my side as well. Just on the M&A theme there, Gerteric, you seem pretty confident in the pipeline, which is reassuring. Mm-hmm. I'm guessing we're talking about M&A within climate. If you could just specify that. Climate solutions, I should say. Also, I'm a bit curious to hear how you think about the M&A landscape now in terms of valuation levels and if you're maybe seeing also more competition from, sort of ventilation, air conditioning players wanting to play a bigger role there. Any comments on that would be super useful. No, you know where we would like to expand. We'd like to expand in commercial equipment, and we also like to broaden our presence, let's say, particularly in the southern part of Europe, as well as we like to broaden ourselves on the residential in North America, but perhaps more so in the commercial side. So that way you can foresee acquisitions in the future on the climate solution side. As far as valuation and prices are concerned, good companies, you know, they never really come down. They never come up for sale. If the company is of a good caliber and the owners aren't under strain, then they're very seldom under strain if they're making money. They don't just sell because there's a downturn in economy. They'd rather wait. It's a very few moments where you can say, "Well, now we're gonna buy a company at a discount." A good company is very solid and it's difficult to get a discount. At the same time, we have never paid ridiculous, you know, multiples. We paid, of course, high multiples three times when we had acquired listed companies. Those are the only times. Otherwise, we try to be cool-headed because we know that if you pay too much, the company's gonna suffer from that itself. If you have a sensible owner, they know that. That's why we divide acquisitions into two steps typically. That we buy one chunk, and then eventually the true value gonna come out to the previous owners after three or four or five years, and then we've had the assistance of developing the company. Of course, competition from other companies are always there, and if they're ready to make it one go, we are not ready to make to buy a company flat out, typically. Because we don't have the capacity management-wise. It's Hans and myself, and we are six more. We can't send in a squad of people in that code. We just have to do it on our own and rely on the management. That's our... You may call it shortcoming, but that's also a very solid way of acquiring a company because if the previous management is on board and if the owners are on board, it's not dramatic as far as the change of ownership. We're gonna continue with that philosophy. But as you say, of course, everyone is aware of the fact that we are going into a dramatic change in climatization of private buildings and commercial buildings. Mm. Of course. That's how the market works. Yeah. Okay. On investments, this have obviously now doubled in Q1 compared to last year, and you flag that they will remain at high levels for the next few years. Is it possible to get some more specific details on 2022 or maybe just the phasing of the investments over the next few years? Well, I don't know. If you pay 50%-100% more, I think that's pretty substantial, and that's a picture of how we are able to engage, you know, construction companies to go to Finland. Until Until now we're relatively constrained to get serious companies bidding for you. Now, here in Markaryd we have a very good contractor. They're reliable. We've also been able to get a couple of those in North America, one in Poland and one in Czech Republic, that we've known since before and have good reputation. It's been a competition until quite recently. Now we believe that. Mm. The forecast of interest rates going up and so forth, that'll be a different situation, and we can perhaps shorten delivery times a little bit and we get more contacts which will be interested. It's difficult really to suggest, but our wish is more or less described in the wording there in the report. Okay. I understand. On the inventory side, which we discussed quite a lot previously, I was more interested in the sort of the long-term context. You are now, and have been doing so for quite some time, running inventory to sales at a high level. Do you expect to do so even in sort of a normalized market going forward? You know, looking a few years down the line to better protect yourself for future potential hiccups? I mean, this is extraordinary. It's an extraordinary situation right now. We've never been into this. Of course, we've seen constraints of some kind in the past, but as Hans said, you know, typical value for us would be 14.5% in working capital. I don't think that the world, in general, has ever seen a shortage or constraint like we're going through now with semiconductors. That's extraordinary. Why we have built up inventories, that's pure math. I mean, if we, for some reason, all of a sudden get a big chunk of components, there can't be a shortage of those components that we typically can get because then we won't get the product out of the door anyway. We have to prepare, be prepared, but that's not the normal condition. We're gonna go back to the 14%-15% as soon as we possibly can when the crucial suppliers are back to normal levels. That also gonna be sustained by more local supply chains, as we mentioned earlier. Okay. Very well. Thank you so much. Thank you. Our next question comes from the line of Pam Liu from Morgan Stanley. Please go ahead. Your line is open. Thank you very much. I have three, please. The first one is on pricing increase and the dynamics between you and your customers. In the report, you mentioned that the supply chain challenges have damaged your delivery capacity to all your customers, and at the same time, you also introduced price increases that are way above normal. Putting these two together, it seems to suggest that you are able to increase price significantly after you received customer's order while they're waiting for delivery. If that is a correct understanding, could you please give us some more color on how your customers are reacting to that? What do you think is the scope for further price increases while your customer is experiencing extended delay in delivery? At what point might you see your customers turning to other manufacturers that might be, you know, offer a slightly quicker delivery or slightly cheaper on the price? The second question is market share. Could you please remind us of your heat pump market share in the key geographies? Have you seen any shifts in that recently? The background is that we noted a competitor of yours recently reported significant volume growth, including January to March this year, so I'm just wondering how impactful that would have been on the competitive landscape. Finally, on investment, you target to double heat pump production capacity in around four years. We already know that there is a plant or production line under construction in Sweden. Could you please tell us a bit more about the others, such as the one you mentioned in the report and any others, and their current status, please? Thank you. That's very specific. You really have a good memory. We have to have a good memory to remember all those questions and go on to the next. As far as the production is concerned, if you take investment from the various. Take that one. Of course, it's we have two units here in Sweden, NIBE and CTC. We are going through the same process there as we're going through Alpha Innotec in Germany. It's the European manufacturing plants. But also, where we produce the water heaters, which is part of the heat pump, they will also increase in capacity, particularly in Poland and Czech Republic. Sweden, Germany, Poland and Czech Republic predominantly where we gonna increase capacity. As far as market share, we see that overall, we are keeping up our market share. Of course, some manufacturers have been trying to work as a bank and say, "Well, we're also gonna increase our prices," and they might have had some supply of components. We are not participating in that game. We feel that no one can be a bank. All manufacturers have to get their costs covered. We feel quite confident that overall, we are keeping our market share. As you know, we never should I say provide specific market figures per country. As far as the first question, it was a heavy-duty one regarding, I don't know whether you'd like to fill in there, Hans, or that I should cater to that as well. On the price increases? Yeah, whatever. Yeah. The price increases, I mean. Of course, we are, you know. When it comes to price increases, you can be as naughty as you want, but the consequences are not easy to foresee. I think that when we started to increase prices last fall, it was quite dramatic because customers said, "What's going on now?" You know, eight months down the road, I think that everyone is sort of tranquilized by the fact that price increases are occurring everywhere, in food, in everything. I think it's been explained so many times in media and through customers and through manufacturers that they have to increase prices. If it's applauded, of course, it is not applauded by the consumers. Of course, there are gonna be demands on salary increases and that stuff. Whether we have hurt any relationships, well, we don't know. I mean, that will come, you know, as the costs are ahead of us. The general rule is that all customers, at the end, they want good, healthy providers of support in the future. Even if we might be viewed a little bit naughty when it comes to price increases, we believe that we're gonna sustain this storm, remaining a very healthy company, and that's what counts when we're gonna come out of this tremendous tornado of price increases. We do not foresee that we're gonna continue to focus or to see price increases of this magnitude in the future. Because already now the economy is cooling off. I guess that's what the banks would like to see, the national banks. Anything from Fed to the ECB here, they like to cool off things. That means that the price increase is gonna also cool down. To what degree, we don't know, but it will not be as it's been until now. I guess that's as specific as we possibly can be in this question here. Thank you. Thank you. Our next question comes from the line of Karl Bokvist from ABG Sundal Collier. Please go ahead. Your line is open. Yes, thank you. Hello. My first one is just on the very strong Q1 set of numbers overall. We usually have a kind of seasonality effect in play here, but of course we have a lot of other different factors affecting this. Just out of curiosity, with how you look at the year, do you think that, you know, the kind of regular seasonality with the kind of step up between quarters might not really be the case this time around, given that we, as you mentioned, you have such a strong order backlog, and you're just waiting to have the delivery capacity? Yes. I mean, our seasonality pattern is also different. You know, we've been selling stoves, for instance, since 1965, and we've never seen such a change in patterns as we saw during the pandemic. Then during the pandemic, at the end, towards the end of it, we said, "Well, we do not foresee really that pattern is gonna change," as you might. People said, "Well, people are gonna go back to their normal behavior." It's a different structure now, when people feel like they need a secondary source of heating due to uncertainties and the price level of energy. As much as we forecasted a decrease in raw material prices, we do not foresee a decrease in energy prices, because there's gonna be a shortage of gas and oil to be substituted with electricity of all sorts of, you know, kind of sources. That means that it could be hydro, it could be wind turbines, it could be nuclear. It's gonna be tough to substitute that. That means that energy prices are gonna be high, and you're gonna see different patterns in stoves. On the climate solutions, of course, Mary said so many times that the market's gonna double or triple over the coming years here. It doesn't matter how much the producers can really produce, rather than coming to the seasonal pattern. Eventually, of course, we're gonna arrive there, but we foresee that new construction will not change so much. Perhaps even gonna go down if the interest rates are going up, but the refurbishment certainly gonna go up. You know, now you typically change your boiler when it's broken down. We believe that in the future, you might change it even if it's not broken down because you like to get rid of the fossil fuel. In that sense, the pattern to the future, we don't really see that. Of course, it's been a very clear pattern when it comes to installing towards the forefront. With such a demand as we see now, I think it's more a capacity issue with all the combined or aggregate level with all our boiler producers, including, I mean, our colleagues as well. I don't know whether we answered that question. Tried to. If you have another one, we'll- No. Okay, good. Thank you for that answer. I think I understand it. Just a follow-up on what you touched upon earlier with competitive dynamics. I mean, in most other industries, it seems like there's been a kind of a maybe let's call it gentlemen's agreement, that all people understand that, okay, we need to increase prices. Do you see that there's a handful of heat pump manufacturers, perhaps, that are willing to sacrifice margins in order to gain a bit of a stronger foothold? Or, is there a You know, is there a single one that's kind of hampering the profitability for the entire industry? Well, I mean, all are increases, increasing prices. I say there might be a few instances where they have delayed them to get some market share. You know, in the long run, you can't buy market share by lower prices. That's when someone else perhaps haven't been able to deliver or you hit a certain spot for the market. In the long run, you're gonna invest in a product gonna last for 20 years. You're gonna have that when you sell your home eventually. You don't like to invest in something, a crappy product that eventually you're gonna break down just when you sell your home. We believe that, and with all respect to oil and gas industry, they have a good reputation of quality. I mean, we could, or shouldn't substitute the present way of heating where they show the methods. It should supersede that. That also is a sustainability message, that you shouldn't necessarily have to change your boiler that frequently as you did in the past. A heat pump should last longer than a gas-burning boiler or oil-burning boiler did. It's not only that you save energy, that you reduce CO2, but that you also have a longer lifespan. Understood. My final one is just the potential bottlenecks related to installation ability. What's the latest there, and do you feel that you and the other competing manufacturers have any ability to support the training and deployment of more installers to thereby, you know, driving more heat pump adoption? Well, there is a shortage of course, and our experience is that if an industry continues to grow with 17%-20% year after year, it's pretty much maximum what the installers and the whole industry can absorb. Because that means that we double organically every four years. Of course, installers are a substantial part of the whole transition process that we're into. They have to be trained, and of course they are fully aware of the fact that they're going through a transition. Still, it takes time to be re-educated and to be comfortable, to make a good job at the final site when you meet the target individual, the final consumer. It's a challenge for all. I mean, everything from the sub suppliers to the manufacturers to the distribution to the installers. We all have to grow. It's a very positive. It's something we've never been through before. We've been preaching this message for 40 years. It isn't until now, when we really see boards, now we're breaking through. We've been too alone before. We can't carry on this message on our own. We need the support from EU. We need the support from our colleagues in the rest of Europe. To build this industry, you know, truly sustainable and long-lasting with a good reputation. Understood. Thank you. Thank you. Okay. Uh- Yeah. Well, it's 12:00 P.M. Should we have one short final question if we are not being polite? Thank you. As we are drawing to a close, our last question does come from the line of Uma Samlin from Bank of America. Please go ahead. Hi, everyone. Thank you all very much for taking my question. Thank you, Hans and Gerteric Lindquist. Very strong results. My question is focused on organic growth that can you please tell us a bit more about have you seen like stronger growth towards the end of the quarter driven by the war in Ukraine? As you said when you answered the first question, does it mean that most of the quarters organic growth was driven by volume instead of price? Well, of course, the war in Ukraine, sadly enough, has alerted people. Everyone is concerned about, I think not everyone, but many people are concerned about what will it look like, the coming winter. Will there be a shortage of gas if someone, you know, sort of returns north to gas or oil for that matter? It has been, should I say, affected positively the demand. People are concerned about it, but that's just sort of on top of the already existing very positive order intake. I mean, we all read about the shortage possibly to come next winter. We're all human beings, and everyone wants to, or not everyone again, but a lot of people want to protect themselves and their families. Thank you. Yeah. Just the last one, just really quick. Have you seen any impact on the supply chain in terms of the China lockdowns, especially on the semi side? We didn't get that question. Impact on the supply chain through the Chinese lockdown. Not immediately, we haven't. I'm sure that there are constraints out there. It would be very strange otherwise. We are not so dependent directly on the Chinese suppliers. Of course, there has to be some hindrance also in our supply chain, but not that has been specifically announced. The overriding issue has still been the semiconductor industry. That's not typically supplied from China. That's more Taiwan and other countries. Okay. That's very helpful. Thank you very much. Thank you. We appreciate that. We see was there one more question there? Was it at Jefferies Global? Was it the last person that had been. Okay, we should be, of course, civilized and allow you to put that question as well. I'm sorry for cutting you off too quickly. Please go ahead. Thank you. Please go ahead. Your line is open for your question. Sorry. Can you hear me? Yeah. We can hear you. Okay, great. Thank you. Yeah, I just wanted to peel the onion just a little bit on the component shortage. Yeah. If you could just talk a little bit about how you're approaching this internally. Are you trying to change which components are used across your portfolio? Are you pushing more centralized sourcing across the portfolio? And any other initiatives, you know, you're sort of embarking upon to solve this problem. Then just a related question would be, just to kind of understand the extent of the issue, you know, what is the lead time today in your markets, in your main markets if you wanted to order, you know, a heat pump? It depends on the last question. It could be two months, or it could be five months. I'd say in the span of two to five months, depending on which model you're asking for. As far as how do we monitor things like this, it's like we try to buy semiconductors, and we can reprogram, if you know what I mean. We have a squad of engineers trying to reprogram into the capacity that we would like them to be. Some functions we cannot reprogram. We also try, of course, to find new suppliers, but the new suppliers, they are typically smaller, and it takes a long time to justify and to verify the performance of the components. I mean, it's very, very delicate to bring in a new supplier just because you have a shortage of a well-established one. Of course, we would like to do that, but at the same time, we have to consider quality, we have to consider the sustainability necessary, cost, and then it comes across. We can't just say, "Well, now we found that a chip, you know, supplier." It's very delicate. We touched upon it before. Once we get deliveries, we have to have capacity with other materials. That's why we keep such a large stock. That shouldn't be a hindrance once we get the crucial components. That's, in short, the answer that I think would be viable to your questions. All right? Thank you. We now hand back to our speakers for any closing comments. Well, thank you for calling in, and we hope it's not too much hide and seek. Some issues we can't really answer, but I mean, that we have to keep some figures for ourselves, you know. We are totally transparent in many aspects. We have not no reason to hurt any investor, to hurt anyone. It's just that we also have colleagues, if I may call them out there, and they are not so transparent as we are. We know that our report that came out 8 o'clock this morning, it's been digested and dug into and analyzed back and forth. We don't mind that because it's not easy to copy our way of doing things. But at the same time, we can't really convey or release all information that we have. We appreciate your interest and the way you talk to us. Yep. Thank you very much. Thank you. This now concludes our conference. Thank you all for attending. You may now disconnect your lines.