Ladies and gentlemen, welcome to NIBE Year-End Report Presentation. Throughout the call, all participants will be in listen only mode, and afterwards there will be a Q&A session. If you have a questions for the speakers, please press star one one on your telephone keypad. You can find the dial-in instructions in the telephone audio panel underneath the speaker section. Today, I'm pleased to present Gerteric Lindquist, CEO, and Hans Backman, CFO. Please begin your meeting. Good morning or good afternoon or good day to all of you out there. Yeah, likewise. Hello, everyone. We're gonna start with a presentation of some slides as we usually do, and just to present the business environment that we have around us at the moment. You've all seen the report, and we are very pleased, of course, that we passed the SEK 40 billion in revenue, which we had set some four years ago, and giving us the framework of some even up to seven years, and now we've doubled sales in four years. Of course, according to our growth targets, we would like to double sales every four years, and that's a target we've had since beginning of the 1990s, and that's why we now continue our journey, saying, well, the next intermediate target is SEK 80 billion, so it's not the final target whatsoever. That's also driven by the fact that the market is very, very buoyant, particularly naturally on the sustainability side, that's the fact that's been driving us exceptionally, of course, 2022 and also 2021, partly. Most market segments have been buoyant. We're gonna come back on some weaker ones on the Element side eventually here. For some five or six quarters, we've had some shortages of components. That is not totally cured by any means, but we've seen a significant improvement during the fourth quarter. That's why we were able also to present a quarter that's relatively decent. We've been idling with a capacity that's been far larger than what we've been able to invoice due to the fact the shortage again. Quarter four represents a typical improvement when you have the capacity and all your components are coming in. The demand is driven naturally by the fact that we have to switch over from gas and oil to a more sustainable world, and that's of course emphasized by the Russian invasion of Ukraine, where we like to, all of us, get more independent from their oil and gas. Ever since the second half of 2021, we've been in a process of increasing our investments quite heavily, and we addressed that already 2021 in the year-end report, and that has continued during 2022. Not that we are short capacity now, but we have to have a capacity in the coming years to fulfill the demand that we can see. We also had two extraordinary, you can call it, events during the year when we saw that Russia invaded Ukraine. We wrote off, of course, SEK 114 million on the Russian investment. We also had a capital gain when we sold Schulthess in Switzerland or stepped down to a minority position. That means that all in all, we've had a positive one-off effect of some SEK 118 million. That's, of course, affected the operating margin as well. Whereas we said that we had an extraordinary strong demand, we say that we had a strong growth in invoicing or suggesting that, of course, we have not been able to fulfill the total demand by any means. I think that our customers out there, they have now seen a positive sign, rather than just listening to promises, that once we have everything in line, we have a phenomenal capacity to grow and to fulfill the demand for the market. Operating margin, of course, that's been a lagging history, you can say, where we started the year being almost 2 percentage units behind the previous year, and gradually we've been taking that back, ending now at roughly the same level as we were, you know, prior to running into these shortages. That's also very pleasing. Of course, it could have been better operating margin had we had all those components very beginning. One also very pleasing thing is that we are back on the acquisition track. It's been difficult for us to travel, and it's difficult at least to acquire some larger entities without meeting people. Of course, we see now that we acquired a relatively large company in Italy, Argoclima, and we also continued the acquisition of Energy, Pacific Energy out in Vancouver, and a German company, ELMESS-Klöpper on the Element side, that was in October. As recent as January this year, we also acquired Miles Industries in Vancouver. It so happens now that we have three entities in British Columbia and Canada. The negotiations regarding other acquisitions, they are back to a more, well, a normal level, but more ordinary level than they've been in the past two years. We can just look at the figures. You've seen the growth, of course, for the year, around 30%. Over which acquired is not so much due to the reasons I just mentioned, whereas the last quarter is a substantial growth of some just south of 40%. Of course, revenue and better productivity, that also drives the operating margin from the 14% up to the 16%. Again, it's a relatively strong quarter, but not at the level where we would have liked it to be. Could have been better had we had more components, of course, as mentioned now for the fourth time. It's pleasing again to see that we could pass the SEK 40 billion. There have always been question marks when we have set our targets back in the 1990s, can you really double sales in such a short span of time? We like to be transparent because that's not the only target for the investors and so forth, but very much a target for our internal use. Say, well, now we set off, we are very determined we're gonna meet those targets. one, if you compare it, since 1993, we've had one period where it took us seven years to double sales. We, say, well, that was a little bit extraordinary because that was Lehman Brothers that hit the world so hard. Otherwise, we typically have been able to double sales within three years-five years. When we now mention the SEK 80 billion, I guess that's the way we should look at it. Of course, if a black swan comes swimming, no one knows where they're gonna be. We like to double sales in four years, typically we give ourselves few more years to do that, the target is certainly to double as quickly as possible. When we look at the graphs that we typically show the last nine quarters, they show a steady growth, accumulated growth. We can possibly see that in Q4 last year, that was a little bit weaker because then the really shortages of common components did affect us. Of course, it's even more pronounced on the profit side, where the Q4 is quite strong this year, and Q2, that was also affected by this effect that we just mentioned a little while ago. Otherwise, it follows a typical pattern. We have a seasonality. We are strong during the second half of the year, and typically, the fourth quarter has been the strongest. It's interesting to see over the years that that is disregarding where we acquire and how many companies we acquire, the fourth quarter almost seems to be the strongest one. Just a few words about the climate solution. Of course, strong growth, and, as we said, the sustainability message, that has really sunk in. Also we have a very nice, attractive, new assortment that is being appreciated by our customers. Improvement in supply chains, again, it's not perfect, but it's better. We don't blame anyone. We understand. Perhaps we haven't been, or our industry hasn't been totally clear on, telling our suppliers what demand we are seeing in the future, or perhaps they haven't totally believed us or our industry that this change is now to take place. I think that is gradually improving and everyone is trying to keep up with the pace. Also here we are massively investing in capacity, in buildings and machinery and naturally also people. That will continue, and we've been very clear and transparent about that ever since the fall of 2021. Operating margin has of course improved, and that's very obvious that when you have better sales and, you can produce more orderly, the productivity increases. We've been forced also to increase our own prices because we've been hit very hard and with very sudden price increases without any warnings really. We hope that we're coming into a period now that is more, should I say, leveled when it comes to price increases, that is leveling out and we come to a more orderly situation. Hans is gonna dig more into the figures, but just for the full year, of course, it's pleasing to see that the growth has also rendered into a operating margin that is a little bit better than last year. Stoves, which sometimes has been said, "Well, that's a product that's not really needed, it's more of a luxury product." That has come to a different situation where now there's a shortage of energy and also the price of energy is, you know, extremely high from month to month. It's been a very good market or order intake, particularly within wood-burning stoves. We also spend quite a bit of money on improving those wood burning stoves, particularly on the particle side. We can introduce to the market, which we hope we can do relatively soon, even more efficient products since they're gonna be used so much more. It's really a second source of heating in many homes, and also in many homes, actually a first source of heating. Therefore, we also invest in not only in R&D, but also in capacity. Here again, the operating margin, of course, has been positively influenced by volume increase, and we've been able now towards the end of the year to produce more effectively. There's also been a price increase that's been lagging. Of course, taking the operating margin up to a little bit better than last year, arriving at 13.7%. If you come to Elements finally, of course, the market segments with a distinct sustainability profile, they have had the same growth or the prosperous situation as heat pumps and wind and all the other guys. On the consumer goods segment, there we're seeing a diminishing demand during the year. That's typical when the economy goes into a slower pace. A more surprising thing was, of course, that the semiconductor industry, that's been very buoyant for us, took a hit during the fourth quarter, and that's not really a market change, that's more of a political issue when the U.S. decided to put export restrictions on equipment to China when it comes to producing semiconductors. That was not, we were not prepared for that, of course, and that's why Q4 was a little weaker than we had expected. Now, of course, that is to swing over to other countries, North America and hopefully also Europe, where they're gonna invest quite a bit in semiconductor production. Therefore, as if we continue with our investment program, and for the year, we've been able to have roughly the same operating margin as the year before. Of course, the fourth quarter was slightly weaker, which Hans is going to come back to. Just a few pie charts at the end here before Hans takes over. The distribution of group sales. I don't necessarily think that that picture is the right one there we see. I think that's more the, that's the Element side, yeah. Perhaps we are coming into your pictures, Hans now. There we are. Thank you. Yeah, there we see the distribution of sales, and that's pretty much as it's been before. When we switch over to distribution of operating profits, of course, that's also typical pie chart as before really, since Climate Solutions is the largest one and also the air business they have with the best margin. I think with that, Hans, I think we switch over to you and, see what you have found in the figures here. We'd be surprised if you haven't, been able to dig in even further into the figures. Yeah, a little bit. Yeah. Yeah. Thank you for that, Erik. I'll take you through the three business areas here, slightly more in detail and a few words on the balance sheet and some key figures as well. Starting out with Climate Solutions, I mean, we had, as you've seen, a very strong Q4, I think it's an all-time high as a matter of fact, or at least during my 12 years here. It's of course, thanks to the improvements in the supply chain, allowing us to produce and deliver on a much higher level compared to previous quarters. Of course, meeting the demand for these green products, so to speak. Sales in the fourth quarter grew by some 42%, up from SEK 5.5 billion, roughly to SEK 7.8 billion with a very good, healthy organic growth in there, although we do have some help of currency. What's not seen in that number or it's not listed separately is of course the divested portion from Schulthess, which is like 6% of that. Having this good volume and getting the momentum into our organization, we immediately see improvements in our key figures. The gross margin jumped up from 34.1% - 5.5%, and the operating profit as such grew with 76%, landing in at this operating margin of 19.3%. For the full year, we're quite pleased that we passed SEK 26 billion in sales for the division, although we've not, on a full year basis, been able to come back to the gross margin level yet, although there was this very nice step taken in Q4. Nevertheless, the operating profit increased by 34%, landing the whole business area at SEK 16.6 billion for the full year. In terms of distribution of sales per geography, there are no major movements, although it is worth to point out that North America has gained a few percentage units again. They have begun growing, although it is Europe that is really pulling. North America is now up to 21% of that pie chart, as opposed to 18% last year. Continuing with stoves. I mean, stoves has basically in all markets shown a strong growth, but especially on the wood-burning side. This previous design product, and Eric mentioned also a luxury product maybe, has now become a security product in a way that very well complements the all-electric heat pumps, and also for those who are worried about the energy prices and have access to wood, so to speak. As a consequence of this strong demand now, the traditional seasonality has to a large extent evened out within NIBE Stoves. Nevertheless, Q4 was also this year the strongest, landing in sales here of SEK 1.2 billion, up with some 37% compared to last year, generating a good operating margin of 40%, also slightly up from last year. A growth of the operating profit with even 51%, landing the operating margin at 17.4%. For the full year, we're quite pleased that we were able to just come in above SEK 4 billion in sales, up 31% from last year. Have not yet been able to fully compensate for the gross margin there either. Also, within this business area, we've had some challenges with supply chain and price increases, and it takes some time to get the effect out of those, and that's what we see started to kick in in Q4. All in all, the operating margin came in slightly above last year there at 13.7%, up with some 33%. In terms of distribution of sales per geography, it's basically the same picture as last year, with Europe being the largest 49%, excluding the Nordic countries, that is, and then the Nordics making up around 25%, and North America also with 25%, which will increase given the latest acquisition of Miles. Moving on to Element. I mean, Element has performed very well over the year, as such. Here we are just short of reaching the SEK 11 billion in sales, but nevertheless, an increase of almost 30% compared to last year. Coming in with an operating profit that is up by 28% compared to last year, and roughly landing on the same margin as in 2021. We have during the year seen a gradual decline in the white goods sector. As Erik mentioned, in Q4, a rather sudden downturn in the semiconductor industry following the U.S. ban on export of such products to China. This did have an immediate effect, you can say, on the results. We ended up there with an operating margin of 8.5% compared to 10% of last year. Nevertheless, an increase of some almost 12% compared to last year. It's overall been good, although we're of course not happy with 8.5% and had expected more. In terms of sales per geography, it's also a similar picture to last year. It's our most global business area, as many of you know. Quickly jumping into the balance sheet. I mean, obviously our total assets, they increase in correlation with our growth in general. The balance sheet is now up to some SEK 54 billion. Worth mentioning on this page is that the current financial assets, being basically the cash, has not increased that much. The reason for that is the line above there, the non-financial current assets. I mean, due to these supply chain issues, we have been buying components to be ready for production when we get those on board which are still lacking. We are tying up more in inventory, and especially in raw material rather than finished goods as a consequence. On the equity and liability side, I think it's just nice to see that the equity has increased substantially here with some SEK 7 billion, and we will come back to the equity assets ratio very soon here. Looking at some key figures, I mean, we are continuously investing in our business, both in terms of acquisitions, and as we mentioned here during the call, I mean, we're, we've increased those activities again now when we finally can meet and greet again. We've also, of course, increased the investments in our current operations quite substantially, which is a project now you can say that's been ongoing for some year or two and which will continue for another couple of years. Interest-bearing liabilities has decreased, is now at 40.6%. The net debt to EBITDA level is below 1, and the equity assets ratio is solidly above 52%. Very good prerequisites for further growth, I would say. Of course, as a consequence of stocking up with inventories and also investing in the business, we have an effect on the cash flow because the working capital has increased. It's now at 21%, that has the effect on the cash flow. Although we generated a healthy number above last year, we're tying up money in the investments that we make and of course the working capital. Although I'm not too worried about it, given that they will be used in the components or the finished products that we eventually would sell. Just looking at the last key figures, they are overall very solid. I mean, we have a return on capital which is up by more than two percentage units. The return on equity is coming closer and closer again now to our 20% target level, where we have been down for some years due to the emission we made some years back and some acquisition maybe that didn't kick in as anticipated. It's communicating vessels, so instead we have this strong equity assets ratio. We've been able to improve the net profit per share and the equity per share. It's overall been a good development. If we just sum up with the very last picture, that's not only a summing up of this year, but it's really summing up our performance ever since we went public in 1997. If we start by looking at the bottom, we've had a continuously positive trend on the operating margin level and the net margin level, where we've constantly and over the years been able to increase it step by step, in a combination of organic growth and acquisitions having been brought on board. Above that, we have the return on equity, which now is taking a few steps up in the right direction. It started a little bit of a downturn in during the time of Lehman Brothers. Was then on its way up again, then the Schulthess acquisition came on board, where we paid with shares to a large extent, and then we made the rights issue. Now with the strong organic growth on board again, it's definitely moving in the right direction, and mirrored in a way, in relation to that is of course the equity assets ratio. With the rights issue and with a good performance, we have been increasing our equity and that ratio has increased, and we're rather solvent these days, I would say. It's a good position to be in, I dare to say, for the future growth. By that, I'm done with my part, unless you wanna add something, Eric? No. Thank you, Hans. I think we're ready for. Very comprehensive. F or the questions. Yeah. good. We are ready, we hope. Yeah, we hope. Thank you. Ladies and gentlemen, if you have a question for the speakers, please press star one one on your telephone keypad. To cancel a question, please press star one one again. One moment. We're going over to the first question. The first question comes from Gustav Österberg from Carnegie. Please go ahead, sir. Thank you, operator, hello, Gerte ric, and Hans. First a question on the phenomenally strong margin in Climate Solutions. I mean, if we look at the gross margin, and the comments that you have on the easing supply chain, I mean, it certainly looks that the strong performance can continue here. I was just wondering if we should expect some, you know, larger changes to OPEX as volume increase or will higher volumes, continue to drive the margin here? Oh. We sort of expected that question. It's very pleasing of course to see that the that we are able to fulfill our promises, you know, that we're gonna take the business area back to a good level. We all know that nothing continues forever. Of course, we can't say now we're gonna improve that quarter after quarter after quarter. We can say that the quarters prior to the fourth one have been disappointing to us because we have the capacity, have had the capacity all along as far as staffing. The margin has really been too low because we have had to have more people on board to be able to cater for what's been lost during perhaps a week when we have had shortages of components. To be able to catch up, you have to have more than you really need for the daily production. Of course, that's what we see in the, in the fourth quarter. I think it's compared to last year and compared to the other quarters, of course, it's a major improvement. I think it's rather where we like to be. Mm-hmm. It's more of a ordinary situation when you have a good demand and you have the capacity and you get components. It's saying that again, it's not perfect, but it's much better. Was that a? That's well understood. Yeah. Yeah? Mm-hmm. Thank you. Hans, did you want to add anything there? No, I think that's fine. Okay. Perfect. Then, just a final question on the demand level. I mean, you mentioned the strong invoicing here. Can you say anything about the development of incoming orders or incoming orders higher than sales? Can you say something about that? I mean, we don't typically comment on that specifically, but as we say, of course, we've not been able to fulfill demand and the transition we are going through now, which we believe gonna continue for many years, going from oil and gas into other means of climatizing the home. I mean, they're gonna be a situation where we as manufacturers have really to be on our toes to keep up with that. We foresee that the refurbishment market is really growing strongly, whereas the new construction due to constraints in the economy is of course, they're gonna be lesser. The refurbishment market is of course always much, much larger, even during our ordinary conditions. I think that's more towards changing from one source of heating or climatizing your home to another one. That is here to stay, we believe. Firmly believe. Okay? Okay. Thank you very much. Those were all questions from my end. Thank you. Thank you. Thank you. With that, we're going over to our next question. Our next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead, sir. Thank you. My first one is just on if it's possible for you. I understand you rarely comment on it very explicitly. Just given that you highlight the, you know, pricing environment, can you give some color on the split between volume growth and price mix now that it sees the products are now leaving the factories at a higher pace as well? No, I mean, now we really talk volume, and that is, you know, substantial volume increases now. I don't think we're gonna dwell too much in the split. I mean, now it is back on a more ordinary level. We are pleased to see that. Again, we would have loved to deliver considerably more had we had So this is not the ultimate stage by any means, but it's a, it's a good sign. I think once again, we like to underline both to you as investors, but also not least to our customers out there. In all countries where we operate, this is also a good sign to our customers to say, well, NIBE is really, if not back on track, they show now their capacity. We trust them. They've been promising all these quarters. Now the journey is starting. All right? Yeah, understood. In Q4, the kind of organic growth, including FX, I mean, it's closer to 40% if we round it a bit. Is there any way to kind of just say roughly how much FX was of that and, you know, what the true organic growth was? Well, I mean, FX is, you know, is, if just to make it very, very, should I say, blunt, is of course it's single digits. We talk about, you know, substantial growth here now. Okay. Understood. Is there any major difference between the FX impact on sales and on profits? No, not really. No, not that you should pay attention to, no. Okay. Yeah. Thank you. Those were my questions. Thank you. We're going over to our next question. Our next question comes from Viktor Trollsten from Danske Bank. Please go ahead, sir. Thank you, operator. Hello, Gerteric and Hans. First, I would like to try to push you a bit on margins. Firstly, on the good, let's call it gross margin development in the quarter at, you know, 33.5% now gross margin. Is this, you know, sort of the level where gross margin should be at now when price cost is up to speed? Is it still, you know, inefficiencies and productivity losses in that figure from component shortage? I think that we've been on to that very explicitly is, of course, almost impossible. I think that in the past, we have been at the better levels. We are not totally satisfied where that limit is. That's, I guess, we leave that for now. Yeah. Historically, we've been slightly higher. Fair, oh, fair answer. Thanks for that. Second, in relation to that, on the OPEX cost base, I think that you have been quite explicit the last couple of quarters that you have had the two large cost base, you know, built for significantly higher growth. Now, growth is obviously back in Q4, but would you say that there is still room to grow on the current cost base, or are you now in a position where you need to start build OPEX costs in the near future? No, I think that we still have a fair amount of capacity. We are not running out. If you mean now like buildings and machinery, they're gonna kick in at a pace that is, you know, normal sort of. Where we've had over capacities, of course, you can say the machinery has been idling because we've not been able to run two shifts. We've had people on board. It's been mainly staff on board that's been, of course, very expensive for us. Now we're able to utilize better during the fourth quarter. Okay. No, that's clear. Just a final on your new, you know, interim target, SEK 80 billion in, as you point out, let's say around 4 years. Mm-hmm. I guess, you know, just strategically, I mean, historically growth has been driven by, you know, both organic development, but also to a large extent M&A. Mm-hmm. Would you say that towards SEK 80 billion, will the growth profile be shifted more towards organic growth, this time around? Well, I mean, the outlook is pretty promising of course for organic growth. To say that we will grow only organically up to SEK 80 billion, of course. We have some targets there as well, but hopefully organic growth gonna be higher than the acquisitions. You know, that's when we, when we typically aim at a new target. Of course, we make calculations in the group or each business area, and we find that the organic growth is a great substance in that. Then again, the acquisitions are coming in or the prospects or the possibilities are at a much better level now than just a year ago, not to mention a year and a half ago when it was sort of, you know, very frosty. Okay. That's why we are fairly certain that we can arrive there, you know. Again, acquisitions, they come in not randomly, but they come in at, you know, at a pace which you cannot forecast. The organic underlying growth we believe gonna be strong the coming years. Would love to see that forecast, but we'll wait for it. Then maybe just a housekeeping final one for Hans, I suppose. Elimination of group transactions on the EBIT line was quite substantially higher than it usually, SEK 77 million negative. What is that? Is that, you know, sort of the new level or? No. That's not a new level in that respect. I mean, it floats somewhere between 20 and 40 on a regular basis, you can say. Typically in Q4, we make the adjustments for, you know, revaluation of continued liabilities. Small adjustments for, you know, what's anticipated for acquisitions going forward. Okay. That's where that kicks in. Okay. That can go in both directions. Yeah. No, I see. Thank you so much, guys, and, I'll step back. Thank you. Thank you. We are now going over to our next question. Our next question comes from Uma Samlin, from Bank of America. Your line is open now. Hi. Good morning, everyone. Good morning, Eric and Hans. Thank you for taking my question. I was wondering if you could talk a bit more about your North American strategy in terms of the, you know, which direction you would like to go, especially now we have seen more policy support from the Inflation Reduction Act. Is there any change in your thinking of the product mix, you know, given it's mostly ground source heat pump, as I understand? What sort of new areas that you would like to do more acquisitions in the North America markets? We believe that the conditions for ground source with geothermal heat pumps are much, much better now, of course, with the IRA kicking in, which is a very strange abbreviation to start with, but that's what it is. If you're gonna broaden our assortment, that's always, you know, in discussion. But we feel now with a 12-month or a 12-year horizon that we've gotten from the administration, of course, the whole industry will have a good solid platform to expand from. That's the way we look at it. Of course, acquisitions, we would like to continue to acquire companies in North America, just like we've continued to do or will continue to do in Europe. We are not, we are not finished by any means. Of course, out of those different categories or products, we like to fill further gaps or add on geographical presence. No difference really between Europe and the U.S. in that respect. It is just that U.S. is a continent like Europe, and there we talk more about states, and here we talk about countries. It's a gigantic continent to the degree if you include Canada and Mexico, then of course the population exceeds Europe's. We have to look at it as a continent, not only as a country. Okay? Yep. That's very helpful. Thank you. I guess that means that you are not really at the present interested in going into the more air sourced market in the U.S.? We are presenting the European models through one of our companies, and we're gonna see. We just put our toes in the water there. One of our companies, they are launching that, or have launched it very successfully. Before we really, you know, blow the trumpets, I guess we would like to see how that is going. That is a correct observation, that the air-to-water heat pump assortment that's being introduced by one of our companies over there. Okay. That's really helpful. Thank you very much. Thank you. I guess my next question is in terms of the market demand in Europe, if we come back here, that especially in Germany, have you seen any changes in the demand patterns following the lower gas prices, and especially given the gas break that, you know, the price break that we have seen in the past few months? What is sort of your anticipation of the market demands running up to the sort of the policy change in Germany with the 65% renewable content for heating unit in 2024? Just would like to hear your thinking on that. Are thinking on pricing or what? Are thinking of what? Just on the general market demand. No. Given, you know, the lower gas prices that we have seen in the past few months and the, you know, the... Yeah. Well, we believe that the market is gonna continue to grow substantially as it's done now. The gas prices, of course, some people might say, "Well, we'd like to install another gas-burning, you know, device, despite all the surroundings," and we couldn't exclude that. I think that if you've been looking at or if you look at the conditions in Europe long term, there's no way back. We are not too concerned about that. We are very firm in our understanding that the market, Germany has to change. They've been dragging their feet, excuse me if I'm insulting anyone. It's very important that they change, not only for their own sake, but also for the sake of Europe, because that's so important that they also set a standard. Can't, not only be France, which is the largest, you know, market, but all the other smaller countries as well. Germany has to get going. The demand is gonna be substantial also in the future, even if the gas prices will come down temporarily. All right? Yeah. Thank you. Thank you very much. Sorry, just the last one. I guess perhaps a more housekeeping question. Given the sort of significant easing in supply chains, how long do you expect it would take for you to go back to the pre-pandemic delivery time? Perhaps like two to four weeks. Well, I don't know whether we like to give that promise like this. I think that we'd rather comment on that once we're there. We don't come out, you know, on the wrong foot with our customers. Of course, we are working towards that target. It's we don't like to make anyone disappointed. We like to work on those improvements that we see now clearly. We, we're gonna come back to that question once we're there. All right. Thank you very much. That's all from me. Thank you. Thank you. We are now going over to the next question. The next question comes from Douglas Lindahl from DNB Markets. Please go ahead. Yes, hello, Eirik and Hans. Congratulations to a strong report. A few questions from my side as well. Starting off with your SEK 80 billion sales target, would you have a specific number for Climate Solutions in mind, total? Yeah. We have specific targets for all three business areas, and, that's, it's very clear, but I mean, we haven't pronounced it, precisely. Mm. I mean, you saw the structure here, and we certainly don't expect the Climate Solutions to diminish their part of the pie chart. Of course. No. Okay. T he sustainability drive is so strong. There's, what should I say? The likelihood of that increasing is, of course, on the wall. I'm not saying now we're gonna arrive exactly there. We have an internal target for that very clearly. Yeah P erhaps we shouldn't pronounce that today. No, I'm just. The reason for me asking is because I believe. Yeah, yeah. H istorically, you know. We understand that, but we can promise. Yeah. W e want to. The SEK 80 billion is not there because it's a guesswork. Yeah. T he SEK 40 billion or the SEK 20 billion or the SEK 10 billion or the SEK 5 billion or the SEK 2.5 billion SEK and so forth during the last, the 30 years, we've always had a calculation behind them. It's not like blindfolding. Mm-hmm. I n order giving a promise that we can't live up to. You know, they are very, very sincere targets. Of course, as I said. Yeah. Or we said a while ago, black swans are coming. We did not expect Lehman Brothers. Neither one of us did expect the pandemic. Neither one did expect the war in Ukraine. Despite that, we've been able to have a steady growth. They can hinder us, events like that can hinder us for a year or two because we understand that things are, you know, happening. It's not perfect all the time. We've had the bank crisis in Scandinavia in 1992, 1993, 1994. We had the IT crisis 2000, Lehman and so forth. There are always gonna be something, a hindrance. That doesn't take away our targets and the realism of the target. We can't do miracles if the world is totally black. Yeah. No, I understand. Just, on the heat pump, theme, it would be interesting to hear, how you feel you're performing in Europe's largest markets, France, Germany, as an example, just, if you feel like you're taking market share there or, what's the situation? I think that market share is. Yeah. I think that it's been some people, we've gained somewhere and others have gained somewhere. If you've had products, it's been more of a game. Have you had certain components, you've been able to deliver certain categories of heat pumps. I think we've all been suffering, particularly European manufacturers. Perhaps the Asian manufacturers have been more reliable on other sources than we've had. I think that's pretty much the answer we can give you. The Asian manufacturers may be having better availability of families and therefore may be gaining some market. Well, in the short term. In the short term, yeah. Not necessarily will that be the case, long term. No, I understand. I understand. Maybe, a final one, just a clarification question, Hans, on the M&A number you show there, in these slides, that does not include the negative impact from Schulthess, right? No, we haven't separated that out on a specific line. Yeah. That's included in the growth number, so to speak. You need to deduct like six percentage units. Yeah. It means the organic growth is basically higher than it would be. Exactly. Used the M&A number there. Okay. Thank you so much. Yeah. All right. We're going over to the next question. Our next question comes from Christian Hinderaker from Goldman Sachs. Please go ahead. Yes. Good morning, everyone. Christian Hinderaker from Goldman Sachs. I have three questions, if I may, and maybe we can take them in turn. Firstly, I wanted to clarify, if possible, the comment on refurbishment versus new construction. I wonder whether demand for the latter is still growing today, and how you see those two demand drivers developing through the year ahead. Overall picture is typically that new construction is between 15% and 17%, and refurbishment would be the remainder or the 85%-87%, 88%. That's a proportion. It's not like the new construction is the largest one. When you set in a new market historically, new construction has been very important because that sets the standard. Now, the standard has been set. Now we're talking about much more renovation or refurbishments. Not only when a product breaks down, but you also are ready to change a product prior to its life length because you like to change from oil and gas onto the new one, even if the present one hasn't broken down. I think that's the overall answer to that. Thank you. That's clear. Can I ask about the... You've not commented on the quantum of the historic price uplifts through the year, but maybe we can touch on your approach, and indeed operational processes, for how we should think about any price changes going forward. Well, I think that we, you know, historically, we've had inflation of some between 1% and 2%, or some years 0%, and we've been trying to beat that. Not saying whether, we've been trying to say, well, if it goes up at 2%, possibly we can absorb half of it, not being always, you know, parallel to the inflation. Now, of course, inflation has been almost double-digit. That's, I guess, what the market has been hit by price-wise. It's been very much so in raw material and components. Now, of course, with inflation being high, the demand for salary increases naturally will also come in a different fashion. They have been relatively seen, I shouldn't say, I'm not in negotiation with any labor union here, but they've been fairly modest so far, which has been very constructive. We can expect, I guess, salary increases both on white collar staff and on blue collar staff to compensate for the inflation. We believe that they are, or we not only believe they are a smaller portion of the calculation of the price structure. We, we hope to come back to a more, should I say, civilized level of price increases due to that. Is that a decent answer to you? That's helpful. Thank you. Maybe just a more broad question. As I understand it, one of the barriers to growth, albeit obviously growth has been very strong within heat pumps particularly is the availability of installers. Mm-hmm. I just wonder if you have any comment there in terms of differences, by market, and I mean region therefore, and whether there are any specific actions that you're doing as a business to help, tackle that potential bottleneck. Thank you. Yeah. Well, I mean, where do we start? We believe that the market is working. When plumbers or installers or whatever you like to call them, when they see that one market is diminishing, they're very quick to adapt. All manufacturers, including ourselves, they are offering broad and efficient educational programs. I think in the past, why there haven't been so many installers engaged in heat pump installations being that there have been question marks. Is that something that's here to last, or should we continue to, you know, install the then prevailing product? Once the understanding is there now that that's definitely gonna be a change, we believe that the installer is gonna be very quick to adapt. As I said a little while ago, we are there to educate, and our colleagues in this industry, they're also there to educate. The products have become easier to install. We are all driving towards a lesser complicated assortment of products. We've been able to develop that over the years, where you don't have to be a scientist to install a heat pump. Perhaps that's been more of a situation in the past where not everyone fully understood what a heat pump was, but I think now it's totally different. Well, we do not neglect the fact that installers have to be educated, but they are also living in the market. Our experience is that they're very quick to adapt. All right? Okay. Very good. Thank you. We are coming to the end of the session, right? Are we? No, we have one more question. We're going over to that question right now. The next question comes from Pam Liu from Morgan Stanley. Please go ahead. Okay. Thank you so much for taking my question. I have three very short ones, I'll ask them one by one, please. The first one is climate solutions for Q4. Sales momentum in the Nordic has been very strong this quarter, That's particularly so given there's very little M&A or FX. Could you please help us understand more about the drivers there, and how do we think about this into 2023? That's the first one. Thank you. Well, you talk so fast, you know. I don't know whether I have my hearing aid correctly. Could you repeat that a little bit slower, please? Sure. Q4 Climate Solutions, the sales momentum in Nordic is very strong. Just wanted to know, you know, if you can help us understand the drivers. Is there a sudden in-increase of the Nordic heat pump market, or is that because pricing has been so strong because of your market share? No. It's a demand there. I think that, it's sinking in into every household, how dramatic price increases have been. We've not been able to fulfill, as we say, our delivery promises, before. I guess that's more of a natural quarter when it comes to us delivering. Okay. My second question is, in Element, regarding the U.S. China trade relationship impact on the semi industry. Obviously that is not within anyone's control. I'm just wondering, what are the actions you're planning to take that you think could help your business mitigate that impact? How long will that take? Well, that's impossible to say. The administration in U.S., as you know, they're very eager to help the semiconductor manufacturers to start to produce in North America. I mean, they have signed a treaty there, Canada, U.S. and Mexico, and they're also very eager to start to produce in Europe. We can't do so much about that than just following our customers since we are a Tier 2 producer. We do not, of course, supply the factories. We supply the manufacturers of machinery to the factories. Since we believe that that market is gonna come back, we will not, you know, take or cut down on administrative staff or R&D like that, 'cause all of a sudden, it's just gonna take off again. The industry as such has been cyclical also in the past and is cyclical. Of course, we are constantly developing new products for this industry, which is relatively new to us. It wasn't until some seven or eight years ago when we really started to get into this. We do not, by any means, have a full assortment yet. To mitigate to some extent is of course to broaden our offering, which is not complete, but we are working on that. I guess that's as much as we can say on that question. Yep. That's very helpful. Thank you. The final one, in some of the market that you operate in the heat pump space, we have seen a push towards lower cost heat pumps. For example, a U.K. energy supplier said they're confident that they can make a heat pump similar, at a similar cost as a gas boiler. The head of the Dutch Heat Pump Association recently said that he still think it's a wealthier consumer that are buying heat pump today. I'm just wondering, you know, are you putting some R&D focus towards lower cost heat pumps? Would you say that's even possible without compromising the energy performance? Thank you. I think that when there are shortages of products, you know, anything is being delivered, if I may blunt about. When we talk about inexpensive products or of course you can always specify a product to a lesser level. You do not need perhaps all the fancy stuff on a heat pump. We believe that it's been a little bit of a chaotic situation where the energy prices have been just been phenomenal, and people have been scared. We have to get something. We do not necessarily believe that that pattern will continue. We believe they're gonna be more realistic, and there are always gonna be products at a lower price level. We hope that it won't be at the price of lower quality, because that would sort of not ruin, but that would give heat pumps a lesser, you know, popular stamp if you like it. We are very concerned that quality will not be linked to a lower price, but rather that the quality be maintained, but it'll be lesser features on the heat pump. Of course, we can respond there. All right? Yep. Thank you. You're welcome. Thank you very much. There are no further questions at this time. Please go ahead. No, thank you for for calling in or whatever you do when you, when you sit there. It's interesting, as we always end up saying, you know, it's no hide and seek. We cannot answer all questions specifically. We have the answers, we have to protect ourselves a little bit from our nice colleagues in the three respective industries that do not have the same obligation. It's really challenging. It is nice to have you out there. Of course, we're gonna continue to pump as the headlines read here in Sweden. Thank you very much. Thank you very much. Thank you. This now concludes our conference call. Thank You all for attending. You may now disconnect your lines.