Ladies and gentlemen, welcome to the NIBE Q2 report. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions via the telephone line. May I now hand you over to Gerteric Lindquist, CEO, and Hans Backman, CFO. Please, go ahead. Thank you very much. Good morning or good afternoon or good evening, wherever you are in the world. Yeah. Hello, everyone. Hans here as well. Very nice to have you on board, we gonna follow the usual procedure by going through numbers and a few comments, and then we, we have the Q&A session. Today, as usual, we have another gathering with the TV set around noon, so we have a little bit, just about 1 hour to go through all this. If we just start with some general comments, and of course, you've read the headline, we believe it's a fairly strong first half-year. Since Climate Solutions is so dominating, we can say that within most market segments, it's been a very good growth, and also within the segments with an element that's related to it, it's been a very good growth. Of course, on the stove side, it's very much the wood burning that's been showing the best growth since pellet Stoves has been hindered by tremendous price increases coming down, however, on pellets, as for instance. To cope with the coming, as we see it, growth, we are in engaged in a pretty massive investment program, both here in Sweden and elsewhere in the world. It's also pleasing to note that after the pandemic and despite the all the wars in the world, we've been able to increase the accelerate the acquisition again or the acquisition rate rather. The first 6 months here now, if we include some weeks into July, we've been able to sign 4 dotted lines, and we're gonna come back to that. Of course, the, it's been a growth, that's also come along with a pretty healthy margin increase in operating margin. The acquisition we will talk about, they are, if not evenly distributed, of course, on the stove side, we have that, the acquisition that we made in the beginning of the year with Miles Industries, again, in British Columbia, meaning now that we have 3 companies fairly close to one another, which is facilitating the traveling, because when we go there, it's 1 stop in Vancouver, and then we can visit all the 3 companies. Of course, on the Climate Solutions side, we have a fairly large acquisition in our world, in a way, with the Climate for Life Group, that we've been, of course, talking to for many years, and now finally there was an opportunity to bring the company on board. Then we have another company on the stove side, which is in Portugal, where we have not been acquiring any company in the past, and that's Solzaima, which believe is going to give us a good platform for further growth into the pellet stove business. Then finally, we acquired the Ceramicx Ireland Limited in July, on the Element side, which is a consequence, you can say, of the electrification, where the LED lamps are fairly cold, and you have to have something that's heating up the headlights I think we should see how the automotive is changing, not only the engines going electrical, but also all the equipment in the car is to be changed. If we have a quick look at the figures, and you've seen them, the growth is considerable. There again, I know through Hans, that you've been requesting, you know, how much was the divestment of Schulthess, and I think around 3.5%. I think that Hans is gonna come back to that. The growth that you see here with 27.6 should perhaps have been then, if we dive into all the details, some north of 30%. The growth in operating margin is perhaps more interesting to look at. It doesn't look as dramatic here, but considering that we had one-off events last year and during the first six months, and we've been very clear here when it, when it comes to how that is described, saying that the growth is, of course, 43.5%, but in reality, it's like 50% or just more than that, due to the one-off events during Q1, SEK 118. The first six months, and SEK 118 million. There's also the same thing with the operating margin, of course, 15.3 is, as I reported, the highest ever we've had. Comparing that to, you know, the, the 13.6 of course, last year doesn't seem so dramatic, but that is actually to be compared to 13%, if we exclude those one-off events. We prefer, as we always do, you know, to talk, like, in the running year, like the 6 months and the 9 months and so forth, but we also know that you out there are very interested in looking at the, the individual quarter. We are a bit stubborn there, always commenting on the, the full period, because when you run a manufacturing business, that's how we reason. We reason over a rolling 12-month period, typically, with investments and, and so forth. That's why we are sticking to that. Nevertheless, the quarter as such, of course, again, had a healthy growth of some 22.6%. The margin, again, is quite substantial at 15.6%, and if you recall, it was like 15.3%, so it's been an improvement period. There again, we shouldn't compare the 15.6% with the 16.2%, but rather 13.8%, as of last year. The figures are quite pleasing, but of course, again, Climate Solutions is overshadowing some shortcomings in the other two, which we're gonna come back to in a little while here. Looking at the typical graph, with the bars here, coming up, and seems like to be a healthy development over the last nine quarters. If you look at the profit on the financial items, of course, there again, Q1 and Q2, 2022, they stick out because Q1 is a little bit weaker than usual, and that is again burdened by the write-offs in Russia there, or, yeah, in Russia because of the closure of our operations. Q2 comes out with a better loss here due to that we are selling Schulthess the shares in June of SEK 232 million. Looking at the typical pie chart, Climate Solutions is like two-thirds now of the total sales, Element is a quarter, and Stoves is like 10%. Due to the difference in margins, of course, the distribution of operating profit is even more pronounced. The Climate Solutions now almost, when it's like, you know, 80%, and the other two, 14% and 7% respectively. The pie chart describing the geographical distribution is slightly different because North America is coming up and having some 27%, and the Nordic countries around the same, and Europe excluding the Nordic countries, some 47%. I don't think there's too much to be mentioned there. Climate Solutions, again, a few comments, strong growth, and everything is driven by sustainability. Of course, that's why we invest as we do. New attractive products, everyone is talking about the new refrigerants, and not only that, also a broader assortment within all 3 categories of heat pumps that we supply. Which is very significant, further improvements in our supply chain, that's been commented upon now the last 7 or 8 quarters, and we see now clear signs of improvement, of course. We will even predict now that during the second half of the year, we're gonna come back to a more normal situation. Of course, I know that there's been a lot of we know there's been a lot of writings about the demand in the heat pump market in Europe, and we mainly believe that is depending on subsidies or support from different governments coming to an end, and how should they structure the new ones? We are firmly believing that they will be in place during the later part of the year, and we also dare to mention there's been such a chaotic increase in demand. The worst thing that could happen in our industry when it comes to heat pumps would be faulty products coming out and not being serviced correctly. Although we don't necessarily like that the market has a slower pace, or somewhat slower pace, but I think at the same time, for the customer, plus the customer's point of view, we think that is almost necessary. Acquisition, again, of course, the Climate for Life in the Netherlands, it's a fairly large acquisition. It's last year, some EUR 220 million. That is, of course, an assortment that is sort of complementary to our own. We smaller buildings, it's also strengthening our market position, of course, not only where they are now, but also for us to be able to tag along and sell that assortment in other sales channels that we already had established outside Climate for Life's immediate sales channels. The growth is healthy, healthy, as we say, with a 11.9-15.9 almost, and an operating profit that is, of course, substantially higher from the 18.16 or really like 1.7, if we exclude the one-off events. With an operating margin that is relatively high in our books, 18.2, and to be compared to 14.2, really, a year, a year ago, again, if you exclude that. Just a little bit of a puzzle when you have those big one-off events in our own world, because sometimes you almost forget it and then say, "Well, of course, we had an, we had a decrease there and an increase there." That's why we try to be very clear on this. Of course, the Q2 comes in even, even better when it comes to margin, and Hans is gonna come back to that in little while here. Looking at the Stoves, there we see that it's been a softer market for particularly wood pellets and also gas fire products in Europe. That's a very small part, that's really Britain only. Whereas demand in North America, that is back on pre-pandemic levels. Wood is growing considerably in, in Europe, and again, demonstrating, we believe, that people are concerned about the security and also the reliability on other energy sources, you can say. One would like to have a backup product, and then wood burning comes in. We continue to spend quite a lot on, on reducing the particulates, because we know that is a soft spot that we have. We have to come up with a, with a solution there, and we believe that being one of the market leaders, it's our duty to really pronounce that task, and to come up with a solution that's good for the environment necessarily, but also causing or giving the customers comfort. Again, that's quite considerably, considerably, and you've seen in the report that we just opened up a new factory in Britain. We're quite pleased to see that we don't only open up factories, you know, in so-called low-cost countries, but also starting to invest or dare to invest in, in old industrial, or industrialized countries like Britain, for instance, in this case. The operating profit has improved, but at the same time, the margin has remained at the same level. There, of course, we spent quite a bit on R&D, and also we had to take some costs when it comes to, you know, adjusting the organization in North America. There again, the two acquisitions. Of course, Solzaima, that gives us a platform for the for the coming, we believe, pellet stove expansion, with continued pellet stove expansion. Also the Miles Industries in Canada, that's again, reinforcing our market position, not only in Canada, but particularly in the U.S. Well, those figures, they speak for themselves. Of course, the operating profit is up considerably, but the operating margin is on the same level as I explained just recently. On the element side, there we have been able now to become less dependent on the light goods sector, but still, when that is really coming down, of course, that is hindering us. What we did not expect in, in this segment, and that happened already through full last year, was when America, or the president and his administration, put restrictions on the export to China within the semiconductor industry. I think that's the most dominating negative factor that we've had. We've been able to compensate for the that, light goods going down. Coupling that with the, the semiconductor softer market, that's been hitting our, of course, margins, as you, as you've seen. Nevertheless, that is to come back because now factories are shooting up elsewhere in the world, but of course, they're gonna be a little while before they're up and running, and before they are to be equipped with machinery, where we are a fairly large supplier to those machinery manufacturers. When it comes to acquisitions, as I said earlier, we have Ceramicx Ireland that, that's coming on board, and that's, again, a company directed to the electrification part of the world, where particularly the automotive industry is now serviced by this company. When the old combustion engine is not with us anymore, and we need heating and, for instance, in headlights, as we, as I said before. There you see the results, slightly weaker than the last year, and of course, the, the operating margin has taken a hit when we had those two segments, going down and making, getting softer for us. Looking at, the, the... Did I say the rest in more detail? I think I hand over, as we typically do here, to Hans. After that, we come back, trying to answer your questions that you have after this presentation. Please, Hans. All right. Thank you, Eric. Yeah, I'll try to be quick here, although we will do some deep diving in a way, into the numbers. Just one more comment on the group, for the Q2, the divested portion there of sales amounted to 3.4%, for those of you asking for that number. Since we're also punishing ourselves, including that in the, in the growth rate, I think it's, it's fair to, to state that, of course, as well. Jumping into Climate Solutions. I mean, within Climate Solutions, we grew by these 32.7% in total, of which 4.2 was acquired. The divested portion and all of it falls into this business area, was 5.5%, and that is, of course, the surplus washing machine business. That leaves an organic growth, including currency, of some 33.9%, making us land there then at almost SEK 15.9 billion, up from the SEK 11.95 billion. As Eric mentioned, the drivers has have been and continuously are the shift towards more sustainable heating solutions in both residential and commercial buildings. With this better volume that we have been able to achieve, thanks to a less strained supply chain situation, you can say, I mean, that has a good impact on our numbers. The gross margin has improved by some 3.4 percentage units, and the operating profit has, you know, increased from 1.8 to 2.9. If we do the comparison there, you know, apples to apples, the increase has, of course, been even better. Not the 59.2 that you see, but rather, you know, 70% or slightly above that. Landing in an basically all-time high margin of 18.2%, and this, at the same time, as we continue to invest quite heavily in our facilities for further expansion. If we jump into the Q2, sales grew by some 27.6%, of which a portion there of 4.9 was acquired, and 5.2, -5.2, of course, was the divested part. Leaving, again, an organic growth, including some currency of 27.1%. In the same way as with the first half year numbers, this has resulted in improved gross margin and, of course, substantially better operating profit than, than previous year. The increase has not been the 27.7 that you see there, but rather 58.2, if you then again compare apples with apples, reaching an operating margin of almost 19%. In terms of geographical distribution of sales, it's very much the same picture as before. Europe has grown a little bit more, but it's basically the same figure. Jumping into Stoves, here we grew by 35%, of course, a lot of that came from the acquisitions of Miles Industries and Pacific Energy over in British Columbia that Eric mentioned. Without those, the growth, including some currency, was 14%, with an improved gross margin, then with an operating profit jumping up from SEK 198 to SEK 266, being an improvement there of some 34.6%, allowing us to maintain, you know, the same margin as last year. This, despite the fact then that, it's the wood part that has been growing and, where gas has been the more challenging part, especially in North America. That's really what we see in the Q2 as well, the impact there on the North American business. I mean, we did grow sales by some 10+% if you exclude the acquisitions, and we maintained a reasonable gross margin. With, with an impact there from the companies over in, in Canada, we had an effect on the operating margin there. There's been a shift in product mix, you can say, leading then to an increase in operating margin in absolute terms, but not in terms of, of operating margin. Also here we have, excuse me, continued with a very ambitious R&D program, and especially on the particle side that Eric mentioned. The geographical distribution of sales has, as a consequence of this, shifted a little. The, the North American activities, well, including the acquisitions, have of course increased. If, if you were to exclude those, it's the European business that has increased slightly. This also as a result of the product becoming a complementary heating source to other heating systems in the house, rather than being this decorative product, you can say that it had been before. We quickly then move ahead to NIBE Element. Within the Element business, sales grew by some 16%, and a small portion there was acquired. Main drivers, as Eric mentioned, have been segments with a sustainability profile. Whereas then the consumer goods business, and especially the semiconductor business, has suffered, and the latter, especially, due to political decisions in North America. In summary, sales came up from SEK 5.1 billion to almost SEK 6. Cost margin was slightly weakened since the semiconductor business, especially, is a good profit business for us, you can say. We came in there with a margin of just below 9%, whereas we have, as you all know, a target to be at least about 10%. In the Q2, this was also pronounced. You can say that the effect of not having the semiconductor business on board as usual, had an effect there, leading to a slightly lower operating margin compared to previous years. It's also fair to say that we consider the semiconductor business to be a temporary thing, that it's going to come back. It takes, of course, time to adjust to political decisions. Yeah, I think we move ahead to open up for the questions eventually. Just a few more slides first, of course. r most global business, and there have been no major shifts there in terms of the sales per geography. A quick look at the balance sheet. Again, this is more a consequence of our ongoing business than any other major changes. When Climate for Life comes on board now, and some of the other acquisitions, that will, of course, have an effect on the balance sheet. The one item that sticks out here are the non-financial current assets, and that equals very much inventory, and I will address that in a minute when talking about the working capital. On the liabilities and equity side, the equity part especially, is increasing due to the profits that we are achieving, leaving us with a very stable balance sheet. A quick look at the cash flow analysis We have been able to increase our operating cash flow by some 30%+. There is still a negative impact from the change in working capital, but it's much less than last year. Of course, this is a consequence of us now being able to get more components on board and manufacture products and get them out the door. We are also, during the first half-year, and especially in Q2, building inventory for the sales that are to come now after the summer break. As you see, we're also continuously investing in our current operations, and there we have several activities ongoing, as have been mentioned before. A few key financial figures. I mean, we don't need to address the investments again. I just mentioned them, but we have a good portion of cash sitting in our books. The Interest-Bearing Debt to Equity have decreased, net debt to EBITDA have remained stable, and we've been able to increase our Equity Assets Ratio even more. Just quickly looking at the working capital, I mean, it has come down, as you can see. If we exclude the cash and bank part, it's come down from 23.1 to 22.3% of the balance sheet, which is a move in the right direction. It's, of course, still very high, and we are looking at reducing that even further, of course. Now we have been able to build inventory in a different way for sales that are to come. We still need to, of course, be better in this. During the pandemic or post-pandemic period, we were sourcing intensely to just be able to deliver, because that was a major hindrance, and I believe that was not just for us as a company, but for, for many companies. All in all, on the key financial figures, they have been improving and are, are reasonably healthy, you can say. A return on capital employed, that's now at 18%. A return on equity that is close to 18% and coming close to our target of, of 20. An improvement in net profit per share, and of course, also the equity per share, which I think leaves us with a very healthy balance sheet for further growth and whatever challenges there, there may be also in terms of shifting to other refrigerants and so forth. I think we have the, the financial strength here to, to take the, the next steps. Stop by that. Unless you want to add something, Eric? I think that you covered it, perhaps too lengthy. Nevertheless, now we have... I tried to be quick so we can have some - Q&A. Yeah, right. Thank you, Hans. All right, we are ready. Thank you. If you do have a question for the speakers, please press star one one on your telephone keypad. If you wish to cancel your question, it's again, star one one. One moment, please, for the first question. The first question comes from the line of Karl Bokvist from ABG Sundal Collier. Please, go ahead. Thank you, and hello, yet again, Hans. My first one is just, if possible, I believe during the last conference call, you, you did mention that the heat pump business grew about 40% or something in the Q1. I was just curious if it would be possible to hear about the growth rate now in the Q2. Okay. Well, I think that the growth rate, I'd say, would be perhaps between 25 and 40 in the markets where we are present. In some markets, it's been, you know, like in Italy, I, I think that that's been quite considerably lower. I think it's difficult to give a, a figure, but we are, we are present. It's been just behind the growth that we see in our own figures. It's come down, of course, in general, you can say from, from the 1st quarter when the uncertainty became more obvious when the subsidies sort of got a little bit of a hit there. I think the most significant one was perhaps Denmark, we're now discussing them to come back. We don't know the details. Of course, in Germany, when they came to standstill just before the summer holiday, and, being to be discussed now in the Parliament, which we understand in the beginning of September. understood. Then, the, well, not only you, but, I mean, your North American part of NIBE Climate Solutions grew very strongly, and, then it seems like American HVAC and heat pump manufacturers are quite optimistic on, on next year with the subsidies and the IRA package and so on. How do you foresee your heat pump business, in the U.S. next year? Well, we are positive. We've been waiting a long time. I mean, in a way, you can say that we started our investment in North America 12 years ago, and then we came in with, it was Enertech Global, and then WaterFurnace 14, and climate, you know, ClimateMaster 16. Of course, we've been a bit disappointed it hasn't moved faster. I think now, when the bold decision was taken by the current administration, that now they are very determined, for 12 years they're gonna back this industry. Of course, that's a totally different signal than before, when you had, like, 3 or 2, 2 or 3 or 4 years, horizon. We are positive, but at the same time, I mean, we, we know we are criticizing politicians. They live in a different world. I mean, as we mentioned in the beginning of this conversation, all of a sudden, Chinese export was banned by the same administration. That hit Element. Now we hope that this 12-year period will remain, disregarding administration. As it looks now, it's positive, very positive, that I have to say. Of course, our 3 companies in the U.S. and the 1 in Canada, they prosper from this. Not only our industry, but also the people engaged around it. They dare to hire people, and the whole drilling, energy drilling, industry is growing. That's positive. It's taken a long time. Taken a long time. Understood. My final one is just on the refrigerant side, you, you touched upon briefly, but, could you just give an update on kind of, your ambitions with regards to how large% of your portfolio will be running on, by current standards, compliance, refrigerants, and by, by what time? I mean, we can say that our, you know, exhaust air heat pumps and ventilation heat pumps, they already 100% switched over to propane. That means that the, the models that we already came with, you know, with out inverters, they came late 90s. We never changed that. It's been propane for all these 25 years, so it's a tremendous experience. Now, of course, all our inverter driven pumps, the NIBE F750, the NIBE F730, NIBE F735, this is our latest model, that of course, driven by or using propane. On the, the water side, we switched over there as well, but there's been a lack of compressors suited for on the, on the larger capacities. There we, we have to switch over in a few quarters to come. On the ground source side, there we are working again on an intermediate solution with aim, of course, of having that assortment ready 2025. Now, it's a little bit uncertain whether they're gonna be 2025, because a lot of the lobbyists are saying they're gonna be difficult for many manufacturers to, you know, comply with the 1st of January, 2025. That's our target. That's how we work. We will be there with our full assortment at the beginning of 2025. As you know, the legislation and the bill has not been passed in the European Parliament yet. It also take place in a year and a half. The rumors were suggesting they're gonna be deferred 1 year or even 2 years, but that's rumors. We will stand there in our Q1 of 25 with a full assortment that's switched over. Understood. That's all for me. Thank you. Thank you. The next question comes from the line of Douglas Lindahl from DNB Markets. Please go ahead. Mm-hmm. Hello, gentlemen. Thanks for taking my questions. I wanted to follow up on the previous question a bit, where you gave some useful information on the heat pump growth rate in the quarter. I, I'm assuming you're referring here to sales that you are seeing for, for your business. I wanted to get a better picture on the sort of underlying demand that you see in the market. You, you talk about, slower, slowing pace, in terms of the heat pump market in general, but can you confirm that you are still seeing positive volume growth when you talk about the sort of order intake side rather than the sales side? My first question. Well, I, I, I cannot comment upon the, the market as such, because we don't have those figures. The figures we have, that's what, you know, is reported as being invoiced, the order intake. It's, it's not possible for us to judge when it comes to the, the industry as such. Mm. Okay. Of course, that's, that's a typical reaction, if you say in Germany, where there's been a tremendous demand, and still continues to be a decent or a good demand. Of course, when people hear that, you know, the incentive is gonna be lesser or there's some uncertainty, we wait. That's how we react as individuals. We all react the same way, and that's what we've been trying to communicate. Again, we don't like to criticize any politicians, but we like to advise them that if they are to change, they should say, "Well, we might modify them, it might be different, but don't hesitate to continue, because we gonna subsidize or continue to help those who are willing to do something in the interim." That's exactly what they did, I must say, in the US, when they took away the subsidies. That, of course, was a big blow because then no one knew whether they were going to come back or not. They came back, and then they said, "Well, okay, we reinstate them, and to be fair to those who were bold enough to invest, they're also going to get the subsidies." I think that's the request we have, so we don't have these stop and go, stop and go events all the time. Okay. I see. I guess moving onwards then, I was curious to see if you could give any sort of comments on the underlying volumes and underlying pricing for Climate Solutions, specifically here in the quarter. Some, if it's not, specific, maybe in broad strokes, any comments on that would be useful. Well, I think that, of course, it's a, it's a volume increase, naturally, as you, you see it. Mm I think that everyone talks about inflation and so forth, I mean, it's not our style really to increase prices unnecessarily. I think the picture that you get now in Q1 and Q2, that's really the full leverage, you can say, when we are in balance, because even if we invest quite heavily, of course, when you start to increase volumes, I mean, we still have 1 CFO and 1 CEO. Just to make it a little bit the joking side. Of course, we get an leverage, as you see also on the gross margin. We are not going to increase prices or try to squeeze the last thing out of the market. What you see is that we are fairly much in balance with the price increases that we've been hit by, although it's taking a long time for it to compensate for that. On top of that, of course, the volume has helped us tremendously to come up with a better margin, and at the same time, we're continuing to be cautious with costs. I mean that, that's. I think that the pandemic, in one facet, has changed us forever. I dare just use that word. We all travel much, much less, meaning that we also stay in hotels much less. I think that's not only for our industry, I think that the society has changed, and I dare to say that we don't even travel, you know, I think we reduce it with at least a third, possibly more, where more meaning so perhaps cut in half. Okay, combination of being in balance with the price, getting a better leverage out of the, the production, of course. We've been idling here, being overstaffed, as we said, so many times in production, and then continuing being cautious with costs. Of course, that's, that's all ending up in, in, in a better margin. Okay. On the, on the pricing impact, can you confirm or deny that it's double digits in the quarter? For climate year view. I wouldn't say that. Okay. Yeah. My, my final question then on, is on the elements. You already gave some helpful insights into the semiconductor exposure there. But it seems as if the underlying growth is slowing still. Is it mainly consumer goods business behind this? If you could elaborate a little bit on that, would be useful. Consumer and the semiconductor. Them two combined. Okay. Thank you. Yeah. The next question comes from the line of Viktor Trollsten from Danske Bank. Please go ahead. Thank you, operator, and good, good morning, everyone. The first, Gerteric, you said that you expect to go back to a more normal situation in Climate Solutions in, in the second half. What, what do you mean by that? Well, we, we believe that we cannot have months and months of delivery times. You know, we have to have a realistic delivery time of a few weeks, well, from when, from the time we get the order. I mean, we also, you know, we sell through wholesalers, and I think we don't like to be abused. Wholesalers, they have to have their inventory. They cannot expect us to deliver within a week. Now we've been dragging our feet. It's been a terrible situation. I mean, we've never been through anything like it, as we said so many times during our 70-year existence. Coming back to a normal situation, meaning that we can respond within the ordinary delivery times, that's could be an exception, of course. It says, I'm gonna, well, I'm gonna have that, I need that heat pump, but that's what we're gonna come back to, and that, that means that we talk about delivery times of weeks rather than several months, and sometimes should be talked about half a year, as we all know. How do you see that impacting, you know, growth and potentially margins then? Because I guess, you know, you're in a massive, you know, ongoing investment phase. You're basically ramping up, you know, the new market, new factory, et cetera, I suppose. In terms of growth rates, you know, what would the normalization mean for Climate Solutions? Well, now you're, now you're touching, you know, forbidden grounds. I mean, we're not, we're not trying to, but we cannot give you more, but of course, when we write like this, that we have massive investments. If we didn't believe in the market, would we, as people in Småland, would we then invest that heavily? Isn't that a very heavy signal to you folks out there, that we are massively investing, and we are massively be- believing in the future? How, how clear can, could we possibly be? Yeah, I guess you're touching upon my second question, actually. You know, if, if your view on the investment program has changed anything in the last, you know, let's say quarters, you are, you know, now mentioning some regional weaknesses. I guess you just answered that, that you're not, you know, viewing your investments anything different. Not a bit. No. Good, good to, good to hear. Coming back on, on the order side, just, you know, what we are hearing from the industry, obviously, you know, demand has come down a bit from the crazy high levels, you know, seen, in the last couple of quarters. What we're hearing is that, you know, orders are still well above, you know, sales levels. Would you, you know, agree on that, that demand is still, you know, higher than, than current sales? Yeah, well, you know, again, it's a very, very difficult question. If we are to meet the targets that everybody's talking about, but just give it a broader... I'm not trying to, trying to play hide and seek, but I don't know anyone that would like to give you a more detailed forecast. The industry talks about 2030 arriving at around anywhere, anywhere between 7-9 million units. That means to arrive there in a manner that would guarantee quality, that would guarantee installation capacity, and so forth, then we would need to go, like, 15%-25% per year as an industry to arrive there. Otherwise, that's, that's never gonna be fulfilled. Now it's been pinpointed as one of the major sectors to decarbonize. All the people that we talk to, they are very convinced that this has to happen, and I'm not talking about colleagues. Because sometimes, you know, an industry can be sort of over-positively to then stimulated. We firmly believe in, in that, and that means that we're gonna double, you know, every 4 years, as you see now, the coming, the coming 8 or 9 years. That means that we have not fulfilled by any means the demand by decarbonization when it comes to buildings, and it's just the start. We see that in Sweden now, when new construction is going down, and everyone is so worried about that, and that is, of course, not good because the building industry drive the same. New construction is about 15%-17% of, of the Swedish market. 85 or at least 80+ would be, you know, retrofit because of the massive installation that we started to go through here in 1998 and onwards. It's gonna be the same in Europe. Once we have rebuilt Europe into heat pumps, gonna last well into the 2030s, then the massive investment that we see now, they will be ready for replacement in 15 years. The ballgame is totally changing, and we don't understand the nervousness when 1 or 2 quarters would be a little bit softer because we are in for a major change. I don't know how you should explain that, or whether we are the only ones in the world believing in this, but it doesn't sound like it. No, no, I, you know, I can't, can agree. I guess, you know, the market gets a bit nervous when you speak about, you know, normalization, and then, you know, we look at historical growth rates in climate at, you know, let's say 5% through COVID, I guess that's the wrong way of looking at it then. Well, we are only human beings, ironically, but we've had a hell of a drive, I can tell you that. We've been through all these different situations and difficult ones. We've been through Lehman Brothers, we've been through IT crisis, and now we are facing this, and facing this is a phenomenal growth pattern behind it. How the heck could anyone question the, the possibilities for us to grow now? It's, it's hard to comprehend. Excuse me, I'm getting a little bit, you know, enraged here. No, but it's good. Thank you very much for your answers. I'll step back. Thank you. Thank you. The next question comes from the line of Carl Ragnerstam from Nordea. Please go ahead. Hi, it's Carl here from Nordea. A couple of questions from my side as well. I mean, with the changes in subsidy programs in Germany, Poland, Italy, and Denmark, could you perhaps quantify your exposures to these markets on the heat pumps? Also with the calming demand in the hopefully very short term here, do you see a risk of under absorption in productions, where since you add new capacity, or do you just, you still rely on the, I mean, healthy order they can then backlog to compensate? Yeah. No, we, we try not to build too much inventories. I mean, as Hans said here, of course, we've been trying to compensate for deliveries of components and material to be ready, because if you have 95% of the material, you still miss 5, nothing gonna happen. I think that's what most of the manufacturers, not only in our industry, been doing. They've been trying to compensate, so when you get the, the two crucial components, then you're ready to produce. Of course, that's no way to live in the long run. Obviously, because we could specify to the very day, you know, our market shares and so forth. I don't think that's, that's our profile, is that, well, now we have so much in Poland and so much in Germany. As a rule, I think that we have such a broad presentation, and that's something we decided to change 1992, because then we were so exposed to the new construction industry in Sweden with a very narrow assortment. Since then, we've been working for 30 years, consecutive years, trying to not to be too dependent on one particular country. That's why we suggest that we don't like to be dependent on one country to 20-25%, because then you're too vulnerable. Of course, we like to sell as much as possible into one country, but our philosophy is to have as broad as possible of a penetration. I mean, I know that you don't like that answer, typically, but I think you also, I don't think you expected anything else. Okay? No, no, that's, that's fine. And also a bit on, on pricing, you, like many others in the industry, raised prices quite a lot here over the past two years. I mean, with maybe more, I mean, more rapidly growing market than, and also raw material prices coming down, freight rates stabilizing. What is your view on the pricing landscape here over the coming few years? Maybe not tomorrow, but in the coming few years here. I mean, do you know, do you notice any gradual increase in focus from installers, wholesalers, or end consumers on pricing, or? Well, I mean, here we can philosophize. I think that we, we've been tremendously hit by the shortcomings of, of course, shortages in components. I think that, the suppliers subsidize. They've been, they've taken that lesson, and they have invested on their term to be engaged in, in growth. That means, like someone said here before, now you're investing in me, and how should we pay for that? When you invest, of course, you assume that the, the market's gonna go up and not necessarily say, "Well, now we're gonna try to make less money because we've invested too much." I, I don't think that's anyone's idea. Hopefully, with all the programs going on now, that inflation gonna be sort of, hindered and controlled, where we come back to a, if I may call it, a more normal situation. Normal, we haven't had a normal situation perhaps for, for 15 years, ever since the Lehman Brothers situation. Negative interest rates, we do not believe would be a good thing in the long run. It should be, of course, on a, on a realistic level. That's a long story about the pricing. Of course, there are gonna be some manufacturers perhaps, or I don't know who would do that, but try to decrease prices for some reason. We never heard anyone that really, in the long run, has gained any market share and also made more money by decreasing prices. I mean, that's a very simple model, and you don't have to participate in Harvard, in Harvard to study there to understand that that's the, the wrong avenue. The coming price increases. On the other hand, will be more moderate, we believe. If inflation is coming down, there's no reason, because if you look at it, and I don't know whether you read the article in The Economist, not the last issue, but I think it was the issue before. Then they say that it's nonsense, that the manufacturers increased prices unnecessarily and caused inflation. There were, there were other factors doing that, we fully applaud that analysis. Our history has not been to increase prices, but rather absorb a few of the price increases that we have gotten by own productivity. That- that's how we're gonna conquer the, the, the future as well. Now, I'm stealing your time or, or the others' time perhaps. No, it's very good. Thank you so much. I step back here. Thank you. One moment, please, for the next question. The next question comes from the line of Nathan Kebede from Nordea. Please, go ahead. He just put his questions. Oh, my apologies, Christian Hinderaker from Goldman Sachs. Please go ahead. Yes, good morning, everyone. Thanks for the question. Morning. I've got three, and, and we'll go one by one, if that's okay. Just wonder, following up on the regional conditions in Climate Solutions, the market, et cetera. You touched on this a little bit earlier, but eager to understand, not just in heat pumps, but more broadly, how affected you've been by the construction slowdown in some of those regions? Well, I think that's when, when it comes to interest rates, you know, everyone or most of the people have the same reaction in any country. Of course, the new construction is important, but to various degrees when it, when it, when it comes to our assortment. I think the most obvious example is here, the element decrease in white goods, because when you build a new house, a new flat, of course, the flat or the house is always equipped with dishwasher, a cooker, a dryer, and all those white goods in the. On top of that, if people say, "Well, now is a bit, is not the right time to replace a dishwasher," they also wait. There is like you're hit twice. Whereas when it comes to saving energy, that's more something you say, "Well, no one can predict really about energy prices. We better do something here to come back to a realistic level." Also, if you're gonna sell the house or sell the apartment, if it's a condominium, we have to have a decent way of climatization here. I think that's a different situation. Of course, new construction is going down. I don't see any market that's really increasing the construction in the in, in Europe. Okay? Understood. Thank you. Secondly, maybe I'm just interested, we talked a little bit about pricing and obviously the volume dynamic, but given the higher rates and sort of macro sensitivity in the back half of the year, how do you think about mix or any risk of down trading? Is that something that you've seen in terms of category sales in the Q2? Well, I mean, I think I gave an indication there in the two previous also, that there'll be more renovation or there'll be more of that category rather than new construction. When we talk about the volumes, you know, like arriving at 7-8 million units per year in like eight years, depending on who you talk to, of course, that is predominantly, you know, rebuild. New construction in Europe is, of course, perhaps even a good year, is much, much lower. Could possibly be around, if even 1 million new dwellings for heat pumps. That's, that's a smaller category, but it's an important category in the sense that, that sends a good signal to people, okay, in, in new builds, they install this category of in heating. Just like when we went from wood to oil, that also started in new construction, but eventually everyone caught on. There was a tremendous era change into oil from wood, just an example in this country. Took 20-25 years, and in a similar way, it took another 20 years to change Sweden from oil into heat pumps. That, of course, was not the new construction that was driven by the tremendous amount of dwellings or houses already existing. All right? Thank you. Then just finally, question relates to the decline in the consumer segment. You've talked about customer destocking. Just wonder how big of a growth contribution that had from destock, and then also what your sense is in terms of channel inventory levels, and whether there's any other product categories or segments that destock could be a risk? Also, just more broadly, or, or sort of at a higher level, how much visibility or control do you have in terms of, understanding your, your customer inventory levels? Well, I think that the last question there is n o one really wants to admit that they have overstocked. I think that's the human, the human brain in a way, because that's a misjudgment. At the same time, as I said before, we are overstocked on components. I think the whole industry is overstocked on components. We wouldn't like this massive increase, although it's less now, as Hans explained. Of course, that's based on our assumption that even if those companies are gonna come out of the woodworks now being so much better, we like to make sure that we have the ability to deliver, and I think that's exactly like many stockists. When you sell directly to the consumer or to the business to business, I think that's a lesser risk of having that. Of course, when you sell, like, the older stockist or a wholesaler, there's always a risk that they've also seen the difficulty with delivering, and they have ordered a little bit too much. I'm now talking in general terms, we don't have that visibility really. All right? Okay, thanks very much. I think that we have come now to, if I'm not being polite, you know, we are five after 12. 2 very quick answer questions then, so we are being polite. There's a line up here of some, someone from Hong Kong, China, buying that. Please, if you have easy, if you have easy questions, then we're willing to take them. Quick ones. All right? We take 2 more questions, please. Thank you. The next question comes from the line of Axel Stasse from Morgan Stanley. Please go ahead. Yeah. Morning, everyone. Thanks for taking my questions. I have two. The first one was linked to the numbers, of course, you have mentioned for the Climate Solutions division. I just want to understand how we can link this with Germany, for example, which has, you know, announced this number of applications that has dropped significantly in the first half of the year. I just wanted to understand how you guys have seen this impacting your business in the first half of the year in Germany. Yeah, a bit more clarity and visibility on this would be highly appreciated. Thanks. Well, what should I say? I we believe, without being 100% sure, not even perhaps even 69% sure, that the companies, the European companies in general, they have all had difficulties. We believe, I talk about ourselves as a group, I think that companies producing elsewhere, they've had a little bit of an upper hand when it comes to delivers. When, when the European manufacturers are coming back, it seems like they've been lesser hit by a slower pace. I think that's as precise as I can be. Okay. All right? Yeah, okay. Understood. Last question, just wanted to make sure, have you seen a change in sales split across your heat pump product portfolio? Can we still assume that geothermal is representing more than 50% of your total sales in Climate Solutions, or has this significant change over the last couple of quarters? I think, yeah, that is- it's very important that everyone out there fully understands that we follow each market, you know? There are a few markets, and geothermal would be the largest. That's when you have the severe climate, like up in Sweden, Finland, and some East European countries. Of course, new builds, that's again, is the requirement of energy or should say, output, is so small, so then you need smaller modules, and there, the ventilation heat pumps would be quite sufficient. To change the gas and oil burners or boilers, there, of course, air to water is by far the largest segment, and we follow, we follow suit. That's why we, we have the three assortments, not trying to convince everyone in, in France or in Germany, you should have this assortment. We follow very much each market. That, that is a wrong assumption that you have there. Okay. Okay. Okay. Understood. Thank you very much. Thank you. Thank you, everyone. Now, the time is running short. We appreciate your questions. As always, we try to be as sincere as possible, but sometimes we have to crack a joke, and we cannot answer every question, even if we would like to. Thank you very much. Thank you. Bye-bye. Thank you, ladies and gentlemen. Thank you for your attendance. This conference has been concluded. Thank you. Thank you.