Welcome to the Nibe Q2 presentation for 2026. During the questions and answers session, participants are able to ask questions by dialing #key 5 on their telephone keypad. Now I will hand the conference over to the Chief Executive Officer, Gerteric Lindquist, and Chief Financial Officer, Hans Backman. Please go ahead. Thank you very much. Good morning, good afternoon, whatever it means to you sitting out there. We are back, and we are going to give you a 20 minutes, 25 minutes presentation of the report, and then we are going to, of course, invite you for questions. Just a couple of things. We have to finish around 12:00 P.M. because we have other tasks to fulfill today. Also, we would ask you to only put two questions at a time to allow as many as possible to get their questions across. Yeah. Hello, also from my side, Hans here, and I will be happy to fill in where Gerteric hands over. Okay, fine. Well, the overall headline is, we believe it is a strong report that demonstrates both, of course, the growth in revenue and the profit and also margin-wise. It is a six consecutive quarter, so we might say it is a trend anymore rather than just a quarter coming alone. So we are bold enough to suggest that. We have given a few hints here on the slide that you have in front of you, and that is, of course, that it is less pronounced with the Swedish Krona this time. It is more like par with the Here we go. There we go. With the previous similar quarter or corresponding quarter. We also talk about tariffs. Of course, we have to do that, but they have been fended off fairly well, but for Stoves. We are going to come back to that during the presentation. We see also a trend towards more renewable attitudes, both in Europe and also in North America. Also something that we are going to comment more on when we come back to the quarter per business area. Then, of course, we are very pleased to see that our assortment now is so well-received, and our presence is appreciated, of course, both national and also international. We keep the good cost control. Although we see that things are improving, it is very tempting to perhaps increase cost. We have to have that discipline. Also, we see that our investments in new facilities have given us a good productivity development. They are sitting there, we are just dialing now to fulfill the demand that we believe going to come for the years to come now. Just a quick glance at the figures, you have them before, of course. The growth there of the 7.6%. Organically, that is really 8.7%, which is a healthy growth, and it is also the gross margin that is improving, which is pleasing to us, demonstrating that we are polishing in our cost and keeping the cost discipline. The operating profit speaks for itself, but also that the operating margin has taken a considerable jump compared to the corresponding quarter last year. The graphs that we typically have, that is also indicating that we are now on a stronger path towards the revenue. We also see, I am sorry, the profit of the financial items, and that is, of course, a function of several factors, the sales improvement. Also that we have a pretty good cash flow. We borrow a little bit less, or quite a bit less than we did a year ago. So all the things are working in the right direction. If you talk about NIBE Climate Solutions, we have already mentioned that the market is solid when it comes to improvements, and it is very pleasing to see that in Europe, both the single individual home market for heat pumps has increased, and that is particular for renovation, of course. The new construction is not so prosperous until now anyway. Also the commercial segment is expanding. In the U.S., as expected, the single-family home market for heat pumps went down when the subsidies were taken away. But nevertheless, the commercial segment is really outnumbering that. So overall, we still have a growth there. Also, that we have also these political uncertainties that we mentioned initially, but when it comes to looking at it in the U.S. with the manufacturing there, they will really have an upper hand, so that is a good thing. Of course, people are affected by the political situation. But I also think or believe, which is sad in a way perhaps, that people are getting used to these things, and eventually, we have to continue to live. So we feel that there is an uptick in demand and in positivism in all three segments, really. That, I think, has to do that eventually you get fatigued listening to all these problems. You just have to continue living. Again, the product launches have been very efficient and successful, and that fills us with the satisfaction, naturally, that people are looking for better refrigerants and intelligent controls for energy optimization and so forth. So we feel we are really on the right track. Investments, we have them, the larger ones behind us now. That is not something that we are going to start now. They are installed, ready to take on the challenge. Hans is going to come back to more detailed figures when it comes to gross margin and such, but it is important to note, though, that the real underlying growth here, if we take away the effects of the currency, is around 9%, and the operating margin is now up well into the spectrum, whatever we call it, or interval that we really aim for between 13%- 15%. Of course, now we have, on a running basis, 12.2%, so still a little bit to go, but that is quite a bit better than the corresponding period the previous year. Swinging over to Element, and there we really have had a positive development, and that is particularly for the semiconductor segment. Everyone talks about the segment, AI and all that, and here we are positioned so well in North America with our subsidiaries delivering components to those manufacturers that really stand behind the manufacturing of the chips themselves. They, of course, predict a steady growth in the future, and now we have gotten a sniff of that, and that is, of course, one of the major factors behind the growth. But it is also that the HVAC market is certainly coming back, and that also has a positive effect on Element. However, of course, new construction, that is still slower in Europe and elsewhere. Of course, when construction is slower, that is dampening the whole mechanism in society. Construction drives the whole society. So that is when it comes to the home appliances and stuff like that is, of course, still limping along. Just jumping over to the next I am too quick. No, here we are. I am sorry. There we are. Again, the net sales, quite an improvement, and of course, now we see a growth of organically 11.6%, even outnumbering Climate Solution. Then on top of that, we have a couple of percent of growth when it comes to acquisitions. Very pleasing to see that our operating margin is back within the interval again, 8.9% versus 6.6%. That is quite hefty improvement. We are very pleased to see that. Also, the gross margin has taken a good step, which Hans is going to come back to and explain. Stoves. I have said that earlier during interviews today that we would have liked to have this discussion or this press release or press conference 2 days later, because we do not really know what is happening on the tariff side in North America. That is, of course, very, very important that that is mitigated somehow. We have had those tariffs since 2025, and then they were worsened in April this year. Of course, we hinted about that, going to be difficult to mitigate that. We feel that in a little bit longer time, we will be able, but now we know that negotiations are going on between Canada and the U.S., and as long as people are negotiating, there is still hope. Hopefully, tonight their time, they will have reached some kind of agreement. We hope that the tariffs will be eased off a little bit. We do not know. They certainly will not be hardened to any respect. So what we see now, what we described, is worst case, and we thought it was well thought out to present that to you. But we hope that after negotiations tonight, we are going to come back with some better news. Despite headwinds, we dare to say that demand has started to improve a little bit. We see signs in Europe of improvement in demand. Not so strong, but still, we had an organic growth around 2% during the quarter. It has been more stable in North America, I must say. Whether they are not so anxious as we are in Europe or what is behind that, we cannot really tell, but it seems like their market has been more stable altogether, both in Canada and in the U.S. But it is very promising to see now that we believe that we have been down at the very bottom also on Stoves. On the second quarter, that is very pronounced, as we all know, the seasonal pattern for Stoves. We just hope that we are going to have a real comeback now during the coming six months or come, let us say, five months as of today, of course. That is a little bit about the Stove situation. Here we have the figures. The margin, of course, operating margin is still negative. That is a considerable improvement from the previous quarter corresponding year. That is why we are fairly optimistic about changing this into a decent result. If the 25% tariffs would remain, it would be a bit more difficult to, of course, mitigate that in the immediate future. But we are fairly optimistic about looking after that. See what happens tonight. Just a few more pie charts. Excuse my language. Excuse my voice. Here we have the distribution of sales. Of course, now Stoves has not been able to grow, so that is a very obvious dominance by the NIBE Climate Solutions and NIBE Element. When it comes to the operating profit, of course, that is now all taken care of by NIBE Climate Solutions and NIBE Element with 78% and 22%. But we hope to change that pie chart fairly quickly. I think with that is the last pie chart that I have. The Nordic countries, slightly under 20%, rest of Europe 45%, and North America just about 30%, and then Asia, 7%, which is predominantly Element. Hans, I hope your voice is better than mine. I hand over to you. Thank you very much, Gerteric. Yeah. I hope you recover quickly enough for the question and answer session. All right. Hello again from my side to everyone out there, just like on previous calls, I will take you through the numbers a little bit more in detail, of course, also the balance sheet cash flow and some key parameters. If we then again look at Climate Solutions here, as Gerteric said, we have seen a robust growth in this business area, in both sales and profit in most markets, both on the residential side and the commercial side. The only exception really being the residential in the U.S., but which has not declined as much as we expected following the Trump administration's seizing of the tax credit. So they have actually done fairly well under these circumstances. With regards to the U.S., our local manufacturing footprint is of clear advantage over there, because we virtually do not ship any product across any borders there, meaning that tariffs within this business area is not much of an issue. So for that reason, we have neither had much of tariffs nor any refunds. It is the underlying business which we show here. Looking at the underlying business, as Gerteric mentioned, we saw a growth in the quarter of 9% cleaned from the currency effect, which by the way, is becoming less and less pronounced for every month that passes. Coming in at sales of SEK 7.3 billion, up from the SEK 6.8 billion, leading to an increase in the result of some 20%. If we would do the cleaning of the currency impact here, it is actually up to slightly more than 23% improvement in margin. The reason for this is the improved gross margin, which comes naturally when we get more volumes into the factories. It is also, of course, a consequence of the investments that we have made, where we have more efficient, more modern and automated factories. Year to date, we are up some 9.6%, up from the SEK 12.8 billion in sales to more than SEK 13.5 billion. Also with a good improvement in gross margin because of course that took off already in Q1, leading to a result improvement of more than 18%. So, on a rolling 12-month basis, we are now at 13.6%, thanks to the 13.8% that we made in Q2, and carrying the 12.2% with us from the first half of the year. So all in all, we feel very confident and happy about the development in this business area. In terms of geographical distribution of sales, there have not been any large movements at all, a small shift between Europe and the U.S., where Europe has taken a percentage point, you can say, because that is where we have seen a larger growth, and then the U.S. just coming down to 23% from 24% a year ago. Moving on into Element. Also, as Gerteric mentioned, we have seen a phenomenal growth here in the second quarter of 11.6%. The NIBE Element business area has seen an overall strong growth, mainly driven by semiconductors very much in the U.S., but in general, and also the HVAC business, as well as an improvement coming from the electrification of the industry that is going on in general. This growth has been achieved despite the geopolitical uncertainty that is out there, leading to not very many houses or buildings being built, and people are also careful when it comes to private spending, be it in the white goods industry and so forth. But the statistics, and what you hear, so to speak, from central banks and elsewhere, is that this slowdown in economy is coming to an end. We should hopefully here also see an improvement as we move forward. Also in this business area, the local footprint for us, manufacturing footprint, that is clearly a strength and neither here do we see any large impacts of any tariffs. Again, the numbers speak for themselves. Sales, as I mentioned, up by 11.6%, up from SEK 2.8 billion to more than SEK 3.1 billion in the quarter, leading to an improved profit of 50%. Also, when you clean it for currency. Here we have seen the gross margin improve by two percentage units, also coming from more volume in the factories. But of course, the large investment program that we have been carrying out over the last five years has been within all three business areas, so NIBE Element has naturally benefited from that as well. Then landing the operating margin in the second quarter at close to 9%, well within our announced interval there. Year to date, we are up some 9%, and with an operating margin of just below eight. Rolling 12 months, we are at 7.7%, and have good hopes to, of course, improve this during the remainder of the year. Geographical distribution of sales within NIBE Element. Here we have had some movements in the sense that both North America and Europe have improved if you compare with a year ago. Things are clearly moving here in the right direction, and in our very strong markets. Nordics has kept its share in this respect. Stoves is, as Gerteric mentioned, of course, still facing an overall challenging market. But in North America, it is actually fairly stable. It is again, these tariffs that causes some questions, of course, but the negotiations between the two countries are ongoing as we speak, and we interpret that as a positive sign. From a market point of view, we definitely think that we have been down at the bottom and are moving in the right direction. I think a very clear sign of that is the small but very important organic growth that we achieved in the second quarter of 1.8%. We did come up from the SEK 678 million- SEK 686 million, and have also here been able to improve gross margin. Numerous actions have, of course, here been taken to fend off the impact of the weak market and the tariffs. I think we are very well-positioned for a further growth. The operating profit, which is a loss, but if you read the line, it says profit. It has been cut in half, which also is a very good sign for us. Year to date, we are basically on a plus minus zero situation, a small profit in there, and expect to improve from there. On a 12-month rolling basis, we are at 4.3% and have said that we should aim to be somewhere between 6%- 8% for the full year. Also here, the geographical distribution of sales. The Nordic region has actually taken a slightly larger portion of this pie compared to a year ago. North America has kept its portion, whereas mainland Europe has been losing out a little. That is where we have seen the strongest weaknesses over the last quarters, you can say, but where things are beginning to move again. Leaving the business areas and moving into the balance sheet. I will not dwell too much upon this. I think we can comment upon the non-financial current assets having increased from 16.2% at the end of the year up to 18.4%. I would say that is a very natural trend for us. That is the working capital, the inventories that we build during the first half of the year, in order to have our stocks filled with good products for the sale that takes place during the second half of the year. So it is all within our planned levels. On the equity and liability side, the equity itself has increased by some SEK 2 billion compared to the beginning of this year. Long-term liabilities there have increased slightly, the long-term ones. We have issued a bond, and it was a very successful bond emission that we made. It was oversubscribed quite substantially, and we decided, given the good conditions that we got there, to simply take on board a little bit more bonds than we needed to replace, as a matter of fact. Very pleasing to see, coming from the performance of the business areas and the group in total during the first half year, and not the least in the second quarter, is, of course, the cash flow. We have increased that by some 50%, if you look at the quarter now compared to a year ago, from some SEK 950 million- SEK 1.4 billion. Of course, we have had a slightly negative effect from the change in working capital. But again, that is just what I mentioned, that is building the inventory. The investments in our current operations has also been reduced quite substantially, down from SEK 480 million- SEK 330 million, roughly. Meaning that this large investment program that we have been carrying out has come to an end, and we are more moving into normal maintenance investments. All in all, an operating cash flow in the second quarter of close to SEK 800 million, up from -SEK 100 million a year ago. The remaining positions there are more of a mathematical character, you can say, financing activities, for example, being the dividends that we paid out. Looking at the cash flow year to date, it has actually increased by some 65%, which is a sign of the increased sales and profit from our business areas. Working capital roughly on the same level as last year, but then investments being cut in half. I think it is a very good cash flow, and we will come back to the net debt on this page instead, because that is now on 2.7x. It is the same number as we had last quarter. If you do the decimals, again, it is actually an improvement. It is 2.65x. Going forward during this year, we are quite convinced we will bring this down roughly to the 2.0x-2.1x line, hovering around there. This is a key parameter, of course, that the banks look at, investors look at, and so forth. We keep it very much under control. We are not worried about this at all. It follows exactly our path. The only challenge was back in 2023, when we made this very large acquisition at the peak of the cycle, and then the market turned sour. But ever since things have normalized, the development here has been exactly according to our plans. We are quite pleased with that. Interest-bearing liabilities as a portion of equity have also continued to decrease at the same time as our equity assets ratio has increased. We feel that we are quite stable and also well-positioned for both an organic and a growth through acquisitions going forward. Working capital, a slight improvement there from a year ago. It is natural, again, that it is a little bit higher during this part of the year, because we need to fill our stocks for the sale, which I just mentioned. Now, last slide here before we open up for the question-and-answer. Return on capital employed, return on equity, they are, of course, not at the targeted level yet. But they are improving step by step, as they were also last quarter. They are on the right way, and of course, a result, again, of this improved sales and profitability situation that we have. The equity per share has also increased. The closing day share price, we will know at the end of the day what that will be. That is right. Won't comment that any further. But with that, I am ready for questions. I do not know if you have anything to add, Gerteric. No, I have been trying to cure my voice on my vocal cords. We should be ready. So please, you shoot now. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christian Hinderaker from Goldman Sachs. Please go ahead. Good morning, Gerteric. Good morning, Hans, and thanks for the presentation. I want to start on the working capital, Hans. You mentioned, obviously it is up year-on-year. I think inventory is actually broadly flat in that sense, but you had more than SEK 700 million in both receivables and the liabilities line. If we look at the non-interest-bearing current liability, SEK 8.6 billion, including provisions, that is up quite considerably quarter-on-quarter and was well ahead of consensus. I guess two parts to my question here is first, what drove that increase, and are those drivers structural? Then second, what is actually in this number? Because when I look at the annual report, I think only 1/3 of the line is coming from trade payables. I think you have some contributions in here from acquisitions. Just interested in the splits, if you can share those. Well, there are no major, or how shall I put it, one-off effects in these numbers, really. The effect from acquisitions is fairly limited because we have not made any larger acquisitions in this respect. We have some delay when it comes to the invoicing or the effect from receivables. We saw that quite clearly during last year as well, where they kick in more during the second half of the year. We have a tendency here of invoicing very much at the end of every quarter, very much in the third and especially in the fourth week, which has an effect. This is especially pronounced, I would say, when we come to a quarter as well. So the inventory we have been building, actually, we should even possibly be building even more to meet the demand out there. But the payables and the receivables, which are the major things in there, have developed quite normally. But we can dig into the numbers in a separate call if you have remaining questions. Yeah, thank you, Hans. Appreciate that color. My second one is on M&A. You have the through-cycle growth target that includes the 10 percentage point contribution from acquisitions. The software end markets in recent years, growth from M&A has understandably been a bit more modest since 2023. But you have acquired Beltrami in the quarter, and the release talks about aims to be more proactive on acquisitions. I guess just interested in is Nibe still targeting M&A of that scale, mid-single digit, double-digit percent of sales? Then what are the technologies or segments, really, that you are seeing as a particular focus in your pipeline? Well, of course, we are going to go back to acquisitions, but as they say, once bit then twice shy, and Hans mentioned that, of course, when you acquire a company that is relatively large at the peak of a cycle, then the downturn comes and we have, of course, been very, very cautious not to overburden the balance sheet since then. I think that the overheated market 2022, 2023, particularly in NIBE Climate Solutions, has also taught us a lesson that we have to be cautious when we aim for larger acquisitions. Hopefully, also the market has been taught that lesson. We are definitely back to, again, evaluating acquisitions of larger kinds than the Italian ones you referred to. Not to diminish that one to any point, but certainly now with Hans' projections here of the important ratio coming down to in the vicinity perhaps of two or so, we are certainly positioned to take on large acquisition, but without being, of course, too risky-minded. So we are back on track when it comes to evaluating acquisitions of larger kinds again. I hope I answered your question partly, anyway. Is there any sort of regional technology focus there, or? Well, I think that there are no specific regions, but of course, we are fairly well set in the Nordics. That is very important to note. We could possibly buy one or two companies, but the growth is going to come from mainland Europe and North America for all three business areas. That is as clear as I can be there, I think. Understood. Thank you. Yep. Mm-hmm. The next question comes from Karl Bokvist from ABG Sundal Collier. Please go ahead. Yes, thank you and good morning. My first one is just on Climate Solutions here. We think about both what we see happening in the market, and I am specifically talking about the heat pump volumes here. Of course, that is not all of the Climate Solutions division. But now when we come into the second half here, and we have had organic growth of, well, for the first half, close to 10%. You also should have, and to your guidance here about the stronger second half than first half, I am just a bit curious about how you would expect the seasonality to help you, given that all else equal, this should also support a bit of an acceleration in your year-over-year figures. Well, it is perhaps a very naive answer in a way that the seasonality, you can always argue and reason around it, but it seems like heating equipment has more of a season towards the second half of the year, and that comes for heat pumps, that comes for Stoves. To a lesser degree, of course, on the NIBE Element side, where we supply so many categories of industries. So I think it is an old established truth that equipment that we supply has typically its more major season during the second half of the year, and it is very pronounced for Stoves, of course. Whether that is intelligent or not, you can always argue, but you like to have your stove in for Christmas, whether you live in Sweden or whether you live in France or in North America. It seems like when you have renovations going on, now comes the season. Could be, of course, a little bit of a difference when it comes to air conditioning that you like to install in the spring. That is more pronounced on the south or the Mediterranean market, in Italy, for instance. So it is more a tradition than anything else. So we do not foresee that that pattern will go away. How much that is going to influence the whole thing? Well, I think we have to look at the figures prior to the war in Ukraine and the pandemic, where we had more of a seasonality of a certain kind. Understood. I will limit myself to two questions. The second one is just also on NIBE Climate Solutions here. When we think about the last four quarters, really, the increase in operating margins have to, well, to a full degree, been driven by higher gross margins. So, of course, you get the benefit, as you talked about, from more volumes in your factories and so on. As we now look into second half and think about your margin range guidance and so on, should it still be expected that if we fast-forward to end of the year, that it will have been driven by a continued increase in your gross margins rather than efficiency on the SG&A and R&D line, for example? Well, I think that overall, I think we are through the streamlining that we went through 2024. That is more to monitor that. That won't be any major additional savings of that. Just trying to keep what we've achieved now. That is one thing, and of course, productivity-wise, as volume now will increase, as we predict, of course, the productivity going to be more pronounced. So that is the major things, of course, when it comes to gross margin. I don't think that we can cut down any further on sales and those activities. I think they have to tag along with the growth because we are utilizing our sales resources very, very, should I say, to the maximum right now. If that answers the question in part. Understood. That's clear. Yes, absolutely. Thank you for that. The next question comes from Daniel Khajenouri from Morgan Stanley. Please go ahead. Good morning, gentlemen. Thank you for taking my questions. I have two, and I will take them one at a time if okay. I wanted to start with the Climate Solutions segments. Organic growth was sense, but if I reverse the FX benefit in Europe, growth is behind peers and market indicators, and it has decelerated sequentially. I do appreciate this is a decentralized business, but it would be useful to get some color about the underlying top-line trends, where you are seeing growth by product category and just be useful to comment on growth out of peers here. Yeah. When we take Europe, we also mentioned in report, we are fairly large on water heaters. The fundamental idea years ago when we started to acquire was to acquire companies selling water heaters and then couple that with the heat pumps produced in those days here in Markaryd in Sweden. Of course, water heaters today, they do not have any growth. A very modest one. It is more for replacement, and for some reason, it is rather replaced in several instances by a heat pump for just tap water. Also district heating that we have invested in, and that is typically a Nordic phenomena that is also fairly flat. So it is the heat pumps in Europe that is driving the growth. What is pleasing to see is also that the HVAC commercial segment is improving considerably in Europe, and that is something that we are looking at with, very focused because we believe that there is a lot of things to do there. Saving energy, adding air quality to offices, hospitals, schools. That has been, I should not say, has not been forgotten, but compared to individual homes, it is on a lower level. So that is to come. Very pleasing. In North America, the drive there is, of course, on the commercial side and that is naturally ventilation, cooling and also heating, particularly on the commercial side. On the individuals, single home side, there has been a downturn, as we have explained a couple of times now, mainly due to the subsidies or the tax subsidies taken away. But we also see there that the downfall is not as big as we would have anticipated. Hopefully giving us a signal that also there, the understanding is now coming. You have to heat and ventilate and cool your home in a different fashion. Hope I answered your question there, the first one. Yeah, that was very useful. Thank you. My second question is on the cost and margin, because in my view, this is the key positive surprise for investors. If we exclude operational leverage, could you maybe give us a little bit more detail on what drove the better cost performance? It would also be very useful to understand if you see any cost inflation coming down the supply chain, looking into the rest of the year. Thank you. I think that all manufacturers, they are looking at the inflation when a product is coming in. I think that is very important for us to do everything, our utmost to hinder that. We have, of course, very ambitious savings programs going on where you, together with manufacturers or our suppliers, do it in a different way, where you say, "Well, if we promise you a certain volume over a number of years, you also have to come down in price." We also allow you to modify the design, not only a brutal price cutting, but also designing the products in a different way for us to benefit the ready-made product at a lower cost. So that is going on parallel with guarding off with the price increases that everyone wants to have now. I think we have a fairly good defense mechanism short term, but we also have a longer-term defense mechanism where we really work together with our suppliers to lower the cost in a more constructive, civilized way, if I may call it. I hope I answered. Okay, thank you. Yeah. The next question comes from Anders Åkerblom from Nordea Markets. Please go ahead. Yeah. Hello. Thanks for the presentation and for taking my question. I wanted to follow up again on Climate. You've been through sort of the automation, sort of operating leverage uplift, but I was wondering a bit on sort of the pricing side. How do you see, I guess, pricing potential in the current environment? You raised price quite a bit a while back, but how do you see that potential developing? I think that, as inflation has come down, as interest rates have come down, it's not that much of a maneuvering room for price increases. There might be room for smaller ones, but they can't be compared at all to the price increase we had just some 36 months ago, even 30 months ago. That's come to a totally different scenario. And of course, that is balanced out with a better volume. I think they are communicating vessels. You cannot continue to increase prices when inflation is fairly low, at least here in Europe. And of course, it's not so positive to hear from one point of view that the interest rate's going to go up, but also an indication that the market is coming back, and which we feel. I don't know whether I answered your question fully, but that's how we reason. No, you did. Difficult to import any larger price increases. Yeah, suppliers. Okay? Yeah. No, that makes sense. Thank you. I guess the second question that sort of piggybacks a bit on that, from a competitive point of view, would you say that is impacting your outlook on pricing to any extent? I guess a sort of question in that, how do you see the competitive landscape, mainly from a volume perspective and capacity additions in the market now that market growth has been good, a lot of projects that have been sort of potentially not really been ramped up. How do you see that developing going forward? Well, typically in the past, we were not so well geared up when it comes to taking on all the volumes. We believe that for once we have done our investments, it is never ready, you know that, but the major chunk is done. We are ready to expand. Of course, we have to get labor accordingly and when we see the order intake coming, so that is very important. As far as the landscape of competitors, they have always been there, and I think everyone is really clinging on to the market shares they have. I do not think that anyone is going to give up, neither will we give up. So, it is a fight out there, but I think that the pleasing part is when market is developing in a positive direction, I think it is becoming lesser of a dog fight. We look at it as a fairly decent situation, but always tough competition. That is nothing new. Right. Makes sense. Thank you very much for taking my questions. Thanks. Welcome. The next question comes from Uma Samlin from Bank of America. Please go ahead. Hi. Good morning, Hans and Gerteric Lindquist. Thank you very much for taking my question. Two for me, please. The first one is on air-to-air. I think in the last quarterly result, you announced that you are going into the air-to-air segment. Would you be able to give us a bit more update on what are the opportunities there, what are the timeline of the product launches, and what would be the expectation, in terms of margins for that product in Europe? Mm-hmm. I will try to be as expedient as possible there, Uma. When it comes to air-to-air, a number of our companies that we have acquired have had agencies for air-to-air machines. But they have been limited to their respective countries, Italy, Norway, just to mention a few of them. And we have not been able to capture or broaden that because there have been other countries that have had in that agency. Now we decided to work with another company to broaden our sort, under the Nibe umbrella, the products that are produced here in Markaryd. Because there we have exhaust air, we have air-to-water, and we have ground source. And we do not have the supplement of air-to-air. So that is why we introduced that one. It is not a new subject in our group, but it is new under the Nibe brand name. Was that clarifying? Yeah. That is super helpful. And what kind of margin expectation do you have for the air-to-air product, if I may ask? Well, I think that, we are entering that segment with two price categories, you can say. One very premium one and one a little bit lower priced. So that should not be derogatory to the overall margin, of course. There we do not carry any investments or anything like that. We, of course, have to carry inventory. So, that should be a supplement to what we already have, not being a burden. And of course, coming from a relatively low volume, they are going to take some time before we are up and running. But we see from the companies where we have it elsewhere, there has not been a burden on the profit and loss. And that is the experience. And Hans would like to add something there. No. Maybe I haven't forgotten it. I think Uma also asked the question on the timing in this respect. Yeah, the timing. Yeah. Yeah. Of course, they are on the way to the market now. So of course, they're going to take, before we really can say, "Well, it was a success," or, "We need another year." I think we need a year. We need a definitely, we need another summer season. So perhaps at this time next year, we can give you a more adequate, clear answer of the timing. If we have been successful, have we kept the timelines we have given ourselves? I apologize for not getting that. Thank you, Hans. No, no. But what I mean, they were introduced on the Nordbygg Fair this spring. Late spring, and they will, as Gerteric said, they are on their way to the market as we speak. They are being launched now during the fall here or will reach customers during the fall. Yeah. That is super exciting. Is that both cooling and heating, for that product? It, wait, what? Is it both cooling and heating? Yeah. That's the traditional one. Yeah, absolutely. Yeah. That's super helpful. My second question is actually just on the longer term. I guess it's a follow-up on the previous questions regarding the margin on NIBE Climate Solutions. I guess if you look back between 2017- 2020, your NIBE Climate Solutions margins is around 14%, give or take. I guess, after the roller coaster of between 2021- 2024, I would say that as you have now higher efficiencies, you've done several rounds of cost-cutting. So what do you see in the medium term as the sustainable margin profile for NIBE Climate Solutions? Do you see that to be higher than the previous levels you have before 2020? I think that it's premature to give you that guidance, Uma. We believe that we give guidance in our report that we are fairly certain we can fulfill. Until now, I think we have to live with the 13%- 15%. But of course, there's nothing saying that we wouldn't like to come higher. But I think that we have to give you that guidance continuously right now anyway, that 13%- 15%. But it looks promising to fulfill that this year. I hope you see that in our report. But to come out and say now we're going to go for 16%- 17%, it's premature. Yeah. That is super helpful. Thank you very much. Thank you. The next question comes from Carl Deijenberg from DNB Carnegie. Please go ahead. Thank you very much. Thank you for the opportunity. My first question is regarding the semi-exposure in the Element business. I think in the past we have said that is been accounting for roughly 10%-15% of the division. So first question, does that assumption roughly hold? And then, second question related on the same topic as well, if you could share anything with regards to the growth in this specific segment here in Q2 given the quite significant step up we see here sequentially relative to Q1. Thank you. Okay. Let's see. The 10%-15%, I think it is rather on the upper side there, of course, anymore. That is as clear guidance we can give you. When it comes to the growth, particularly Q2, I think that has been in the system for a while, that they have been hinting us that you better gear up and that is very promising to us. Of course, they do not release everything to us, but they are fairly good when it comes to giving us indications of what they foresee, what they see in their system. They are giants, of course. When you talk about those companies, I guess it is no secret if you talk about Applied Materials and Lam Research, we are a little midget compared to those. It is very interesting to work with them, and we feel that we have a very good relationship. We also feel that we have a solid position among them, which means that when they grow, we are going to grow. We also launched new products during the spring here now, which is also helping the improvement. New, very delicate components to their machinery that have been developed together with our customers. I hope that gives you a little bit of an answer to your question. Yeah, absolutely. I was maybe also looking for if you wanted to share the growth number in your Element or semi-exposed business in the Element side, but maybe you want to keep that number for yourself. Okay. Well, perhaps I'm a little more discreet there. Okay. Sounds good. Secondly, I just wanted to ask also very briefly on your U.S. heat pump business. We talked about this in the beginning of the year. I think you were sort of anticipating quite a drop here given the removal of the tax breaks, and now we see that your U.S., at least measured on the net sales, is still holding up fairly well. So, maybe now in hindsight, would you say that the market is still doing a little better than what you anticipated? Also here would, of course, be very interested to hear anything if you've given the numbers of what the decline has actually been on the U.S. heat pump side as well for you. Yeah. Well, it is actually better than we anticipated. There were predictions of some dramatic drops in market going down with 50% or things like that. It's not that dramatic, but it's still a hefty cut. I shouldn't perhaps be so precise, but it's much less than the predicted 40 or 50 that the people indicated. So that's an indication we hope that the knowledge among customers of private individual homeowners, it's a higher level of understanding what they can achieve by installing a heat pump given that the tax subsidies are gone. Of course, it's also noted that the oil and gas prices are higher in North America. I personally visit Canada last summer here now, and that's one of the things that everyone talks about, the petrol prices, as we say in Europe, or the gas, when it comes to diesel or petrol. Also on the oil side, everyone talks about that. I think that has also, sadly enough, driven people to realize, how should I really climatize my home? I think those are the main explanations, that we've been in the market. The heat pumps is not a novelty anymore. It's something that's there. Of course, on the commercial side, the construction industry is so well-acquainted with the heat pumps, so I think that rubs off. Mm-hmm. Okay. Perhaps I was a little bit Thank you very much. Hesitant there. Yeah. No, absolutely. That is totally fine. Thank you very much. Thank you. The next question comes from Michele Baldelli from BNP Paribas Exane. Please go ahead. Hi, good morning to everybody for taking my question. I have got a question about your dealers/distributors inventory level. Do you see them as having reduced the inventory level in the last two, three months with the Iran war that may, let us say, come back from one day to the other, and therefore probably they did not, let us say, continue to demand at the same pace of the current demand trend? This is the first question. You prefer that I do the second, or you answer to this? Well, we can take the first one right off, where our inventories or the wholesalers' inventories are monitored due to the oil prices. Is that the question, really? No, the question is more if you feel that they have just used their inventory level to satisfy this spike of the demand in the last two, three months, or Oh, okay. or not. Well, that's always the question. That was one of the main reasons why everything went so chaotic three or four years ago. We just hope that, and I think I mentioned that initially here, we really hope that the industry now is more sensible. Not overstocking of any kind, but rather realizing that heat pumps, they're going to be there, and we have to fulfill, naturally, the demand, but you can't swing up and down depending on oil price. I think that the overall fear among customers is there that oil and gas will not be reliable in the foreseeable future, and therefore, they're swinging over to other alternatives. That's our view of this. And of course, there could be wholesalers that have been ordering a little bit too much. That is not to our knowledge, but we don't have the total insight into what they do, and I don't like to criticize anyone, but what that part of our industry did in 2022 and 2023 was not very good for the overall industry. That whiplash, whatever you call it, that was terrible for all of us. We just hope, and when we talk to our immediate wholesalers, we try to convey the message: be sensible, be realistic, don't overstock. We know what's going to happen. We are one out of many preachers out there. We are aware of the question and the danger in your question, and we try to do our chunk to prevent that. I don't think I can answer the question more than that. Yeah, sure. No, thank you very much. The second one was just a clarification. When you said that H2 trends should be at least the same level or even better than the first part, you refer to the organic growth year on year for your business, or it was just about seasonality, so basically, a normal seasonal trend? Yeah. Ordinary seasonality, yeah. Okay, perfect. Thank you very much. Mm-hmm. Well, Anders, you are there with another question. Should we allow you one more question before we close because you are so polite? The next question comes from Anders Roslund from Pareto Securities. Please go ahead. Okay. I had just one question, and that is regarding the sales development in NIBE Climate Solutions. You had 11% up in the Nordics, 5% in Europe, and 6% in the U.S. My question is that this tendency of having a stronger second half, and particularly fourth quarter, is that true also for Europe? Because they have now, for a couple of years, had the strongest quarter in the second quarter. Yeah. This seasonality with Europe as well. I think that we should perhaps divide it a little bit better. What you see in the second quarter, and I think I touched upon that during a previous question, that during the second quarter, the air conditioning segment is really strong, and I think that is what you see there. Okay. I was referring more to the heating, which is our home turf since many years back. Okay. For the heat pumps, we will see the seasonal tick-up, at least. Yeah. Okay. Definitely. That was all questions for me. Thanks very much. Thank you. Without being impolite, we have to close the session for today. I apologize for my voice, but interesting questions, and very pleasing to present the report to you, like the caliber of what we had today, and we hope to continue with that. Thank you very much for calling in. If there are remaining questions, we realize there are a few more on the line here, feel free to reach out to myself or to our new Investor Relations Officer, Frida Lannerheim, and we will try to answer the remaining ones. Thank you from my side as well. Thank you.