Welcome to the Nederman Holding Q4 presentation for 2022. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to CEO Sven Kristensson and CFO Matthew Cusick. Please go ahead. Good morning, everybody, welcome to this presentation and later on the Q&A session for Nederman Group Q4 2022. 2022 has been an eventful year, interesting year, what we can conclude is that we had a very stable end to the year. We can happily report that we had a record year when it comes to sales and profit for Nederman Group and also in three out of our four divisions also in Q4, reported a strong order intake and growing order intake. We continue to lever on a record high order backlog, we also saw that last quarter, we had record high quarterly sales levels. Q4 2022 was the second highest quarterly EBITA level ever, it's reasonably good. The margin was lower than Q3, and that has to do with inflationary pressure and some quarter operational challenges. It was more to do with some bad debts that we from the Chinese. It has to do with especially MCT having grown problems getting the right component. We are running out of stock, but we have managed to supply to our customers, but at the cost of higher cost of both component and more labor. We acquired the small MBE AG, and it's a distributor to the MCT division, and they are based in Switzerland, so that will further strengthen our position on the Swiss market. There are, as it's been all year, continued uncertainty. The order intake growth has slowed down a little bit, especially we've seen in Q4, but that also has to do with the comparison with Process Technology in the textile and fiber side of it that has been slightly slower, where Q4 2021 was extremely high. There is a clear cost inflation which we have to handle, and the geopolitical concerns continue and again, specifically the Chinese situation cause challenges even though they are now claiming that they are opening up the economy and some of the restrictions. When it comes to dividend, the board of directors have proposed a dividend of SEK 3.75 per share compared to the SEK 3.50 that was for last year. Over to key financials and to Matthew. If we start with orders received, Sven already mentioned we have organic order intake growth in three of the four divisions. The fourth division where it didn't grow being Process Technology, like you mentioned, where there was extremely tough comparative figures from the year before that were not realistically going to be exceeded this time round due to the bounce back in the textile business that we were seeing in the back end of 2021. Incoming orders were SEK 1.396 billion in the fourth quarter, slightly ahead of last year, but currency neutral 7% down versus the Q4 2021. Like I say, positive in three of four divisions. For the full year, we reached SEK 5.425 billion, up from SEK 4.623 billion in 2021. Currency neutral, that's a 9% growth there. What you can see there on the charts on slide four in the presentation is if we start on the one in the middle maybe, that the rate of growth has slowed down somewhat. The rolling four quarters order intake growth is a little bit slower than it was at the start of the year. It's still growing, however. What to say on the bridge for the quarter, we had lower organic growth all from the Process Technology division. We're not overly concerned with that one. We're going into the year with a rather good backlog into the 2023 year with a rather good backlog. If we look at the full year, you can see the organic growth for the full year was 5% currency accounted for 8%, and then acquisition that largely RoboVent, but also Ezi-Duct and MBE. They gave us 4% as well. Moving on to the sales. A record order for sales, Sven has already mentioned that. Organic growth in sales in three of four divisions as well. SEK 1.515 billion in sales in the quarter versus SEK 1.152 billion in Q4 2021. Currency neutral, 20% up versus Q4 of 2021, which we're very happy with. If you take the full year, again, a record year, SEK 5.179 billion versus SEK 4.042 billion is 19% for the full year. What we can see is that we've been delivering on this backlog that we've been mentioning for some time. We see organic growth and acquisition growth in the quarter, and a strong organic growth for the full year of 14%, and the acquisitions have given us another 5% there. Moving on to profitability. EBITDA, SEK 161 million versus SEK 144 million in 2021 for the Q4. The margin, Sven mentioned some challenges there. 10.6% versus 12.5% for Q4 last year gave us profit after tax of SEK 91 million versus SEK 84 million. Earnings per share in the quarter, SEK 2.59 versus SEK 2.41 last year. Adjusted EBITDA full year, the record profit year for Nederman, quite a significant increase. SEK 567 million versus SEK 495 million in the prior year. The margin for the full year, 10.9%- 12.2% last year was our record year in margin terms. There's been obviously some significant mix change when it comes to our margin. It must be pointed out with Process Technology having a much larger share of the overall revenue for Nederman Group in 2022 than they had in 2021. Profit after tax, SEK 329 million versus SEK 279 million for the full year last year. That comparative figure excludes this Norwegian pension scheme where we, for accounting purposes, got a credit of SEK 29 million onto the income statement just through canceling a pension scheme, which we don't think is fair to take the credit for. Earnings per share is 9.37 for the full year 2022, 7.95 in 2021, excluding the Norwegian pension. Including the Norwegian pension adjustment, we were at 8.7 last year. Still a significant increase there. We can see on the chart at the bottom of slide six that our adjusted EBITDA is still heading upwards. The trend up is quite clear still. Cash flow net debt. Cash flow was continued to be positive, less so than Q4 of 2021. We had a cash flow from operations in quarter four 2022 of SEK 88 million. It was SEK 159 million in 2021. January to December, SEK 346 million in 2022 versus SEK 520 million in 2021. It must be remembered that 2021 was this bounce back year for Process Technology, where significant orders were received and down payments on those orders were booked. We were basically coming from a very low backlog position relative for that division that has then boosted 2021 figures. From the operation on the cash flow for the full year, we're quite comfortable with. This is somewhere near where we ought to be. Net debt has increased in 2022, the biggest single factor for that being the acquisition of RoboVent in late July for SEK 430 million. At the end of the year, net debt was SEK 1.477 billion, including the IFRS 16 leasing adjustment and post-employment benefits scheme. We move on back into the divisions, and I'll hand back over to you, Sven, we'll start with Extraction & Filtration Technology. Yeah. Extraction & Filtration Technology, just to repeat a little bit, they are trading under the brand name Nederman mostly. Key areas is welding, composite, manufacturing, wood manufacturing, and also some general dust, etc. Very wide range. Development during the quarter, we had at least three major orders, we have a very, very strong backlog. The major orders was for food, both in U.S. and Brazil, then for the newly acquired RoboVent to electric vehicle industry. We have also actively tried to go after new industries or industries that we anticipate long-term growth. The factor here is very much recycling. You see paper, battery, plastic, etc., and also electric vehicles and defense. We continue to grow into these industries, as sometimes is tougher for the traditional ones. The sales increase in all regions and in all sales channels. Uh, the strongest, uh, regional trend was in Americas, and of course also we added RoboVent, which made us the absolutely number one in welding also on the American, uh, continent, uh, where we had already a position in Europe as number one.In EMEA, uh, most markets, uh, increased. APAC had good growth in some regions, but, uh, again, some negative impact by the COVID-19 situation in China, where we still have had restriction. You have not been able to travel even domestically, et cetera. So the situation in China has been a bit troublesome, whereas we have had good growth in Australia, et cetera, et cetera. The key activities, uh, has been, of course, launch the Nederman SAVE solution, that software package and service that enable their energy savings. That's in line with what a lot of people are discussing and seeing issues with, and that is energy consumption. Here we have a solution with that will help customers with their with a simple system, not the system as such, but simple to apply, and it will give significant possibility to give significant energy cost saving. We have also introduced the division's online store to a number of APAC partners, and then the continuous work with integration of RoboVent. Nederman is doing well together with the new people from RoboVent, and we see good progress in that. Again, we have an absolute leading position in both U.S. and Europe. If I talk numbers for the Extraction & Filtration Technology division, order intake for quarter four hit SEK 591 million, up from SEK 411 million in 2021 Q4. That's currency neutral growth of 34%, organic growth of 11% as well. Sales SEK 637 million versus SEK 482 million, 24% currency neutral and 5% growth in sales organically. Adjusted EBITDA 14.5% margin versus 17% in quarter four in 2021. Looking at the full year, the division hit SEK 2.238 billion versus SEK 1.78 billion in 2021. Organic growth 10.4% on orders there and currency neutral near almost 19%. Sales SEK 2.165 billion versus SEK 1.763 billion in 2021. Not quite as much growth. We built a little bit of backlog there. This is an indicator of the outlook for the coming period maybe. Adjusted EBITDA 16.5% for the full year versus 17.5% for 2021. Moving on to Process Technology, Sven. Yeah, Process Technology, large projects mainly focusing on textile fiber nonwoven under the brand name Luwa, where we are definitely number one globally. We have also strong positions in recycling when it comes to metal, steel, aluminum and other areas, and we are also into the energy sector, et cetera, et cetera. For the quarter, good sales following a very strong order and we have now delivered most of what we got in 2021 Q4, which was an absolute record year. We also have continued to book orders, so we have a record backlog going into 2023. The service business continued to grow significantly, and that has been a task for us over a long period. We are pleased with that. There are still some concern about the uncertainty and what is happening, et cetera. I will bore you here by saying China again, we have had difficulties to get in and out in our Chinese supply chains. Going back to textile and fibers, sales were strong, a bit of a slowdown in orders. China continues to pose the greatest challenge here. Customers have been increasing investments in other markets, that includes India, which goes very well for us. It's very well performing in this area with our large factory in Bangalore. The raw material prices have gone up, there's been a weaker macroeconomic trend, that could lead to reduced textile investment in the short term. We will see. In foundry and smelters, we have seen increased demand and positive trend in especially aluminum. Aluminum is a material, and here we see continuous opportunities. A very large portion of aluminum used in Europe is recycled, whereas 30%-40% in Americas and 8%-10% in China. There is room for improvement, and we have very good systems if that comes into play. There have been several major project registers in this segment, and spending in the defense industry could further increase the need for foundry investments. Customized solutions, two major orders for metal cycling and in the energy sector was booked and quotation pipeline is very strong still. The key activities, of course, is the working capital position remains strong. Healthy orders proceed with the resulting in new down payments. We have adjusted the price to defend margins against rising material and energy prices and also general inflation, where we see also here, inflationary pressure. If I talk financials for Process Technology for a few minutes. On the slide, there's the chart at the top right of slide 10 shows the order sales and backlog for the division over a number of quarters. We can still see that this with the backlog is the highest ever year-end backlog we've had going into a new year. It's slightly below the peak of the middle of 2022. If we look at orders received, SEK 437 million in Q4 versus SEK 646 million in Q4 2021. It's a 40% drop currency neutral or organically. What I must point out is SEK 437 million is 24% of the full year 2022's order intake of SEK 1.825 billion. It's below quarter four in 2021, but in line with the rest of 2022. It's not a drastic reduction we're seeing in this division right now, at least. Sales, clearly up SEK 515 million versus SEK 398 million in 2021 is 19% currency neutral increase. Perhaps most pleasing of all, EBITDA SEK 39 million Swedish krona versus SEK 23 million in quarter four 2021 is a 7.5% margin versus 5.8% last in 2021. That's despite these challenges and a partial... A part of, large chunk of the bad debt write-off in China came in this division. For the full year, sales SEK 1.72 billion versus SEK 1.29 billion. A clear increase there, 23% up versus currency neutral versus 2021. They didn't quite make it to SEK 100 million in EBITDA, SEK 99.9 million versus SEK 50.9 million last year is obviously a significant increase. They ended with 5.8% adjusted EBITDA margin for the full year versus 3.9% in 2021. Moving on to Monitoring & Control Technology on slide 11, Sven. Yeah. Monitoring & Control Technology, that's where we sell control and monitoring systems for the industry. We have well-known leading brands like like Gasmet and NEO Monitors, AFS in Boston, and also selling our digital solutions under the name Nederman Insight, MikroPul-Assist, et cetera. The development in the quarters, orders received increased, and especially to the process industry relative to industrial activity. The backlog heading into 2023 is at a record level, and that is a clear base of continued safe growth during the coming quarters. China is a concern. Demand to allow only domestically produced product when it comes to state-owned companies and state institution. That has caused a problem, especially for the Gasmet side of it. NEO Monitors and AFS have continued to have a better development since they are focusing industrial activities, process industry in that. Their reduced turnover not yet fully compensated for elsewhere because it was large. We have had very good business in that region. We haven't been able to fully compensate them, even if we have seen growth in other areas. Again, challenging remaining component supply, and that has had a significant negative impact on production capacity and profitability. We have had to spend lots of extra time, pay a lot of extra to get the specific components needed, et cetera. We believe that it will ease in the coming quarters, but it's still a challenge. In AI, we had growth both in orders received and in sales. It was primarily driven by NEO Monitors' laser measurement technology that comes from our factories and our base in Oslo. Gasmet saw some delayed emission monitoring projects and overall slowdown. Although parts of it, like UK, performed very well, we have other areas and again, good growth. APAC orders and sales declined in total. That was Gasmet, very negatively impacted by the situation in China. NEO Monitors had a much more positive trend driven by petrochemical industry, where we've seen that we going direct to the end user to get a better position and success. In America, sales and orders grew significantly versus Q4 a year, 2021. NEO Monitors had strong growth driven by the investment to improve efficiency and to reduce dependence on imported energy. Auburn FilterSense sales in particularly particle monitoring increased very well. We've seen areas besides our significant problems in China, there are very positive signs in many areas. The acquisition of MBE AG will give us a position on the Swiss market and will the, be the base for further growth on, in the Swiss market. If I take financials for Monitoring & Control Technology division, order intake in the quarter was a very strong SEK 203 million versus SEK 166 million in 2021. That's currency neutral growth of 10.4%, organic 6.1% despite the Chinese challenges. Total sales SEK 177 million versus SEK 156 million in quarter four last year. The increase not as much, like Sven Kristensson has said, perhaps we would have preferred lower backlog and some more sales in the fourth quarter, we're working on that. Organic growth 1.2% on sales. Adjusted EBITDA SEK 34 million versus SEK 41 million in 2021 quarter four. That's a margin of 19% versus the extremely high 26.5% that we saw in Q4 of 2021. 19%, it must be pointed out, still clearly above the average for the first three quarters of 2022. Full year now for the division SEK 657 million in order intake versus SEK 562 million last in 2021. Currency neutral growth 7.2% and organic 4.7%. 3%, currency neutral growth in sales, 2.3% organically, and the adjusted EBITDA full year 15.9% was SEK 97 million versus SEK 121 million and 22.5% in 2021. On to Duct & Filter Technology, Sven. Yeah. Duct & Filter Technology for Q4, we have in the quarter growth in sales and orders compared to 2021. The increase primarily from strong performance in Europe, and we have a positive effect by higher sales volumes. The negative impact comes from some of the ducting production issues in the United States in the quarter. We have in Nordfab, that's ducting and suppression system, continued very healthy order growth. We have clear variation between regions. U.S. orders received decreased a little bit versus Q3 2022, but strong growth for the whole year. We have significant orders from battery production factories that are being built around the U.S. at the moment. We have good growth in Europe, and our new 2 m ducting performing well, including major orders to U.K., where we are further strengthening our position. We also have seen good growth in Australia, especially, and in Thailand, it declined a little bit during the last quarter. Menardi, which is a filter element, we have seen a bit of a slowdown in orders received, and the backlog is still good, and we have a continued healthy sale. The quotation pipeline remains very strong. The key activities, of course, we are building a new expanded Nordfab factory and warehouse, and that is scheduled to open April, around Easter time. There will be 9,000 square meters of solar panels to generate at least 50% of the energy needs for that factory. It's one of the largest industrial park solar panel installations in Carolinas. It's interesting for us in our continuous work. We have also continued to work and renew and upgrade older manufacturing equipment, both in Europe and U.S. That is also to take away some bottlenecks and further increase our efficiency in the different factories. Financials for Duct & Filter Technology, orders in quarter four were SEK 165 million versus SEK 128 million in quarter four, 2021. Currency neutral 8.3% up, organically only 1.6%. Sales, however, were very strong, SEK 212 million krona versus SEK 138 million in 2021 quarter four. We had an EBITDA that was SEK 10 million higher, Swedish krona higher at SEK 34 million versus SEK 24 million in 2021 quarter four. Margin slightly down at 16.1% versus 17.7%. The margin exactly in line with the average for the full year 2022, it must be pointed out. Order intake for the full year over SEK 700 million for the full year for the first time in this division's history, SEK 704 million versus SEK 495 million last year. Good currency neutral growth almost 25% and organic growth at almost 17%. Sales up 28%, currency neutral 22% organically. EBITDA, a clear inter-increase of over SEK 23 million. What, SEK 127 million for the full year is 16.1% like I mentioned, versus SEK 104 million in the full year 2021. Onto the outlooks, Sven. Yep. Again, it's an interesting period in the world, so the outlook here is of course, very difficult. As on the short term, we have seen the demand and the orders received in Q4 were generally good. We have seen that the decline mainly came from PT, but that was mainly due to an extreme situation in 2021. The rate of growth has slowed a bit from first half of 2022, probably because of awareness of inflationary pressure, hiking interest rates, still the macroeconomic are so and worried. We've seen a little bit of a slow in the growth. The backlog heading into 2023 is solid. It's actually record high, so that bodes well for the short term. There are challenges, including what mentioned before, inflationary pressure, economic geopolitical uncertainty, and that might impact customers' investment decision. Time will tell. Still, with addressing solutions for new growing industries like battery factories, recycling, whether it's paper, plastic, or metals and so on, we are very well positioned for the future. We remain cautiously optimistic toward the coming quarters. Long term, we see the potential continues to strengthen. We see, in a world which insight into the damage that poor air does to people is increasing. Nederman, with leading industrial air filtration offering, has a key role to play. Technical advances centering around digitalization have led to completely new possibility to streamline and optimize the air filtration process. All together with political insight and willingness to set stricter limits and legislation, there is a basis for a viable future manufacturing industry that contribute to sustainable air quality around the world. Again, also the move into sort of the reshoring to U.S., Europe also leads to new factories, and they will be modernized, and they will use latest technology. Again, cautiously optimistic going forward. The final slide we show is the financial calendar. The annual report for 2022, it should say note there, will be released on the 17th of March and the presentation for the quarter one report will be on the 24th of April 2023. I think we can open up for any questions that listeners have. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Anna Widström from Handelsbanken. Please go ahead. Hello, Sven. Hello, Matthew. Hope you both are well. A few questions from my side. Firstly, if we go into some details on the cash flow. I mean, of course you have very sort of high comparison numbers from Q4 2021, but usually we do see a better development on working capital in the quarter. I mean, usually seasonally we see a working capital release. Could you maybe give us some details on this quarter and how we should perceive it? What we've seen is, what the tradition. You're right on about the tradition of this Q4 has traditionally been this huge quarter for large projects where companies are spending their budgets, and with large project orders being booked becomes large, very large down payments. Like I said, last year or 2021 was extreme in that respect. We've seen a much steadier flow of orders in Process Technology division. This is where the main one, the main division that is impacted by this. Much steadier flow through 2022. That, that is the, that is the thing that we've seen there or the reason for the lack of a major uptick in Q4. The other thing you can say about cash flow, and this is effective throughout the year, is we have been impacted. We're not stocking up more inventory in terms of volume of inventory, but with inflationary pressure, the cost of inventory has gone up, and that impacts negatively. Those are the two main factors impacting cash flow. We've not seen. Overall, we've not seen a large impact on from receivables from overdue receivables on the cash flow, with the exception of these one-offs we've seen in China related to bad debts. We've not seen a general trend change. We're having to work a little bit harder maybe to collect our money, but we've not got a major problem yet in the terms of accounts receivables days increasing. Okay, that's very clear. Thank you. If we maybe go into the Process Technology a bit, I mean, you did touch upon it a bit then. Should we kind of view the current happening as a pause in investments, and we should expect it to pick up in a year or two? Or should we view it as a one-time boom from these textile companies? It was a bit that everything came. It's like the ketchup effect when you've been working, and everybody has been waiting. You saw 2021 was not that great until we hit Q4, where everything, they should do everything, it should be signed before year-end. That was exceptional. We had a very good, if you look at the ordering taking Q4, despite the fact it was 40% down compared to 2021, it was a very good year, and we have a record backlog. When it comes to textile, and fiber, it has a tendency to be a bit volatile. Then there has been these transport issues, inflationary issues, and then there's been a slightly slowdown in the investment trend in textile at the moment. We do not see it as dramatic. There is a lot of new but activities in these recycle. We come back to, again, recycling. We're focused a lot in recycling industry, and also here we are involved in a number of projects for recycling textiles, et cetera. I think that part of the effect we've seen is that's a wait and see. Should we continue on traditional only? Should we find other technologies? There's still a good demand in that industry, and we definitely have the leading position. I'm not worried that, but there's certain volatility. What has been positive is that we've been able to go into, which has been a part of our project when we acquired Luwa to grow the nonwoven side, which is everything from feminine care to technical fibers to baby diapers or adult diapers, et cetera. Here we have had a significant change in and success and grown that, so that has balanced quite a lot. We see using our footprint when it comes to sales and service, we can further grow that, especially in these areas in Asia, India, et cetera. I don't, I'm not overly negative, but there are sort of a bit wait and see mode at the moment. We'll see in June when the sort of the big textile exhibition in Milan, it comes every fourth year. We'll see then what mood they are in, the potential customers and buyers. Okay, perfect. Thank you so much. If we go into a bit on price and volume, do you have any sort of aggregate on group level? Or is it better to look on each division maybe to see sort of what price increases you've done in the last 12 months, just to give us some sense on price level versus volumes? For the group as a whole is extremely difficult. I think with the amount of Process Technology, I don't think it's dangerous to even talk volume because they're projects rather than the number of filters. Yeah. What can we say? The largest price increases if we take the division that's impacted most by price is Duct & Filter Technology, where there's a clear connection to steel price. They're the largest part of their price increases happened towards the end of 2021 and into the early part of 2022. We have increased prices throughout this 2022, but it's not quite the rate that we saw earlier on. Of their growth, it's a little bit difficult to say, but it's 25% I think they had growth or 24% growth. I think you would probably, I think roughly, half, below half. 9% was price, and the rest was what? 9%-10% price and the rest, what? Rest volume in Process Technology. Sorry, in Duct & Filter Technology. Extraction and Filtration Technology That one I don't have an accurate figure for you, so I don't want to guess. Okay, that's fine. Thank you. That's very helpful. Maybe my last question, going into the situation in China. I mean, we do read a lot about some, opening up and everything, but you haven't started to see any improvements yet in your operations? I think it's far too early because the opening up is. There's still they are trying to book meetings, they are trying to do. It's still very early, and it's still difficult. it has taken its toll on the economy, this lockdown. we also have Chinese New Year, and this is the first time since 2019 that they are allowed to travel to meet their relatives. you can imagine that the whole country, the industry stands still. what is normally one week, we see that people want to be away for three weeks, et cetera. let's come back to what's really happening in, when we come into March and see if we have a positive effect. I think we will have that. Again, from our horizon, China is still a troublesome market when it comes to the financial situation. It's taken its toll in the industry over these severe lockdowns and activities they've had for the last two years. Almost three years. We'll see. Time will tell, it's probably going to be a bit better in Q2 at least. Okay, perfect. Thank you so much for asking all my questions. That's all for me. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, I hand the conference back to the speakers for any closing comments. Yeah. Thank you very much for taking time listening to us. Again, summarizing the report, we are very proud of being able in this challenging environment to deliver record profit and record sales for 2022. It's not been without challenges and there are challenges also forward. As mentioned, we remain cautiously optimistic based on good order intake and a very strong backlog for the coming few quarters. Thank you very much, we'll be in touch again after the first quarter, and maybe we can straighten out some of your question marks then. Thank you very much. This concludes the call. You may disconnect.