Due to the delay, ladies and gentlemen, there was a technical issue on our side, but the call will now begin. Welcome to the Nobia second quarter report 2022. To ask a question during the Q&A, press zero one. During the call, you'll be in listen-only mode, so there's no need to mute your own individual lines. Today, I am pleased to present Tobias Norrby, Head of IR. Please go ahead with your meeting. Thank you. Thank you everyone for calling in to this presentation of Nobia's second quarter result. Once again, our apologies for the delay today. We will do it the way we usually do it, so meaning starting with an overview by our President and CEO, Mr. Jon Sintorn. Then Mr. Kristoffer Ljungfelt, our CFO, will dig into all of the financial details. With that introduction, please, Jon, go ahead. Thank you, Tobias. Welcome everybody. As said, I will start with some general highlights for the business in the quarter and an update on some of our strategic initiatives, and then Christopher will run through some more details in the regions. The second quarter, a challenging quarter on the back of world turmoil, direct material inflation, and supply chain constraints, but the markets we operate in are good. Sales and price increases are coming through, and we have great momentum in our strategic structural initiatives as well as the previously announced cost program. The market was holding up well in the quarter. Footfall was softer in April but came back strongly towards May and June. We see more physical than digital activity for the moment, which is a big shift from how it looked the same period of last year. The project market continues to be strong after the strong housing starts the last few years. Judging from our order book, our deliveries for the project market should remain strong throughout the year, also backed by the fact that kitchens are among the last things you install in the building. We have a strong order book. Our net sales for the quarter was SEK 3.8 billion, and that was an organic growth of 3%. With continued good sales momentum in the Nordics, a strong order intake at winter sales campaign in the UK, and market price increases that gave that organic growth. Volume growth was flat in the Nordics, but the lack of volume growth is purely a result of capacity constraints and general supply chain and material problems in foremost our Swedish factory in Tidaholm, but also to some extent in the Danish factory. We have taken on temporary additional cost to manage the external supply chain constraints. We see some costs remain in the third quarter, but it will taper off for the fourth quarter as most of it is related to temporary effects and not run rate cost. Again, the strategic decision and direction for the Jönköping factory to cater for more capacity will make a big difference going forward. Our gross profit was 36.3%. The direct material headwind in the quarter was a considerable SEK 270 million. We believe that the direct material have peaked, both in term of price and year-on-year impact on our profitability, although prices are still on a high historical level. Even if we have managed to compensate the majority of the cost through our market pricing, our most recent market price increases have not yet materialized in full. Operating profit of SEK 212 million with a margin of 5.4%. Obviously not satisfactory profit in the quarter. In the UK, however, we're doing gradual improvements towards profitable growth. We started to address top-line growth by better operating model, management, and sales execution, higher average order values, more kitchen designers and sales capacity, and introducing new products such as Nordic Nature, as well as improved brand building and marketing. Even if results to some extent are lagging a little bit, it is good to see the growing sales. As an example, retail sales up 30% in the quarter. Improved margins and cost reduction initiatives. We also remain bullish that our UK business will be able to take share in the coming quarters and the foundation for that is much improved compared to just a few years ago. A lot of work remains to be done, but a lot has been done. The cost program that we announced in conjunction with the last quarter's call has been executed on. The new factory in Jönköping is progressing even ahead, slightly ahead of plan and on budget. We have implemented the first group-wide CRM or digital sales solution for our two largest brands. I'll get back to a little bit more on the new factory and some other strategic initiatives in a little while. Moving on to the kitchen market development. I guess one could say for everybody everywhere, the general uncertainty has increased. In our case, we still see in the Nordic market stable market development in the consumer segments, project segments holding up well on the back of new housing completions. We have been operating on quite more than decent market conditions for quite some time, and in the short term, we see that reasonably well continue. In the UK, market is growing in value, and the trade segment is gaining share in relative other segments in the market. However, the London super premium project market remains very weak, and it has been a struggle, as you know, since quite some time by now. In Austria and the Netherlands, we have stable underlying demand in the markets. Getting on to the direct material impact in the second quarter, again, continued significant inflationary pressure on the direct material. As I said, the total on-cost of material, energy, and transport of about SEK 270 million in the quarter. What we do see now is that material prices are flattening out even though it's still on a high level. We have done repeatedly price increases, and the latest extraordinary price increases will materialize during the second half of this year. An update on our Tomorrow Together strategy. Looking at the right-hand side, I'll give you a few examples, not all examples in every box, but a few examples. Looking at some growth initiatives, we can see that we are increasing our sales capacity, specifically in the UK, regarding itself both for the trade growth that we are pursuing, but also for the consumer retail. Here we have a new Magnet store concept that just very recently has been inaugurated, and that is on Stockton-on-Tees, if you would have the opportunity to drive by and have a great look at this great store. We see the continued trend of paint being very positive. Marbodal, we talked about before, and other Nordic brands, and as well as in the UK, where our paint to order portion of sales have gone from 5% of sales a year ago to 7%, and now rendering a 14% of sales. That's a very positive trend for us. In terms of selective geographical expansion, I'm pleased to announce that we have signed with two franchisees for HTH in Germany, and each taking on a couple of stores, from now and one or two years ahead from now. As I mentioned, the digital and data excellence, which is a good bridge into structured efficiency initiatives, next slide, is that we have the first-ever group-wide digital sales solution, the CRM system, for the two largest brands, HTH and Magnet. For the structural efficiency, another example that we have is shared services center now operational in Vilnius. We have a manager and then some people starting that up. Early days still, but it is now in operations, which is great and something to build on for the future efficiency. Last but not least on this topic and slide is that the new Jönköping factory is ahead of schedule and on budget. About 50% of the factory building is completed, and the first production machinery is being installed. What you see on this picture is actually the first machine. It's a saw. It's 12 meters high, the height of the wall, so up to the ceiling, so to speak. It's quite a significant building, and this is just a small little corner in this building. Project progressing well, both in terms of building the building, but also in terms of designing and ordering and getting the machinery. We will have some component manufacturing to start. We plan to have that start before year end with some real deliveries then, most probably early into next year. It's really, really great to see how this is coming to fruition and how this is materializing, and it is building capabilities, capacity, lead time, and other things which we will have great benefits from this project. With that, I hand over to you, Kristoffer. Thank you, Jon. Let's start with the Nordics. It represents 55% of total sales. In general, average order values were up in the quarter, and the product market remained solid with reasonable stable housing conditions across all countries. Consumer sales was slightly down following tough comparables in some countries when COVID restrictions were eased last year. If you look by country, sales in Denmark was strong with double-digit growth in product sales, driven by both value and volume. Consumer sales held up reasonably well given the extremely strong retail sales comparables, which last year grew by 100% in the quarter. The Danish market now represents 46% of the Nordic business, and we estimate that we continue to take share in this market. Volume in Sweden and Norway declined in the period, with the only reason being the capacity constraints in Tidaholm and difficulties with the material availability. As a result, we have stronger order book when we enter Q3, which is based on then the good sales, but also on back orders from Q2. The cost for manufacturing and dispatch is higher for the moment as we run night and weekend shifts to a much larger extent than we did the same period last year. We estimate this has had a negative impact on the P&L with about SEK 30 million in the quarter. We estimate that additional production costs will continue, as Jon was alluding to, for the next quarter, but then gradually taper off. Finland is representing 12% of sales, was growing single digits backed by good product market. Also in Finland, the product availability was a concern, but it starts to look better already towards the end of the period. Current order book in the Nordics is roughly up to 20% compared to last year, and we see price increases start to come through in the back order in the order book, as well as towards the end of the quarter. However, we strive still to get more capacity through the system and to be able to deliver on the order book and avoid the long lead times that we currently have. Actions are being taken in that direction. Among other, we have started to shift volumes between factories and run overtime and night shift that I was alluding to. These actions are impacting our margin short term, but should improve profitability in the mid to long run. In summary, organic growth of 6%, driven by improved pricing and product sales in foremost Denmark. Gross margin of 35.6%, burdened by increasing direct material prices and the capacity issues, while market price increase contributed positively. EBIT of SEK 248, margin of 11.5%. Now over to the UK, please. Here you can see it represents 35% of total sales. Magnet Retail had a very strong period during winter sales with both volume growth and strong growth of average order values. A large improvement in mix also strengthened the gross margins in the period, hitting 41.2% compared to 38.5% the same period last year, despite considerable headwind on direct material. I just repeat what Jon was saying, that with the sales and gross margins moving in the right direction, we found it necessary to address the cost base. It's been instrumental now to complete the cost out program in the quarter, which is done mainly impacting UK. Project sales continued to improve from very low levels during the pandemic. Judging by the housing starts last year, we believe that the project market will be stable throughout the year also in the UK, while the social housing market is still soft, however. Magnet Trade was flat in the period, mainly due to tough comparables last year, but we continue to improve and invest in our proposition to grow the very important for us trade business, and it rendered slightly additional costs in the quarter. In summary, organic growth of 5% or 10% if we exclude the exit of the Benchmarx business. Growth was driven mainly by price and positive average order values. Gross margin improvement by 2.7% on the back of the higher average order values, and it's negatively impacted by the direct material costs. SG&A increased in the quarter due to recruitment of more sales staff in our stores in line with the strategy, but also on the back of the rate relief we had last year from government-backed rate relief. EBIT of SEK 14 million is obviously not where we want to be, and again, we're taking the corrective actions and namely the cost out activities as well towards the new operating model. Over to the portfolio business unit, which represents 12% of sales. We start with Austria, which represents about a third of the region. They had another very good quarter, both with good growth and solid profitability despite the heavy direct material headwind. In Bribus, representing 43% of sales, we were, however, struggling with both growth and profitability in the quarter. First of all, the entity has been the Nobia brand with the highest direct material headwind and very long order books with the old prices taking down the gross margins. We now, from this point, expect the situation to improve gradually during the second half of the year as we are materializing our extraordinary price increases in the country. In addition, Bribus had an IT security incident in June, where we had to temporarily shut down the computers, and thus were unable to manufacture and deliver kitchens for a period of time. The situation is now fixed, and operations is tracking according to plan again, but top line was impacted in June by SEK 30 million. Despite this, the underlying demand remains solid in the Netherlands, and we do expect Bribus to continue to grow profitably as has been the case before, since the Nobia acquisition. Coming back to the London super premium project, it's been extremely tough with very few completions during the quarter. Unfortunately, we do not foresee this market to come back anytime soon due to the current geopolitical circumstances. All in all, the result in this region was a disappointment from the earlier days. Again, it was mainly due to one-off circumstances for our Bribus business. Moving over to financial position. Our cash flow from operating activities improved in the quarter. The change in working capital contributed positively, mainly due to improved accounts payable, which was impacted both by the higher direct material prices, but also good performance for the extended payment terms through various programs that we are running in the company. The investment in the Jönköping factory amounts to approximately SEK 300 million in the period. In total, we have now invested north of SEK 1 billion in the new factory. As Jon stated, we are on track with the budget despite the large headwind in material cost for the construction industry. Net debt excluding IFRS of about SEK 1 billion with a leverage of 0.9, meaning that we have very solid financials and sufficient headroom for both completing our large investment and dividend going forward. With that, Jon, I'll leave it to you again. Thank you. Summing up a little bit, looking forward. As we can see for this year, continued stable market demand. We will continue to drive price increases and drive towards higher average order values as we have done quite successfully in a lot of our brands, and also continue on our pursuit of adding sales capacity. We will manage and further drive activities in order to mitigate the supply chain constraints that we have had. As we said, we have added cost, temporary cost that will continue for a while, but it's not a run rate cost. It has been a difficult circumstance that we are now working on and step by step improving. We will keep the momentum in the major strategic initiatives, which I am pleased to see or very happy to see that, for example, as you mentioned, the big investment in the factory is running really well. We have the, as Kristoffer mentioned as well and emphasized, the cost out savings of SEK 140 million on an annual basis. We have executed on the program, and we are preparing and have a readiness for more, if we see that the market is going in the wrong direction. Those are some key initiatives going forward. With that, thank you very, everybody very much. I believe it's time for Q&A. Thank you. Operator, open for questions. Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Victor Hansen at Nordea. Please go ahead, your line is open. Thank you. Hi, Jon and Kristoffer, and thank you for taking my questions. I'll start off with. Hello. Hi. If you could please share some details on price versus volume-driven sales growth year on year? Yeah, I can start maybe on- No, please. You can fill in. Again, growth was mainly based on price, for the Nordic region, we had difficulties moving more volume across the system. In UK, the volume decline from Benchmarx exit was compensated by volume increase in Magnet Retail. Yeah. Okay. And then just to clarify what you said earlier, Christopher, you mentioned SEK 30 million of additional, I think it was production costs in the Nordics in Q2, and you expect a similar amount in Q3 and then for it to taper off. Was that correct? Yeah. Correct. Thank you. Our next question comes from the line of Rasmus Engberg at Handelsbanken. Please go ahead, your line is open. Hi. Good afternoon. Two questions. Firstly, just a clarification. You have an impairment in this quarter of SEK 42 million. Is that included in the restructuring cost, or is that on top? That was the first question. Yeah, it's included most of it. Yes. Okay. Right. The second question, I'm trying to understand what you are trying to say about pricing. Are you expecting that you will catch up during the third or the fourth quarter in terms of the raw material cost increases in terms of your earnings? When do we get to a sort of tipping point when you have compensated for the price increases in the first half of the year? We should be able, towards the end of Q3, to have a net, you know, fully mitigate the cost increase. That's positive, so to speak. Yeah for direct material. Right. Yes. Yes. Given that materials are at the current level with their ask for the moment. Yeah. Yeah. Yes, of course. Of course. Yeah. Just that extra production cost you had of SEK 30 million, is that part of the gross margin or is it in OPEX that we see that effect? Gross margin. Gross margin. All right. Thanks. Thank you. We have Victor Hansen of Nordea back on the line. Please go ahead. Your line is open. Hi. Yeah, I think I was cut off. Something happened. Yeah, my next question here on the UK, Magnet Retail up 40% organically. I was wondering if you could mention some actions behind this increase and how we should view this improvement going forward. Well, there are multiple things. One should add that one is that we had a winter sales campaign order intake coming quite late in the campaign, so it's a little bit of spillover from first quarter as well, just to be fair enough about the number as such. We've done multiple things in the entire commercial organization in the UK, anything from management, improved sales management. We have introduced smaller and bigger product launches. We've done marketing campaigns in a different fashion than we've done before, which have improved both in terms of brand, but also more of tactical initiatives in that areas. As I mentioned, one token of what we're doing is to improve sales in paint to order. We've changed the pricing structure. No, not the pricing structure as such. The easiness and accessibility of getting paint to order product, which has improved the ratio of sales in that area. It's not one big silver bullet, it's multiple small and some big initiatives driving there. As I said, a lot of work remains to be done, but it's a big market, a good growth opportunity, and a lot has been done. I often say we're going from planning to doing and seeing results, and planning 2021, doing 2022, seeing great results 2023. That's kind of been the mantra for some time. We're now seeing some of it paying off. Yeah. Sounds good. Oh, we have a few more designers as well, I should mention. Yeah which is important. Yeah. Yeah. Great. Which you see both in the cost and revenue side. Yeah. Finally, if you could provide some flavor on the cost savings from the restructuring which you announced in Q1, and mentioned on the call here as well, how we should think in terms of timing H2 2022 versus H1 next year for this? We previously said a little shy of half coming through this year. Yeah. That still stands, I guess. Shy on half. Nothing has changed. Yes. Yeah. Okay. Great. Any estimate of you mentioned adding some designers. Any estimates for the net savings? I think this, the figure you mentioned was gross savings. Yeah. We are working now to increase the number of sales designers. That would be a gradual move, not something that we have specifically targeted at a specific amount of sales designers. That will be spending according to revenue as well. The logic is the decrease, let's call them regional or central costs, which was a big part of the cost program that we did. We'd rather call it a structural cost program, so to speak, and then use some and make sure that we increase our sales density closer to the customer. Understood. That's all from me. Thank you. Thank you. We currently have one further question in the queue. Just as a reminder to participants, if you do wish to ask a question, please dial zero one on your telephone keypads now. That's from the line of Cecilia Chen of Carnegie. Please go ahead. Your line is open. Thank you, and thank you for your presentation. I actually only have two questions. First, I think you already answered it. It's about the cost program in the UK. Is it correct that you don't expect any additional costs, except for the one that you already took now in Q2? The savings, you expect to see a little bit shy of half of the SEK 140 million already by the end of 2022. Is that correct? That is correct. Keep in mind also that we are looking at recruiting more sales designers, as Victor also mentioned. We cannot as of yet say exactly to what extent we will add sales designers in Q3. All right. Yeah, since I answered the question, the actual program as such, the effect of the program shall have by the end of the year. We have. All right. Okay. Yes. All right. Thank you. I only have one more question. Given this large order book, and it's some of it is due to longer lead times, have you seen any effect of canceled orders or as such? Currently, we have not seen any such thing. Again, we believe that it's a result of the completions from housing starts last year that start to kick in, and therefore the lead times are quite, still quite long for the product base. The quality of the order book is as good as ever, so to speak, than normal. Yeah. All right. Okay, thank you. I don't have any further questions. Thank you. We've had one further person join the queue. It's a follow-up from Rasmus Engberg of Handelsbanken. Please go ahead. Your line is open. Yes. Hi. Thank you for taking my question. Just wondered, the SEK 40 million financial cost, is that sort of the underlying run rate in this quarter and then presumably going up a little bit with higher interest rates and increasing that going forward? Or is there any sort of one-off in that figure? No, it's the run rate. To your point, we expect a slightly higher run rate going forward. Yeah. It's because of the learnings. Right. Thanks. Right. Thanks. for the factory, so. Yeah. Yes. Good. Thank you. Thank you. As there are no further questions at this time, I'll hand the floor back to our speakers for the closing comments. Well, very good. Thank you everyone once again for calling, and see you all on the second of November for our third quarter results. Until then, we wish you a great summer. Thank you. Thank you. Bye.