Good day, and thank you for standing by. Welcome to the Nobia's Third 1/4 Report 2022 webcast conference call. At this time, all participants are in the Listen-Only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. Now I'd like to hand the conference over to Mr. Tobias Norrby, Head of Investor Relations. Thank you. Please go ahead, sir. Good morning again, and thank you, and welcome everyone to this Q3 conference call for Nobia's quarterly results. We will do it, the usual way. Our CEO, Mr. Jon Sintorn, will start with an overview of the past 1/4, and then our CFO, Mr. Kristoffer Ljungfelt, will dig into some of the financial details. With those words, Jon, please go ahead. Thank you, Tobias. Once again, good morning, everyone, and thank you for calling in on this third 1/4 update. Slide number 2, the first one with some writings on. We had organic growth this 1/4, which was good, but let's start by saying, obviously, we're not pleased with the Short-Term results to the extent that I decided to Pre-announce it, but we are pleased with the progress we are making in our strategy for mid and long-term benefits. The third 1/4 was turbulent. While delivering really high volumes from our factories in the Nordics, we have also had continued raw material price inflation and material availability issues and transport issues everywhere. It has put big pressure on the supply chain, and especially so in our Tidaholm plant. We are addressing these bottlenecks and constraints and have introduced further initiatives to safeguard deliveries and profitability short term. We are also pushing ahead with our State-Of-The-Art factory in Jönköping, which we are ramping up already this 1/4, almost one year ahead of plan. In the UK, it has been a quite turbulent times during the 1/4 with extremely high temperatures during July and August, 2 new prime ministers and a huge swing in the British pound, to mention just a few. We deem that the retail market was down double digits in the 1/4, so I am pleased that we managed to grow volumes in Magnet retail while at the same time increasing average order values. We still have a lot to do in the UK to fix our project sales and consolidate volumes, and we do not rule out further cost out programs in the region to lower our fixed overheads. Having said that, we shall continue to invest in Sales-Driving activities, such as adding kitchen sales designers and such as higher density of stores. In Central Europe, both Austria and the Netherlands are making progress. We're looking for more franchise partners in Austria, and HTH has also opened their first stores in Germany with great enthusiasm from their franchisees. We are excited about these opportunities to grow with new store formats and new franchisee colleagues. Our large transformation projects and activities that we call Tomorrow Together strategy are progressing really well. 2020 to 2021 was the time for planning. 2022 for start doing, and 2023 to continue do and see results. As we are in the midst of executing some of these very large investments, which drives a lot of resource, we are also experiencing some difficult contemporary business fundamentals during the last couple of quarters. It has impacted our Short-Term results negatively. I look forward to see the results of our investments come through, and we will address the Shorter-Term cost as well for increased profitability. For the 1/4 in terms of group numbers, we had net sales of SEK 3.480 billion, organic growth of 4%, a gross margin of 35.8%, EBIT of SEK 78 million, and a margin of 2.2%. In summary, the organic growth was driven by higher average order value and price increases. We did experience some quite challenging or very challenging business fundamentals leading to lower margins and profit through the continued inflationary pressure, challenges in the Nordic supply chain, and continued investment in the UK sales initiative. We have put measures in place and expect to normalize the Nordic supply chain bottlenecks by the end of the year. Our strategic initiatives are progressing well, and the new Jönköping factory project is ahead of plan and on budget. The large transformation activities during 2022 were requiring additional resources, but we're expecting to see the results come through in the course of or during 2023. Moving on to the next Slide, which Slide number 3. Kitchen market development. In the Nordics, we see the project segment holding up on the back of new housing completions. We did see some softer consumer demands and a bit more so in Denmark. UK was quite turbulent during the 1/4, as I mentioned. The consumer segment was softer, and the London super premium project market remained weak. In Austria and the Netherlands, overall, a stable underlying demand. Moving on to Slide number 4, looking at direct material impacts during this 1/4. Continued significant inflationary pressure on direct material. The raw material prices are flattening out, yet on a higher level. We see a slower increase in other areas, and in some areas, actually small decreases. All in all, in total, the COGS for this 1/4 was SEK 250 million. It is a good thing that we have been pushing and driving price increases at our end as well. The latest extraordinary price increase with materials during the second 1/2 of this year. Since the start of this more inflationary pressure started, we have a bit shy of SEK 1 billion headwind. Again, which we continue to price for going out in the market. One reflection on this is also, though, if the demand would soften a little bit, then direct materials we expect pricing come down. Moving on to Slide number 5. This is our Tomorrow Together strategy priorities. I will mention just a few, a little bit on updates as I started saying that the big new factory in Jönköping is progressing according to plan or even ahead of plan and on budget. We are looking forward to already, by the end of this year, start doing components, and we are looking forward to consolidate, not least component manufacturing, to get this ramped up, which is great since we also have outsourced some or we have suppliers supplying to us, and this is one of the great opportunities we have with an early start of the Jönköping plant. Another thing I'd like to mention is that we are also progressing well and have taken the first step in the implementation of our new digital platform for customer experience. It's almost 300 stores by now, in the course of the third 1/4 that has implemented it across the UK and Denmark. As I also mentioned, in the selective geographical expansion area, we have our first HTH stores and franchisees up and rolling in Germany, which is great to see. That was a few comments on our Tomorrow Together strategy update. With that, I hand over to you, Kristoffer, for Slide number 6. Thank you, Jon. Nordic region Q3, and as you can see from the pie charts here, the Nordic now represents 51% of total sales in the group. Organic growth came in at 7%, mainly driven by higher average order values and a positive mix. Volumes were flat in the 1/4 due to component availability and some capacity constraints related mainly to the customized kitchens and the painted kitchens as we have repeatedly come back to. These capacity constraints are especially related to the Swedish factory in Tidaholm, but to some extent, also in other parts of the supply chain. We had an organic growth in all countries in the Nordics in the period with Norway growing double digits, a strong growth there. Order books remain quite strong in the Nordics, +13% compared to last year. In general, we must say that the markets are holding up well in all countries in the project markets. However, we could see some demand softening somewhat in Denmark, as Jon was mentioning before, and that was mainly towards the end of the 1/4. We believe we continue to take share in the retail segment as a result of the investments in the brand propositions, the customization abilities, and some successful product launches, as we have mentioned before in the Nordic Nature and Nordic Spirit, just to mention a few. Gross margin of 31.6% was clearly a disappointment in the 1/4, and the main reason for the declining profitability. Continued headwind from raw material costs and supply chain issues burdened the gross margins. In addition, we have had considerable increase in transport costs, where parts of it was self-inflicted due to the supply chain issues. Parts of it is obviously a reason due to the energy bills that are going up. Just for information, the transport cost is booked in our P&L under the FD&A. We currently see some improvements in the supply chain, and we have launched further mitigating activities to rectify the situation, as Jon was alluding to. Therefore, we expect productivity into the home to normalize towards the end of the year, but that we will still have an adverse effect of about SEK 30 million in Q4 compared to last year in this factory. In summary, EBIT of SEK 97 compared to SEK 196 last year. Over to UK, please. UK now represents 36% of total sales on a rolling twelve-month basis. Managed retail had strong period again, which is promising to see given the efforts and the investments and strengthening of the brand. We have both a higher average order value and a growing volume, and then the net sales had a Double-Digit growth in a declining market. Also, kitchen sales in the trade channel grew somewhat in the period, albeit mainly on the back of the higher average order value, while volume was slightly down. Project sales was down double digits in the period as we experienced a lot of postponements on the construction sites. The order book for our project business in the UK remained healthy, and we are gradually shifting volumes away from the less profitable social housing segment. Gross margin of 43%, which we consider to be good result given the extreme pressure on input materials. The material cost increase was foremost mitigated by improvements in the average order values mix, segment mix, and a positive momentum in our UK supply chain, which has improved considerably the last couple of years. However, and again repeating what Jon said, we will continue to address our fixed cost base to both cater for inflation and prepare for a possibly softer retail market going forward. In the 1/4, we have seen results from the cost base program launched during Q2 with cost savings of about SEK 15 million. We expect the program to generate savings of about GBP 3 million during Q4 and onwards. However, we will continue to invest in sales-driving activities, especially in store and sales designer density, and especially so in front of the very important winter sales, which is starting end of December. Over to portfolio business units, which represents 13% of group sales. The region grew by 1%, also here mainly as a result of price increases, while volume was slightly down compared to last year. Austria is continuing to perform very well in both sales and profitability through mainly the brand Ewe. The Netherlands has come back strongly after a difficult Q2. Most of you know that we were hit by a quite severe cybersecurity attack and had to close production for the entirety of June. However, the Dutch operations have now recovered from the incident, and we have a strong order book of 20% compared to last year as we enter Q4. Operations in and around London through Commodore and CIE, which supports or deliver to the super premium segment, have been extremely challenging. Pandemic and the war have drastically impacted construction activity in the area, and we are looking for structural alternative for that business. Let's move on to the financial position. Cash flow from operating activity was negative in the period, mainly as a result of timing effects from Q2 working capital position, but also obviously the lower EBIT in the 1/4. On a Year-To-D ate basis, operating cash flow was a positive SEK 521 million. The operating cash flow, including investment, was negative SEK 530 million in the period, where the cash outflow is primarily related to the Jönköping factory, and again, the timing on the working capital from last 1/4. That puts the operating cash flow year to date at negative SEK 723 million. Currently, we have invested about SEK one and a 1/2 billion in the factory in Jönköping, which is then part of that result. Leverage amounted to 1.6 in the way that we calculate our covenant leverage ratio. With that, I hand over again to you, Jon. Thank you. As the summary Slide at the end, going forward, we will continue to drive price increases and to drive towards higher average order values, which we have been doing for some time now, with good results. We will normalize the productivity in the Nordic supply chain. The measures that we're taking, we expect results coming out of that during the fourth 1/4. Very important to keep the momentum in our major strategic initiatives and move into the future, so to speak, using our new digital platforms that we are implementing and progressing with the factory in Jönköping and investing in Sales-Driving activities, will be key also going forward. Of course, further measures to address costs, going forward looking into 2023. Let's also this piece of information that we are planning for a Capital Markets Day to be held in or around March 2023, and we would love to have it on site in Jönköping so everybody can really feel and touch the progress we are making in our Tomorrow Together strategy. With that, thank you very much, and we open up for Q&A. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Once again, that's star one one for question. Our first question comes from the line of Victor Hansen from Nordea. Please go ahead, sir. Yeah, thank you. Good morning, Jon, Kristoffer, and Tobias. Victor here. Quite a few questions from my side, actually, but there are also some housekeeping, so hopefully it won't take too much of your time here. I'll start off on the new factory. As I've understood it, you're not moving any full production with all the steps to Jönköping in 2023, only the first couple of production steps. How much of your production will be moved to Jönköping already in 2023 from Tidaholm? What we have said previously according to the plan is that in the course of 2024, the full manufacturing will be in place up and running fully, so to speak, in Jönköping. That does not necessarily mean that all the operations that we're doing some stuff with suppliers and whatnot. In terms of having full kitchen supply fully, that's according to plan, that is in the course of 2024. We believe that we may be able to do that a bit sooner in terms of full kitchen manufacturing, and definitely component manufacturing significantly sooner. Okay. Understood. No quantification on how much of your, say, component manufacturing will be done here from. Say again, please. 2023? No. Yeah. Yeah. You said that you're moving parts of your production to Jönköping earlier. You mentioned the components here. Could you give any quantification on how much of your components you are moving? In the course of 2023, a very significant part. Understood. Great. Will it be possible to do a sale-leaseback, perhaps a little bit earlier, due to you starting the factory earlier? Or is it still sometime in 2024 we should expect that? There are absolutely opportunities to do a sales leaseback earlier if needed and necessary. As it stands right now, we're still looking at 2024 for that eventuality. Yeah. Understood. You mentioned here on the call regarding the Jönköping factory CapEx, you mentioned SEK 1.5 billion invested thus far. So I'm wondering here, how much of your CapEx in Q3 was related to Jönköping, and does this mean that there's about SEK 2 billion left for the factory? Could you repeat what you said? How much was in 2023? Yeah. No, how much of your CapEx, SEK 400 million in CapEx roughly in Q3, was related to Jönköping, and how much do you have left on the Jönköping factory in CapEx? Okay. About all of the CapEx was related to Jönköping in the 1/4. You are right about the amount. We have about SEK 2 billion left for the investment. Yeah. Understood. Moving over to cash flow and net debt. I'm wondering if you could give some more flavor on what's driving the higher working capital bind. Do you expect it to improve in the near term, or how should we view this? Yeah. Primarily in Q3 it was impacted by the timing effect. If you look back at Q2, there was a big positive on that. I think you need to look at it from a year-to-date basis. We have some- Good initiatives that we can see start to bear some fruit for improvement in the working capital position, especially on the payable side, but we're also looking into alternatives on the receivable side. We expect continued improvement in that area as well. Sounds good. Yeah, go ahead. Can you give any indications where your financial covenants are, at what levels? Currently, we would not like to do that, but we are confident with our covenants, and that they are well within our where we need to be in our financial position. We have plenty of headroom on. Okay. Sounds good. Is there anything meaningful impacting Q3 net financials besides interest rates? Quite a big jump year-on-year in net financials. There was a big effect from the pension scheme, the defined benefit pension scheme in the UK, and you have probably read all about it with what happened with the pension liabilities in the UK, and that hit our deficit as well. However, we are quite pleased that we have managed to hedge our assets to those liabilities quite well, and therefore the increase is not very big when this happens. It's in a good place. We're in a good place as a company, but it's still an increase in the 1/4 that you see in net debt because of that. Okay. Here on savings, final question. Kristoffer, you touched upon it, but should we expect the full savings rate of about GBP 3 million quarterly from the UK from Q4, or with net savings figure lower due to you hiring some front office personnel? Yeah, the net savings will be lower as we move into more sales-driving activities, and especially now in front of the winter sales that starts in December. We have come down quite a bit on the fixed overheads, but we'll increase the variable overheads. Also just to mention that we will be obviously very mindful how we do that. We will also spend to the revenue opportunities that we have. Especially so if the market moves in any direction, we are able to quickly adjust on that. Okay, great. That's all for me. Thank you. Thank you. Great. Thank you very much for your questions. Our next question comes from Rasmus Engberg from Handelsbanken. Please go ahead. Yes. Hi, good morning. Good morning. Can I just start by asking you with regards to financial covenants that they is that correctly understood? Yes, they exclude leases. Yeah. Good. You could increase headroom through a leaseback solution? Yes, yes. Yes. Very good. Then the second question is, you know, what kind of do you expect any impact on your earnings from starting Jönköping earlier? And how do you expect that to sort of impact going forward? There's been some small increases, and Jon was alluding to the fact that this larger program is pulling quite a lot of resources in that direction. However, it's not material to the results in Q3, and let's say that it's not really material for Q4 either. As we move into Q1, it will be, and then we will come back with more details on that. The transition. The transition, yes. All right. We're quite positive that we can balance quite a bit of that cost with the benefits that we get from both insourcing our components and quite a big, quite a large cost saving by manufacturing in the new highly automated factory. All right. Cool. Can you be a little bit more specific about what really happened in Tidaholm and why you think that it's going to get better towards the end of the year? We sort of can understand it in a more hands-on way. Well, it starts on the back of the pandemic, starting with high numbers of sick absence, and then with the war situation coming up, with scarcity of direct material, a lot of struggle just to get availability of components. Then you also have a more severe transport situation where you can only manufacture so much because of space limitations. If transport systems is not in place or very scarce or very difficult, you need to come to a stop. There's multiple reasons behind why we've had these out of the ordinary, significantly out of the ordinary challenges that we've had, in the Nordic supply chain in general, but even more so specifically at Tidaholm. That has been driving significant extra costs, extra shifts, extra staff, extra transport, extra availability costs, et cetera, et cetera, et cetera, et cetera. It's been quite, I must say, a quite significant out of the ordinary situation, last few months, I should say, starting in the second 1/4. That is. The overall situation in terms of availability, you know, and transport and all of that obviously have improved significantly since that time. There is a lag if I put it that way, or the aftermath of rectifying the issue and catching up and so on. Obviously there is a lag on that, in order to get full productivity back on track. This comment about reducing the backlog, does that relate that you were risking to be quite late in some orders? Or how should we understand that comment? Correct. Correct. All right, cool. Very good. Just on 2 final questions. I don't think I've ever seen a loss in the UK in the third 1/4. You know, how soon can you come back with further savings on that business? Yeah. If I start. We are obviously looking into it and some of the parts also to say that we have never experienced also this headwind in terms of raw material cost, et cetera, which has also made it difficult to keep profitability up. Even besides that, we are not at all happy obviously with the negative result in the UK. We are seeing a lot of opportunities in what we've done now in retail and trade, and we also see that positive mix is driving better gross margins for us. A lot of things have happened to go to the right direction. Now we have to address the fixed costs that we still have in the UK. Again, we believe that more of the investment should be funneled to the sales-driving activities where we see that we make a lot of progress when we have. Mm-hmm ... where and when we have better density in the store and the sales, staffing. We will continue to do that and also look into the project business on how we can improve that. That will all happen during Q4 as well. Just a final question. You have other income of +SEK 38 million in this 1/4. Is that sort of the explanation why your overhead costs are unusually low, that there's some sort of FX effect or something there? Yeah, it's hedging effects that come in there as well. They actually go towards the gross margins, net out the negative currency impacts we have in the gross margin. Okay. It's nothing extraordinary in there, so to speak. No, there's nothing extraordinary. All right. Very good. Thank you. Thank you. Thank you. As a reminder, to ask a question, please press star one one on your telephone. Once again, it's star one one for questions. Our next question comes from the line of Sophia af Forselles from Carnegie. Please ask your question, Sophia. Hi. I think that was me. Sophia af Forselles here from Carnegie. Can you hear me? Yes. Yes. Okay. Thank you. I have a follow-up question on this leaseback asset. You mentioned that you could actually proceed with this before 2024. Is that, would you say, that you have that as an alternative now because you already are in discussions with companies that are interested to acquire this plant? Or could you give us some more details on this? It's an opportunity to do it. There are definitely investors for such an asset. Remember also that it's built as a logistics building in Jönköping, very close to the terminal. Mm-hmm. It's an asset that should be easy. Very attractive. Actually, you know, very attractive. Yeah. We don't foresee any issues when we go to the market with it at all, as of now. We are not interested to sell it right now either. It is deliberately built as a logistics. Yeah. To make it a feasible. Oh. Yeah. All right. Thank you. Also about the residual CapEx for this plant. You mentioned it's roughly SEK 2.2 billion. Could you say something about the CapEx schedule now and until the beginning of 2024 then? Will we see similar CapEx, higher CapEx level in the near term, and then it will, like, fade away? Or if you can give us some kind of guidance here. I will. It's SEK 2 billion left, just to clarify that. All right. About SEK 2 billion, let's say. Most of it will happen during 2023. Also keeping in mind now that we are pushing ahead a little bit quicker with the investment as well, as we have progressed well in the factory. We believe that the investment profile would be a little bit closer in the beginning of 2023, rather than later. There will be other parts which we expand by in Jönköping in end of 2023, 2024. Some of it will run into 2024. We obviously have the intention to have our suppliers to help us to finance this through longer-term payment terms as well. It's not fully set on how that exact cashout profile will look like. We could do that as well. All right. I see. Also, maybe just a little bit, a quick question about this luxury segment in London. What is the strategy going forward for this Commodore brand? Do you see any recovery at all, or you mentioned structural change in the strategy here? Well, we've been quite patient with looking at if the market would bounce back. Mm. We don't really see the big spurt or a big bounce back anytime super soon. We're looking into how we structurally can make sure that we have the competence that we need for the project business. We have a lot of good talent in terms of project knowledge there, and then look at how our fixed costs can be reduced. All right. Okay. You mentioned the Nordic market, and the Nordic has been a really strong business unit for you or division. You see that the order book is still holding on, et cetera. We read in the news about how developers in Southern Sweden now put people on notice due to lower order intake. How do you prepare for a quite significant weaker order intake for next year, especially then in Sweden and the rest of the Nordics? You can give us some details. Let me start by saying, I think, sharing the experiences with the vast majority of management team and business leaders as of today, I think a lot of people are looking into how do we best prepare for the uncertainty of 2023, where things can go, well, north and south. I think there's plenty of people thinking about how to best prepare for 2023, and so are we. Mm. As of now, project business for our clients coming late into projects, we have this order book. As we see, we don't see any projects not being completed. There is continuation or completion of projects and so on, but we also notice, as many others, that the new start for development phase is not fantastic right now. Yeah. Just to add to what Jon was saying, and have everybody remember that we look at 12 or 6 to almost 24 months before we come into the projects. The last years of very high housing starts should bring a quite okay market on the project side, at least for yet some time. In essence, we haven't seen either a huge decline in the housing starts or request for housing starts, but probably more of a normalization compared to what happened right after COVID. We are obviously extremely mindful of this. To Jon's point, we look into every area where we know how to act whenever this might happen. We also. I should also say we have a lot of experience of these type of situations in the company. Mm. We believe we have acted quite well to these type of global effects. All right. Thank you. That was all my questions. Thank you. Once again, to ask a question, please press star one one on your telephone. Further questions, I'll now turn the conference back to Mr. Norrby for closing remarks. Very good. That's it, everyone. Thank you for calling. We welcome you all back on the ninth of February for the full year results. Thank you. Thank you. All right. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.