Good day, and thank you for standing by. Welcome to the Nobia Q3 Report 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tobias Norrby. Please go ahead. Thank you. Good morning, everyone, and thank you for calling in today, and, our apologies for the little technical delay. My name is Tobias Norrby, Investor Relations. The presentation today of our Q3 results will be done by Mr. Jon Sintorn, our CEO, and the financial details will be covered by Henrik Skogsfors, our CFO. With that, we start, so. Thank you, Tobias, and good morning, everyone, and thank you again for joining the call today. Over to slide two, the Nobia Group highlights of Q3. We delivered a positive operating profit in the third quarter. Given the continued weak market situation, driven by poor macro fundamentals, resulting in significant volume decline, I regard this as a good achievement. We are meeting the market headwind with cost reductions and taking steps to strengthening our financial position. The organic growth in the quarter came in at -18% for the group, with substantial declines in both consumer and business-to-business project segments. An exception was our operations in the Netherlands that delivered another quarter of growth. For you calling in today, I do not think the significant market decline and headwind is a huge surprise, given the current market, macro situation. There are nonetheless several positive developments I would like to point out. Firstly, we are saving SEK 140 million in comparable currencies in SG&A expenses, whereof SEK 90 million is related to the previously announced restructuring program. Year- to- date, the program has delivered cost savings of SEK 194 million. At full effect, by mid-2024, the restructuring program will deliver cost reductions of approximately SEK 350 million. So right now, it means that we are ahead of the original plan. Furthermore, the cost of our input material is starting to decrease slightly, and our price increases have effect. Additionally, our main strategic initiative, setting up a factory in Jönköping, remains on track. We are producing kitchen components for assembly in the Tidaholm facility, as well as starting the first flat-pack kitchen deliveries to flat-pack deliveries to customers. By the end of the year, as per plan, we will have the full capability for kitchen manufacturing and order consolidation for complete kitchen orders. Group operating profit for the quarter was SEK 51 million compared to SEK 78 million last year, excluding items affecting comparability. The gross margin for the group has remained stable compared with the corresponding quarter last year, despite the volume decline, which of course is good. Operating profit was supported by the cost savings I just mentioned, but offset by the impact from the decreasing volumes during the quarter. Operating cash flow was positive when excluding the temporarily elevated investment levels due to the construction of the Jönköping factory, that summed up to SEK 362 million in the quarter. A sale and leaseback of the Jönköping factory is a prioritized activity for us. Some good news is that the main manufacturing building will be granted a formal approval of completion in November. We are, in parallel, reviewing other strategic options for strengthening our balance sheet, including, but not limited to, sale and leaseback transactions. Moving on to next slide, the kitchen market development, and I'll be fairly brief. Not a lot of new news. If we look at the Nordic market, there is a softer consumer and retail market, project decline, as housing starts, the decrease of housing starts and housing completions are tapering off. Very similar situation also in the U.K., where the retail and trade market are, markets are softer and the project market remains weak. Also overall, the same in Austria and the Netherlands, whereas the Austria retail market is softer, however, a more stable project market in the Netherlands. So the overall trend, as we have seen, is pretty much no significant news on that front. So with that, moving on to the next, where you, Henrik, will add some color and flavors on the numbers. Thank you, Jon. The Nordic region for the third quarter, EBIT was in line with previous year, a solid performance considering the volume decline. Organic sales experienced a decline of 21%. Price realization was good across the board and continued to support top line. This was counterbalanced by a notable decrease in volume, affecting sales performance in all countries and segments. The retail and project sectors observed the most significant sales decline, followed by a slightly smaller drop in the trade sector. Sweden encountered the largest decline in sales, trailed by Finland and Denmark. The increase in gross margin by 1.2 percentage points to 32.8 was primarily driven by price realizations and reduced direct material cost. The improvement was partly counterbalanced by adverse currency effects and less favorable currency mix due to sales is declining somewhat more in consumer compared to the professional segment. Reduction of sales and administrative costs benefited the result in the quarter, whereof the impact from restructuring and cost program, which was announced in January, result savings of approximately SEK 20 million in the quarter. As outlined in the quarterly report, we accounted for SEK 27 million as items affecting comparability in the third quarter. These costs are associated with the supply chain and transition for Tidaholm and Jönköping. In summary, EBIT margin improved 0.8 percentage points, mainly driven by cost reductions and lower direct material cost. The absolute EBIT amount that came in SEK 93 million compared to SEK 97 million last year. The main driver behind the lower result is the volume decline and the negative sales mix. Next slide, please. Region U.K. The organic sales declined by 18 percentage points. The U.K. kitchen market, much like the Nordics, exhibited softness during the quarter. Within the U.K. region, as communicated previously, the company is strategically withdrawing from lower margin portions of the project segment, impacting overall sales. Economic headwinds particularly affected consumer sales, leading to reduced volumes. We notice good progress in gross margin on back of the progress in our U.K. transformation strategy, with higher average order values on back of higher share of sales in the premium segment. However, the weak market and large volume decline in the third quarter, with slightly higher year-on-year direct material cost, could not be mitigated, which resulted in a gross margin decrease by 1.1 percentage points to 42% flat. The savings resulting from the restructuring and cost program communicated in January positively impacted the quarter by around SEK 60 million, slightly surpassing our own expectations and driving the reduction in selling administrative cost. The positive impact from higher average order value and cost out activities were not able to offset the volume decline, resulting in a loss of SEK 28 million, compared to a loss of SEK 11 million last year. We have now finalized the sale of the Dewsbury plant, as previously communicated. The sale resulted in a gain of SEK 112 million, accounted in the quarter as an item affecting comparability. So with the next slide, please. Portfolio Business Units delivered stable sales and flat EBIT. Sales declined 3% organically, primarily on the back of volume and mix decline, offset in part by realized price increases. In the Netherlands, the largest entity in the Portfolio Business Units, managed to offset market slowdown and higher year-over-year material prices with strategies involving price increases, advantages, product mix, and strategic contracting. The Austrian market remains challenging, with a sales decline attributed to a reduction in both volume and shift in product mix compared to the previous year. Price, in combination with stringent cost management, was hampered by higher input material prices, an unfavorable shift in product mix inflation alongside a decline in volume. The gross margin declined close to one percentage point compared to the third quarter last year. EBIT remained flat to previous year, primarily due to savings in freight and staff costs, which counterbalanced the slight decline in the gross margin. Over to the next slide, financial position, please. Cash flow from operating activities improved by SEK 177 million in the quarter on back of improved working capital. The improvement in working capital was driven by lower accounts receivable on back of lower sales level. Simultaneously, our focus on reducing inventory had a positive effect in the quarter. The operating cash flow, including investments, amounted to SEK -305 million, where investments in the quarter, primarily related to the construction of the factory in Jönköping, amounted to SEK 484 million. Net debt, excluding leasing and pension debt, increased by SEK 534 million in the quarter to SEK 3,039 million. The increase in net debt is according to plan, as we are continuing to build a factory. The increase in net debt, in combination with a decline in EBITDA, resulted in a leverage of 6.2, which is in line with our plan. The fact that the economic downturn coincides with our planned extraordinary investment level has resulted in an increased leverage ratio. We are fully committed to reduce leverage and explore various leverage reduction options, as Jon communicated earlier in the call. Over to you, Jon. Thank you. Then rounding off the presentation, talking about priorities going forward. Even in this macro situation, the market situation, there is business to be had. So driving sales, sell, sell, sell, deliver, deliver, deliver, sell, sell, sell. That's really a priority for the organization to continue to drive sales. But also to continue to deliver on the cost- out program and beyond. Working on the direct material price reduction, and obviously complete or work on the major strategic initiative, the Jönköping factory, and make sure that we continue to be on track and on plan. And then last but not least, review and strategic options for the balance sheet strengthening. I think it's fair to say in this quarter that we, at the core, have a good business model, and even though the market circumstance at the time, currently, right now, is challenging, we know that the market will come back, and it's a good market to be in, and now and going forward, we will be ready to capture those opportunities. So these were the presentation, this was the presentation from us from management. a nd with that, thank you, and we leave to Tobias in Q&A. Operator, please open up for some questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, that's star one and one, if you wish to ask a question. We will now take the first question. One moment, please. From the line of Rasmus Engberg from SHB, please go ahead. Yes, hi. Thank you, and good morning, guys. Good morning. Can you hear me? Yeah, very good. Excellent. I was wondering, to what extent the - 18% that you recorded organically this quarter, you know, how do you see that developing in the fourth quarter? You know, we have no data on your order intake and so on, so can you help us, please, with that? If you think that's going to be better or worse in the fourth quarter. We typically don't give forecasts for the future. But in general, as a general reflection, and we had a general reflection as well, the previous quarter, I think it's fair to say that in terms of the market, the largest drop in the market, we believe we have had. It doesn't mean that we see a market pick up in the short term, by no means. Let's start that. Yep, very good. And the second question is, could you shed some light on why the sale lease back, which I think, you know, at least was signaled during the beginning of the year or during spring, why has it taken such a long time to finish up? Obviously, it's a quite large transaction or a big project as such. And with that, I think it's fair to say it's good and more simple structure, if I put it that way, that when the majority of the facility or the building is completed. Is that [audio distortion]. Excuse me? Is that the main reason that the factory is not finished? Let's put it that way, it's, it's transactional, easier to have clear, let's call them very clear milestones and completions, yes. Did this surprise you, or was it really part of your plan? No, I think, you know, very simplistically, you can, you can do such a transaction on either drawings or in the midst of anything, or when it's more to completion. So again, it's quite, it's large, it's a lot of things to go through and so on, but it's definitely easier to have a more clearer, that way, not so complicated, less complicated, structure when buildings are completed. All right. Thanks. Thank you. We will now take the next question from the line of Hanna Lindbo for DNB Markets. Please go ahead. Hi, good morning, everyone. I have a question, because you wrote that you will be granted a formal approval of completion in November, and I know you have talked about before, that the sale and lease back could take place within 10-12 weeks. Is it after this completion, we can expect that it's 10-12 weeks before a sale and lease back, or how should I think about this? I think you refer to what we mentioned as to the quality of the standard timeline for a ready building. That's the approximate time for this type of transaction. We also mentioned it's from a new start and, you know, really start working on it with a real project, so to speak. Because my view was when all this was settled, it was 10-12 weeks from that, or is it now in November that we already can expect a sale and lease back? Well, first, just for clarity, I think it's fair to say that the main manufacturing building will be granted its the completions and performance. Then we have some office and other buildings that needs to be. W hich is much less complicated, I should say, which is to be completed mid-2024, according to plan. Just saying, but this is a, this is a very important milestone for us. So could you comment on when we could expect to see this sale and lease back to its close? Now, for the integrity of the process, I'd rather not give any data. I just reiterate and say it's a major milestone for us to have this completion and facilitate a clearer structure. And that's fine. And then just a question on pricing. How should I view that going forward? Are you planning on any price increases, or are you talking about lowering prices, or how's it going? Hey, Hanna, it's Henrik. We have in the past, you know, on back of the very quick and fast increases of direct material, we have increased prices to compensate for that cost inflation. That is still, you know, something that we have in our existing pricing with our customers, of course. But looking forward, it's reasonable to believe that, you know, the depending on the development of raw material, of course, but looking at it as it is right now, we will see sequential decreases in direct material. It's most likely that pricing versus custom is, maybe further on, we cannot expect it to be as high as it has been in the past. Yeah, that makes sense. Maybe just a last question on like the consumer demand. You talked a bit about this, but you sense that, you don't sense that it's declining from here, or is it worse in the U.K. right now than the Nordics? Or if I could get some more flavor on that. I believe, the previous quarter, I knocked on wood and had a reflection on where the market is going. But if I knock again, then I think everybody appreciates the difficulty to have any forward-looking view, which is very robust. Just saying. But it seems we do not expect such a dramatic drop in consumer demand as we have seen. So we believe it is flattening and flattening out, or at least one could have that view. It's starting to flatten out. Again, I want to reiterate, it's very difficult to. Yeah, yeah. I understand that. Yeah. Yeah. All right, but, thank you very much. That was all from me. Thank you. Thank you. We will now take the next question. From the line of Sofia Sörling from Carnegie. Please go ahead. Yes. Hello, Henrik and Jon. Thank you for taking my questions here. So I will focus on the U.K. So could you give us some more details regarding the cost saving plan here in U.K. and what we can expect in the short and mid-term? And as I see it, at the moment, you have a negative adjusted EBIT margin, meaning that your business model, your current business model in the U.K. is actually burning cash. So what is your plans in the short and medium term here to mitigate this risk due to the quite negative market outlook here? My first question. Yes, as you know, Sofia, in the beginning of the year, announced cost out and restructuring program, and that was, you know, primarily, you know, addressing the U.K., but also, yes, also in the Nordics. Where we took the decision that we had challenges in U.K., and we realized that we need to, you know, look over the business model and doing the transformation that we are doing right now. Meaning, for example, that we closed two factories in U.K., where Dewsbury, the property that we sold in the third quarter, was one of those, leaving parts of the low-end market where we did not manage to make any money. That's one of the steps in the transformation. But we also, I think it's very important. I tried to highlight that when I commented in the U.K. section, that what we see is that we have positive in effect in the gross margin from the strategy. Transformation strategy, where we are moving up more in the Premium segment. We have positive effects there. So we still see that what we do in U.K. is actually paying off. However, in the quarter in U.K., we had negative direct material impact, even though we see sequentially it's going down, but year- over- year, it's up. We have positive effect there, but due to what we said, the organic sales was down by 18%. We have a volume decline that is burdening us, but what we see is that the things we are doing in U.K. is good for Nobia, even though the volume is hampering us right now. All right. On that, our average order value is going up. We are addressing the right segment, the right premium, and our gross margin is increasing. So what we see is, it is working. In a more normalized market, we will be on a positive number. All right. So just a follow-up. Yes, please go ahead. Yes, just a follow-up question there. So given the actions that you've made in the U.K. so far, would you say that even though quite significant volume declines in the U.K., you would rather reach an EBIT break even in Q4? Is that what you're guiding for? What I'm saying is that the things that we are doing in U.K. is the right thing, and we see that it's bearing effect, but considering that the volumes are challenging, that has, of course, a large effect on our profitability. But what we know is that the things that we're doing is the right thing, and will just put us in a better situation. All right. Thank you. And then a question in the Nordic region. So, could you just give some color on this, the main reason for the improvement in the gross margin in Q3 this year compared to last year? If you could just go through the improvement here. Yeah, it's. Yes, it's, you know, the price adjustments that were done, that's an important component. On top of that one, in Nordics also, we have actually a decrease in the raw material prices, also year- over- year. Yeah. In other regions, yes, but it's the sequential improvement, is it? That's the main drivers. All right. And then my last question is regarding this transition cost. Could you just remind us how much you have spent on transition costs accumulated for Q3 and what you expect ahead? I think it was SEK 27 million in the third quarter. And we expect, you know, around the same amount going forward also. Okay. For each quarter until? We don't really know exactly when that will taper off, but, you know, we will do the transition to Jönköping ongoingly, starting, you know, starting now going forward, or not started, going also. But, it depends on when we, you know, do the real, you know, the final move to Jönköping. All right. Okay. Yeah, and maybe one last question. Just on your capital structure ratio there, leverage of 6.2 times, is there any risk that you will be hindered to actually borrow more money in order to continue with the factory in Jönköping, or how do you view this risk? So it's been clear since 2020 that we have this temporarily elevated investment during this period, so that's been clear for all, everyone. We also planned, with regards to time, and money. We believe that we will materially continue to do so for now. Okay. Thank you for answering my questions. That was all. Thank you. Thank you. As a reminder, if you wish to ask a question, please press star one and one. There are no further questions at this time. I would like to hand back over to the speakers for final remarks. Well, very good. That's it from our side this time, and we welcome you all back on the February 20th for the full year results. Thank you. Thank you, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect.