Welcome to Nolato Q2 Report 2023. 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. Now, I will hand the conference over to CEO Christer Wahlquist and CFO Per-Ola Holmström. Please go ahead. Hello, and welcome to the presentation on Nolato's Q2 2023. We start on page two in the presentation deck, there is a summary of the Q2 for the group. We had sales just shy of SEK 2.5 billion during the quarter. That was, we saw decreased volumes within our VHP business, a good performance, or positive performance within Industrial and Medical. The operating profit, EBITDA, ended up at SEK 198 million in comparison to SEK 264 million. The EBITA margin was affected by the lower volumes within the VHP sector. We saw good cash flow during the quarter. It rose to SEK 224 million, if we exclude acquisitions, and we have sustained our strong financial position. If we then turn to page three in the presentation deck and look at the different, overall picture of the different, business areas, starting with the Medical, we had sales just shy of SEK 1.4 billion during the quarter, and an EBITDA of SEK 138 million. That is, of course, then more than half of our sales within Medical and two-thirds of the group EBITDA result coming from the Medical division. On the Integrated Solutions side, we saw the heavy decrease due to the changed purchase and the different volumes for the VHP. It ended up at SEK 392 million, and then EBITDA of SEK 60 million during the quarter. On the industrial side, we saw a good performance. Sales ended up at SEK 724 million, EBITDA of SEK 56 during the quarter. We turn to page four, starting with the Medical Solutions business area. We are continuing our profitable growth journey. You see on the graph the development of the sales of the business area over the last 20 years. It continues good development of the business area. On page five, we see a split up of the focus product areas within our Medical Solutions business area. Most of the areas were performing good. The exception was the in vitro diagnostic, where we still see some lower volumes due to the supply chain adjustments after COVID in that business area. We go to page six, focusing on the Medical Solutions. Q2, we saw a 6% increase of sales if we adjust for currency. We saw, as I mentioned, good growth in most of the market areas, but the IVDs are on an unchanged level, and we see still inventory adjustments in the total value chain. The margin ended up at 10.1%, giving then the overall development of the medical business for Nolato. On page seven, focusing on the Integrated Solutions, here, we have seen a dramatic growth over the years within the VHP. We are now in a situation where the VHP has been decreased due to the dual, the new sourcing situation and also the lower total volumes in that business, and enable us to grow in other market areas and market segments, which we are focusing on. If we turn to page eight, we will see those areas that I mentioned. The VHP is now decreasing as a total share of the total, and we are focusing very heavily on growing the smart home and home security part of the business, the wearable, the wellbeing devices, the in-ear phones, the speeches, and the complex modules on our side, that is the consumer electronics side. On the right-hand side of the page, we see the EMC part of the business, and that is, then, of course, sort of a little bit of a different business model in that. If we turn to page nine, summarizing the Integrated Solutions business area, during the quarter, we saw a 63% decline if we adjust for currency, and of course, it's low volumes and the change of sourcing strategy at the previous significant customers within the VHP area, and that the VHP within Nolato is now approximately 5% of the group sales. The EMC sales increased to SEK 174 million, and we saw the automotive area increasing significantly, while we saw the telecom area had lower volumes as a total. The margin ended up at 4.1%, and we are working with cost cutting, but maintaining our strength in order to build new businesses within the other segments of the consumer electronics area. Sales ended up at 392, as mentioned, and the operating profit, SEK 16 million during the quarter. If we turn to page 10, focusing on the Industrial Solutions, here we are on a technology and geographical expansion journey. If we look on page 11, we see the split down of the different product areas that we are focusing on. These are then the different segments within the industrial sector. If we look on page 12, summarizing up the Industrial Solutions business area, we saw during the quarter a 1% increase in our sales, if we adjust for currency. We saw volumes in the automotive have risen, and also we saw less disruption in the supply chain compared to previous quarters. We saw also that demand in product for products in consumer discretionary sector, slightly lower due to a weaker economy. The margin ended up at 7.7 percentage points, due to the less disruption in the supply chain, movement, of course, more efficient production for us. Good afternoon, this is Per-Ola Holmström, presenting group financial highlights on page 13. Net sales was almost SEK 2.5 billion in the quarter. The 20% decrease, adjusted for currency, compared to SEK 2.9 billion. Operating profit was SEK 198 million, with an EBITDA margin of 8.0%. Cash flow was strong in the quarter. After investments, excluding acquisitions, it rose to SEK 224 million compared to SEK 71 million, by more favorable working capital and less CapEx. Earnings per share was SEK 0.58, compared to SEK 0.71. Dividend was paid out with SEK 512 million in Q2, and net financial liabilities increased to almost SEK 1.2 billion. Turning to page 14 and focusing on the current situation per business area, starting with the Medical Solutions, we are on a maintain growth strategy, lot of focus on innovation, built together with strong customer relationships. On the Integrated Solutions side, we have established positions in new product areas. We have a very flexible production structure in the base, and we have good success within the automotive area that is positive for the EMC, but generally speaking, lower volumes within the telecom area. Overall, there are some geopolitical concerns that affect the supply, global supply chains. On the Industrial Solutions, we have advanced our market positions, a lot of emphasis on sustainable solutions and overall a general weaker economy. We will now open up for questions. 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 Adrian Gilani from ABG Sundal Collier. Please go ahead. Hello, it's Adrian here at ABG. First, question on medical, we're still seeing these inventory adjustments on IVD that you've been talking about for over a year now, and I guess a two-part question on that. First of all, are there any signs of improvement on Q3 current trading there? The second question is, if we do return to a more normalized inventory situation among your customers, can you just help to quantify the margin impact that that could have on medical? We have not seen any improvements during the Q3 so far. Margin-wise, the situation we had during COVID with very high utilization of that part was of course, positive to margins. When that picks up in volume, it won't be like that, of course, and then it's a more similar margin that we have in the overall medical business area. Okay. On the EMC products, you've previously said that these could grow around 15% per annum. Now you're saying you were seeing slower demand from telecom. Just for the current year, can you give us some estimation on where the full year growth might end up in EMC, given that for the first half, growth has been in the single digits? Yes, I don't think that we should expect much higher growth numbers from that business. It is slow on the telecom side. We have a good situation in other areas, which is supporting us. Of course, as telecom is not that strong, the overall situation is not very much more positive. Of course, it's hard to judge when telecom will be stronger, but for the time being, we don't see that change coming yet. Okay. Am I correct that telecom is roughly 80% of EMC, or am I misremembering that? The telecom part has decreased compared to that as the total telecom has decreased, and we have had a good growth in the other areas. It's a bit less compared to that right now. Okay. I guess on the VHP sales, if we take away the current EMC sales, it seems like VHP is down sequentially as well. Is this an effect of BAT's total volumes coming down, or have you sort of lost further shares on this dual sourcing contract? That is the effect of volumes, and you're correct. Sequentially, it is a smaller downturn, and that's the way it is, yeah. Is it your customers selling for less volumes in total, or have you had a smaller share, and the other dual sourcing partner has a larger share of the volumes? Which of those is it? I think the situation is similar when it comes to splitting volumes. It is low volumes totally, and yeah, so not a very big change, but we did see some downturn in our volumes during this quarter. Okay, a final question on, also on VHP. Given that we've had really Q3 now with VHP not being profitable, and if I remember correctly, at the sort of peak sales level, you said fixed costs were around SEK 300 million in that segment. How much can you decrease the fixed cost base in VHP? We should see the cost base as consumer electronics, and what we are doing is that we want to grow the business within consumer electronics in those areas that I explained before. In order to do that, we want to maintain our capacity and our strength in order to address other businesses. We are not maximizing our cost out because we want to continue to grow that business long term. Okay, that's clear, and in that case, that's all for me. Thank you. Thank you. The next question comes from Carl Englund from SEB. Please go ahead. Hello, couple of questions from my side. If we start on medical, the margin was relatively flat there year-over-year in the Q2 here. I was wondering a bit on the outlook on the margin in medical, given that you are facing a bit easier comps now in the second half, do you think you can improve margins a little bit more than what you did in Q2, in the second half of this year? Would be my first question. Thanks. It's correct that we have a margin situation in previous years, which decreased from these levels. I do think that this business should be seen more in a sequential development from the levels we have right now. There is a smaller effect coming from Q3 as we have a vacation period during that quarter. That might affect volumes by a little. Except for that, I see it more sequentially than. Yeah ... comparison to. margin should look better year-over-year than in Q3 and Q4, I guess? Yeah, it's. Okay ... more in line with. Yeah. Yeah. Good, then a question also on the IVD sales. Is it possible maybe to quantify, was it a flat development, or was it, how much was it down year-over-year? It's possible to quantify that? The IVD volumes you mean? Exactly. How much did it decrease year-over-year in Medical? The volumes for IVD were similar to the same period last year. Okay, that's great. Then a question on Industrial. Nice to see the good margin development there. Just wondering a bit on the, on the outlook for the cycle, basically. What are you seeing in terms of the demand from your customers, and how did it develop during the quarter? Was it stronger in April or stronger in June, or any form of, guidance there would be very helpful. If we look on the Q2, I would say it was fairly stable during the quarter. We didn't see a strong start or a strong end. It was fairly stable during the quarter. Okay, that's great. Then just one question on price increases. I mean, now we are seeing that, you know, production costs but more material costs, electricity costs, et cetera, are coming down. Is it possible maybe to quantify how much price helped you I guess it's mostly predominantly in Industrial and maybe in Medical, but is it possible to say anything on how price helped you, or what the impact from price was year-over-year? That there was a slight support from that, not very much. The margin improvement came mostly from more efficient production, and that is mainly within automotive, and we didn't see much of the fluctuations in production planning that we have seen previously. That was the most affecting positive reason for improving the margin additionally. Yeah. The Medical is the 6% organic growth, is that mainly volume driven, you would say? That is mainly volume driven, yes. Okay. That's all for me. Thank you. Thank you. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Mikael Laséen from Carnegie. Please go ahead. Okay. Thank you. Just a housekeeping question here on when it comes to the administrative expenses. It was SEK 122 million in Q2, I think, and step up compared to Q1 and quite a lot higher than last year. Can you explain what this is? Is it FX driving this, or what's behind this? That's correct. It was higher, and I think last year should be seen as a low number to start with. In comparison to Q1, I would say that this quarter is on a bit on the high side. Different explanations to that, but one area would be that we had notice cost for some management levels, more MD levels during this quarter, which affected with some SEK millions on top of Q1. Mm-hmm. Is this part of the Integrated Solutions segment, or is it included in the intragroup line? It's not part of the business area levels. It's on the group level. When we have that kind of cost for MDs and above, that level, we normally treat that as a group level cost outside the business areas, and the same this quarter. Okay. Can you maybe specify what you have done and how much it was? There are not many, but some of these positions that have been replaced. It's in different business areas, and it's around SEK 5+ million in this quarter. Okay. It sounds a bit, non-recurring. That's correct. I would call it, more... I mean, it happens from time to time, so it's not a very unusual thing, of course, but it's not every quarter, and it was on the high side this quarter, of course. It's a bit non-recurring. I agree. Yeah. Okay. Also just a quick question on CapEx, if you have any changes to the CapEx plan for this, for this year? No, I would say, it's the same picture as it has been for some time. Looking at this year, we do see SEK 600 million-SEK 650 million in CapEx. It's including paying for one production unit real estate in Sweden, which is SEK 150 million included in that number. We don't know exactly when that will happen. We expect it will be this year. Yeah, the same situation as last quarter. Okay, got it. Can I just follow up with a question on IVD? Approximately how much of the medical that product category is, and approximately, the profit level that that area is generating right now, if it's possible? That is around 15% of the business area. The profit level is slightly below the average of the business area, because capacity utilization is lower than what it should be. Okay. When it comes to GW Plastics or the North American business, is the entire North American business at roughly 7.5%? I'm thinking about medical now. If we look on the different regions, we have lower margins in the North American market. Yes, that is correct. Okay. Did you have any improvement sequentially, or is it still at some stable levels? It's still on a low level. That means that the other product areas, excluding North America, are maybe at your historical average margin levels at 12%, 13%. Is that a fair assumption? Yes, it's a fair assumption. All right. Thanks. Thank you. The next question comes from Johan Skoglund from DNB Markets. Please go ahead. Thank you. Just a quick question on VHP. Did you say how much this was of group revenues? Could you say if the segment contributed with profits, or was it negative in the quarter? VHP is around 5% of group sales in this quarter. Coming back to the nonprofit situation, we do have still a situation where this part is not positive in result for us. It's a slightly negative situation for that part. Okay, that was all for me. Thank you, and good luck with Q3. Mm-hmm. Thank you. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thank you very much for your interest in Nolato's Q2, and I hope you all get a really great summer. Thank you.