Welcome to NOTE Q2 Report Conference Call. 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, Johannes Lind-Widestam. Please go ahead. Thank you. Good morning, everyone, welcome to NOTE's second quarter presentation. What do we think about the second quarter? On the surface, it looks like we came in just about what we guided for, 20% growth, profit improvement with 0.5 percentage units. As you know, we were at 10% in the quarter, excluding the FX. Underneath that, there is a lot of things that are happening in our customer base. We see that we talked to some about optimization among the customers. We have seen more of that in the quarter than we anticipated. As you know, we are quite flexible in allowing our customers to back and forth, because we think that that is part of task to do that. We have also seen customers that are increasing and improving their demand. We had a slightly patience internally about the sales, a bit delayed on the startup in I would say our biggest customer contract that we have at the moment. We should have been doing more volumes in second quarter, that is pushed into third quarter. It's not any loss of sales, it's just that some improvements of those volumes are taking some time. It's, these things happens as I see it. Overall, we are pleased with, we deliver 20% growth. Organically, we are at 12%, excluding the extraordinary material sales that we had last year. You could say, even if the component market is still a bit tight, we don't see much of the so-called spot buys any longer, and therefore, we don't invoice that to our customers as naturally. I would say that this is just how the market is. Lead time has started to come down on most of the components or basically on all the components. There is still some limited supply on some versions of the semiconductors, especially, and so on, but that's the effect of that is not that large at the moment. We are seeing that we have about SEK 100 million still delayed due to component shortages in different areas, but not more than that. If we go into the numbers, sales SEK 1,078,000,000 was our strongest quarter ever in sales. Operating profit SEK 106 million, that's our underlying our second largest quarter. I think the Q4 last year was stronger. Q1 was about the same if you exclude FX. It's a good quarter as we see it, and we see the margin improvement. As I said before, it will not be significant steps, but it's going to be an improvement quarter year-over-year, as long as we keep the organic growth rate. That is really pleasing to see that this, our vision in this, in this area is working as we have thought it should. All profit of the tax goes the same way and so on. Cash flow, we were expecting to have a slightly higher cash flow than SEK 28 million, excluding acquisitions. I've said before, this year will have a positive cash flow. It's just a matter of in which quarter this comes. I would say that cash flow is a bit affected due to the fact that we have allowed some of our customers to really deplete their stock. We can say our largest customer last year, Charge A mps, we have helped them to reduce their inventory fairly much by not shipping to them. This is part. This has two effects in our, in our book. First of all, we didn't get the sales that affected our top line. Secondly, since we are now tying up some more inventory to that customer, the effect is hitting us on in both the cash flow and also in our sales as low, as well as the operating profit, of course. Nevertheless, we see that their sales is moving along as scheduled and so on. We are expecting that account to come back and show positive numbers from Q3 and onwards, as I see it. It's a one-off effects. For the first half year, just about SEK 2.1 billion in sales, up 24%, profit is following that. We are at the 10.2% for the quarter or for the first half-year, that is just slightly a slight gain on currency, but by I think it's SEK 1 million- SEK 2 million, so basically marginal. All in all, I think the numbers are very well connected and are keeping aligned with what we expect. I will come back to how the customers, because I think that's very important to understand where these changes have occurred. Looking at our segments, when it comes to Western Europe and rest of the world. We see that the rest of the world is picking up, and it looks like Western Europe is a bit down. I would say that this is more of an how should I say, a reporting effect. We have changed a little bit in our accruals, so we have moved some from rest of the world into Western Europe, and that has some kind of yeah, reporting effect. I would say that the underlying effect is that Western Europe is still running at a slightly higher level than we show here. The rest of the world is doing maybe 8.5% underlying. it's the same situation as we have been used to see here. What is in Bulgaria is now into the rest of the world. Very marginal effect still, since we're still only doing the value-add sales, as we talked about in the first quarter. We are working with the customers on changing the business model there. As I stated there, we are expecting that we will see effect of this in the fourth quarter, and from next year on and onwards, it should have the full effect as we see it. Very positive, and we see that the customers in Bulgaria are very pleased with the new owners. We have good dialogue with all the customers there, so we are very pleased with how this transition has moved on. What can we expect for the future here? I would say that the margin development we have seen in the past will remain. This means that we will see some improvement, both on the Western Europe level and also on the rest of the world. It will continue in about the same pace as we have seen in the past. I will come back to that later. All in all, I think the underlying margin is improving as our sales continues to pick up. We talked about it before, the value of getting higher volumes out from the same footprint. The effect of that is that our operating profit will continue to improve as long as this development is continuing, and as we have stated, we believe that this will continue also several years to come. The segments. Last year, we saw that all our segments were growing. We have a Greentech is still lower than last year. We are down with 16%. I've said that we are expecting Greentech to come in for the full year with positive numbers. We still believe that. We see that in this quarter, I think we had an inventory reduction with Short Champs in the level of maybe SEK 30 million-SEK 40 million. Their sales are significantly stronger than our sales towards them. They are close to where they want to be at their inventory, our sales will very soon pick up and go hand in hand with their sales development. We are expecting that only that account will contribute with good growth numbers going forward. We also see customers like Ferroamp and others are continuing to have very strong demand, and we are growing very nicely with them. On the other hand, the EV market in U.K. are still at a very low level, so we are seeing quite significant negative growth numbers from the EV market in U.K. That development is. We see some slight improvements, but it's more marginal than significant. I think that market has not yet came back as we have expected. We are expecting that we will beat last year's numbers from the EV segment in U.K. More to come from that. We are meeting with significantly lower numbers in the second half year than the first half year. Overall, this market has not developed as we expected when we entered 2023. We are seeing some signals that it is improving, but I mean, 2020, 2021, we had the almost doubling every year, and I think that those numbers, we're not seeing that in the forecast. We are expecting that this segment. Medtech is the segment we have, as I said before, we have started up a few with this, with big volumes. We are seeing the effect of that now. We are expecting also the third quarter to continue at around the +100% level. We will in the higher number already in fourth quarter. We will continue to grow, but not in the +100% level. This is a segment that we are expecting good growth to come from this segment also in the future, but not in this, in this level. Communication, I think it remain. We are seeing that the sales are looking strong also in the future. We have good customers here. We see that their demand is very. We see that their and their order levels are continue significantly higher than last year. This segment will most likely end up at 40%-60% growth for the year as we see today. Very solid outlook also for this segment. Industrial, at 14% on it looks like a very solid quarter. Within this, it's significant changes. We have, I think we have our largest account that are down with 30%-50%, 60%. Those that have doubled and tripled and the is very, it's You can say that the half that they're going better than we expected. The half that is going a little less good, they are actually declining more than we expected, this, a lot of this has is coming from inventory adjustments. When we look at this, we are seeing that these adjustments are probably w e are more than halfway through this. This means that adjustments will be lower in the coming quarters than in the second quarter. We are expecting that this development will change in the third and fourth quarter. We still expect that we will have an effect of this, and this is also built in our guidance. We are, we have taken into consideration how we have seen this development in the second quarter when we have put our guidance to the market. Currently, we have several accounts here where our customer sales are significantly stronger than our sales to them, since we are since they are declining their inventories internally. Our growth will pick up towards these accounts when the stock reduction has been done. I would say that the second quarter, a bit weaker than expected in Industrial. I would expect that in the later part of 2023, and especially in 2024, we are seeing that our strong growth in this area will come back and still be our growth driver in going forward. We are seeing that the demand is continuing to be at a very good level. We are seeing some short term adjustments on the inventory side that are pushing down our sales in the second quarter and also in the guidance for the second half. As I said, this is what we see as short term activity. All in all, I think that we are still benefiting from our big mix of our customers, and this is our core strength, as I see it. Our 50 largest customers stood for 48% in the second quarter, and I think this is very good for our continued growth going forward. If you look at our highlights, as I said before, availability of the electronic components are getting better for every month. Still see some of our components with shortages, but it's the numbers are getting less and less. We are measuring how many components that we have a shortage on, and that number has significantly been reduced in the last quarter. We are expecting that the component market to come back to be normalized within the next, say, quarter or so. We are looking very positively upon this. Looking several years ahead, I think the electronic industry is growing very fast, and there is always a question mark if we are if the our suppliers are investing enough money into capacity increases for, say, the next four or five years. We will come back to that when we see that. Quality and delivery performance is, as always, our focus. I would say that we are still, our quality is top class. I think we're down to, like, 500 PPMs in general today, which is, it's a really low level. Supply challenges are getting less and less. The total amount of delayed orders caused by component shortages is down to around SEK 100 million. We are expecting that that number will more or less be depleted when we end the third quarter. Order intake up 10%. Here, as I said before, I'm positively surprised by this because we have several customers where we have had 12-18 months of orders, and they are now down to the normal three to six months, and we're still increasing the order backlog, and that's a very positive sign. If I look at this at the underlying order intake, if I also include our customers' forecasts in the next 18 months, we're seeing much higher numbers than this. We are expecting that our growth will continue to be similar to what we have seen in the past years. We are very pleased to see that the order intake is continuing to be strong, even though the order length is reduced in this quarter. This is one of the things that I'm mostly pleased with to see when I read through the numbers. CapEx, still one part that is very important for us. We have a big capacity needs for the coming years. We are looking at how to extend the Torsby factory, where we have significant order backlog increases. We are expecting that site to continue to really good growth numbers. We are in the final phase of extending our Norrtälje factory. That will be done in fourth quarter, hopefully, earlier during the quarter, those investments in increasing floor space is for us to support our growth. Return on operating capital up to 26%. Also, a good level. This is also given that we have an too high inventory situation. The underlying return on operating capital is the stronger if we would normalize our inventory, and that will take, I would say, three to four quarters until we are back to where we should be, given that the improvement on the component market is continuing. Our balance sheet, equity, 42% still a very strong liquid. Our equity will most likely go down in the third quarter since we have acquired DVR in U.K. That will be one part that will take up some of our cash. If we look at this equity, and what we see with U.K., interesting market. What has happened after Brexit is that we see that the size of this market is roughly the same as the Nordics. What we see is that more of the customer in the small to size volumes, up to GBP 4million- GBP 5 million in purchase. They are moving or they are remaining their production in the U.K. due to the complexity of importing and so on. We are expecting that the British market to be fairly strong going forward, and the expectation when we look at the market surveillance, is that it will grow significantly higher than the rest of Europe in the coming two, three years. We are seeing that the underlying demand is really strong. We have started up several new accounts in the last two years, and we are growing our segments, excluding the [audio distortion], that we still see negative growth numbers are. DVR is primarily into the Industrial segment. Therefore, we are seeing that this will balance our offering in the U.K. in a very good way. The factory is well invested. It has significant growth potential, and it's located in a good of London. Our other factories are west or northwest of London. Companies, the owners have been, the current David will remain as managing director, and he has owned this with his parents. This is a very good transition for us. We keep the same management structure, we keep the same ambition in the company. They have a good trend for the last 10 years, and we are expecting. This is the kind of acquisition that we like. We don't, there is no one. There is, we will keep the same management. The company is performing well. We are, that we can benefit with better terms and conditions on those, on the component. We will have a possibility to maybe guide some of our customers that want to go into U.K., to go into this firm. We will help them grow, and they will continue with their strong performance as we see it. This is an acquisition that we really. I would say that on all our acquisitions, but we are very pleased with that. We have found this one. This was not also a company that were not down, out on the open market. We came across them due to contacts. Let me get back to DVR later on in the coming quarters, and we will see how this develops, but our expectations are really high on this company. Go more to our outlook. Our operational momentum is still very high. We are winning more and more accounts. Our win rate is higher than last year, so it's on the highest level ever, and this is also supporting our coming year's growth. What we see is that our backlog is now up with 10%. We are guiding, as always, on our lowest estimate, to be SEK 4.3 billion. We are still seeing that this inventory reductions at our customers, that is, as I said before, built into our guidance. We also see that the potential continue to strengthen our operating margin is very high. We are well positioned to achieve our sales target. At latest in 2025, we will invite you to a new Capital Markets Day, where we will come out with new long-term financial objectives. This is where we are today. I will go to this slide, which will be my last slide. We see that, as I said before, there's not gonna be a linear trend on the operating margin. It's always that, some quarters are stronger, some are weaker. We will see that trend to continue. As long as we continue with our growth, we will continue to improve our margins. We are expecting the growth to continue to be fairly good. Second quarter guidance may sound a little low, looking at this as our lowest estimate, but still, if we hit this guidance, we are expecting the operation margin to continue to improve as well. We are looking very positive future. In Europe, the expected growth of 7% per year still remains. I would say that there will be fluctuations. My guess is that the 2023 and 2024, the general growth rate in Europe might be lower. It depends on how deep the financial or economic slowdown is. What we see is that we will continue to have growth. We are expecting double-digit growth for the coming years to come. How high they will be, we will come back to that when we guide, but we do not see any decline in our underlying demand. As always, there will be swing quarters. We look very positively upon the future. If you look at this in the bigger picture, if you look at this in a, say, the two, three years to come, our industry and our customer base, and our order intake, and what we get from our long-term planning with our customers, is supporting, and growth that are in line with what we have seen over the last, say, five years. We are not seeing any kind of slowdown in the underlying demand. Our discussions with the volumes with our customers remains at a very high level, and so on. We are looking very positively upon the years to come. I think I will end my presentation there and move over to questions. I will start with some questions that [crosstalk]. 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. Yes, I will start with some of the questions that have came in during this call. I have one from Philip: "You guide for net sales of SEK 4.3 billion in 2023. All that is coming from M&A done in 2023?" I would say that the SEK 4.2 billion-SEK 4.3 billion, about 80% of that is coming from the acquisition of DVR. We are expecting that to be around GBP 6 million for the second half of the year. Curious to hear. We have one from Johnny: "Your inventory levels going forward, should we expect reduced inventory levels, or how do you think about the future ahead?" This is a very good question. I have said before in these calls and the remaining, we have roughly 20%-30% too high inventory, and that level still remains. What we are expecting is that our inventory level will start to decline, but at the same, expecting to grow. I would say that in the perfect world, we would end up an inventory that are maybe 15% lower when we end this year, then we grow 15% or something. We, half of the reduction will be met by a sales increase. I would say that, yes, we are expecting inventory to go down, but at the same time, we are expecting to grow, that will generate new demand of inventory. Say that half of the inventory reduction is expected to go down, half is expected to be, so to say, that we grow into the new inventory levels. That is what we are expecting, nevertheless, this should mean that our cash flow will come in strong in the quarters when this inventory reduction is happening. I have one from Yuan, but I think I answered that one, and that was also related to how much of our sales increase that we forecast that is coming from the DVR acquisition. Those were the three questions I had got in here, and one and other questions on the call. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. I got one other question in here from Staffan: What are you most excited about in regards to NOTE's future? Which sectors, industries do you see being the strongest coming years? Very good question. I think we have really strong customers in all our segments. I am expecting that the EV market is coming back in a way, and that will sales increase in that segment. I'm also expecting the significant improvement in what I call a segment in the industrial segment, which is everything that goes into buildings, I mean, smart buildings and all that is when the market is really down. We see that these customers are struggling to get the sales out, and we expect that to change in the coming years. I would say in our industrial segment, several accounts that are expected to grow really, really nice in the coming years. It's hard for me to pick out one of the sectors, but I think that we will see that our, the coming years' sales growth will still be driven by strong demand in our industrial segment with the other subs. Communication looks very strong in the next one to two years. And so also in that segment, we are expecting the growth to be. It's very hard to pick here, Staffan, but my view is that we will, if I look at some customers, I see that they are expected to grow extremely nice. It's hard to pick. I would again say that our, how should I say? The, our mix is our strength, and luckily, we have growing customer segments. The full picture is what I really like when it comes to our sales distribution. I have from Yuan: What can you say about risk related to your inventory? Are the inventory customer-specific products or general products that could be sold to many customers? In general, you can say that I would, n ow I'm a bit guessing here, so don't quote me on this, but I would say that half of our inventory is on electronic components that are generic, and half of our inventory is on the customer-specific. If I start with that, with that, yeah, that way of looking at it. What we see is that we have advanced pay of our customers, where we have over inventory, and this means that if there are a change of the product or if there are phasing out of different versions, which we have, we can net that out with by using that. We see that our inventory risks as a company are not higher today than it has been in the past. We don't see this as a big risk or. What we see is that, yeah, we have seen customers over ordering when the component market was a bit or was very hard. We see that they are adjusting their orders and their forecast had to better match what they are actually selling. We see that we have this has generated some over inventory. Combined with that, everything that we have bought on the spot market and the normal supplies, that has an effect that we are increasing our inventories. There are several activities or things that have been pushing our inventory a bit on the higher side. We have been through these changes in market conditions in the past, and what we see is that we should see that we are around where our peak of inventory compared to our sales, meaning that our inventory turns are at the lower end of this cycle. That is where we are at the moment. Yeah. It's, you can say that we, the over inventories to customers are, have a tendency to be higher on the non-generic component rather than on the generic components. It's one way of looking at it. I hope you're happy with that answer, Yuan. That was the last question I have got in on this on the written questions. Is there any questions on the, from the call? There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. I think I've said most of it. I think we are quite pleased to see that also a bit problematic quarter, where we saw some delays of starting up of our. We also see that the slightly higher inventory reductions at some of our customers, that we could still meet our guidance. As always, we remaining transparent. We are showing you what we expect for the future. We are trying to be clear on what our upsides and downsides are, and so on. I hope that that is meeting your expectations, and we look very positive, positively upon the second half of this year. We are expecting the second half of this year to be our best second half ever. We are expecting 2024 to continue to grow in a good way, and also that we will continue to improve our margins going forward. On top of that, we are expecting the inventory to get more normalized over the next, say, two to three quarters. That is what we are expecting, and, yeah, leave it there. I thank everyone for listening, and I hope that this was informative. Thank you.