Welcome to the Nordic Waterproofing Holding AB Audiocast with Teleconference Q4 2021. Today, I am pleased to present CEO Martin Ellis and CFO Per-Olof Schrewelius. For the first part of this call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. Speakers, please begin. Thank you very much. Good morning, everyone. Very happy to have you on the call. Thanks for joining in. So I'll jump right into it. We have had, all in all, a strong year again. It's actually a record year, but just by a relatively minor margin over last year, which was quite good already. We have achieved that in spite of the cost inflation you have seen and which we continue to see. Moving on to page two. A few takeaways. We have an increase in our net sales of 11% over last year, with 4% organic growth. That's basically in sales price increases, 8% from acquisitions and a small negative currency effect of 2%. Our results of EBITDA and operating profits are up 13% over last year. Our cash flow from operating activities was weaker than last year, and the main reason is an inventory build-up, which is both in volume to make sure that we have enough raw material available and enough finished product available to deliver to our customers, and also the cost inflation effect on the inventory values. The earnings per share are slightly up compared to last year, SEK 10.64. Moving on to page three. Looking at the quarter, we've had a solid quarter against a relatively strong quarter for last year also. We have especially been able to increase our net sales by 16%. Most of that is acquisitions, 11%, and 5% is organic growth, which is all sales price increases and no currency effect. The results were flat, basically, compared to last year. EBITDA is up 4%, slightly up, and the operating profit is slightly down. Cash flow, again, is weaker than the quarter in the year before, for the reasons I just described. Earnings per share also are somewhat down SEK 1.81 versus SEK 2.3 last year. Moving on to page four. A few highlights. All in all, as you know, we are on a pretty strong demand level, have been for the last three to four years. That is still the case, so we don't see any downturn in the coming months. The roofing business has a stable demand at a high level. Insulation services for our part have decreased slightly. Reasons for that are mainly still some delays on job sites and component shortages from the disrupted supply chain. To some extent, a disciplined approach on our side towards not accepting lower margin business. The bitumen-based waterproofing business as well. SealEco showed double-digit growth, strong growth, and probably some market share gains on top of the sales price effect. In prefab elements, we had slightly lower sales due to our Norwegian entity, but we continue to have strong order books in all countries, Denmark and Norway. Our green infrastructure, which had a bit of a slowdown in the beginning of the year, showed a positive organic growth again. In Installation Services, we're talking about the volume, number of buildings, and we had net sales decrease by 7%. We hope to come back to the profitability level in that business, but it is a bit more difficult than passing on the cost inflation there, compared to the industrial activities of Products & Solutions. Moving on to page five. We have a slight decrease in the operating result that is entirely explained by the lower returns in Installation Services and in spite of a positive development in Products & Solutions. The latter has been achieved in spite of input cost inflation. We've been able to basically pass on all of our input cost inflation now to customers and which has a slight volume effect, which is also positive. The input cost inflation, as you know, has been dramatic, never seen in the recent past, and it has an effect on both business segments, of course. As I mentioned, in Products and Solutions, we've been able now to pass all of that on. Versus Installation Services where we have seen margin compression. It's a more fragmented market. Some competitors have a certain degree of nervousness and have not been able to come with price increases to compensate. Right now it's difficult to say when the situation will be totally absorbed. Our estimate would be maybe six to nine months from now, but there's no certainty about that. We have continued our acquisition drive. We've made seven acquisitions last year, and we have already made one acquisition in the first quarter of this year. A company called Gordon Low in the U.K., which is specialist fabricator and distributor of waterproofing membranes for aquatic and commercial water containment in the agriculture sector. We acquired on the first of February. The strategic rationale is downstream integration, as we have successfully in SealEco for a number of years now, and also introducing the Distri Pond and garden concept, which we have started with originally in Belgium to the U.K. We believe there's also a pond and swimming pond market in the U.K. to be served through this company. Moving on to page six. As I mentioned, stable demand at a high level. We don't see any change in that basically when we look at our order books. SealEco products, which we distribute throughout Europe, are also seeing strong demand. In some European countries, we continue to see market share gains of the synthetic rubber material against other solutions on roofing waterproofing. We have continued strong growth in prefab facade and roof elements in our roofing elements business in Denmark, Norway, and Finland, so where we have Taasinge, the company we recently acquired. Basically no clouds on the horizon there in terms of the demand. I'd say it is true for green infrastructure. Growth rates in that business are not as high as in the prefab, facade and roof elements, but we continue to. Sorry for interrupting your presentation. Could you please shortly dial in your line again because we have bad sound interruptions from your side. Okay. I'll try and do that. Thank you very much. I'm very sorry. No, no. It's good. No problem. Please continue with your presentation. Thank you very much. I'm sorry for the interruption. We spoke about Gordon Low, the acquisition. We have now slide number seven. A little bit more column. Specialist fabricator using EPDM predominantly is the material we produce in SealEco, but also alternative materials like butyl and PVC to serve the predominantly U.K. market. Company was founded 35 years ago. It's headquartered in Bedfordshire, has 20 employees and an annual turnover of about GBP 5 million. As I mentioned before, the company will allow us to extend the successful Distri Pond and gardens concept to the U.K. Moving on. Palle, I pass it on to you. Yes. Thank you, Martin. We move to slide eight. As mentioned before, we had net sales of SEK 890 million in the quarter here, up 16% versus last year. We see the organic growth is 5% with a positive impact from price increases, so basically meaning that underlying volume development is slightly negative. The new acquisitions contributed with 11%, and on a yearly basis, we are now approaching SEK 3.7 billion in turnover. EBITDA increased from SEK 93- SEK 97, while EBIT decreased from SEK 65 to SEK 59, and the difference here is obviously the depreciation has increased. On a rolling twelve basis, the margin is 14.1% now for EBITDA, and it's basically, as we said, explained by a good and solid development in Products and Solutions, whereas in the Installation Services, we've seen a negative development, but I'll come back to that in a few slides. Moving on to slide nine then. We can see that the gross margin in the quarter was 26.1% versus 26.9% last year, and then we should bear in mind that we had a strong fourth quarter last year. For the full year, we had an increase from 28.1%- 28.4%. And same for the EBITDA margin that down in the quarter from 12.1% to 10.9%, whereas an increase for the full year to 14.1%. As a reminder of the negative development on net financial items was that in the third quarter, we did significant updates on earnouts and valuations for the options to buy outstanding shares in the subsidiaries we do not hold or we own, and hence a higher negative value this year than last year on that line. Moving on to slide 10 here, where we can see that ROCE continues to be well above our long-term threshold level of 13%. We're currently at 16.6% at the end of the year. Our net debt to EBITDA ratio continues to be strong at 1.5 x, even though higher than last year, it's still at a good position. We should remember that we also have a weaker cash flow this year. We've done several acquisitions, and we also paid out a significant dividend for both 2020 and 2019 during last year. Our interest-bearing net debt, that SEK 677 million, still leaves us in a good cash position and a strong balance sheet for further growth through acquisition as an example. Moving on to slide 11 and looking at the cash flow from operating activities, we can see that the operating cash conversion is lower in 2021 than it has been the previous two years. As commented here, the reduction is because of we have higher inventory and it's partly higher input costs, but it's also a higher level of both raw material and finished goods to secure our capability to continue to deliver to our customers. I like to point out that the board suggests will suggest the AGM a dividend of SEK 6 per share, compared to SEK 5.50 for previous year. Moving on to slide 12 and looking into the Products & Solutions segment where sales was up 13%, up to SEK 658 million in the quarter. Organic growth was 8%, and acquisitions contributed with 5%. We can say that basically the organic growth is to a large extent price increases, whereas volumes are say flat if flattish I would say in this respect. Looking at the bitumen businesses in total, we have a good solid growth, but it differs a little bit by market. We can see in Finland, the growth there is 10%, where acquisitions is 17%, organic development is then slightly negative, about 7%. Denmark, strong for both the prefabricated elements and the bitumen business, and a very strong development in Sweden with 23%. In Norway, we see a negative development. There it goes different ways, where the weaker part is the prefabricated wooden elements. For the rest of Europe, we have a good double-digit growth there. EBITDA good growth, up to SEK 100 million in the quarter compared to SEK 73 million last year. The EBITDA margin increased from 12.4%- 15.2%. For the full year, we're up at 18.3% now. Then moving on to slide 13 in Installation Services where you can see that the sales has grown to SEK 249 million, an increase with 21%. Organic growth or organic development has been negative with 7%, and it's mainly caused continued delays on job sites due to component shortages from other suppliers than us, and also that we kept the disciplined approach towards not lowering our margins for the works we do. The impact from acquisitions is more significant in this segment with a +30%. The EBITDA in the quarter decreased to SEK 1 million compared to 24 last year, and the margin is then obviously 0.4% compared to 11.7% last year. For the full year on a rolling twelve, we're now at 3.7%. Our other decrease in the result relates to the input cost inflation that we are a little bit later on passing on to our customers in this segment, the lower volumes and our disciplined approach. We can also note that we have had some operational issues in two companies here that also has contributed to a lower result. With that, I'll move on to slide 14 and back to you, Martin. Thank you very much, Palle. We conclude the presentation with our financial target structure. We basically for the full year ticked again all the boxes, of course. We did have sales growth, albeit volume growth was relatively flat. We increased profitability significantly beyond the 13% threshold we have in terms of ROCE, where, as Palle mentioned, we're above 16% right now. Capital structure, we are significantly below the 3x debt on the EBIT level, which we have defined as our target. In terms of dividend policy, Palle mentioned the proposal of SEK 6 per share, which would be significantly above the 20%, 50% level we've defined. Thank you very much. Now we're looking forward to your questions. Ladies and gentlemen, if you have a question for the speakers, please press zero and one on your telephone keypad. We have the first question. It is from Sofia Sörling, Carnegie. Your line's now open. Thank you, and thank you for this presentation. I will start off with the Products & Solutions division. You mentioned that from the group level you had 5% organic growth, but the volume growth or the growth derived from volume was slightly or neutral. Would you say that this is the case for all the product segments, i.e., the waterproofing, the prefabricated building elements and also the urban green, or does it differ depending on these product segments? My first question. Yes, thank you very much. Yeah. The answer, I would say, is nice differences. We do have positive growth in the prefab elements. We probably have slightly negative in green infrastructure. As I mentioned, that was predominantly the first nine months. We've seen an improvement there in the last quarter. Yeah, reasonably flat in waterproofing. All right. Would you say that the urban green product segment has been negatively affected during the quarter due to like the natural seasonal effect this quarter? Yeah, seasonal effects are significant obviously in the fourth quarter, so it's difficult to talk about the trend. We believe that we've lost some market share last year and also in the first half of this year, and we are now again on an uptick trend in terms of market share. Okay. What is your estimated market share, would you say in the Nordics or in Sweden or? In green infrastructure? Yeah. It's still a relatively fragmented market. Mm. We might be talking about a 10% market share. Mm. It's a market where we don't have the strong position we have in the waterproofing material, where we usually have up to 1/3 of the market in each country. What we see there is really obviously it's still an attractive market and we're looking at acquisition opportunities and in the coming years there might well be possibilities to increase our market share. All right. Through acquisitions. All right. In the Installation Services, have you continued to see this negative effect due to job delays from other parts in the beginning of 2022 as well? Yes. Yes. Can you give some details if this is really related only to external factors, or do you see any hampering in the demand for your Installation Services or is it just longer lead times and the fact that it takes longer time? Yeah To execute these services? Yes. It's clearly the latter. The underlying demand we believe continues at previous levels, at a strong or relatively high level in this cycle. We have good order books going forward. Mm. The component shortages, that's a situation which is slowly improving, but it's still there. I think we still see some effects of that and there should be some catching up probably during this year. All right. The negative effect on organic sales in these Installation Services, would you say, is mainly due to these job delays or is it due to other external factors in the Finland market? Or what would you say is the main driver of this recent Yeah, I think it's a combination of course, but we do believe that we probably lost some points of market share because of our sort of disciplined approach to margins. You can say that the other issue we have compared to product sales is that it's been difficult in that market to pass on the price increases so that there's a differential in Products & Solutions. We've seen a flat market in terms of volume at a high level, but we've been able to increase our sales prices sufficiently. For Installation Services, that's not been the case. It's a more fragmented market. You have more players. Some of them tend to panic in some cases when they see the margin compression in their business, and they take orders at a relatively low profitability level. There has been an impact of that. Again, going forward we are quite confident. We have a strong order book with sort of quite acceptable margins. We really expect to see an improvement over the next six to nine months in that arena. I see. The margin pressure on the Products & Solutions division, do you see that since your material costs continue to increase quarter by quarter, do you see that you can compensate for the margin going forward as long as the material increases or the material costs actually stagnate or stay at the high level? Yes. We think that we've been able to pass on the past increases in our costs, and we are confident that with a certain time lag, where if there are additional price increases, which we can't exclude, then we should be ultimately able to pass them on to customers. Right now it's a bit of a mixed picture. Some raw materials are coming down slightly. Mm-hmm. Mm-hmm Others are still increasing. You still see some additional transport charges. It's difficult to predict right now, but at the present moment, we don't have a dramatic increase in our costs. All right. Okay. My last question is about M&A. This is the acquisition of Gordon Low, and isn't it a kind of large distributor for you already, right? Yes. In annual sales, how much would that be as an addition to Nordic Waterproofing in this acquisition? Yeah. Well, basically most of the turnover will be addition. There's a bit of obviously of raw material going into their costs, but that's not a huge number compared to their sales figure. On top of that, we obviously want to develop the Distri Pond concept in the U.K., which after a while should increase Gordon Low sales. All right. Oh, sorry. Perhaps one last question. What do you see as the main synergies with this acquisition and perhaps with the Distri Pond operation in Belgium? Yeah. Well, I think Distri Pond has a very successful concept, and so we're going to. Mm-hmm. Copy-paste that to Gordon Low. That's. Mm-hmm. Really the main driver. To some extent it's also a defensive move you could argue because we historically have sold our material to Gordon Low, and being part of the group, we should not lose that volume to a competing producer of the EPDM sheets. All right. Okay. That was all my questions. Thank you. Yeah. Thank you very much. At the moment, there are no further questions. Just to remind you, if you want to ask a question, please press zero and one on your telephone keypad. And we received another question. Please introduce yourself shortly. Your line is now open. Yes. Good morning, Martin and Per-Olof. This is Max Scheffel from ABG. Hello. I have some follow-up questions on the previous ones. As you said, you do expect a recovery in the Installation Services segment in, say, six to nine months. According to my numbers, the full-year EBIT margin for the Installation Services segment was 1% 2021. What would you expect for 2022, given the ongoing recovery in that segment? Should we say somewhere around 3%-4%, a bit below normalized level? Yes. That's pretty much what we believe. We have a bit of a combination of the. Now, if you look at our Installation Services results, we have the Finnish contracting business, where we have basically the situation we described. We have a small effect from our Danish franchise companies who also have had some margin compression, because it takes more time and it's more difficult to pass on the input inflation. We also have an exceptional element, which is two of our recently created or acquired companies have had operational issues, which we are right now trying to improve, to turn around. That has also had a significant effect, especially in the quarter. As and when we turn these two entities around, we will also get an additional improvement of results. I'm talking about Byggpartner in Norway, which we acquired just more than a year ago. About Nordic Takvård, which was a copy-paste operation from a Finnish company, and LA-Kattohuolto, which we acquired three years ago to the Swedish market. In these two operations, we've encountered some operational challenges which we're in the process of solving. Okay, understood. All that together means that the figure you mentioned should be achievable. Okay. Yep, perfect. One last question. You talked about this in a previous question as well, but I mean, the bitumen price has come up significantly, I mean, since December last year and also since the 2020 and 2021, and we are now on par with 2018 peak levels. I mean, shouldn't this be notable in the Products and Solutions segment going forward? Or are you able to increase your prices to offset this fully and defend your high margins? Yeah. The short answer is yes. I think we've sort of demonstrated that last year. Right now we don't see any reason why that should not be valid also this year. We are- Okay. Yeah We are confident on that issue. Yeah. No, that sounds great. I think that was all for me. Thank you very much for, Yeah Thank you for the presentation and answering the questions. Yes. Thank you so much for participating. There are no further questions, so I would like to hand back to you, gentlemen. Okay. Thank you very much for attending. It's been a pleasure and I look forward to speaking again at the latest in three months' time. Thank you very much. Have a good day.