Welcome to the Nordic Waterproofing Holding Audio Cast and Teleconference Q1 2022. Today, I am pleased to present CEO Martin Ellis and CFO Palle Schrewelius. For the first part of this call, participants will be on listen-only mode, and afterwards there will be a question and answer session. Speakers, please begin. Okay, thank you very much. Welcome all to our call. Thanks for participating. Sorry about the glitch. We are ready to start now. To sum it up, we had a strong start in the first quarter of this year, but given the geopolitical situation and the very strong inflation we are all seeing, obviously we can't rule out some disturbances throughout the rest of the year. That could take both the shape of some raw material supply chain issues, and it can also take the shape, maybe further down the road, if inflation continues at a very strong pace, to some degree of demand destruction, because construction obviously has become much more expensive than it used to be. There's no immediate signs of this as we have seen in the quarter and also in the short term, we don't see anything of that materializing, but it certainly is a risk out there. Moving on to page two, I would like to present our financial performance in the quarter, and sales are up 30% versus last year. 19% is organic growth, whereof 13% is price increases to reflect our input cost inflation. 6% of the increase comes from acquisitions and 4% from the SEK currency effect. EBITDA increased 81% compared to last year to SEK 91 million. EBIT increased 151% to reach SEK 56 million in the quarter. Cash flow from operating activities was almost balanced, SEK -15 million versus SEK -88 million last year. Earnings per share are up significantly, of course, at 1.60 SEK per share. Next page, a few comments. Demand, as I mentioned, remains solid. It's historically a relatively high level, and it's stable in the roofing business, in terms of our product sales in all markets, basically throughout our geography. In Installation Services, we had a slight decrease, and that is primarily attributable to a late spring in Finland, compared to the year before. We continue to have strong order books there. The bitumen-based and the synthetic rubber business show double-digit growth in the quarter. Prefab elements had a single-digit increase in sales compared to last year, with a strong development in the Danish market and still some COVID-related difficulties in Norway. Our green infrastructure business showed strong positive organic growth in a seasonally relatively small quarter. Again, we are confident in the future development of the business given the order books we see. In Installation Services, we had an organic decrease by 6%, mainly weather-related. Moving on to the next page four. We've mentioned the dramatic input cost inflation. It has had obviously a strong effect on both business segments. In Products & Solutions, we've been able to absorb these through a series of sales price increases. In Installation Services, we have also increased our sales prices, but it takes a bit more time. We still have a historic standard, a bit of a margin compression in the quarter. Obviously, we're continuing to work on catching up. We have continued our acquisition drive. Last year we had seen seven acquisitions, and in the quarter we acquired the U.K. company Gordon Low, which is a leading specialist fabricator and distributor of pond liners and other waterproofing membranes, predominantly EPDM, the synthetic rubber we are producing in Sweden. We also acquired the remaining 33% of the Dutch subsidiary of SealEco, a synthetic rubber business, in line with the initial agreement from 2017. Moving on to the geopolitical situation. The Russian war on Ukraine has had extremely limited impact on us. Fortunately, we have no subsidiaries or employees in either country. The sales exposure to the area last year was minimal, and we have stopped exporting to the countries. We have discontinued any raw material supply from Russia. We do expect an acceleration of input cost inflation because of the effect on the oil prices and the energy prices. As I mentioned before, there might ultimately be some softening of demand because of this very strong inflationary effect. We also cannot rule out the midterm impact on our supply chain. We obviously are very actively looking for solutions, but some of the materials we are using used to be sourced out of Russia, and we are working to make sure that we can substitute them in time. We also continue to have relatively high inventory to make sure that our capability to deliver to our customers is not impaired because of these supply chain issues. We also have supported refugees from Ukraine, and both our employees and the company have made donations. Moving on to page six, we see stable demand at high levels. This is true basically for all of our business segments, and especially obviously for the sustainable solutions, the wood-based prefabricated facade and roof elements and the green infrastructure. The acquisition of Gordon Low on the next page, a few more items here. Basically, what we've done here is again a vertical integration. Gordon Low used to buy material from us, and we have now the capabilities to get closer to the end use of our products through this acquisition. They also provide alternative materials, butyl and PVC in the U.K. to their customers. What we also would like to do is to implement the pond concept we entered into in Belgium through the acquisition of Distri Pond two and a half years ago, and the acquisition of Schouwers in Holland. Gordon Low we see as a good platform to copy-paste that business into the U.K., where we also believe there's significant demand for this type of solution. Moving on to page eight, I pass it on to you, Palle, for some additional information on the financials. Yeah. Thank you, Martin. If I start with the net sales, as we said, SEK 912 million in the quarter, up 30% from SEK 704 million last year. Organic growth of 19%, whereof the price increase is 13%. Acquisitions contribute to be 6%, and currency impact 4%. On a rolling twelve basis, the net sales is now approaching SEK 3.9 billion here. EBITDA increased to SEK 91 million in the quarter from SEK 50 million last year, and operating profit at SEK 56 million compared to SEK 22 million. EBITDA margin is at 10% in the quarter compared to 7.1%, and on a rolling twelve basis, we're at 14.4%. Basically, increase in EBITDA explained by the positive development in Products & Solutions, where we've taken a proactive approach to the cost inflation. From the Installation Services, the EBITDA was unchanged. It's also maybe worth noting that, actually, we had a higher sales in Q1 than we had in Q4 last year for the first time. Normally, Q1 is a seasonally weak quarter for us. Moving on to page nine and looking at the table of the income statement here, we can see that the gross margin for the quarter was basically unchanged from last year, 26%. On a rolling 12 basis, we're at 28.3%. EBIT margin 6.1% in the quarter, up from 3.1% last year, and on a rolling twelve basis, we're at 10.7%. The net financial items is a fairly low negative value, and our tax expense increases compared to last year, which is in line with the result. Looking at the balance sheet table on page 10, we have a net debt/EBITDA ratio on a strong 1.5 times, compared to 1.1 a year ago. This is in spite of a quarter where we seasonally have a weaker cash flow moment. Interest-bearing net debt, that's SEK 762 million, compared to SEK 677 here. We still have a solid cash position and a balance sheet here. As you can see, the current assets here has increased due to increased volumes, increased inflation, and that we keep inventory to secure our capabilities to deliver. Moving to slide 11, we can see that ROCE are at an all-time high 17.9%, up two percentage points compared to a year ago, driven by the improved operating result. We also see an increase in capital employed, which is due to, well, increased activities and also that we done several acquisitions here in the last year. Our cash flow from operations on a rolling 12 basis is lower than a year ago at SEK 292 compared to SEK 460. The cash conversion, that's 52% against the strong 97% a year ago. We have communicated this several times that we have a decreased cash flow partly due to accounts receivable because of the increased sales, but mainly as well increased inventory to secure our raw material availability and higher finished goods able to ensure that we can deliver to our customers. Looking at the segment, starting with Products & Solutions on slide 12 here. We had an increase of 37% of sales in the quarter, SEK 773 versus SEK 563 a year ago. Organic growth 30%, where price increase is 13%. Acquisitions contributed with 4%, and currency another 4% in the quarter. As you can see, we basically have a strong growth on all markets in the table here. It's also worth noting that net sales for the first time in Products & Solutions is about SEK 3 billion on a rolling 12 basis. A good development on EBITDA, SEK 111 million versus SEK 72 million a year ago, and as well on operating profit, the EBIT at SEK 83 million versus SEK 49 million. EBITDA margin increased to 14.3% in the quarter, and for the latest 12 months we reached 18.4%. Again, I would say the good development is driven by having managed the cost inflation in a good and proactive way. Moving to Installation Services on slide 13 here. We had net sales of SEK 171 million versus SEK 152 million a year ago, including 12%. Organic development -6%, where we see a price impact of +11%. The volume development is negative here, of course, by a later arrival of spring in Finland. We have a positive impact from acquisitions of 14% and another 4% from currency. As you can see, it's a seasonally weak quarter for us, and the EBITDA improved from -11 to -7, and operating profit we can say is basically unchanged in the quarter here. We saw a EBITDA margin increase in the quarter here compared to previous years, to -4.2 versus -7.4. Moving to slide 14 and passing it back to you, Martin. Yeah. Thank you very much, Palle. Here we just summarize our, I would say our performance standards, and we tick all the boxes. Obviously, we have good sales growth, good profitability, significantly above the 13% threshold we've defined for ROCE. Capital structure also, solid. As you know, we proposed a dividend of SEK 6 to the general assembly in two days time. That makes it a distribution which is in line, which is about 50%+ of net income. Now that is our presentation. We very much look forward to your questions. Ladies and gentlemen, if you have a question for the speakers, please press zero and one one on your telephone keypads. We have our first question from Max Bakko from ABG Sundal Collier. Please go ahead. Yes. Good morning. Thank you. Can you hear me? Yes, yes. Perfectly. Perfect. Welcome. Hi, Martin and Palle, and congratulations on the very strong report. Thank you. A few questions from me. First off, I mean, except from Finland, the weather conditions was better this quarter than Q1 2021. Do you have a guess on how much that helped the improved sales year-over-year? Yeah. I think it's difficult to quantify. You have an excellent point, and we Mm-hmm. We do believe there was a bit of tailwind from that side. Yeah. Where we haven't obviously been able to quantify it, but. Of course. I think that, like we said, the underlying demand remains strong. I would say it's helped in the quarter, but even without it, I think we would have had a reasonably good level of activity. Okay. Fair enough. As you wrote in your report and said during the presentation, it's likely with additional cost inflation going forward due to the Russian invasion of Ukraine. Do you feel comfortable with rising prices to customers further than you already have? Yes. I think in the short term, we don't see a problem there. As I mentioned, in the medium and long term, it looks like there very well could be some demand disruption down the road, but it's too early to quantify it or to confirm that. Have your competitors increased their prices to the same extent as you have? Yes. Yes. To a similar extent, yes. Yeah. Okay. As we spoke about in conjunction with the Q4 report regarding the Installation Services business, the guidance or your best guess regarding the full year margin was somewhere around 3%-4% on EBIT. Mm-hmm. Following this report and the Q1 being closed, do you still see this as a good level to aim for 3%-4% on EBIT margin? Yeah. I would say it's not exactly a forecast. It's maybe. Yeah A bit more of a tighter target. Yeah. Yeah. We still have the possibility to reach it if things go well, but we are not sort of promising that we're going to hit that level. Yeah, yeah, sure. Maybe to give some color, we have quite good situation in Finland, sort of. Mm-hmm Gradually restoring our margins and gradually absorbing the input inflation. Yeah We still have a bit of a special situation in Norway where we have a company which we acquired a year and a half ago, where we had initial difficulties, and we are working with those. We are confident we're going to improve the situation, but it has been a negative impact also in the Q1. Yeah. Yeah. That's great. As you said as well, you cannot rule out a decline in the new build and renovation markets going ahead. Would you expect this to be, I mean, visible in the numbers in this year already or is it more tilted towards next year, 2023? Yeah. It's a difficult call. I would probably opt for the latter. I think the impact- Yeah This year should be quite reduced. That, yeah, we're probably talking more about 2023. Two more short questions. If you could just remind us how much of sales in the Products & Solutions segment is towards commercial properties versus residential properties, if you have a number on that. Yeah. Not really. I think it's yeah, no. We have sort of a general feel, but commercial is predominant for us, but. Okay. Yeah. Yeah. We don't have a precise number. No, but that's good enough. Finally, as you said as well, potential component shortage going ahead, do you see this as likely, or is it just a potential risk you have identified? What specific component could there become a shortage of? Yeah. No, we have two specific situations. One is a bitumen supply, where one of our supplier, Nynas used to buy oil from Russia, and they've discontinued that and are now substituting it. There might be- Okay a short window where they will not be able to supply us with certain grades. Yeah We obviously work to go around that if it happens, and we are reasonably confident we'll be able to do that. Yeah ... the other item is carbon black, which is a material which comes predominantly from Russia historically, and which is an ingredient in the synthetic rubber EPDM compound. Yeah. There again, we don't have a totally guaranteed solution. Again, we're working on it. We are reasonably confident we'll solve it, but it will in all cases lead to a significant price hike, which then we believe we'll be able to pass on to customers. There will be a bit of a game change situation there. Yeah. Okay. That was all for me, for now. Thank you very much. Thank you very much. We have another question from Cecilia Sindling from Carnegie. Please go ahead. Right. Thank you, and thank you for your presentation. My first question is the strong sales volume for the bitumen waterproofing segment. You mentioned you had double-digit growth in all four Nordic markets. Do you believe your customers now have bought more this quarter to secure their inventory, which will impact your Q2 or Q3? Or can you give us some color about that dynamic? Yeah. It's something which is obviously difficult to measure. Mm There probably was some degree of holding inventory with two customers. Mm-hmm. Usually, they don't hold huge quantities because it's a fairly fast-moving throughput. They usually order for basically what they need in the coming days. I don't think it's a huge effect. There's a bit of it. All right. Great. The solid order books in prefabricated wood elements, and especially this one in Seikat until quarter three, is it possible for you to protect your margins here as well, or is it a delicate problem with high order books and increasing cost inflation when you have such a- Yes ... long- Yeah, that's a good question. We have now learned to cope with this. We have Mm changed our contracts to be sure that if there's a dramatic input price increases. Mm Throughout the life of the agreement, then we have the possibility to increase our prices. It's something which historically wasn't always very well-defined, but we've now learned to do that systematically. All right. Okay. That sounds great. Also this strong order intake in green urban areas during the quarter, so it's a small quarter, but what is driving this, like, demand? Is it renovation or new build? Perhaps you can give some color if it's different between geographic markets. Yeah. It's usually you could call it new build. In a few instances, it's basically cities deciding to create new green areas. Yeah. Mm-hmm. A new aspect. In terms of the order book and the improvement we've seen, it's really we are clawing back some of the market share we lost last year because of price-aggressive competitors. Yeah. We think we are successful in gaining that lost market share back, and that explains part of the increase. All right. Okay. Given that this, the prefabricated wood elements in green urban areas increases, should we expect that your taxonomy share of total sales would increase during 2022? I guess you mentioned around 19% of sales was taxonomy eligible- Correct. in 2021. Yes. Yes, that should be the case, I would say. It's a bit mitigated by the fact that our core business grew quite significantly also. Mm-hmm. Which maybe we didn't expect to that extent. Yeah, in the medium term, clearly these two segments should grow more than our legacy business. All right. Perhaps another. You already got a great question from the previous person. Regarding your increase in raw materials, if the opposite happens now when you have a large inventory, is there a risk for you to have a too high cost in your inventory base and not be able to keep the high prices, or not be able to increase the prices, to cover for the margins for your current inventory level? Yes. Yeah. In theory, obviously that is the way it goes. In practice- Mm-hmm. We've always seen historically that it takes quite a while for us to reduce prices when our input costs come down. So Mm-hmm. Historically, we've had a bit of a windfall period of up to six months in that sort of situation. Okay. I would say that, right now, obviously, it doesn't look like this inflation will stop. No. You're right. Down the road, next year, for example, especially if there's some demand destruction, that might very well happen. That usually is not a bad period for our financial results. Yes. All right. I think I covered all my questions, so thank you very much. Thank you very much. Yeah. We have another question from Johan Meltres from APUS Capital. Please go ahead. Yes, good morning. Only a very brief follow on after the very good question from public colleagues. Yeah. Only to give us a feeling about the oil price increase, how fast maybe are your suppliers increase their prices? For how long is the time lag? How strong is the impact of the bitumen prices on your product business percentage-wise? For example, a 10% increase in oil price has a cost effect of X. Have you some of these rules or is it too difficult? Yes. to give us the estimate? Yeah, yeah. Interesting question. Yeah. The first question, the effect is immediate because the Okay. Bitumen prices are indexed on certain oil indexes. The second figure is basically in our legacy business, in the production of waterproofing membranes. Mm-hmm. -based on bitumen input. Bitumen represents about one-third of the total raw material cost. The other two ingredients being SBS, the plasticizer and the carrier, the polyester sheet. Mm. or glass sheet. You can easily say if the oil price would increase 10%, if it's one-third, certainly you have a 3% increase in prices or something like this. Correct. Okay. Correct. Yeah. That's correct. Obviously, there's a bit of a correlation with the other materials also. Mm-hmm. SBS is oil-based, is not directly correlated to the oil price, but there is a positive correlation there too. Okay. Super. Thanks a lot. Yeah. Pleasure. We have no further questions, gentlemen. Okay. Well, thank you all very much for dialing in, and it's been a pleasure to present our quarterly results.