Welcome to the 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 pound key five on their telephone keypad. Now, I will hand the conference over to the speakers. Please go ahead. Good morning, and welcome to the PowerCell Quarter One Report. Today, me, Richard, is joined by CFO, Torbjörn Gustafsson, and we will walk you through this first presentation, and then answer any and all questions that you might have. So, looking back at the quarter, we had a rather good market activity, but on a slightly softer market. That doesn't mean that it's a bad market out there, but it's softer. With soft, we mean that we see slightly longer time for decisions, but on the other hand, larger orders potentially out there. We reported a 3% growth for quarter one and 18% rolling twelve months. Torbjörn will comment slightly more on that one in a few minutes. As we said, we see more OEM orders growing in, which is encouraging because that means repeat business. Notably, the ancillary power business to Fantuzzi Group that you see on the right side on the delivery truck there. We also had a presentation together with Hitachi Energy, Skanska, Volvo Group, and Port of Gothenburg, with a HyFlex container, where we are replacing diesel generators to give power to construction vehicles operating in silent mode on green energy in the Port of Gothenburg, where they are redoing one of the docks there. We are happy to report a historically strong operating cash flow, as we promised in the quarter four presentation, bouncing back on the slightly negative side that we reported there. We indicated we had cutoff effects at the year-end, and now we are happy to see that we could deliver on that promise. Also glad to see that we're part of another larger development project, H2 Marine, which is an Asian- Japanese conglomerate to develop the next generation stack platform. This is once again one more application where we are accelerating the development of the next generation fuel cell stack from PowerCell. The 300-1 MW, 300 kW, 1 MW fuel cell core stack that we're industrializing that we previously had in the Project Newborn for Aviation as well. We are seeing a strong underlying market, but it is shifting gears. We have reported this previously, that we are now moving away from the project-driven market that we saw a couple of years ago or up until last year, moving into OEM business, where we see larger orders, but at the same time, longer decision process, because we are now integrated or designed into the customer solution. So the evaluation process is longer, the contract negotiation is also longer, but at the same time, order volume will be greater when we have the orders coming in. So it's a different time in market. We also see now that Marine and power generation is driving demand. Up until now, we have seen Aviation accelerating the industry. Marine, driven by the fact that vessels operate under a long period of time, 20, 25, 30 years, so they are future-proofing their installation with green technology. Power generation, mainly driven by data centers, with the growing demand from AI applications. AI applications also consume more energy than traditional computing, so this is now heavily affecting the power generation industry. Moving into the numbers of the quarter, I give the floor to Torbjörn. Thank you, Richard. As you brought up on previous slide there, we are up with 3% to 52.1 in the quarter, and relates to soft market, but still a growth. As you can see on the graph there, there's... The quarter one is normally a slow month for PowerCell. In the quarter, project sales, it stands out as the part that is the strongest, and project sales often relates also to Marine business. For rolling twelve months, sales are up 18%, and then also royalty has been increasing during rolling twelve months. So we're up to about SEK 20 million now, royalty then coming from Bosch. Two notes on the net sales and revenue. We had issues in the supply chain affecting growth in quarter one. Some delays in deliveries into PowerCell. We will be working with those in quarter two and quarter three, not necessarily affecting growth too much, but it is affecting, so the underlying market was stronger for PowerCell. Secondly, we see now China redistributing their subsidies from technology development related to hydrogen electrification, to more driving market demand. So most likely, we will see a upgoing trend in China when it comes to automotive, where we then have a royalty from Bosch, when we now see a massive expansion of the value chain and a distribution around hydrogen for commercial vehicles, heavy-duty trucks, et cetera, in China. On the gross margin side, we have previously emphasized our ambition to keep good gross margins, something that is of great importance to us. I think for the first quarter here, we also show that we are keeping up the gross margin. Although the sales weren't increasing that much, we have gross profit increase of 28% in the quarter. So we're now at the gross margin of 47% in the quarter, and rolling twelve months, we are at 41.5%. We're also focusing on operating leverage, where we are looking at the graph there, and the overall trend is going down, but we have a slight uptick than in the first quarter of 2024. But that comes then from increasing numbers of employees versus last year, which is then a part of improving capabilities, and we are industrializing and setting up the structure for our capacity build-up, and then also still driving a lot of R&D towards having the next generations of products out there. But this is something that we will be following, and we should have a downward going trend in this ratio going forward. Yeah. I mean, in this case, downward is positive, just to be very clear. Downward is positive. Yeah. That's right. And then just to highlight that in the quarter, SEK 9.5 million is capitalized as product development then for future product releases. And then highlighting cash flow. The operating cash flow, SEK 38.7 million positive. And this has had a positive effect coming then from current receivables, mainly, but we have other positive factors as well. But this is then going back to what Richard said earlier on, that we had a cut-off effect in quarter four, 2023, that we then see as a positive sign for the quarter, but not only that, that we had other positive effects also in the quarter here. So we are back at that. And then having a rolling twelve months cash flow of about SEK 69 million, minus then at the moment. Mm-hmm. So looking at 2024, and what do we have in focus here? Of course, continued growth. As we said, we see a very interesting market out there. All segments are showing activity, and we see also that the infrastructure supporting hydrogen electrification is improving. Especially in the U.S., it's a priority for PowerCell, as we now sign additional sales capabilities and presence in the U.S. But we have two parallel dimensions of PowerCell. One is that we're scaling the existing product generation. We are quite proud of what we have done with the industrialization of the S3 platform into different products. That is now really taking volume in the market. That is what is driving PowerCell towards breakeven and a balanced cash flow. So we have a very solid foundation to work on, together with Bosch as the supplier for the fuel cell, which gives us economies of scale, etc. But we are also, as an indicator, accelerating industrialization of the next-generation product portfolio. We have two stack generations that we are moving into industrialization. We have the heavy-duty stack platform, which will be the world's first 1 MW fuel cell stack. We can also make that one into a smaller 300 kW, optimized for heavy-duty trucks, etc. And in parallel, we have a medium-duty platform. And having those two in the pipeline for industrialization is extremely valuable for the next growth phase that will come in this industry from 2027 to 2030. So having the ability to both work towards breakeven on existing generation, while still accelerating the next generation, it is a very important balance for PowerCell. So doing that and still reporting an improved operational leverage is, of course, something that we are quite proud of. So can we continue to, to grow the top line? I think that we will have a very interesting 2024 ahead of us. We can also report that we have even more products coming out there. We will release new features in, in both quarter two and quarter three, because this is still an innovation market. So we need to be out there, enhancing performance in existing products, but also adding new features to be able to stay competitive and win the business that is out there, because we see a rather interesting market out there. And as we said, this is a new phase in the market. It is the commercial market growth compared to when we had a technology or a technology feasibility market growth. Different requirements, more about life cycle management, that you have products that can support the customer operation for 10, 15 years. Opens up new opportunities, but also, as I said, new requirements, that you have your house in order. You can report on quality improvements, you can have cost control, et cetera, in your production, and this is where the collaboration with Bosch is essential for PowerCell. We have prepared for this for the last three years by investing into the product offering, being clear on what is the value that we create to the customer, investing into the internal abilities and capabilities, so we have a very streamlined operation and manufacturing process. We have invested in productivity and internal efficiency. Although we are expanding PowerCell, we're expanding in innovation and having a rather strong efficiency focus in operations. And then, of course, the industrial stability and capacity. So we are well-structured to reach breakeven, also in a low volume market. We are not dependent on the mass market that will come eventually, but we don't know if we will see that ramping up in 2027, 2028 or 2030. But we will continue to have a PowerCell that is ready to break even, even sooner than that. So we will continue our growth journey also in 2024. We have an industrial production line, which is very efficient and is providing value to PowerCell and our customers. We have been working with our offering, industrialized innovation, for quite some time now. That concept is combining the fact that we have a very good ability to do custom adaptations, very close to the customer application, doing application-specific features. But we do that on an industrialized core product portfolio and technology portfolio that is industrialized. You get both the industrial stability and the high-value innovation from PowerCell. This is a very important concept that we see is competitive in the current market conditions, especially when you go into an OEM business where you need to design in your product into a customer offering. We think or we see that we have a strong advantage from being active in multiple applications. We have reported previously that we have over 20 Aviation projects, between 15 and 18 Marine projects, et cetera. All of those contributing to both the understanding of how a fuel cell system operates in actual market conditions, but then also what is driving different values. Looking at the market drivers, we see, of course, strong initiatives from the U.S. with the Inflation Reduction Act. We see that the European Union trying to follow. We said previously that China is now redirecting their subsidies from technology development to stimulating and incentivizing demand in the market, which we think is really, really good. So we see that the macro trends are supporting this this transition. We are also seeing what we call decarbonize or die in certain markets, where we have customers stating that if they cannot decarbonize, they will be out of business. This was best portrayed by one marine company who is part of a larger group, who came to us and explained the fact that they had a rather small part of the revenue for their owners or their group, but a rather large part of their combined emissions. And having an imbalance between those means that you will be challenged. So they have been faced with the notion that either they decarbonize their operation or they will be divested within three years. This is the first indication where we see that this is now business-critical for some customers. This is not just about reporting for the green perspective. It is becoming business-critical that you have control over your decarbonization. And there, PowerCell, with our ESG work and sustainability work, we have a very good way of tracking also how you are implementing these decarbonizations. We see now that hydrogen electrification is essential also to stabilize grid capacity in, I would say, North America, Europe, et cetera, because you have a high demand on electrification, and the grid is not providing enough capacity to expand the industry. Hydrogen electrification is not just for backup power, but we already see it as prime power in certain applications. The hydrogen industry, as such, is quickly maturing, and we see now that where you have invested into the infrastructure and the value chain around hydrogen, you see viable business emerging. Fantuzzi Group that we reported as an OEM business in February is one example, because the Welsh government and a region there have invested into the food value chain. As soon as you have hydrogen available at reasonable prices, a viable business is emerging. It is quite encouraging to see this now happening. So in summary, strong market drivers, an acceleration towards electrification and emission-free energy, supported then, as is said by governmental subsidies and also legislation making emissions more expensive. We are doing this with having the best fuel cell stack in the industry, really high power density, which is compact and very efficient for the customer. We are now entering into the serial deliveries, which is, of course, something we've been working for some time to be able to do that. And we are now scaling production together with Bosch in a very interesting existing footprint that will support us going forward. Upcoming dates for reports, you'll also see this on our webpage under the financial calendar. So with this, we're opening up for questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Henrik Alveskog, Redeye AB. Please go ahead. Hello, gentlemen. Morning. Good morning. Yeah, my first question relates to HyFlex and Hitachi Energy, and if you could maybe say something about their marketing plan for the HyFlex, given that access to hydrogen is so critical. Yeah, as always, I think that Hitachi should answer on their marketing plan. But what we see now is that we are looking into building on this demonstrator that we're doing in the Port of Gothenburg, together with Skanska and others, to have additional test sites to demonstrate or make the proof of concept available. And then, as you know, Hitachi Energy is a global giant in this field. So when they start to move, they tend to move rapidly. But as you point out, availability of hydrogen is, of course, an issue. So most likely, we will see this emerging in areas where you have a natural supply of hydrogen related to perhaps the mining industry, where we now see investments going into hydrogen production, et cetera. But for Hitachi to scale this one up is something that we are looking forward to, and also to be supporting. But at the same time, it is important to point out, and we have been doing this, I think, for quite some time now, that in all our segments, we are working with the legacy companies like Hitachi and others, who have the existing tangible infrastructure of market presence, aftermarket service, et cetera. They are the giants of the industry. They tend to move slightly slower. We also work quite actively with the new entrants, who are not transforming any existing industry. They're just acting on the opportunity. And we might see short-term growth that is faster from the new entrants, while at the same time, the traditional OEMs from the legacy companies, they move slightly slower, but when they start to move, you have a mass that is quite strong. So, although HyFlex and Hitachi is really interesting for us, we also see much more activity on the other end of the spectrum, where you have the new entrants. All right. Well, thanks. Then, I have a question regarding prices in the market, and I know that you're not too keen on discussing this in specific terms, but let's be a bit more general, please. Could you say something about price points and the development of, well, let's just call it price per kilowatt hour. Mm. per kilowatt. Today versus, like two years ago, which was pre the inflation era, if that has had any impact? And also, just in general terms, difference between, Stationary segment and Marine- Mm. And also how this translates into your growth margins in very broad and general terms. Yep. I'll try and be as specific as possible. I would say that we have been fairly successful in bringing cost per kilowatt down. So it is actually lower than the pre-inflation era, because we have been working on our product offering, working hard on industrialization together with Bosch. This is why PowerCell went in a direction where we set up an industrial system that should be cost efficient already on lower volumes. So we have been successful in bringing that one down while still protecting our gross margin, which is, of course, essential for us. But then you point out something interesting, and that is: What is the cost of kilowatt in different segments? It's also dependent on what is the delivery from PowerCell, and this is where we talk about our concept of industrialized innovation. Would we just sell a standardized product, a commodity as a fuel cell? Then you would see over time costs go down to an extent where it would be difficult to protect the gross margin on the levels we see today. So by optimizing not just the fuel cell in a system, but a system to a specific customer or in a specific segment, means that you can have a more value-based pricing. We also contribute quite a lot into the customer integration, because this is not the commodity market, also, when it comes to the maturity in the customer side. So doing a lot of integration, working together with them and making sure that we are generating enough value for the customer to be that high in the value chain, but then also, of course, charging for it. That is essential, and I think we've been fairly successful doing that. But of course, some Marine projects will have a higher price point per kilowatt than perhaps a more standardized power generation installation. But on the other hand, we are also looking into protecting the gross margin in those segments by adding more features, as I reported. We will have product releases in quarter two and quarter three, making sure that we add more value to the installation. So, your question is really valid, but I think that we have been quite successful in both managing the fact that we need to bring down costs to stimulate growth and getting volumes, but still protecting the gross margin. All right. Well, thank you. Any additional questions coming in? Oh, here we go. So we have, from Aryan, a question on: How is the sale in Sweden, our home country? Well, unfortunately, not that good. Sweden is still very much a battery country. We see that other nations have gone further in their transition towards other decarbonized energy solutions. Just going across the border to Norway, they are a role model in this way, but they are also used to working with gaseous energy. So, Sweden is not a primary market for PowerCell at the moment, but we are, of course, we are a Swedish company, proud of our Swedish heritage, and we try to be part of building a new Swedish industry. So, we will be working quite, quite hard with our colleagues in the nation and also with politicians. But at the moment, it's not the primary market for growth for PowerCell. Then we have a question here on serial deliveries from ZeroAvia. When will that happen? Well, ZeroAvia reported—well, actually yesterday, they inaugurated their U.S. production facility up in the state of Washington, northwestern part of America, North America. Last month, in March, they started their second phase of certification flight testing, and last Thursday or Friday, they completed their longest test flight so far. This is now the 12th test flight, everything passing with flying colors, so they are on track towards receiving a certification. Both ZeroAvia and PowerCell are contributing with, also the certification, European certification, government body, to make sure that we are compliant to it. Then the exact date is, of course, too soon to disclose, but we feel that we are on track doing this. When we look at the reported order that we signed in November 2022, it was an order of SEK 1.5 billion conditioned that they are approved for aviation certification. At that point, PowerCell, I think we indicated that that SEK 1.5 billion represented 800 propulsion units from ZeroAvia. To date, ZeroAvia have reported that they have signed 2,000 contracts, so they are ahead of that plan. We are not updating anything on that, but we're following it with great interest, and we're quite encouraged to see the success that they are having in the market. But it's still a lot of hard work to get this completed and get our joint product airborne. Torbjörn, you want to? Yeah, I think we got a question here from that we are—we mentioned the expansion in the U.S. and how our establishment of operations in the U.S. is going. I think for now, we have been progressing with establishment in the U.S., and we have set up the company and all the things related to having a company and sales in the U.S. However, for operations, we are now I mean, what we're doing right now and have been doing is really future-proof and being ready for it, and then setting up operations from our sake at the moment, that's, that is to set up assembly, and we feel that with the setup we have in the U.S. right now, we can be fairly swift in setting up operations. So we will await the right situation when we do have a customer, when maybe serial deliveries, or if any other trigger comes in, that we will then set up the operations. But the establishment has been going good, and we are out there, and we have a company and all the processes around there, to make it happen. And hopefully, we will sign an additional contract now, where we have strengthening the sales organization and also application organization. But then we can, as Torbjörn indicates, be rather quick in setting up an excellence center to support both development, integration, and aftermarket. And then potential assembly or manufacturing will be a condition that we get a serial order with substance to take that step. Otherwise, we will support that market together with Bosch and from the parent operation in Europe. And then perhaps a question then for when, when will these new products be ready for the market, and how does the products improve from the current offering? Yeah, new exciting products. New exciting products. Yeah. A good question. Of course, you need to constantly work with your product offering. This is not, as I said, this is an innovation market. So we will see updates on the current product portfolio, where we are enhancing performance. It could be related to actual output of the product, but also expected lifetime and guarantee structures, but then also new features making sure that we simplify the integration for the customers. We need to constantly lower the threshold for the customer to transition into fuels and hydrogen electrification. And by assuming a larger role of that integration, we might lower thresholds for transition. We will lower the technical risk, the technical investment, and also time to market for the customer. So by adding more features and expanding the PowerCell offering, we think that we will accelerate the growth, not just for PowerCell, but for the whole industry. It was something on the cash position there, Bob, that one. Yeah, the cash flow was good. Can you comment on the improved financial position? And I think, as we said, for the quarter, we did have this positive operating cash flow of almost SEK 39 million. So we're ending up in a cash position of SEK 101 million at the moment. And then partly a cut-off effect from quarter four in 2023, that really also then came back in quarter one. But not only that, because we have had other positive effects also in quarter one, then strengthening the cash flow and also then the cash position. And I think we have been saying in previous calls as well, that-... There will be a fluctuation and volatility in our cash flow and also in the cash proceeds, cash position. But at the moment, where we are at, we do feel that this is a good position, and it's well-funded in order for us to work with the current product portfolio, and also then go to the market with that one. So we feel confident in the financial position we have, and looking forward to drive the business coming quarters. Yeah. And as we said, we are, of course, monitoring the market development, so we could act on the opportunities, because as we said, we see a really interesting business and growth potential out there. We need to generate them, but we are also happy to be able to not just leverage growth and provide an even better performance when it comes to improving the financial position, but also investing into the new product portfolio and next generation of technology. That is extremely important because hydrogen electrification is still an emerging market. Although we have been doing this for 30 years, it is a novel technology to the industry, so you need to be out there, constantly protecting your position, protecting your gross margin, and earning your position at the customer site. So, quite happy to be able to balance that. Yeah. We have a question here on a colleague in the industry. Ballard is working a lot in the train industry and bus market. Does PowerCell have an ambition to compete in these areas, or are they the responsibility of Bosch? First and foremost, we're quite happy to see the growth that Ballard is reporting, because we now see, just following them, we see that the numbers or scale of orders is constantly growing. I think they signed an order of 1000 installation a couple of months ago. Really encouraging, because, of course, we are competing, but we are also both contributing to this industry. When it comes to buses, that is the area of Bosch, of course, so Bosch is working in that market, and we have the royalty revenue model, which is wrapping up, as Torbjörn presented previously. Train is an interesting market. We have been following the train application in industry, and not just entering for the sake of entering, but doing that with a purpose and understanding of what would be the potential. And now we see that the freight train is where we have a sweet spot for our product offering. We don't think that the commuter trains, although a lot of them need to be electrified because they're still running on fossil fuels in many areas. I think that the train network in the U.S. is only electrified by 30%, so a lot of potential there for electrification. But the PowerCell offering has a sweet spot in the freight trains, long-distance trains, where you could have a containerized fuel cell solution in combination with the hydrogen storage on a different container. That will provide more value and, of course, more operational total cost of ownership value as well. So we have been working on finding that sweet spot and now have a number of dialogues ongoing. And when we see progress, we will of course report it. Let me see here. I think we have covered most of the questions. We have also a slight overdraft of a couple of minutes. With that, I think we will say thank you for listening in. As always, reach out to the company. You can contact either myself or Torbjörn anytime you want. You're always welcome to make a visit at PowerCell, Ruskvädersgatan in Gothenburg, where we now have an operation which we are quite proud of. And if nothing else, we will see you at the Quarter Two Report in July. Have a nice spring and summer!