Ladies and gentlemen, welcome to the Permascand Top Holding Podcast and Teleconference Q1 2022. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I am pleased to present CEO Peter Lundström and CFO Linda Ekman. Dear speakers, please go ahead. Thank you very much, and welcome to the first quarter earnings release for Permascand. I'm Peter Lundström, the CEO, and together with me today I have Linda Ekman. Before we jump into the first quarter, I must say it's with happiness and joy, we're going to present this morning our first quarter of 2022. Before we start, I would like to make an introduction, and I'm moving to page number three. I mean, Permascand has a clear vision and a clear mission. I mean, our vision is to be and to become the leading independent global supplier of electrochemical solutions for clean tech applications in green technologies. Our mission is to deliver innovative, competitive, technical and product solutions to the markets for Electrification & Renewables, Industrial Solutions and Water Treatment. I move to number four. What is core for us? Our core technology platform, that is the foundation for our success. There's no doubt that the starting point is all about the catalytic coatings, what we do with electrodes, and how we build the electrochemical cells for our customers. We do new build and we do refurbishment and aftermarket and service. That is what we do for a living. If we move to page number five. We have more than 50 years experience in research and development, construction, design, and methods for manufacturing. We are aiming to be a scalable manufacturing of electrochemical components and solutions for the processes for our customers. What we do is that we adapt. We do the new coating mixture recipes to fulfill the requirements that our customers have. It's a lot about how we pre-treat our materials, what we do before we are entering the catalytic coating materials, and what we do afterwards. It's all about how we are assemble these and how we are manufacturing them. Because what we would like to work on is to lower the energy consumption for our customers, to increase the product and components with an improved lifespan, and that is more cost efficient with a higher reliability for our customers, and therefore also be very competitive on the market. I move to slide number six. What we have been doing over the last past years is to invest heavily into automation and robotization for scalable manufacturing. We are supposed to be very flexible when we are manufacturing, and we're supposed to be very reliable when we're manufacturing to a high quality. We invested a lot into automation and robotization. I can say that if you Google ABB and Permascand together, you will find some videos and you will find articles what we have done so far. I can say we have only started because this is part of our strategy to continue to develop our manufacturing methods and the way that we're operating to secure that the products and the components that we are delivering to our customers, that they also are very suitable and competitive for the future. I move to slide number seven. We have a clear strategy. There's no doubt that this is. It's all about winning the customers in all segments and growing the aftermarket and service. We will do it through our innovative solutions and our ability to actually manufacturing this in a scalable way through our automation and robotization programs. If you take on the right side Industrial Solutions, I mean, that's where everything started 50 years ago. I mean, it's clear it is the North American market that is primarily where we are targeting. We have opened up a company, and we've started to employ employees to set up the Permascand site and establish ourselves on the market. It is all about increasing the performance for our customers, and it is to have a superior customer support to them. If we move to the left, the Water Treatment sector, I mean, it's a regulated market, started 2017, and it's a new build market. For us it is to deliver as many electrochemical cells into this new build market, and then switch to become an aftermarket and service business, very similar to the Industrial Solutions market is today. In the middle part, that's where we have the future. Our growth opportunities are for sure in the hydrogen spectrum, in the metal purification, and in the power transmission. And that's where we are investing and that's where we are spending our time and money today to grow into this future business. Moving to number eight. We are now in the quarter one highlights, and we are really, really proud of being awarded two orders for a SEK 100 million project that will take place, a greenfield project in South America. We're building a new plant together with our customers, a world-leading supplier of chlorate. It starts already this year or beginning of next year, and it will be a very good project from Permascand's perspective. Last time we delivered a greenfield project was around the timeframe of 2012 and 2013. We're building our market share, and we're building our future aftermarket business through this type of projects. We are contributing to the innovation and to the sustainability in this industry, and we are, of course, really proud of this. We will continue our process and our development together with our customer set. If we're really moving into quarter one, I'm now on page number nine. I am really proud. I'm really happy, and it is with great joy that I can present that we in the first quarter of 2022 had a record high sales. We had a strong order intake, and we had a really solid foundation for the remaining part of the year. It's not only the strongest sales quarter in the company history. It is actually the strongest start in the company history when it comes to all the different parameters. We have continued to grow our gross margins, and we can really see the impact of the investments we have done in automation robotization. We have made improvements in our efficiency, and we can see that we are very flexible, and we can scale up and scale down our production in a really quick way. Also we see that the growth proof is really good. When it comes to the market demand and how the market is looking upon it, I mean, the activity level continued to be on a really strong level. We see that Industrial Solutions with the strong order intake is moving on as we are expected, but also a little bit stronger from the timing perspective. We see that Electrification & Renewables on the activity and the development projects, they are continuing as we have planned, and we believe it will actually increase going forward into the future. The Water Treatment sector has started up after the pandemic, and we really see that is going on and moving in relation to what we expected from the beginning. I will now hand over for some of the numbers will be presented by Linda Ekman. Thank you, Peter. If you look at the financials, as Peter said, we are proud to present this quarterly report. The last time we presented was the fourth quarter, and everyone asked us, "Okay, it's good numbers, but where are the order intake?" Now we can present the first quarter with even better numbers, and we also have a really good order intake. So it's really fun for us to present this and that we have the strong order intake that we also press release in February. If you compare the first quarter 2022 with the first quarter 2021, of course, there are some differences. We must remember that the order intake and the sales in Permascand is volatile. It doesn't go evenly on a really slow-moving curve. It's differentiated. The order intake +238%, of course, that's a really good number. As Peter mentioned also, the higher revenues +86% to SEK 139 million. Maybe it's more comparable to the fourth quarter where we had revenues of SEK 130 million. Still it's two really good quarters in a row, the fourth quarter and the first quarter, in sales. We have a gross profit of SEK 52 million, and that's a gross margin of 37%. If we compare that to first quarter 2021, it was 24%. If we compare to the fourth quarter, it was 36%. It's on a good and a high level. The adjusted operating margin is 22%. If we look at the share per sales per business segment, the sales in the first quarter is driven by the Water Treatment side. It's dominated by 71%. That's an increase, however you compare. The Industrial Solutions stands for 25%, and the Electrification & Renewables, 4%. However, it's important to remember that all these three segments contribute in sales and in different ways. They have different characteristic, which I will present a little bit more later. The key metrics also I want to highlight a little bit is order backlog value. We go out from the first quarter with an order backlog of SEK 509 million. That's a strong and solid ground for continued growth and continued business. We also have a positive cash flow from operating activities of SEK 22 million. The adjusted EBIT margin of 22% gives a total result per share, earnings per share of SEK 0.40. We move on to the next page 10. As I said, Permascand has three different segments. They are diversified, and they have a little bit different characteristics that you must remember when you look at them. The first one on the left, Electrification & Renewables, actually is on many different types of sales, all in the green transmission area and the environmental area. For example, it's electrowinning, power transmission, hydrogen energy storage. These sales are very much project driven, and it's volatile due to the customer development phase and also the product mix. For first quarter, we had solid order intake of SEK 17 million. We had quite a low sales of SEK 5 million, but a strong gross margin of 38%. As I said, this can be a little bit volatile, and will continue to be so. It's the smallest segment right now, but perhaps it is the segment with the largest potential moving forward couple of years. The segment Industrial Solutions, as Peter said, that's our background, the 50 years history. This is something Permascand knows really good, and we have customers that keep coming back to us year after year after year. And something really fun about Industrial Solutions in the first quarter is actually the large order intake, and that it is a signal for capacity increase and it's a greenfield order that we are really proud of. We have an order intake of SEK 138 million. We have sales of SEK 35 million, and a strong gross margin of 40%. The order backlog in Industrial Solutions, if we look at the total going out of the first quarter is SEK 204 million. We have an order backlog of around 40% that is in Industrial Solutions. The last segment, Water Treatment, that is a regulatory market. This segment was really much impacted from COVID and the pandemic. If we look at first quarter 2021, it was really a hit. It was really a full break, and everything stood still. Orders was postponed and pushed forward. It seems now like it's coming back. We have really seen in the first quarter now in 2022 that we are receiving new orders, and we want to deliver as much as possible. The high sales of SEK 99 million is a really good signal of that this segment is getting back on track. We hope for the lockdowns to kind of ease up now and the dry docks to start taking ships in for installations, which will open up. The order backlog for Water Treatment going out of the first quarter is SEK 193 million, which is 38% of the total. Now I move on to page 11. A little bit about the cash flow in the first quarter. We have a really strong positive cash flow. It's mainly driven by the positive operating profit. But also, we have a negative working capital. We have increased our inventory a little bit, or it's affecting the working capital a little bit, but we have increased the inventory quite a lot. We also have some investment activities, not so much, but what we do is that we continue our plan, our investment plan. We invest in the site, we invest in our production for a more cost-efficient way. We also have some cash flow in financing activities, and what we have done is that we have decreased the use of credit facility. We have paid back some of the loans. Total cash flow for the quarter is SEK 30 million, and we go out of the quarter with SEK 48 million in cash, in cash receivables. We can move to page 12. This is a way of setting the first quarter, the development in a little bit longer perspective. We need to remember that Permascand has a history of going out of 2019. It was a record year for the company, SEK 444 million in sales. We definitely thought that 2020 and 2021 would be even higher. The pandemic struck us and orders were postponed. It's important to remember we didn't lose any business, we didn't lose any orders, but they were pushed forward. It has been two years with struggling, but we have taken the opportunity of building a strong production facility. We have worked on much of our operations, so that we can continue going forward now on a really solid ground. If you look at the order backlog development, this is also proven that it has grown. We have moved from around SEK 400 million, SEK 428 million, SEK 491 million, and now we're up on SEK 509 million in order backlog. And as I have said, we have a strong order book within all the segments. And the large increase now is primarily in Industrial Solutions. Gross margin, we talked a little bit about, Peter talked about it, and it's fun to see that we can really get a result out of the things we have done. We have integrated the automation in the production process, and that's also proven that the scalability in our process gives us a cost efficiency. Even in the adjusted EBIT development, we can see that we slowly increase, and it's fun to see that 12 months adjusted EBIT is now 19%. It's driven by the gross profit development, but of course, it's the scalability. We don't have to increase costs when we grow. When we can run the operations according to plan, we receive the good results. Move on to page 13. I'm gonna say a word about the financial position. As you can see, Permascand is a solid and a transparent balance sheet. The assets is primarily non-current assets. It's robots for automation. The non-current assets primarily are inventory. The inventory is SEK 147 million. If you look at the total assets SEK 519 million compared to SEK 455 million in the beginning of the year. We have an increasing equity due to positive earnings, and we have lowered our loans. The equity to asset ratio is 59%, and we have actually a positive net debt going out of the quarter. We have total debt of SEK 39 million, but we have cash of SEK 48 million, so we are on a positive side right now. On the total, we have a strong position for future growth and future investments. Move on to page 14, and I'm gonna hand over to Peter for some key takeaways. Thank you very much. If I summarize what we have said so far about the first quarter, it is the best quarter performance in company history and the strongest first quarter ever. This gives us a very good foundation for our future ambitions and for our future growth plans going forward. I'm also very glad and happy that we have proven now for the third quarter in a row that the investments we have done basically since 2018, they are paying off, and we are more efficient, and we can scale our production more in a flexible way. It shows through the gross margin expansions we have said over the last quarters. I'm also really proud that we have maintained the interest of customers, and that we have a strong order intake, from primarily this quarter in the Industrial Solutions. It gives us an opportunity, and a profitable growth potential going forward. The strongest commercial potential we have, I mean, we've said it several times, it is the electrification and the renewable segments, through the hydrogen, through the metal purification, and through the power transmission. There's no signs of less interest from the customers. The projects, they are started up, they are ongoing, and they are actually a very high speed process to develop and to collaborate, the next generation of electrochemical cells for green hydrogen. We haven't spent so much money from an investment point of view in the first quarter, but we are doing our activities, and we are building for the future, as Linda says, in the ultimate automation sector for production, but in particular our technology and innovation center for the green hydrogen. We were presenting in a press release a couple of weeks ago an intent together with a company called RES. They have plans for building a green hydrogen factory, and we would like to set up a commercial test lab in conjunction with that as a kind of a part of our technology and innovation center because we see that the commercial testing is going to be really key to be a successful player for basically all our segments in the future, but in particular then for the green hydrogen. As a summary, I mean, it is with really great happiness and joy that we can close our first quarter as strong as we have done. This is really important for our foundation and for our continuous growth plans that we have presented before. That was all that we would like to present today, and I think we can open up for questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press the one on your telephone keypad. Our first question comes from [Gustav Ottosson], Carnegie. Please go ahead. Thank you, operator, and good morning, Peter and Linda. A couple of questions from my side. First, sort of on the Water Treatment business, can you give some more color on sort of the large increase in deliveries seen in the quarter, is that sort of driven by end users that are having different dry docking schedules, or is it driven by your capacity to deliver? Just trying to understand sort of the good development we are seeing there. Now, if you start, the market is the market. I mean, there is. It's not like it is a market growth. It has to do with our ability to deliver and that there are, I would say, a more speedy process in the installation phase than we were expecting. Keep in mind that we have had two years where we have basically pushed the deliveries out in front of us, and now it seems to be going in the other way there. We are bringing in more deliveries into the quarters, and in particular the first quarter than we were actually expecting. Just trying to understand if there's any sort of specific bottlenecks that have sort of opened up in Q1 and sort of the read from a larger picture, given that we had sort of two years of pretty muted activity. I haven't foreseen any bottlenecks during this first quarter. I think it's more like that the market is opening up. Keep in mind, there is a timeline for this to happen. The clock is ticking to make it happen. It seems to be starting up now, and hopefully we can have a more stable forecast going forward for the installations and for, of course, our production to our customers and to the market. Got it. Thank you very much. Just moving on to the Industrial Solutions business where you saw very strong order intake in the quarter driven by the two orders that you mentioned earlier. Are those orders reflecting better market activity levels, or are they driven by sort of your internal efforts to open up and take share in those markets? Just trying to get the read on demand there as well. There's for sure a good demand for our customers' products. I mean, this is an expansion of capacity on the market, since it is a greenfield. It is for sure the market demand for customers' products that is driving this investment for our customers and our order win more than anything else. If you look historically, during periods like this, is it reasonable to expect sort of a more lumpy order intake profile where there will be some larger orders in one quarter and then lower order intake in another, but over time, sort of seeing a good development? Or how should we think about sort of the nature of that order intake in Industrial Solutions? If you look at the—I mean, that's. We have 50 years experience from the Industrial Solutions market. Of course, this greenfield project, this SEK 100 million order intake in one month, that is unusual. I think it is more than 10 years last time we received it and won a greenfield project. That type of business is lumpy from the perspective that you cannot really predict that the orders will always come in the first quarter or in the second quarter. It's normally not even over the 12 months because it is long lead times for deliveries, and there are decision periods within the company, and you have a window for deliveries. I believe, and the history says that it is a lumpy business from that perspective. If you look upon it on a longer term perspective, it is a quite stable business over time, because you have your market share, you have your after-market and service programs. It can vary some over time. If you don't look on the long perspective, it is a quite stable business from that side. Okay, perfect. A final third question from me. I mean, you continue to deliver very strong gross margins and this time around on high sort of delivery levels. I mean, if you were to scale up deliveries and sales any further, do you foresee any sort of clear bottlenecks, or have you find a new way of operating with the factory that makes you comfortable that you can sort of scale up and maintain those margins and the output at these levels? The answer is clearly yes. I mean, our philosophy is to have continuous improvement in everything we do. We are supposed to be a little bit better tomorrow than we are today. With that said, we have a scalable production. We have proven now for the third quarter that we are able to improve our margins and still keep the control of our production and deliver solid performance from the delivery standpoint with high quality. And that is what we're aiming to do and continue to do. There's no doubt about it. We have no other plans than continue to deliver good scalable production with good gross margins going forward. All right. Thank you very much. That's all questions for me. Thank you, [Gustav]. Our next question comes from Karl Bokvist, ABG Sundal Collier. Please go ahead. Thank you, good morning, Peter and Linda. My first question is on the backlog number. If it's possible for you to give some kind of indication of the SEK 509 million, how much do you expect to be delivered this year? I would say that we continue to take orders. The backlog isn't closed for deliveries in 2022. We still believe that there are more to come. With that said, it is a majority of the order backlog that is to be delivered according to plan, but we also have orders for 2023 and 2024 in the order book. Understood. Just the water treatment development. Gustav was already touching upon this, but I just wanted to follow up. Did you hear or see anything toward the end of the quarter, given what we know about China and the lockdowns here? It might not be that much to China, it might be Korea or other countries. Any sense here in case that has affected water treatment installations? I mean, I think if it is a lockdown, and we all know that there is a lot of installations in that part of the world we haven't seen so far, that we are slowing down our installations and our production. I mean, I have no other crystal ball than anyone else, and I think we all hope for them to open up. The longer it's closed, of course, it will be more difficult to keep operations up and running for everyone involved. Understood. Just a two-part question. The first one is kind of very short-term oriented, but when you say that Water Treatment picked up perhaps a bit faster than expected, does that mean that there might be some things would have happened in the second quarter that instead happened in the first? No. All right. Just the, you know, going forward, I apologize if you feel you want to reiterate something, but if we have these kind of sales fluctuations that don't deviate too much, I mean, take water treatment, for example, SEK 100 million now, 65 a quarter before, these kinds of fluctuations, it seems like they don't seem to have that big of an impact on the gross margin. It has to be big, given that, right? No, but if you recap what we have said over the last calls, I mean, we have not built an operational process for one or the other of our market segments or customers. We are utilizing our production facility, our processes, competence and knowledge basically in the same way for all our products, components and segments. It is in the end, when it comes to the assembly, the packaging, the documentation, where it starts to be separated. We're utilizing our processes for all our products and for all our components. I think that is the strength in Permascand. This also gives us quite similar margins potential no matter what we are delivering, because we can utilize it in very good way, and it's more scalable from that perspective. If we have space somewhere, we can fill it up with another segment and smooth out and have a better, you know, streamlined operation than if we would build something for a particular unit or for a particular customer. I think that is what we have been successful in doing. That was the plan, and I think we have proven that we can run our operations in a similar way with very similar margins no matter what the customer or the market is. All right. Understood. I just have two more questions, and that's the first one on E&R. You mentioned that it's mainly partnerships and development projects currently. Still you have the almost 40% gross margin here. I think previously you mentioned that there could be some mix effects in E&R in particular. Is there something worth keeping in mind for the rest of the year here, or is it similar to the other businesses that we can kind of use the 38% as a starting point because it's more of a stable production now? If you take the Electrification & Renewables, that is really startup projects. Normally in a startup phase, you cannot utilize the automation and robotization maybe to a fully. In the first quarter, it's a little bit, I would say, unusual for these type of projects to be able to run it through our processes. This will continue to be the project business. It will continue to be quite lumpy from that perspective until we get a more commercialized components and a more commercialized production for electrochemical sales into this area. I would not say that this is going to be every quarter because it will be a variable part in the projects that might be less profitable and more profitable. We are as I said before, I mean, we have no other goal than to continue our improvements projects and try to maintain this level overall. Mm-hmm. Understood. Thank you. My final one is just cash flow continues to be positive, and you have a quite stable investment pace compared to the previous quarters. You touched upon it, but we of course know that hopefully you will begin to invest a bit more in growth opportunities. Do you have any indication when you think you will start to ramp up CapEx in a more significant pace? It will start in this quarter two. It will ramp up during the remaining part of the year and into 2023. What's worth mentioning there is that they are running full. We have a lot of investment projects going on, and we have a lot of things that are happening. The payment terms to our suppliers and then the CapEx that would affect in cash flow, it can differ. It's worth mentioning that we are not waiting. It was not on hold. We are running full speed on both our investment projects and development projects. Would it be possible for you to give some kind of indication of how much in monetary terms you think could be related to investments this year or the next? We have an investment plan. We have a budget, an investment budget, and that's what we are following. On the other hand, we are also, as I said earlier, we have a stable cash position. If an opportunity comes up, we don't have to say no. We are evaluating different types of investment all the time. Therefore, it's hard to say a number because we don't wanna say no to any opportunities either. Understood. That's all for me. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press zero one on your telephone keypad. We have no further questions. Dear speakers, back to you. Okay. Thank you very much, and thank you for listening, and thank you for the questions. We will now continue with running quarter two and quarter three and quarter four. The next time we have our quarter two financial report call will be 18th of August 10:00 A.M. Looking forward to meet you there and I will promise you that we will have some more news to release at that time. Thank you very much. Thank you. Ladies and gentlemen, this concludes this conference call. Thank you all for attending.