Welcome to the QleanAir Q2 presentation for 2023. For the first part of the Conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to CEO Sebastian Lindström and CFO Henrik Resmark. Please go ahead. Again, welcome everyone to the QleanAir Investor Presentation for Q2 2023. My name is Sebastian Lindström. I'm the CEO of QleanAir. Joining me in today's call is Henrik Resmark, our CFO at QleanAir. Henrik and I will run through the presentation, and then towards the end, open up for Q&A, as mentioned, in the automatic talk in front of the call. With no further ado, starting off with the numbers in Q2. In short, as I've highlighted in light green on the slide, we're back to growth, we're in a good profit mode, and our EPS is greatly improved. Great work of the entire team. We deliver a very strong quarter with sales over SEK 135 million in the quarter, which means a growth of about 25% over last year, and it's also the strongest quarter for the past two years. This also means that we meet our targets for the first half, of growth of above 10% in constant currency. Great work of the team, and as they manage not only to grow at this rate, but also grow across all three regions and across all three product categories. Cabin Solutions grew 11%, Air Cleaners, 40%, and Cleanrooms, 147%. Our recurring revenue continued to grow in the quarter, and growing quarter-over-quarter, actually, and is at SEK 78 million at the end of Q2. Our gross margin remains strong and stable at 68%. It's a bit behind last year, but it's mainly due to some product mix, and also that we've seen some higher costs on the service side in the quarter. Our EBIT margin has been brought back to where it should be, so above 15%, at 16% in the quarter, thanks to the reductions we made early on in the year on the overhead side, and of course, some leverage of the increased volume. Our operating cash flow is well improved over last year. Henrik will talk more about that in the financial update. Our EPS earnings per share greatly improved over last year. Order intake is stable. It's 17% up over last year, driven primarily by Japan in Q2. Moving from that overall picture and looking a little bit from a regional perspective, it is a strength in our business that our three most important individual markets are as well the top-ranking economies in the world from a GDP perspective. Japan, Germany, and the U.S. are all in the top-world top four from GDP point of view. Starting off in APAC, so continued stellar performance from the Japanese team, order intake up 44%, revenues up 18%. As mentioned in the last quarter, we've dialed up our activities, pretty much doubled our presence at exhibitions, and we're having the highest backlog now, order backlog on the Air Cleaner side than we've ever had in Japan. Really positive from the Japanese team. Moving over to Europe, we're not around the corner in Europe just yet. Although, great work of the team, delivering a 14% growth in the quarter, it is clear that our actions on follow-up and the reorganization that we've done is starting to pay off in Germany, especially, which grew 25% in the quarter. I'd like to mention that 8 out of 12 countries in Europe are showing double-digit growth, so, so really good, great work of the team. Main focus in the fall is to get the Nordics back on track, and I must say that activity levels have improved throughout Q2, which should be able to materialize in orders and revenues in the second half. America delivers, as expected, a strong quarter in revenues. We've added two more people on the sales side, and we're looking for a third salesperson in the coming quarter to broaden our coverage of the U.S. market, and thereby, take full advantage of the recent update in the regulations. When it comes to order intake in America, it looks a little weak for the quarter, but I'd like to point out that these are very, very large projects, and it's very easy that the signing of these projects can slip into one or the other quarter. We have great activity in the U.S., demand is quite strong, so no worries in that from our perspective. From that, we move to... This is a, so in order to better bring to life what we do as a company and what problems we solve, I want to continue to share some customer cases in this call. I start off with Europe. ERKA Technik, a plastic manufacturer in Germany, focused on medical and pharmaceutical sector. For ERKA Technik, it's critical to limit the particles in the manufacturing process, and with the use of 15 Air Cleaners from our side, they are able to now comply with ISO 8 requirements in their production. It's been a great journey with ERKA Technik, and we're now moving on and introducing a cloud-based monitoring system through the QleanAir Connect solution. Moving from Germany to Japan, an example of a long-term client on the Cabin Solutions side that have grown into an important client within the Air Cleaners segment. Our journey together with NEC on the air cleaning started back in 2020 with combating COVID with our FS 30 HEPA machines. It has evolved since then into a growing business as NEC saw big benefits in relation to reducing flu transmissions, pollen sensitivity in their workforce. During the last quarter, we doubled the number of Air Cleaners with them to 80 units, and we're looking to install another 30 next quarter. Finally, I want to talk about UC Davis Health, where we're in the final stages of finishing a 200 sqm room for their new home infusion center, which I had the great opportunity to visit at the end of June this year. The project is exciting in many ways. It is our first Cleanroom targeted at the rapidly growing home infusion market. It is our second room in short time in California since we achieved our California contractor's license. This contractor's license means that we have shown that we have the knowledge in how to handle seismic events. UC Davis is one of the top-ranked hospitals in California. It's in the top five. It's a very important step in our expansion into this most important state from a healthcare perspective in the U.S.. There are over 560 active hospitals in the state of California. In July, we welcomed on board a senior account manager placed in California, so very positive. From the exciting world of or the exciting excursion of our clients, back to the day-to-day running of the company. We're sticking to our short-term plan of stepping up in relation to our three prioritized areas to get back on track: customer focus, sales efficiency, and cost control. Let's together see how we're pushing forward on these three priorities. First, customer focus. We have, in the quarter, continued our journey to strengthen the direct sales team in Germany, and as mentioned before in the presentation, also complemented the U.S. team with an account manager focused on the West Coast, located in Sacramento, California. Our central product team are in the process of boiling down all the great inputs we had from the commercial workshops that we did across the globe in early spring, where we had more than 100 participants, and to outline our strategy for the next three years. Moving over to efficiency. We've clearly seen a pickup in activity, and we're now refining it further. In the quarter, we introduced the back-office sales support in Germany to ensure that we get more time of the account manager in front of clients. Separating out Germany outside of the EMEA sales managing is also starting to show results. We're now much more on top of the challenges and opportunities in the other 10 markets in Europe. The growth in Europe, as mentioned before, of 14%, was a great step forward, but we still have ways to go to show growth for the year to date, to show sufficient growth for the year to date. Over to the cost control. The last point in the short term, our operational agenda is cost control. We will continue to review our cost structure. It's evident that the actions that we took early in the spring have really had an effect as we're back about 15% on the EBIT level. We've seen our service cost increased a little in the last two quarters, and we'll put an extra eye on that for going forward. Summing up, looking a little bit ahead on our, our strengthening, continuing to further strengthening our profitable growth, I think overall, we deliver great value to our client, and we just need to get in a higher gear. Our commercial focus in Europe remains. We must get in front of more clients and leverage our existing solutions through improving our industry expertise. We will see what the introduction of a back-office sales team in Germany gives us, and then see how we'll take that further into rest of Europe. APAC is on track. We're continuing to step far up our marketing activities in Air Cleaners further. We see that it's paying off. We see new sales rep resources delivering much sooner than what would have been expected, so very positive. In America, we'll continue to increase our sales coverage geographically. We just recent, as I mentioned, added a person in California, and we will, in the next quarter, continue to add to that team. Overall, we have solid products, we have a circularity built into our business model, and a team that really wants to win. With that, I hand it over to Henrik to take you through the financial update. Thank you, Sebastian. QleanAir by region. We are present in three geographies with three different product areas. In QleanAir Group, Japan is the number one in terms of sales and order intake, the same pattern as previous quarters. Cabin Solutions is still a success in Tokyo area. We are gaining traction with Air Cleaners through focused and dedicated work. We are growing within Air Cleaners in Japan. We see QleanAir Japan to continue to grow 2023. Europe is also a strong Cabin Solutions market for the QleanAir Group, contributing with both sales and profitability. Air Cleaners in Europe is growing. We focus on to increase that growth. We see a clear growth potential in QleanAir U.S.. The positive signs from the 1st quarter and the 2nd quarter, we shall continue to build upon. The order intake in the U.S. was low in the second quarter, as Sebastian pointed out, the order intake in the U.S. is more volatile quarters to quarters as the orders are not always on a weekly basis, and there can be some time between the orders as the order values are relatively higher. Looking at the different product categories, we had a growth in all three product categories in the quarter. Cabin Solutions up by 9%, Air Cleaners up by 40%, Clean Rooms up by 218%. Second quarter. Net sales. We have a growth of 25% in the second quarter. Currency adjusted, the growth was 19%. Japan is up by 18%. Japan continues to deliver strong growth. U.S. was up by 188%. We continue to see a recovery from the U.S. subsidiary. Europe was up by 14%. We start to see positive signs from the focus on sales efficiency and sales follow-up. Gross margin is still on a relatively high level, somewhat lower in the quarter due to product mix, where we have lower gross margins for air cleaners and clean rooms. The EBIT margin is improving during the second quarter to 15.6%. Our clear focus 2023 is to reach our financial targets, growth of approximately 10% and EBIT margin of 15%-20%. Page 13. This slide illustrates the relation between the book values of units in QleanAir balance sheet and the revenues stemming from such units, including service. We call them the recurring revenues. The recurring revenues increased to SEK 78 million in the quarter, and the recurring revenues are a solid base of revenues that, to a larger extent, are predictable in the future. Now, approximately SEK 285 million on a rolling 12- months basis, up by approximately 5%. The book value is relatively low, SEK 56 million, compared to recurring revenues. This is, of course, contributed to our gross margins. Moving into next page, revenue split and installed base. We increased the product sale in the quarter to SEK 19 million versus SEK 8 million. That is one driver behind the growth in the second quarter, and all revenue types increased in the second quarter. Looking to the right on this page, quarter by quarter, we continue to increase the installed base. We continue to see a growth in Air Cleaners in both Europe and Japan, and Cabin Solutions in Japan. At the same time, the Cabin Solutions market in Europe is very solid for QleanAir. Finally, it's really important to point out that we improved the cash flow in the second quarter, up to SEK 19 million versus SEK 9 million. We are a cash generative company, and we shall deliver strong cash flow year by year. At the same time, we continue to amortize according to plan every quarter, and the net debt- equity- ratio also improved in the second quarter. This is a financial summary of the second quarter. Having said that, I hand over for a summary to Sebastian again. Thanks, Henrik. To close off the session in front of the Q&A, what we do at QleanAir is really important. We dedicate our work to improve the health of people, the quality of products, and the per- performance of processes. We do so throughout our three product categories: Cabin Solutions, Air Cleaners, and Cleanrooms. Looking at the amount of clean air that is delivered through our solutions, we estimate that we clean close to 7 billion m³ of indoor air per month by June 2023. That matters because air pollution is a key challenge to human health. People dry- die prematurely from exposure to polluted air. We spend an important part of our lives in indoor environments. Indoor air can often be more polluted than outdoor air. With that, I would like to open up for questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Anders Roslund from Pareto Securities. Please go ahead. Okay, good morning. Morning. Just to congratulate you, very good report. My first question would be just to, to start off with the strong outcome for Air Cleaners that surprised me, the sales outcome. Could you elaborate a little bit on what, what's going on here in Europe? Especially because you've given your forecast a little bit cautious outlook for Europe, while obviously the outcome in Air Cleaners was, as I see it, a little bit stronger in Europe than I expected. How come? Mm is this development? Well, I, I think it's, it's two things, right? I, I think it's one is that we have, as we started, you know, earlier in the year and, and actually towards the end of last year, have a little bit more focus on segments, right? Try to carry the, the, the good cases that we have done and go to other companies in the same sector and really leverage the industry experience as, as we grow that. You know, in Germany, that grew well in the quarter on the, on the air cleaner side, that we really reorganized that team and went more for a segment focus. I think that's one thing. Of course, I think we have amazing people on board, so, so that is overall helping us. Then I think there is also a slight effect of the fact that we've removed some resources centrally and transferred investments into the regional teams. I can see, as an example, there was a recent regulation in Germany regarding a specific substance, that team, just really quickly, without having to go to the central marketing organization and check everything, they just sat down, decided to script something, go out with marketing communication, and so forth. We're getting a bit faster in the regions, is what I'm feeling. I'm, I'm seeing very positive results of, of transferring the mandate and, and power a little bit closer to the customer. I don't know, Henrik, if you- Yeah. I don't know if Henrik wanted to add something. No, no, I think it was a good summary by, by Sebastian, so I'm fine. Okay. I just had a little bit follow-up here, because, you know, the surge of sales in Europe are more, so to say, COVID-related air cleaners in 2021 and 2022, and I've been afraid of that, that part of the business could fall quite dramatically. Mm while your core business, the more industrial-related or logistics inventory, et cetera, air cleaners, are the ones that are picking up now. How should we interpret this strong development? Uh, so, so- Is it still COVID-related sales, or? No, I, I think if we look at our Air Cleaners sales, and we recently did an analysis of it, and the majority of our Air Cleaners, both installed and sales, are to the industrial sector. I think, of course, you know, some of the HEPA, which if I can call it HEPA-related, which was really targeted at the COVID outbreak and so forth, some of that is continuing because they see the benefit of reduction of flu transmission, of sensitivity to pollen, and so forth. The majority of the business and the growth is really in the manufacturing area, so plastic industries, medical devices, all these fine mechanics. I think we are not so dependent on that. Yeah, very impressive. You also are a little bit cautious on your outlook statement, saying that you see weakness in the European market due to macroeconomic factors. Is that offsetting part of this development? I, I think it's good to be cautious, right? Somehow, and, and then we, we steam ahead on, on all the, you know, plans we have and so forth. It's clearly so that, that the overall European macro situation is, is not, you know, we're not around the corner on that. I, but I see the teams in the, in the industrial sector doing really well. Excellent. Just to have a few words on Japan, where you've started your marketing of Air Cleaners last year. Mm. Obviously, you start to see now an increase. Is it entirely then the industrial part, or is it more also the COVID-related, more office-related, air cleaners or? No, the example that I gave was, of course, still, you know, had the starting point in COVID-related combating, right? The MSC, and how- Mm how we can add value also in the office environment by reducing the, the outbreak of flus and, and the pollen sensitivity, and so forth. I thought it was important to bring that forward, but if I look at where our efforts and our traction in Japan, it's really also in the industrial sector. The industrial sector, I mean, you have been very strong in the Cabin Solutions area, or you are very strong in Tokyo. Mm which is, I guess, not an industrial area. This means that you have been sort of widening your, your market presence outside Tokyo? Absolutely. And, what I, what I quickly mentioned in the presentation, right, we've been really, astonished how fast... We've brought on board now some people that really have industrial background on the sales side, in, in the focus team in Japan for, for Air Cleaners. We are amazed how fast we're getting traction through those, new resources on board. I think in Japan, we are a bit opening the market on Air Cleaners in industrial. Mm compared to Europe, it's a little bit more new ground that is being opened up. Interesting. Finally, coming to Cleanrooms, there is more like an expected strong growth. Could you update us on the legislative scenario here? The USP you referred to has been sort of, what do you call it? delayed. Why is it not, why is demand taking off? Well, I mean, as I mentioned also, I think back in the, in the Q1 report, right? There was an update to the USP chapter in the U.S., 1st of November last year, where they actually put the deadline forward, which is 1st of November this year. Mm. It's been softened a little bit, so meaning that the companies and the governing bodies, so to say, they expect everyone to have a plan, right, by the 1st of November. Yeah. They do realize that for all these clients that need to update their conformity to this regulation, they're not gonna be able. There's not enough companies like ourselves to deliver new solutions to do that for 1st of November. Clearly, we. We also see across the different board, State Board of Pharmacy, that they're increasing their resources in following this up and doing the inspections and so forth. Clearly, the market is taking this seriously. I think most importantly, what we've done in the past six months, and it took quite a while, is to open up through our California, our contractors license for the state of California. We've opened up. I mean, California is 12% of the US Health, right? It's a really important, it's probably the largest state when it comes to, to health, with over 560 active hospitals in the region. It's been a very important step for us that we have big hopes for into the future. Do you have a production capacity for, for delivering? It's a quite steep increase, right? As you can imagine, that's where our, our, our, what we're wrapping our head around, right? Making sure that our supply chain, our capacity when it comes to installers. We've, we've built up a network also of external companies that can, can come in and support us in the installation. I had the opportunity, end of June, to visit both an installation underway in, in Long Beach, California, and with UC Davis in Sacramento, California. It, it's, it's quite some teams that we put on the ground to get this, but, but we're able to run parallel projects and, and so forth. But that is. Yeah. what we need to spend a lot of time on, making sure that we have the capacity. Interesting. How about acquisitions? You have never done that. I'm talking about the past of the company. Is that something you are start to look at now when you see the growth coming back for how that process? Like I've said in the earlier calls, right. The first, first focus is on those top three priorities, right. Customer focus, sales efficiency, and the cost control. From my experience, you, you have to have all those things in place and a, and a good setup as a company before you go into acquisition. I agree with you that we are getting faster than, than maybe what I had expected, the response of the team, and I'm really amazed about how the teams have stepped up during these first quarters. Clearly, to make a step change on the Cleanroom and the Air Cleaner side, an add-on to our current company would be, could be of interest. Okay. My final question here. That is enough, in particular, to a very sharp question. Oh, sorry, I, I take up a lot of time here, but I- Yeah. I have just one final question regarding- Mm-hmm the growth margin here. You talk about higher services cost. Mm-hmm. I guess that's... and you said you should look at that. What, what sort of costs are you talking about here? I mean, I can comment on that. Two things. Regarding the service cost, I mean, we go through all the costs that we have, try to make it more efficient, obviously. Also the more important answer to that question is that, first of all, the declining gross margin is not a surprise to us. We saw that coming, and that is sort of planned for. The reason is simply that we have very, very high margins within Cabin Solutions, still being 70% of our sales. We have so much renewed contracts with extremely high gross margins. That's one thing. Secondly, now we see a growth in Air Cleaners and Cleanrooms to a larger extent, and obviously, we don't have those gross margins within Air Cleaners and Cleanrooms. The gross margin in, in% is being diluted, you can say, when we have a growth in Air Cleaners and Cleanrooms, and again, it's fully scheduled for and planned for, and we, we know that we will end there when, when also the, the Air Cleaners and Cleanrooms will, will grow even more. It, it's, it's, it's the nature of our business. If, if we have slow new sales and Cabins is very dominant, then we have very, very high gross margins, and we're happy for that. Also, when we see the growth, it's natural that that gross margin will be somewhat lower. And of course, as we've grown rapidly lately on the Air Cleaner side, those are not in the renewal. You know, as that install base builds and we start getting into renewal of those contracts, we will again see an improvement also on the, on the margin side on, on those product categories. Excellent. I just want to be transparent, right? We've seen some higher service cost, but it, it's not the whole story, right? It's a, it's a mix of product mix and the service cost. Well, I just want to be transparent and say that we still have things to look at. Okay. Excellent. Thanks for my part. Mm-hmm. Thanks, Anders. The next question comes from Oskar Vilhelmsson from Redeye. Please go ahead. Congratulations, Sebastian and Henrik, on a solid report. I just have a few follow-ups on the previous call here. You mentioned in the report that you have a few Nordic Cleanroom projects that's been limited growth for the segment. Could you elaborate a little bit on this? When do you expect them to be sort of out of your way to fully focus on the other projects? Clearly, we've had some projects that have been prolonged, and we spoke about this already when touching on the Q4 report, right? We worked hard on that throughout the first half of the year. We've closed the main part of it. I would estimate that we within a month, sort of have closed out all of those projects in a good way. Right ... Of course, we're a small company, right? So when we have some extra work and stuff to do, that takes away a little bit the focus forward. So we're really excited to, to get through this in a rapid, rapid manner, rapid and good manner, and to turn to the focus on growth of that segment again. Right you're right in that that's something that we've been battling in the first half. Yeah. I think it's well under control from my perspective. Right. On Air Cleaners, and the segment growth overall, could you just give us a sense of how much the APAC region is contributing right now, and what do you think for the rest of the year? Good question. We are not, we're not guiding on specific numbers when it comes to Air Cleaners in Japan specifically, but it's very, very obvious and clear. We have a number of salespeople with industry experience now in the Tokyo office, and they are gaining traction above what we actually expected. We are seeing a very, very high, it's not double-digit, it's a triple-digit growth within Air Cleaners certain months by months or certain quarters by quarters, and we continue to see that. Also, when we started with Air Cleaners in Japan, we went quite broad, went to very many trade fairs and exhibitions, and then we narrowed it down based on experience. We saw certain segments, certain industries that really required Air Cleaners, we are so, so more focused and dedicated work. Also in combination with the sales culture that we have in our Tokyo office, that is the engine for that. As I said, we, we see Japan to continue to deliver growth 2023, and of course, Air Cleaner is a big part of that. However, still, in terms of numbers, fairly low numbers, but the growth is very high. Yeah. Yeah, thanks. That, that summarizes it well. Thank you very much. That was all, all from me today. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, I hand the conference back to the speakers for any closing comments. I would like to thank you for your participation and interest in our company, QleanAir. I wish you a great continuation of the day. Thank you. Thank you.