Welcome to today's SKF Q3 2022 Results Call. My name is Jordan, and I'll be coordinating your call today. If you'd like to register a question via telephone, you may do so by pressing Star followed by 1 on your telephone keypad. I'm now gonna hand over to Patrik Stenberg to begin. Patrik, please go ahead. Thank you, and good morning to you all, and welcome to this conference call on SKF's third quarter results. As usual, we will start with the presentations hosted by Rickard Gustafson, our CEO, and Niclas, our CFO. After those presentations, we are happy to take on your questions. You could use either your phone, as instructed previously here, or you could use the chat function as you prefer. With that, for a brief introduction, I leave the word to Rickard, please. Thank you, Patrik, and good morning, everyone, and welcome to this interim report for the third quarter. I start by sharing that we continue to deliver on our intelligent and clean growth framework, and I'm very pleased to report that we have very strong traction on all four growth levers that we have defined within our strategic framework. We see that the key mega trends that are, you know, sweeping across the globe, such as electrification, digitalization, automation, and also sustainability, provide a strong ground for growth for SKF. As you can see on this illustration to the right-hand side of this chart, we record once again solid double-digit growth in many of our focus industries, such as material handling, automation, agriculture, and high-speed rotation. There's also one key outlier here, and that's electric vehicles that are growing, you know, 66% in the quarter. I will come back to more details around that when we touch on our automotive business later on in this presentation. When it comes to new technologies, we continue to make good inroads with our products and our capabilities, and opening new opportunities, growth opportunities for us. Our ceramic bearings are key to the growth in EVs that I have described, and I come back to them as well in the Automotive section. Another proof point in this quarter is the fact that our magnetic bearings has been selected to power Tamturbo's new generation of compressors. That's a big win for us in the quarter. When it comes to service and aftermarket, it is an important piece to our core total service offering to our customers. We use our broad capabilities here to really make sure they provide the right value to the customers and that we create loyalty and stickiness with our customer base by leveraging all of our components and technologies within lubrication, seals, bearings, condition monitoring, so forth. In this quarter, we have signed a very significant condition monitoring contract with a large packaging producer in North America that I will share some more details on as well during this presentation. In terms of portfolio management, it's key to us. We continue to work actively to look for how we can fix accounts that are not delivering on the profitability levels that we expect. If we can try to exit some parts of our portfolio that may not be strategic or at the very, you know, margin that is not in line with where we want to be. This is happening across the board, and it's very particular within our automotive business, and we'll talk a bit more about that as we move into this presentation as well. On top of this, we have also worked hard to accelerate the components of our strategic framework that relates to cost efficiency. Today, we announced some progression also in that regard that you will see during the presentation. Let's dig into the numbers. As I mentioned, the strong growth has been really strong in the quarter, and we have an organic sales growth of roughly 11% in the quarter. Again, I'm very pleased to report that most of that organic growth comes from those industry segments that we really want to grow in. That is part of our strategic intent and our strategic framework. Net sales comes in at roughly SEK 25 billion, up from SEK 20.1 billion last year. If you include FX it's 24% growth, but organically it's 11%. The adjusted operating profit came in at SEK 2.1 billion with a margin just shy of 9%, 8.5%, down from 13.3% in the same quarter last year. This is of course nothing that we are very pleased about. We do see that the significant cost inflation in the quarter, especially in Europe, has impacted our results negatively despite the fact that we are driving our price and mix activities successfully. I'm gonna share some more details on this shortly to give you some more flavor on how the cost has evolved in the quarter and also our progression, our capabilities to drive price in this environment. Net cash flow comes in at SEK 1.3 billion, down from SEK 2.5 billion last year, to a large extent due to the fact that, you know, the operating profit has come down a bit, and that is also reflected in the cash flow. Before we move on to the details, I'd also like to take this opportunity to welcome two new members on my management team. Since a week back, we have a new Chief Technology Officer on board, and that's Annika Ölme. We also, since a week, couple of weeks back, we have a new leader for our China and Northeast Asia business with Henry Wang. Both of them, we welcome back to SKF. They have previous experience with the company. They have done, you know, a professional careers outside the group, and they're now coming back to help us drive our strategic framework forward. I'm delighted to have both of them on board and a part, and being part of my team. If we take a look more into this cost deflation and price momentum that we have, and if I start with the price momentum, and I like to draw your attention to the dark bluish or blackish bars on this chart. As you can see, we have significantly improved quarter-over-quarter our contribution from price mix. If I draw your attention to the first quarter in this year, we had a positive price mix contribution of roughly SEK 1 billion. It grew to SEK 1.3 billion in Q2. Now in Q3, it's up to SEK 1.8 billion. A significant improvement, and it will continue as we move forward into the future as well. The problem, though, is as you can see that cost inflation, the grayish bar on this chart, have accelerated at an even higher pace. We also need to recognize that a lot of that has happened in Europe, and in Europe, we have a significant presence. Our European business accounts for roughly 40% of our sales, but 6% of our production. Of course, the energy crisis in Europe and the cost inflation in general in Europe has impacted us negatively. You can see here, that, you know, the delta between price mix and, cost inflation has increased. In the quarter, we have cost inflation of SEK 2.9 billion, primarily driven by materials and energy costs. Niclas will give you some more details about this later on in this presentation. Given that we are unhedged to our exposure, both to energy and to some of this cost inflation, would also indicate that once we see more normalized levels on energy and other, you know, general cost inflation, it should mean that we have a tailwind to our margins going forward. To try to give you some proof point on that, again, I like to draw your attention to the first quarter of this year. There you can see that the delta between the price mix and cost inflation started to ease off a bit. We came from SEK 1.5 billion- SEK 1.6 billion, then it came down to SEK 1.4 billion in Q1. Our margins at Q1 were 13.3%. The delta has increased and now reached a record high of SEK 1.1 billion, having, of course, a negative impact on our earnings. On a positive note, I like also to mention that we saw at the end of the quarter some improvement in some of the cost items that we have in terms of the pace of inflation starting to ease off. I'm thinking about logistics. I'm also referring to some of our steel components starting to ease off a bit. It's a volatile environment. We stay determined to continue to drive our price mix efforts to at some point in time fully compensate for the cost inflation, as you said now, throughout this full year. Staying within our strategic framework for a few more seconds, I already touched on the growth levers that we have, the four growth levers. This time, I'd also like to give you some more insight into two important growth enablers. The how we do to operate more effectively, and also what we're doing to maintain our focus to drive regionalization and enhance our competitiveness across our supply chains. Starting with operating more effectively. When we launched our strategic framework, we were very clear that as part of this, we were also changing our organizational structure. We created more, autonomous business areas with full accountability end to end for our values, for respective value streams or value chains. That also implied that we saw opportunities to simplify our organizations, to change ways of working, to be faster to our customers, and have a more agile structure in general terms. That work has been ongoing since we launched the whole strategic framework, and now during the fall, we come to a point where these now start to materialize into concrete actions and savings that we are ready to share with the broader audience. As part of this, we are, you know, announcing a delayering of our EMEA organization to drive simplicity and clear accountabilities and changing a number of the ways how we operate within EMEA. I think it's gonna benefit our customers. We are trying to leverage more low-cost countries for some of our white-collar capabilities and labors, not just for certain competencies, but also trying to build regional service centers in different countries where it's more attractive from a wage point of view. As I said from the beginning, we said that we wanted to rethink our corporate functions. We wanted to push more of these accountabilities out into our business areas, and that is now happening. We are changing some of the corporate functions, and we're also using this opportunity to look into our IT spend and our IT projects to ensure that they are fully aligned with our strategic intent. We have found ways to also drive down some costs there, within a fairly short time frame. Our connected technologies, it is an important piece of our offering, especially on the service side. We are keen and determined to continue to grow that, but realize that we should not do it by having everything in-house. We need to leverage partners to help to build the software platforms and also the hardware on the sensors so that, you know, we can be speedy, that we can be future-proof, and that we can scale this operation more effectively together with partners. Already in Q2, we announced one step in this direction with the announcement of the collaboration with AWS on some of the, you know, low-end sensors. It goes without saying when you go through these things, we're also constantly looking to ways to reduce our consultancy spend and other indirect expenditures. All in all, we see that we have an opportunity to reduce our cost base with some SEK 2 billion with full run rate effect by the end of 2023. It will come with a restructuring cost at roughly SEK 1 billion, is our best estimate at this point, and that's gonna be, you know, impact our numbers, you know, sequentially from now through 2023. In totality, this will have an impact on a number of positions. Roughly, you know, 1,000 positions will be redundant due to these activities, with a majority of those being in Europe. On the regionalization and how we build our competitive supply chain, I'm pleased to report some good progress also in this quarter. We are today reaching out to you from our head office here in Gothenburg, and next to us we have our factories here. We have recently inaugurated a state-of-the-art, fully automated assembly and packaging line for medium-sized roller bearings. That will really drive cost efficiency and productivity in our Gothenburg factory. We have also continued with our efforts to consolidate our footprint, especially in Europe, and we announced some closures of a factory in the U.S. and three factories across Europe to be completed shortly. Also, on our strive to develop a more balanced regional footprint, we have also completed our second investment in Jinan factory in China, which will really help us to increase our localization rate in China and support our China for China strategy. It's an important step on that journey as well. A lot of activities are also ongoing there, all in line with what we outlined in our strategic framework. Let's take a look into our two main segments, starting with Industrial. Industrial also recorded a very solid organic growth in the quarter, up 8% versus the same quarter last year. Here you can see on this chart that the growth is actually coming from all parts of our region, with a significant and solid growth in India and Southeast Asia. Also, Americas was growing nicely. EMEA has a strong single-digit growth rate, primarily driven by price, where we have more a flattish volume. While China has more of a modest growth, and I think the Chinese economy is still impacted by the COVID restrictions, and that's why we see that growth rates are more modest in that part of our footprint. Looking into some of the numbers for Industrial, I already commented on the growth. The adjusted operating margin came in just shy of 11%, down from 16.5%. Of course, this is not anything that we are pleased with, but it's clear indication that that cost inflation that I described primarily with our European manufacturing footprint is really having a negative impact on our earnings in this quarter. However, we are determined, and we're confident that we sit on pricing power and that we will continue to work with our customers and find ways to compensate for this cost inflation and build back our earnings over time. Also important to note that some of our business units with longer order books, they have had an even tougher time to compensate for, you know, the energy crisis and so forth, and the fast volatility that we're seeing in the quarter. They have a longer lead time to find ways to compensate for that. Two examples of that being our aerospace business and our marine business having a negative impact in this quarter. We also have a number of success stories to tell you in the Industrial side in the quarter. I'd like to start by sharing one related to our strive towards a more sustainable future. I'm very pleased with the collaboration we have with Ovako to find ways to demonstrate to the world and to ourselves that net- zero is not just something, a kind of a vision that is unreachable. It's actually something that will happen and can happen. In this case, we have already produced a mid-size bearing, a sizable bearing with a 90% less CO2 emission than a traditional bearing. A clear proof point that this is really doable. Still, of course, we need to ramp this up and scale this, but we're excited about it. It comes from a kind of a circular effort together with Ovako. Ovako, they provide us with the raw material, the steel that we use for the bearings come from scrap steel. We then, you know, manufacture the bearing here in Gothenburg at our net- zero facilities here, and then we return the finished product back to Ovako and into their production. It's, like, again, a proof point how, you know, we see the future and what that will look like, and we are determined to play our part in the transformation towards more sustainable future. As I mentioned in the beginning, we also signed a new agreement with a major U.S. packaging producer, and I'd like to give you some more details on that one. Again, this is a proof point how we can enter with one area of our offerings and build a relationship and let that grow from there, and over time, enhance our service capabilities, our value add to our customers, and also create stickiness with our customers. This relationship started in 2019, where we got, you know, awarded to monitor one single asset of theirs. Today, our relationship with them have grown significantly, and today we monitor more than 5,500 of their assets. We provide a number of set of services from application engineering through lubrication management, and of course we also provide them with bearings and also with seals, which is another, you know, important component in our total offering. Speaking about seals, last quarter, I gave you some more insights on our lubrication business, and this time I want to share some details on our seals business. Seals represent a sizable part of our portfolio, roughly SEK 6 billion of revenue with attractive industrial margins. Why are seals important? Well, 20% of the bearings that fail is due to either contamination or poor lubrication, and that's where the seals application play a vital role. If we do this right, and if combined these capabilities, our lubrication capabilities, our bearing expertise, and our seals expertise, we can find solutions that are state-of-the-art and really solve pain points for our customers. One key example is what we've done within the agriculture industry with our SKF Agri Hub, where we created a combined offering, where we combined our know-how and expertise in these fields and created this unique offering that really works extremely well in these extreme conditions that you find within the agriculture. That has been the foundation for a very solid growth within this industry for quite some time now. You saw on my first chart that agriculture continues to deliver solid double-digit growth. We continue to invest in our technical capabilities also within seals. Very often we work very close with our customers to define the materials and compounds that will solve their particular pain points or problems that they're trying to solve in their applications. We find ways to also, in a dynamic way, do product design and testing of these applications together with our customers. That has been highly appreciated and proven to be successful. We also to strengthen our footprint here, we've done, recently, as you probably have seen, a small acquisition. We acquired a company in Italy called Tenute that has unique competence in a small niche within the Industrial Seals segment that we're now delighted to have as part of our portfolio. Even here, we have an emphasis on looking into portfolio management and how we want to develop this business going forward. You will see us put more emphasis on the industrial side of seals applications and less emphasis on the automotive side of our seals business and seals application going forward. Of course, because we do see that we have a more value add on the industrial side, and there we also can obtain more attractive margins. Moving on to Automotive. Automotive also saw a significant growth in the quarter. Organic growth up 18% versus same quarter last year. However, though, I need to remind you that Q3 last year was a rather low quarter for the automotive industry. At that time, the semiconductor crisis was really intense and a number of our customers then closed their, or our OEM customers, I should say, closed their operations. Of course, you know, when compare, you know, quarter-over-quarter, it makes a somewhat difficult comparison. But 18% growth, organic growth, anyhow. You can see growth coming from all regions with significant growth in India, in EMEA, and Americas. There we see growth both on personal vehicles, light vehicles, and commercial vehicles. China and Northeast Asia also see significant growth just shy of 20%, as you can see. Here it's primarily light vehicles and personal vehicles that drive growth. You know, commercial vehicles are still seeing a fairly low demand at the moment. Looking into the automotive numbers, I already mentioned the growth. Here we see that the margins can come in at 3% compared to 4.5% the same quarter last year. It's actually up versus our second quarter this year. Automotive have also been impacted by the significant cost increases that we have seen. They have also worked hard on their price mitigation actions, and they have also been successful in getting some surcharges that has also helped them to compensate for some of these energy spikes that we're seeing, especially in Europe. Within Automotive, we are making good progress on our announced transformation. As you probably recall, we're trying to focus on the areas within our own automotive portfolio where we have a clear number one position or a number two position, and where we feel that we have an offering that is truly value-add to our customers. This includes our focus on electric vehicles, on large commercial vehicles, and also to build our focus in the vehicle aftermarket. As part of this, we of course see now good momentum in our EV segment that's up 66%. A big drive for this, not the only drive, but one key driver is of course the constantly increased demand for our ceramic bearings within this industry. Our ceramic bearings are in high demand due to their you know high speed capability and also electrical isolation capability really provides significant value for the EV industry. In the quarter we have signed some significant contracts with big OEMs for their EV platforms, both in Europe and in China. With that, I end the kind of informal overview part of our presentation. I'm now gonna hand over to our CFO, Niclas Rosenlew, to give you some more details on our numbers. Niclas. Thank you, Rickard. Let's start off with some details on our sales. In Q3 we had strong sales growth. As Rickard already mentioned, our sales was just shy of SEK 25 billion. Sales grew both sequentially and compared to last year, driven by a broad-based demand from multiple different industries as well as multiple product segments. Compared to last year, our net sales increased by 24% total. Of this, there was a 2% negative impact from Russia, our exit of the Russian business. The organic sales increased by 11%, and this was driven both by volume and by price mix. The currency effect on sales was a positive 15%, with the largest effects coming from the dollar, the renminbi, the Brazilian real, and the euro. All in all, strong and good sales performance. Moving on to our profitability, our adjusted operating profit was SEK 2.1 billion in the quarter, compared to SEK 2.7 billion last year. Overall, as Rickard mentioned, we had good momentum in price mix, which was then offset by sharply increasing costs, primarily in Europe, leading to a reduction in profitability. If we go through this step by step, firstly, the currency impact was positive at SEK 288 million compared to last year. Just to explain this number, so while we have a strong contribution on sales from, for instance, the dollar, we do have a relatively high portion of our costs in euro, resulting in a more limited benefit on our profit from FX. The Russia business was divested in Q2, and this had a negative impact of SEK 54 million, meaning that we had a profit last year, which we did not have in Q3 this year. Our organic growth, which consists of volume, price, and mix, contributed with a positive SEK 2.1 billion. About 90% or SEK 1.8 billion of this is price mix, while 10% is driven by volume. As noted, as Rickard explained, our price mix has sequentially continued to increase, SEK 700 million in Q4 last year, SEK 1 billion in Q1, SEK 1.3 billion in Q2, and now SEK 1.8 billion in Q3. These are year-on-year comparisons. When it comes to inflation, we did see a sharp increase in costs in Q3, especially driven by Europe. This came from energy, but also materials. For some of the other elements, such as logistics, we actually saw inflation starting to come down a bit from high levels. For energy, we are largely unhedged and also saw costs coming down a bit towards the very end of the quarter. The total impact from higher costs was SEK 2.9 billion. As a comparison, this was around SEK 2 billion last quarter. Just to give you a flavor, SEK 2.9 billion, the component part of it is, call it half of it, half of the SEK 2.9 billion, a bit less than half, while then energy added SEK 400 million, approximately salary approximately SEK 300 million, these being the largest elements of cost inflation. To sum up, we had a continued good momentum with sales, price, and mix. On the other hand, we did have a sharp increase in cost inflation, especially in Europe, resulting in a deteriorating margin. While we are confident that we will offset inflation over time, in Q3, the inflation just increased so quickly that we did not have time to offset it. Moving on to cash flow. We generated a net operating cash flow of SEK 1.3 billion in the third quarter, compared to SEK 2.5 billion last year, mainly driven by lower operating profit and higher working capital. Just to comment on working capital. Working capital as a percentage of sales increased to 36%, mainly driven by exchange rates. Sequentially, inventories were actually pretty flat in Q3, marking a change after a year of increasing inventories. Finished goods, on the other hand, actually went down somewhat in Q3. We've continued to prioritize customer deliveries as demand has stayed on a high level. At the same time, we have seen some normalization of supply chain bottlenecks, although the environment still being quite volatile. Or let's say, regardless of these external circumstances, we will work with reducing net working capital across all of our businesses. There's no quick fixes here, but we are confident we'll start to see net working capital to come down. Moving on to our balance sheet. We have a continuously strong balance sheet and good liquidity. Our net debt amounted to SEK 11.9 billion, a slight increase sequentially, driven primarily by FX, but still at very healthy levels. Return on capital employed was a solid 12.6%. Also during the quarter, we've continued to work on our capital structure and actually successfully issued our second Green Bond. On that note, to comment on the Green Bond. We successfully issued this in September, and it highlights our commitment to work with sustainability, as Rickard commented on earlier. This was a bond of roughly EUR 400 million, or actually exactly EUR 400 million, and the reception was very good, and some 6 times oversubscribed. It's yet another example of our long history of working with sustainability and now also linking financing to sustainability. We'll use the proceeds for, broadly speaking, two purposes. Firstly, the first purpose is to strengthen our clean tech business and support our customers achieve, for them to achieve better sustainability. Secondly, we also invest in our own operations to ensure that we reach our goal to be Scope 1 and Scope 2 emission neutral by 2030 and Scope 3 neutral by 2050. An example of internal investments is, for instance, reducing our own energy consumption by at least 25% in manufacturing. We do expect these investments to contribute positively to our competitiveness and our business. Turning to the outlook for Q4 and full year 2022. For the fourth quarter of 2022, we expect an organic sales growth of about 10%. As a result, we expect organic growth for the full year to end in the upper part of our previously guided range of about 4%-8%. We do, however, expect to see continued volatility and geopolitical uncertainty in the markets. As a result, we expect continued high levels of cost inflation, supply chain bottlenecks, and volatile demand. With that, I hand back to you, Rickard. Thank you, Niclas. I will just end this formal part of the presentation before we go into the Q&A with a summary of what we just have been through. We stay determined to deliver on our strategic framework, our intelligent and clean growth framework. In terms of growth, as you heard, we do report a very strong organic growth. We're pleased that the growth is actually happening in the industries where we want to be and where we want to play. We continue across the board to actively work on our portfolio management to help further improve our margins and our long-term profitability in our business. Even though, we have primarily talked about what's going on within automotive, I like to highlight that this is an activity that's going on in all parts of our business at the moment. We do see that we maintain our strong price mix momentum. We will continue to drive this. The organization is fully focused on driving these activities to ensure that we do everything in our power to compensate for the ongoing cost inflation. We are not pleased with where we are in terms of profitability in the quarter, but we're pleased with the growth, and we're pleased with the activities that we take to help us to come back to a more stable earnings. When it comes to operating more effectively, we really see that we are now starting to embed our new operating model and our new ways of working. As I mentioned, I'm also very pleased that we have onboarded a couple of new leaders to the team. All the work that has been done within the organization for, you know, throughout the spring and summer is now bearing fruit, and we have identified a way to really drive a different way of working, simplify organizational structure, and reduce our overhead costs by roughly SEK 2 billion in run rate savings by the end of 2023. This is a result of a very dedicated and hard work across all parts of our business. We maintain our efforts and emphasis to then improve our regionalization rate across our key geographies, and also continue to drive efficiency in our supply chain. The Jinan investment in China is one example that really, you know, was concluded in this quarter that will really help drive a significant positive benefit for us in the China and Northeast Asia region. As you also heard talk about, we are continuing on our journey to simplify our footprint, manufacturing footprint, especially in Europe, with a set of additional factories being closed within the near future. With that, we conclude the formal part of the presentation. I will now hand back to the operator to help us facilitate the Q&A session. Thank you very much. Operator, please. Thank you. As a reminder, if you'd like to register a question, please press star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2, and please ensure you're unmuted when speaking. Our first question comes from Klas Bergelind of Citi. Klas, the line is yours. Thank you. Hi, Rickard and Niclas. First on the moving parts in the bridge, the SEK 400 million in energy costs and around SEK 300 million in wages year-over-year. I'm curious how these two will likely move heading into the fourth quarter. If you could give an indication of what you see now, Niclas, you made a comment that energy costs are leveling off at the end of the quarter. Maybe energy around the same level and wages higher quarter-on-quarter, perhaps. If you think price mix will also turn higher quarter-on-quarter as part of your 10% guide. It looks like it with sort of flattish volume growth as a result. I'll start there. Well, thanks, Klas. You know, trying to predict energy prices in Europe is, I'll leave it to others. What we did see again was a very volatile energy cost level during the quarter. As you rightly pointed out, we did see it coming off a bit towards the very end of the quarter. I don't dare frankly to predict how it will look like exactly in Q4. What comes to salary inflation, you are, I would say you are right to assume that, it's more likely to go up rather than down. Yeah. Price mix, of course, I mean, as you heard throughout the presentation, it's a high focus area for us. We'll continue to work on it. We are confident that we'll drive more price. Mix is always a bit more difficult to predict, but we clearly expect, you know, continuing momentum from price mix. I guess to be more clear, I know that you're unhedged on energy, but I thought there was some sort of lagged effect still in terms of how it hits your P&L. Is it really a one-for-one effect? Because obviously net gas prices are coming down sharply in Europe at the moment, which will be a positive immediately in the fourth quarter if this is a one-for-one effect. Just wanna clarify that. Well, I think it's true that we are unhedged, but it's not an immediate effect. I would say within a month time or so, we see the effect hitting our results. We do have some contracts, of course, and not just buying everything on a daily basis on spot prices. There's some lag time there, but I would say up to roughly a month lag time before you see it in our numbers. Okay, that's helpful. My second one is on the volume guide. I mean, of course, it's up to us to predict what the price mix will be, but let's say that it's flattish volumes. I'm trying to understand the mix here between your outlook for China on the industrial side, where growth was only 2%, there is more to get back from the lockdowns against potentially European industrial outlook, which is likely getting weaker. This quarter was a lot about higher production on the auto side, but now the industrial weakness in Europe could perhaps gradually kick in versus China gradually coming back. Thoughts here, Rickard, on that would be useful. Maybe if I just comment first. I mean, similarly to what we saw in Q3, can expect a similar kind of ratio, maybe, on auto versus industrial. Essentially auto including volumes growing quite strongly in Q4 as well, while industrial maybe being a bit more muted. For the reasons that you mentioned, we do see the European economy being, of course, challenged, and then China being also a bit challenged by the COVID lockdowns. Yeah, I'm not sure if I have so much more to add to that, Niclas Rosenlew. I do expect that Europe will face some sort of recession, and that will of course impact demand. We already see that, as I mentioned in the presentation, on a volume basis, we're flattish in Europe, and we'll see how that's gonna evolve now in Q4. While I do believe that some of the growth pace in China is somewhat negatively impacted by the ongoing COVID restrictions, there should be some potential opportunities for additional volume growth there as hopefully those restrictions ease off within a reasonable future. Thank you. Our next question comes from James Moore of Redburn. James, please go ahead. Yeah. Hi there. Hopefully you can hear me, Rickard, Niclas, Patrik. Perhaps I could start with the cost development line, your SEK -2,858 million line. Thanks very much, Niclas, for your color on raw materials, SEK 1,400 million, energy SEK 400 million, labor SEK 300 million. I mean, I'm gonna assume logistics SEK 200 million. Even if I do that, there's still a balancing item in here of about SEK -560 million, which to me is your implied savings number, which is a sort of negative SEK -560 million savings number. I know sometimes we have a negative savings number. I thought that the COVID-19 temporary measures, which I think from memory were SEK 625 million eight quarters ago in the third quarter of 2019, had already fully reversed out a year ago. I wondered. My first question is can you just help us understand what's in that balancing item? Maybe I'll come back on the others. Hi, James. I think on components and remembering we buy very little actually raw materials, but it's mostly components. On components, it's actually a bit more than what you said. I said roughly half of the SEK 2.9 billion, maybe not fully, but anyway, to that tune, while then energy SEK 400 million roughly, salary maybe SEK 300 million roughly. And then we have things like shop supplies and so on, making up part of the remainder. Again, a bit more on the component side, and then you're roughly there from a math perspective. Thanks. Your price cost gap, if I can call it that, is SEK 1.1 billion in the third quarter. If you were to take current spot prices for everything, do you think that this is the most negative period for that net price cost gap and that it should improve from here? Or would you expect for it to get worse before it gets better? My other question is, when we take this all together, there's a lot going on with your savings plan, with the price cost gap, with the inflation, with your ambitions on pricing, with the economy, which may roll over, et cetera, et cetera. I understand there's a lot of moving parts here, but how should we think about profitability next year for the whole of 2023 versus 2022 when we pull that together? Can we think about margins being up, or actually should we think that they've gotta come down given some of these inflationary items? Good points, James. I mean, wish we could give you a straight and good answer here. I mean, have we peaked? On the component side, we have a lag. Even if we've seen some of the, you know, for instance, scrap steel prices come down already for some time and so on, we do have a lag of maybe 3-6 months, if that gives you a bit of insight. Rickard commented here, on energy, the lag is shorter. On logistics, we have seen, as I mentioned, a bit more of a normalization or at least cost levels coming down a bit from the peaks. Also operationally, it being easier to ship goods across the world. It's not all pitch black, but we do expect inflation levels to stay at reasonably high or quite high levels. In terms of next year, I mean, of course, I mean, we are not pleased with the margin we have now in Q3. Of course, we foresee, you know, call it normalization or higher margins going forward. We don't wanna give a prediction of margins for next year. I can add to that, James. I think to your point, we do have a lot of moving parts and a very unpredictable and volatile environment around us. I don't really dare to give or guess where this is gonna go. I can only look backwards and realize that when we started this year, in our plans, we did not see a war coming in Europe, we did not see a complete lockdown of China or at least the Shanghai region for a couple of months. We did not foresee the energy crisis that we're now living through here especially in Europe. It is hard to predict. The delta of SEK 1.1 billion is a big one. It's bigger than what we thought when we entered into this quarter, especially because energy in Europe has been a, you know, a surprise or been more maybe, you know, developing in a more negative way than anticipated is maybe a better phrasing than a surprise. It's hard to predict. The only thing we can say is, when and if we see a shift in the growth rate of this inflation, we should have a tailwind on our margins. I don't dare to predict when that will happen. Thank you very much. Our next question comes from Andreas Koski of BNP Paribas. Andreas, the line is yours. Thank you, and good morning. Yeah, I also have two questions on cost savings and price. Firstly, on cost savings, are you still running your SEK 5 billion cost savings program? If so, how much have been materialized, and what contribution did cost savings have in this quarter on a year-over-year basis? If you can sort of talk about the quarter, Niclas, I can start. Yes, we are delivering on our SEK 5 billion commitment. We are making progress. Some of those examples that I gave on what we're now doing with the consolidating our footprint in Europe, investing, you know, in Jinan and in Gothenburg are all part of that. We think that we so far have delivered the benefits from this program equating to roughly SEK 2 billion, there or thereabouts. I know it's hard to see in the P&L. We need to remember when we, you know, gave that SEK 5 billion target number, you know, a couple of years back, that was under the assumption that, you know, everything else would be roughly equal, and that's not the case. Of course, we have seen, you know, a number of other things. Basically, we're swimming against the tide. I think that's why you don't really see them in the numbers. They are there, and they are progressing well, and we are as committed as before to deliver on those SEK 5 billion. Any comments on the quarter there, Niclas? No, Andreas, we have the SEK 5 billion, stay firm on that. Now, of course, we did introduce some additional measures very much in line with the strategy. Let me know, Andreas, if we missed some of your parts of your question. Is it possible to quantify your expected total cost savings in 2023? You have now SEK 2 billion in annual run rate at the end of 2023 from the new program launch, and then we will have additional savings from the COGS program, I guess. No, we don't. We don't really disclose that. Okay. Understood. It's not a number that we are right here and now prepared to kind of, you know, go into. Yeah, understood. Lastly, quickly on price, in price mix. I assume the mix impact is negative in this quarter as automotive growth was much stronger than the industrial division. Isolated, what was the price impact in this quarter? Should we expect that to accelerate in the coming quarters? Thank you. Yeah. We continue to work with price, meaning we continue to increase prices. The majority of price mix in the quarter is, or almost all of it is really price, as you said, mix was less favorable this quarter. We are extremely committed to continue to work on the price part of it. I said earlier today, it's a bit harder to predict the mix, of course, but we are very confident that we'll continue to see a good momentum in price. Understood. Thank you very much. Our next question comes from Yifan Zhang of Goldman Sachs. Yifan, please go ahead. Morning, everyone. I just want to quickly check on this new restructuring plan you announced. This is in addition to the previous 4-5 plant closures, right? I'll ask my question next. Sorry, can you hear me? Yes. Yeah, I just want to double check. Can you hear us? Yeah, yeah. I can hear you now. Yeah. Okay. I just want to know, the new plan announced is in addition to the previous 4-5 plant closure? The two, as Rickard explained earlier here, is more related to our you know staff, how we work more efficiently, while the plant closures relate to our SEK 5 billion initiative by 2025. They are two separate things. Okay, cool. Understood. Also, does SEK 1 billion more restructuring costs, do you think it put you in a probably tougher position for your dividend increase for the full year? Yeah, that's the question. Well, I mean, on the dividend, of course, the board and the shareholders will decide on that, so cannot really comment on it. We don't see the kind of restructuring costs affecting our ability to pay dividends. Cool. A final question to squeeze in. You announced, basically, how's the plan for higher autonomy that you announced in January, February this year playing out so far? Can you give us some progress on that? Well, we do have our business areas. They are up and running. They are, you know, they have their clear set of targets. They have taken over the responsibility and accountability for the end-to-end value chains that sits within the respective areas. We have made some management changes in this regard as well throughout the year to ensure that we have the right leaders and the right capabilities to execute on this framework. I also would like to say that this SEK 2 billion in savings, run rate savings by 2023, is a direct correlation to our efforts in this regard. This has been driven by our business areas as they now scrutinize their areas, identify opportunities to further drive cost efficiency, while we rethink also some of the corporate head office activities that we have had in the past. I think you should see the announcement of the SEK 2 billion as a clear indication that we are progressing pretty well in our restructuring and changing the ways of working within SKF. Perfect. Thank you very much. Our next question comes from Erik Golrang of SEB. Erik, please go ahead. Thank you. I have a couple of questions on the portfolio. I assume the profitability range is quite wide across your different product groups. Could you tell us something about sort of how big a part of the portfolio are you actually able to offset the underlying cost inflation? Is there any part here where you're really operating at continued good margin levels? On the other end of that, could you put a number also on how big part of the portfolio is loss-making currently? Well, we're into sensitive territory here, Erik, on what we are comfortable to disclose also from a competitive point of view, where we have big opportunities and we have other challenges. I will have to answer your question in more generic terms than to specific details, I'm afraid. You're right in the way you realize that in some parts of our portfolio, we are it's harder to drive through the necessary price increases. I mentioned two particular examples in my comments related to businesses with rather long order books, i.e., marine and aerospace. There we have more work to do and to get back on track on the profitability level that we expect it to be at and what we're used to. That would be two examples. On the other hand, we are also looking in each business area. They constantly look into their, you know, bottom 10 performing accounts and come up with clear actions on either fix it or exit. That's a kind of a rhythm that we have in our business that we drive quite aggressively. Within Automotive, we have been more specific. There we have said that, you know, we anticipate to exit SEK 1.2 billion of revenues or of business in revenue terms within the next kind of, you know, couple of years. There we're bound to certain contracts, but those discussions are ongoing and they refer to a large extent to customers within small combustion engine-powered passenger cars, for example, is an area where we pay a lot of attention. I think I need to leave you at high level because some of these others might be a bit too sensitive to share openly. This is maybe a good opportunity to do a bit of marketing. We have our capital markets day coming up on the 8th of December. Some of these topics, as we have a bit more time, we could maybe go into a bit more detail as well. Hope to see many of you on the 8th of December. Very much so. If I could do just one follow-up on those. When you talk about sort of exiting or trimming the portfolio of stuff that isn't profitable or you don't think it will become or reach a good profitability, should we mostly think of that as sort of pruning? Are you just exiting the business as opposed to being able to sell it? I wouldn't rule out the selling part. There might be some opportunities there as well, and hopefully can share more details on that in December on the Capital Markets Day. Thank you, Erik. We have come to the end of the hour that has been allocated, so time runs quickly. Unfortunately, we will have to call it a day here. We are on standby on the phone and on email if you have additional questions. I know we have some that have been posted on the chat that we need to get back to you on, and we're happy to do so. Perhaps a couple of closing remarks from Rickard before we close. Yeah, I'll do a very quick sum up then. First and foremost, thank you for paying attention. Thank you for being with us this morning. As you heard us talk about, you know, we are very pleased about the progress within our strategic framework, especially on the growth side, where we do see very strong organic growth. We're at that, we're excited about. We are less excited about the margin that we have developed or made up in this quarter, but we are confident that our activities and all our efforts will be the right medicine to turn this back to a profitability level where we need to be and where we should be. We are still, you know, optimistic and, forward-leaning when it comes to the future, and are eager to do everything now to move as quickly as we can also during the remainder of this year. With that, I think I thank you all. As Niclas said, I hope to see many of you in London in early December. This concludes today's call. Thank you for joining. You may now disconnect your lines.