Ladies and gentlemen, Welcome to the Systemair Interim Report Q1 2023/2024 conference call. I am Alice, the call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Anders Ulff, CFO. Please go ahead, sir. Thank you very much. Anders Ulff, CFO here of Systemair. Me and Roland are sitting today in Skinnskatteberg, where we have a lovely summer day, and it's also the day of our annual general meeting that will start here at 3:00 P.M. Of course, extra and also to present what we believe is a strong report. You will find the presentation that we will run through on our investor relations page, and if you have some problems there, please press on the press release of the report, and you will find the presentation there. I will hand over now to Roland to do the presentation. Thank you very much, Anders. So my name is Roland Kasper, I'm the CEO, and I have the pleasure to present our report to you. But without further ado, I'll just switch to what we have on our slide, slide 2, which is an introduction to Systemair. Systemair established here in Skinnskatteberg in Sweden in 1974. Our last year's net turnover amounted to roughly EUR 1 billion, and we're listed on the Nasdaq Nordic stock exchange market since October 2007. Today, Systemair is a group. We run our own sales companies in 51 countries. We have 26 factories in 18 countries and have around about 6,600 employees. With that setup, we export today and serve 135 countries all over the world. By that, directly switching over to our slide 3, which brings us directly to the report and our net sales in quarter one. The net sales in quarter one amounted to SEK 3.175 billion, compared to SEK 2.8 billion in the first quarter of the year 2022, 2023. This amounts then to a growth of 11.4% compared to... Or which is organic 10.7%. On the right side of those following us on, on this slide presentation, you see the organic growth development and the dip in the middle is, of course, the only explanation for that is the pandemic circumstances and the recovery afterward of that. But let's go into slide 4 and looking into the growth analysis on the growth that we had. So organic, all the regions actually showed good organic growth, just except our Nordic region. The main contributor after the organic growth of 10.7%, here is, of course, to dimension the acquisitions, which firstly contributed negatively, which is the impact of the divestment of our AC businesses, which is then an amount of 3.5%. Then we had a positive impact of 4.2% by currencies, just because of this weaker Swedish krona towards both euro, U.S. dollar, and Canadian dollar. So in total, then, a growth of 11.4%. Switching to slide 5. Looking into the operating profit. As a result, the gross margin was unchanged at 34.6%, the same as the quarter last year. The sales and admin expenses for the quarter increased by 16.7%, and the operating profit, finally, for the first quarter, amounted to SEK 334.9 million, compared to 269.6 the year before. That means that the operating margin increased to 10.5%, compared to 9.5% the year before. Switching then directly to page 6, ladies and gentlemen. The profit after tax. The net financial items for the first quarter amounted to SEK 18 million. The currency effects on the long-term receivables, loans, and bank balances amounted to a net of SEK 2.76 million. Interest expense for the quarter amounts to -SEK 20.9 million. On the right side, in the staples, you can then see the result of being then the profit after tax, which amounts to SEK 242 million, compared to SEK 217 million, the same period the year before. Switching to slide 7. The cash flow analysis for the first quarter. Cash flow from the operating activities in the reported quarter amounted to SEK 388.5 million. This compared to SEK 309 million the year before. And then the change in the working capital here is SEK 81.8 million. Last year, we had a change in working capital of SEK 373.8 million. Here, the working capital increase last year was quite sharp as a result of increased inventory and accounts receivable. That is a trend that we have been working with and reversed during this year. The net investments in this quarter, this year, excluding acquisitions, is SEK 129.3 million. And here, the net, net investments primarily are about the finalization of a production movement in Czech, and also investments in our setup in Canada. This all amounts to free cash flow in the period of SEK 177.4 million, compared to negative cash flow of SEK 152.5 million in the year before. And here to be mentioned also, of course, as an effect about the results, we have lowered our net debts to SEK 1.4 billion, compared to SEK 2.6 billion the year before, as a result of the divestment of the AC and of bringing down and taking control of inventories and such like. This of course, brings us a strength in looking forward to organic investments for our future growth of the company. Switching over to slide 8, and here you see a split in the pie chart of our development in different markets. Eastern Europe, here stable with a share of 13% of our total set up. North America with an increase from 12%-13% of our total share. Other markets grew from 12%-14% in the period, and Western Europe is really stable at 46% of the total share, and the Nordic region, a slight decline to 14% of the total. By that, going into some words about the different markets and how they have been performed, and switching to slide 9. Starting with the Nordic regions, the sales in the Nordic region decreased during the first quarter of 8.9%, and here adjusted for currency effects, acquisition, such like, the sales decreased by 9.2%. But the Danish market showed a very positive development during the quarter, while the turnover in the Swedish, Finnish, and the Norwegian market slightly decreased. Next region on slide 10, Western Europe. Here, the sales development continued to be really strong during the quarter, with an increase of 12.4% compared to corresponding period last year. Here, also adjusted for currency effects and acquisitions, the sales increased by 9.5%. As all Western Europe had a really good development, I don't want to mention, in particular, the Belgium, UK, and France showed good growth in the quarter. So the development as such in Western Europe, stable and really positive. Next slide, slide 11. As a result of the positive development we had had, for example, in Germany, we also, two weeks ago, could celebrate the groundbreaking for a new production hall in Germany. So this new building, where the expansion will be in a total area of around about 4,000 square meters, will represent a significant expansion of our production, but also our logistics capacity in our center in Germany. And for this celebration, of course, all employees and also certain guests participated in this event. Next slide, slide 12. Going into Eastern Europe and the CIS countries. Sales in Eastern Europe and the CIS countries increased in the quarter by 7.1%. Also here, adjusted by currency effects and acquisitions, sales increased by 2.6%. Most markets, actually, within the region showed really good growth. Here, especially Estonia, Czech, Poland, and Slovenia. The growth, excluding Russia, would have amounted to 14.1%. Go on to the next slide, slide 13, North America. In North America, sales increased by 26.6% during the quarter, and adjusted for currency effects, sales increased by 23.1%. And here, both American, Canadian, and the Mexican market showed really good growth in the quarter. slide 14. What we call the other markets, or to be really precise, Middle East, Asia, Australia, and Africa. Sales in this region, Middle East, Asia, Australia, and Africa, increased by 26.7%. Adjusted here for currency effects and acquisitions, the sales increased to 40% and is today the second largest region within Systemair. And here I have to mention, especially the colleagues in Turkey, India, Morocco, and Malaysia, which had a really good growth in this period. Switching to next slide, slide 15, as a follow-up of the really good development in India, I need to mention a really nice prestigious order that has been delivered by our colleagues in India, and this is to bring really good ventilation solutions to India's New Parliament Building. This is a really iconic building, where we had the possibility to deliver extensive and specialized product range for the best possible air distribution products to ensure a really optimum and reliable air quality in these really nice buildings. Next slide, slide 16. Also to mention that throughout 2022, 2023, and also into this that we're reporting, we have been supplying products to several e-mobility suppliers in Europe. Sorry. In total, a little bit more than 250 large air handling units, with and without heat recovery, has been delivered throughout Europe for American, European car manufacturers. This to a total amount in excess of SEK 114 million in value. E-mobility production, of course, increases every year, and those leading manufacturers continue to invest in these factories, the great need for ventilation, which is highly adapted to the manufacturing processes. This is a really nice area of growth for Systemair. By that, ladies and gentlemen, I switch over to the last slide. I say thank you for listening and open the lines for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets when asking a question. Anyone who has a question may press star and one at this time. Our first question comes from the line of Carl Ragnerstam with Nordea. Please go ahead. Hello, it's Carl here from Nordea. A couple of questions. Firstly, I wonder if you could give any flavor on the order intake development during the quarter. I guess it's relevant maybe to give some flavor on both the pace in volume as well as pricing terms. Also finally on orders, if you could give flavor on the development a little bit per region. Obviously, state that what happened during the quarter, but it would be interesting to hear about the sort of order dynamic? Yeah, thank you, Carl. If you start to do the development of the region, as you can see in the presentation, we, of course, have throughout all regions except Scandinavia, really, really good development. I think that is a little bit what we have and see in front of us. When you talk about the order intake, which is something that we normally do not report, of course, there is a mention in the report that the order intake- Book- to- bill. Sorry. The order intake is above the invoicing for the month. Thank you. In total. Yeah, sorry. Yes. No, no. Thank you. I hope this answers your question here, Carl. Yes, and what would you say is the organic growth in the order intake during the quarter if you exclude sort of pricing as well? If you compare this quarter with the quarter- To last year. Yes. Yes, exactly. Exactly. I mean, last year we had over the whole year, as you know, we made five different price adjustments. This year, so far, two and one is coming. So it's not that. It's not as much as it was last year, but I would here at least estimate that of the organic growth, around about 50%, at least, would be the pricing part. Okay. Very, very clear. Quarterly development- Yeah ... is, I think, 4% down. So it's a small, but- Sorry, what is 4% down? Sorry. You compare the order intake in the quarter compared to the order intake the year before, it's 4% down. But including prices, right? Including everything, yeah. I mean. Ah. Okay, very good. And also, a little bit on the Nordics. You said that it's partly due to weakening market. Would you say that we, in the quarter, see the full effect of sort of, I mean, the soft new construction resi market, especially in Norway, I guess? Or will it sort of accelerate due to lagging completions in any way, or how should we see that development, do you think? You're totally right. Where we see a little bit lag on new build residential is only in Norway and Sweden these days, which is only a really small part of our total turnover. To say it is over... Very hard to say. If you look at those countries where we really rely on predictability, it would normally be Norway, which says that the turn is there. But it's hard for me to estimate. I mean, we have very short visibility here because it's a pure distribution business, but the predictions coming from the Norwegian markets are that it will turn out. So, but it's not knowledge. Okay. No, that is good. And some of the companies or several of the companies in sort of the HVAC industry is complaining a little bit about the inventory levels at the distributors, that they are lowering the inventory levels. I know that you're not working to a massive extent with distributors, but I guess to some extent in part in North America. Could you say what is happening there from a distribution point of view, and where are the inventory levels currently? Yeah, we have also heard that several of our competitors are claiming that the distributors are bleeding through their inventories. We don't see that as a bigger impact for us. We see that in some areas, maybe in North America, but as we, of course, not only in the distribution business in North America, where this is applicable for us, we also with the direct sales for direct project for schools and light commercial, which is a little bit different situation, of course. So yes, we see it, and we have heard it, but we're not that impacted about that. Okay, so a fairly limited extent, you would say? Yeah, correct. Okay. That is very good. Also, one final, I think you took a little bit of a write-down in Menerga in the quarter. Is it due to the production move or is it anything else we should note about the development there? No, no, no, nothing related to Germany. This is for the, for the Polish sales company, sales entity. Ah. So it doesn't relate to the German production. Okay, very good. Thank you. Thank you, Carl. Thank you. The next question comes from the line of Adela Dashian with Jefferies. Please go ahead. Yes, hello. Thanks for taking my questions. A couple from me. Going back to the Nordics, the development in the Nordics, if you could just give us some more flavor into what—like, what is the dynamics there? What kind of different market exposure do you have in Denmark versus other countries that's driving good performance in Denmark, but weaker sales in Norway and Sweden, specifically? Yes. Thank you for the question. It is quite easy. It is a different product mix that we have on the different markets. Just as a background, I mean, we have among the widest portfolio of products that we offer to the different markets, but only in, I think, in three markets today, we offer everything. So we have a different setup of products depending on the market needs. So in Norway, we are as like as in Sweden, but even more in Norway, we are deeply into the residential ventilation, of course, new build, but also in the renovation part. And in Denmark, we are, I would say, to the majority at all, we are in air handling units for commercial, like commercial industrial buildings. And that part is, as in the rest of Europe, strong and is developing, especially in Denmark, very well. So that's the biggest difference. ... That makes total sense. Thank you for that. And then a similar question about Western Europe. What is, what is the driving factor behind the good performance there? Is it more regulatory driven or, or other reasons for, for you being able to, to deliver strong organic growth there? I think it's a mix of a little bit of everything. Underlying, of course, is still, even if you can read a lot in the newspapers, but it's still a rather stable market demand, first of all. And I think the switchover, such like as they do in Denmark on the commercials, they do in other countries on light commercials, but also in residentials. So we see, just following statistics, for example, the residential market in Germany is still developing positive. So there are a lot of different drivers that as a total, gives us a rather stable and good and positive underlying market. All right. And then finally, could you give us some more color on what's been driving the EBIT margin expansion in this quarter and, and also if this is a sustainable level going forward? Yeah, I think it's multiple factors really that are driving it. I mean, this is a very long strategic work that we have been done over several years, really, to work with the improving the margin and, you know, getting over our financial target of 10%. So I think this is just a result of all these actions altogether, and of course, good volumes as it is right now also, that's a contributing factor as well. But I think if you go back- Could you...? Yep. Yep. Yeah, if you have a look at our, for example, the last presentation from the capital market, say, I mean, we did a follow-up really on several actions that we have been working with on, for example, on the factory footprint and the several areas that we are working with in parallel, really. Of course, also, as mentioned before, I mean, the AC divestment has, has given us the opportunity to focus more on, on our core businesses, on the ventilation side, which, in this good product mix that we have been able to, to develop now, also has a better margin at them. Mm-hmm. So in that case, we really shouldn't expect, you know, a margin reset or margin compression. If it's more, you know, efficiency initiatives that's now bearing fruit, then you should be able to maintain this level. Is that your expectations? That's correct. Absolutely. We are working as on this target since long, really, and we have been confident all the way, really, that we were able to reach 10% and beyond that as well. Great. Thanks for that. That's all for me. Thank you. Thank you. The next question comes from the line of Douglas Lindahl with DNB Markets. Please go ahead. Hello, gentlemen. Congrats to a strong report, and thanks for taking my questions. Actually, I have both of my questions are on pricing. So first off, I want to firstly understand the portion of organic or volume growth and price growth in the organic side for sales. I appreciate the comment on the order intake, but can you give it for sales in this quarter? And also, you mentioned that you are raising prices or are planning to raise prices. Can you give some comments on the logic behind that and roughly by how much you're planning to raise prices? Thanks. When I start with the logic behind the price adjustments, we call it price adjustment because it's true price adjustments. We had two price increases earlier this year. The adjustment that we're having now is to adjust to some of the commodity raw materials being downwards corrected. Some of the electronics are in better availability and more competitive prices. But of course, some other commodities are also still increasing due to other influencing factors such as energy and logistics and transport. So it's more an adjustment. It's not in 1 over 3, 4, 5% set, not at all. It's really to right set the pricing in the market. When it comes to the portion of- Fairly neutral it is. Sorry? I'm fairly neutral on the group level, then it seems, or? I would say- If you average, average it out. As an average, I would say that there is, of course, depending on what product groups we are, but in some product groups, it's a little bit more, in others, it's an adjustment downwards. So but, I would say that it... Okay. It's a small price increase at the end. Okay. Yes. All in all. Okay, but net, net is positive, yeah. Okay, understood. Mm-hmm. Absolutely. Then on the portion of pricing on the organic growth, it's very hard to come to an exact figure, but we calculate around about 60%. Okay. So same as the order intake, basically? Yeah. Just a clarification, the future price adjustments—are those being incorporated as we speak, or is there a certain date to that when this would be through the system? The next actually is by tomorrow, 1st of September. And then we have an internal process to review 3x a year at a minimum, which doesn't mean that we adjust 3x, but just that we review as a normal process, if there shouldn't be anything that stands out even more urgent than that. So it's an ongoing process all the time in the background. Okay. Thank you so much. Thank you. Thank you. The next question comes from the line of Anna Lindström with Handelsbanken. Please go ahead. ... Hello, gentlemen. Thank you for taking my questions. Firstly, I would maybe like a clarification on the trends that you've seen during the quarter. So if you've seen any shifts between the first month and the last month in the quarter? You mean from, from our May to July? Uh, precisely. From the month of May. No, not really, Anna. Sorry, no. I mean, overall, as you know, being in Scandinavia, you know what is happening here, but I would say overall, we still see that the industrial logistics and hospitals and such like buildings are still in high demand and is developing well. So, for us, it's a rather stable development for the time being. Okay, great. Going back a bit to Menerga, what are your expectations for the upcoming quarters? What's happening on the construction there? Yeah. As we have been informing earlier, and it's of course an ongoing project, which this year will have the biggest turn. So today, the company as such, and the restoration project is absolutely following with our plans, and we will have the biggest change visible by next year. So we have a plan for the whole year because it's a lot of different project involved in that, which is also moving of productions and components from and to other production sites within the group. So it's an ongoing project, and I don't know if that's the part of the information that you wanted, but that is what is ongoing in background. Okay, great. And, going back a bit to the cost dynamics, you mentioned a bit on, like, component side and material side, but how are you experiencing the personnel costs in different parts of your regions? Yeah, they are quite interesting these days. Of course, the personnel costs are increasing, and the expectations are most probably higher than the true increase in many, many countries. That is, of course, something that is affecting also our estimate costs, but so far we have been able to compensate for that with the internal efficiencies. Yeah. We're still struggling on some sides also to find the right competence also. So a little bit, we have to pay in certain places also. Yeah. Yeah. Okay, great. That makes sense. And my last question is on how you are thinking about CapEx currently, because obviously, you have very solid investment headroom after you've done the divestment. So is that something that's under review, and how are you thinking about CapEx currently? It's really nice to have a lot... For me, as CFO, very nice to have lots of money in the bank in that way, and to take the debt down and to have lower interest expenses. But of course, lots of ongoing projects for future growth, also ongoing, as Roland informed a little bit about earlier also. We see that we currently are, of course, in a very positive and strong position. So to really invest in our own future organic growth, to investments in efficiencies and production sites, but also in markets. Of course, we also, as you know, we are, of course, looking into the M&A pipeline, so we think interesting times ahead, and of course, it's a comfortable situation where we are just now looking at the finance side. Okay, great. That's all my questions. Thank you. Thank you, Anna. Thank you. The next question comes from the line of Henrik Alveskog with Redeye. Please go ahead. Okay. Yes, hello. You've covered just about everything now, at least my questions. But, I'm interested to hear if there were any or more like large project deliveries boosting sales, particularly within the group that you call Middle East, Asia, et cetera. Yeah. As also given a little bit of information, of course, in the report, we have had several very nice projects in India, first of all. We have some on the industrial side coming from Malaysia for the big industrial fans. But we also had some nice project in Middle East area. That's correct. I would, though, say that the biggest portion, relatively to size of our operation is in India, but also very interested open. South Africa as well. South Africa as well. Yeah, but, yeah. Okay. But that's- All right. Thanks. Well, a follow-up then on that, maybe. I remember you said probably two years ago, maybe—maybe I'm wrong, but a while ago you said that you will focus less on these large projects because the profitability is usually lower. Have you changed this attitude, so to speak, or could you just talk a little bit about that? That's a really good question, because it's still the same answer. No, absolutely not. So if you look into, especially these days, where some local markets would feel some kind of pressure, looking into the newspapers, but we have really, in the pipeline, we are looking on the mid to small size of projects. But of course, we have some really good partners on the customer side that want to have our technology on board for their dedicated projects. And those we are following, but of course, then, for example, it's also reported in here the quarter four, I had one slide about the E-mobility investments. They are all together coming in different steps. They're coming to smaller project. But first of all, these units and the solution for these kind of applications, they're all standardized for us. And that is, of course, one of the things that we really like to have standard solutions, and then, of course, can also make them replicable in higher demands. Okay, great. Thank you. That's all for me. Thank you, Henrik. As a reminder, if you wish to register for a question, please press Star and one on your telephone. Star, followed by one. We have a follow-up question from Ms. Dashian with Jefferies. Please go ahead. Yes, just a quick follow-up. Going back to the question about the different sentiments on the distributor level versus what you're being able to deliver with your direct sales platform. Could you please specify what the shares are in the different sales channels and also in which regions you rely more on distributors versus your own direct sales platform? Thanks. Actually, we don't rely on distributors in that many regions at all. As you can see, all in all, we have in all our countries where we have our own sales organization, in 51, we also have our own warehouses and thereby our own distribution channels. For us, we normally say that our business setup is more like that, that we have 40%-50% of our volumes is on the standard product range, BPR, which we produce and distribute. And the other part of the volume is then the project business, where we're working directly with the consultants, with investors, architects, and so on. So that's more the setup that we have. Yeah, that makes total sense. Thank you very much. Thank you. Gentlemen, there are no more questions at this time. Back to you for any closing remarks. All right. Thank you very much, everyone, for calling in, and of course, both me and Roland are available if you have any further questions down the line here. So wish you all a great day. Thank you very much, and thanks for listening in. And, yeah, take care. Bye-bye.