Ladies and gentlemen, welcome to the presentation quarter one report 2022. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Thomas Widstrand. Thank you. Please go ahead. Thank you very much, and thank you all for listening. I will, as usual, for those who have heard me before, try to explain a little bit what's happened here during the first quarter. Obviously I will present the first quarter of 2022 for the Troax Group. For those of you who are new, I can say that I will more or less follow a presentation scheme that we have put on our homepage, troax.com, and you will find it under Investors. Under Investors you will see Presentations, and then obviously Presentation for the first quarter you will find what I'm going through or going to review. You will be able to follow what I say regardless if you have this information or not. If you're interested to follow it, you please feel free to do so. First quarter, we sort of tried to say that we are celebrating cooperation because mainly going back to last year, it was a substantial increase then of the volume for us. I think we grew with almost 40% of organic growth last year, and of course that put some stress to the organization. I would like to start directly to, you know, give some compliments to the organization who did a very good job, and that's why, of course, we say that we support this cooperation, which is obviously quite important to handle this kind of quick increases or for that matter, could be also decreases. You never know what's happening in the future. We are safe and sound on solid ground is the next page, and thereafter, we show you a little bit about our product segments. I will go through them very, very briefly. The biggest one that we have we call machine guarding, which is approximately 60% of our turnover. This picture, which we have now for a while, showing the production line for cars. That's actually a good example of what could be used as our perimeter guarding, where we protect the people from potential hazardous area. That's 60% from the biggest turnover. Next one we call warehouse partitioning. It's approximately 30%. As you see from the picture, where it's indicated that you're actually working warehouses, this is more the traditional warehouses where you have a forklift truck. Someone is picking up goods, and it's being delivered to some sort of dispatch area. You have thousands of them, of course, around the world, and it's approximately 30% of our turnover. Last and least, it's what we call property protection. It is perhaps not safety from the same dynamic aspect that we had in the two preceding segments. This is more, of course, to protect, as you see from the picture here, skis, bicycles, luggage or whatever you have that you normally put down in your cellars. In this case it's normally in multistory buildings where you have different inhabitants, of course, who are renting or as part of their flats, they have a part of the storage in the cellar. That's approximately 10% of our turnover. Now as a hybrid between machine guarding and also the warehouse partitioning, we have something that is called automated warehouse where we primarily use the products from machine guarding, but it goes down to, as the picture here implies, to the more automated warehouses. Those have been increasing for a substantial part during the last three years or something like that. Last year we had a tremendous increase in this part. I think for the first quarter it's been a little bit of a slower start because obviously this is coming mainly from the investments that companies are doing in e-commerce or at least in the warehouse handling connected with e-commerce. We can see then that probably some companies were investing a bit maybe two months last year, so it's a little bit lower this year. Probably also connected that after the pandemic, at least in most areas, people I guess are coming back a little bit to a more physical shopping instead of just, buying something on the, on the internet. This is something which we think over long-term trend is very positive and it will continue to grow substantially. Next page is just a summary of 2021, say, per region, where obviously then still Europe is our home market and the biggest one. We have 75% of our turnover in Europe split in different parts. We are growing substantially in North America and also in what we call new markets, which is mainly the Asia-Pacific area. On the bottom left you see there the figures for last year, which we don't need to go into. The intake next page where you see then that we have been hovering around the 20%. Our operating model over a long period of time. We are the host company, and we are the global market leader. We think of perimeters as protection, so we should be able to have a decent development within all the flexibility. As you see from the comments of the first quarter, we are still hampered a little bit on the gross margin side by a certain delay in transferring price increases to customers because of the very turbulent steel price situation. I will come back to this in a few moments. Coming to the next page, which is a summary of the financial targets before we go into the summary of the quarter one. We should exceed then the growth in the current markets, and normally we are saying that we have market growth, which is some 4%-6% per year. Normally, we take some market share on top of that. I think historically, we've been having a 10% or something like that over one business cycle. We have been increasing the first quarter of 27% in sales, but approximately half of that or maybe slightly more than half of that is coming down from price increases to customers based on the obvious increase coming down from steel price increases that we are suffering from. I would say that the real organic volume is only half of that or maybe even half, maybe even slightly less than half. Due to the fact that we as I said, we are not late transferring over price increases to customers, but there is a certain time difference between we get it from our suppliers until we get it, so to speak, to form a basis for our result account. We have an outstanding order book, which of course is taking to the lower pricing. Of course, you have to let those orders be honored with the old price. It takes normally. I'm normally saying it takes a quarter to get this compensated. By the end of last year, we saw the steel price starting to stabilize, so we had good hopes that we could, so to speak, during the first quarter now come back to what we think are reasonable levels. Due then to the war in Ukraine, with a substantial lack of steel in the market, there's been a lot of turbulence on the pricing side. Obviously that has hit us somewhat on the purchasing side, and it will take a number of, I think, months or at least probably also quarters until this stabilize again. We are back into the situation I would say we were end of December. We still need a couple of months, everything else equal, to compensate for the price increases that we suffered on the purchasing side. Otherwise, on the capital structure, there's no real change. We have increased our finished good stock and also the raw material stock, obviously, since we don't want to have any delivery problems. We have increased the stock in order to cope now with longer lead times and some problems, while buying, I mean, steel or other things in the market. Otherwise, there's nothing I would say in particular that have happened. Now, coming to the next page, which I think is the most interesting, some sort of summary for the first quarter, where we try to explain then what's happened. I'll go through the bullet points briefly, at least, that in the first quarter then of 2023, we continued the good order trend we started in 2021. There's a continuous strong development for customers within automated warehouse and machine guarding. However, that in this quarter, the order level on the automated warehouse was slightly lower than it was last year. It's mainly the machine guarding, I would say that improved then compared to last year. Again, as I've been saying now at least once before, this figure is of course substantially influenced by the price increases implemented. We had the first increase towards the end of Q1 last year and then, of course now already in 2022. We have what we call a reasonable EBIT result. We have a better result compared with last year, but the EBIT margin is slightly lower than last year. I would say that we've been able to handle this situation in a quite okay way because we've had as many companies right now severe cost increases of raw materials, not only steel but also in other types of components. Obviously like all of us now, we've had substantial increases of energy, of freight costs, and, you know, what have you. On the other hand, we've had very good utilization of our manufacturing units, which of course gives good coverage of fixed costs. That somehow compensates this, albeit not to the same extent. We're still, as I said, a few months behind in transferring the price increases to customers. The price increases to customers is going then more or less as planned. I mean, it's not so that of course that the customers are very pleased to have this discussion and some of them are of course trying to refrain from this discussion. In general, there's a big understanding in the market that these increases are coming all over the place, and why should Troax not suffer from the same thing. I don't think we have a major problem in coping with this. There are, of course, little hiccups here and there. There are good sales levels in all markets except actually new markets. We had in China, Japan especially, I would say a slow start of the year, where we last year had one or two bigger projects. I would say that the biggest part of the explanation for the difference compared with last year is due to some pandemic effects. Because for instance, in Japan, like the country was more or less closed during January and February. As you know, from March on, China, not all of China obviously, but Shanghai, where we are, was more or less closed. For instance, our own manufacturing unit in China has been closed now for more than one month. The port activity in China is of course severely hampered, if not stopped. That's obviously hampering the activity level in the market. Going to the earnings per share, it was then higher than last year. As I said, working capital is higher, but still on the expected level. We're not worried about, you know, the content of the working capital. It's just a bit higher because we have higher safety stocks both in raw materials and on the finished goods side. On the manufacturing side, as I already mentioned, we had a good development, good volumes. Steel prices continued to increase substantially towards the end of the first quarter due to the effects of the Ukrainian war. We frame like this, but we don't see really a major risk for not having supply of steel to our company. We are not quite sure where the price will end. There are still an ongoing trend in the market, but the expectation from many people is that it will start to stabilize and then after a while go down. Let's see. This we are of course following it closely, and we take necessary action regarding pricing and our actions to compensate it. The automated warehouse segment, as I said, continue to give us important orders. There were, as I said, a little bit lower activity during the first quarter compared to maybe part of 2021. Our company in Poland, Natom Logistic, that we had now for 1.5 years, continued to show good development both in orders, sales, and results. One of the two factories that we bought in Poznań or outside of Poznań in Poland has now been closed, and the entire activity in that factory has been moved to the new factory outside of Poznań. The other one will come step by step during either end of this year or more probably during next year, as we're still waiting for some electricity improvement in the new facility. With this, I go to the next page, which is a little bit about the financial highlights. The first quarter is of course everything from order to gross result and operating margin compared quarter by quarter. As you see, we have an operating profit of EUR 12.5 million compared with EUR 11 million last year. We have a higher result compared with last year. The margin, as I said, has been dropping a little bit due to that we are a little bit behind with the price increases. On the other hand, we have very strong order intake. Even if we exclude the price increases, the activity level has been rather good. The order intake, if you exclude the price increases, has not been on the same level as the high that we had during last year, but still very good activity. Sales invoice, very good. Earnings per share increase, as I said. Which means then that, the running 12-months figure is now further improved, and we are now up to a figure of close to EUR 270 million in turnover if you talk about sales invoice. Going to the next one, which I think maybe is more interesting, you can see a little bit about the regional development in order intake and sales. We concentrate obviously on the 3 months comparison. You see then on the left here, the different regions. We've had from an order point of view and also from sales point of view, quite strong development in continental Europe. Even if you exclude price increases, it's been a real organic growth increase in volume. The same goes for the Nordic region, which have had very good volume development and done a really good job. Whereas U.K., then it's a little bit lower, actually going down if you exclude the price increases. It's because, which I've said several times before, it's difficult to assess clear conclusion for U.K. since we are running a number of big international projects through that organization. In some cases we get very high figures and then of course, it looks very good. In some cases we haven't got those type of big orders that quarter. Then of course, it looks a bit like this, that, you know, an average quarter or whatever you want to call it. We're not at all unhappy with the development in U.K., so they're continuing to do a good job. North America is lower and that is, but last year we had a number of very big orders for the automated warehouse, which has not come during this year. We know especially then in North America that some of our big international customers are actually postponing a delivery of some projects because they are, you know, delayed of different sorts. Either they are waiting for some other components or some products, which means that they cannot finalize the project, or they see then that the demand from their type of customers are lower, so they are postponing just by that and a little bit the investments. It's not so that any orders have disappeared, it's just that they have been a little bit postponed. It will come a little bit later. The same goes a little bit for, as I said, already explained new markets, where we had two project orders last year, and then on top of this, we had this pandemic effect. You can't really draw any major conclusions out of this. Of course, a minus is a minus, and it's never good, and we don't like that, obviously. Totally, we are up 16% or something like this on the order side, which means a small volume increase then for the first quarter excluding price increases. On the sales, it looks a little bit better because it's +27%, and if you exclude then the price increases, you're talking then still about a real organic growth of some, I would say, close to 15% or something similar. Going on to some conclusion of the quarter, and as we've said several times before, we've continued to receive several important orders in all segments. We think we continue to take market share in many markets. These broad orders comes mainly within automated warehouse and machine guarding, but also property protection has actually been developing quite good. Result is what we call reasonable. I mean, seen from the turbulence in the market and the work we have to do by transferring price increases to customers, I would say it's quite okay. Of course, we are not satisfied that it's a lower margin in percentages compared with last year. Obviously, the work is continuing to catch up with these effects in steel price increases. Good activity level in the market, even if for now China is more or less closed. I'm sure that will soon actually come back. For the sake of clarity, I want to stress then that we have, you know, very marginal sales in Russia and Ukraine before, so we have not been hit at all from that, from a sales point of view. However, some of the steel that we were buying were indirectly coming with this from Ukraine, so we had to change, of course, the purchasing pattern somewhat. As you know, not for us specifically, but in general, of course, the lack of steel coming from this area is of course putting a lot of tension on the steel market generally in Europe, which we'll see sooner or later will start to settle down again. The integration of Natom is going in a positive way. We started the move to the new facility. You can say it's even if there are some problems currently, we still see it as a good first quarter to continue the work into the coming quarters. I normally get some questions also specifically over the automotive situation, and it's continued to be, I would say, a little bit weak. We've had, just like we had in 2021, a reasonable development of automotive demand in North America. For Europe, it's still a bit on the weak side and especially because of the pandemic in Asia- Pacific, it's been very low, I would say, in that specific area. So far it's not yet any sign that it's really breaking through, and certainly it's not booming for us. Going to the next page, you see the growth factors, and I'm only saying that the two factors of increased industrial automation and the growth in e-commerce are the important thing, coupled of course by a general understanding that safety is important. Due to these problems we have now with the pandemic, we see perhaps not so much yet on the top line, but we see that a number of companies are talking about doing more onshoring, meaning transferring manufacturing to their home base. We're seeing more discussion around that, even if we have not seen so much as reflected on the top line. The next one is a short summary of our production units, and nothing much has changed here except the last one is Poland, where we introduced a new shelf production line, so we are substantially increasing the capacity for that product in Poland, which is good because we've had production. I wouldn't say delays because we have taken those orders that we could deliver. There have been a demand which exceeded on the production capacity for last year. Now I think we have a better possibility to serve our customers in this with this new product. As you know, the Troax Group. Next page consists of several brands, and obviously we work together for a safer tomorrow, which is the next page. We were working with this since 1955, and we will continue to do that. Talking about the safer tomorrow, which is a headline for the next page, we continue to work with the climate compensating program. We try to increase the recycled steel, which is the one most important effect where we could reduce our CO2 content. That's obviously quite important. As you see from the last part of this small little presentation, the last item, you see that we write here that the CO2 consumption per main article is now available on our webpage, which means that we try to indicate for our customers that if they hesitate what to buy, they at least get some indication over the CO2 content of different products which might help them to form a decision on what to buy. Having said this, it's not so always that the lowest CO2 product is the right one to buy because obviously it's the safety aspect, which is, I would say, the most important. If you require stronger, more sturdy products, it probably needs more steel in it, and in that case, it has most probably got more CO2 content indirectly, and that means then that from CO2 it's slightly higher. Nevertheless could be from a safety point of view and for the personnel that are working with, that could still be the right solution if you take anything, everything into account. I will try then with this to round off. We have the safety center you can read about. We are certified by TÜV Rheinland, as you know. Finally, we are protecting people, property and processes. That's really what we are doing. We are the original in this market since 1955. We see that safety equals growth in many aspects. With this, I'd like to, as I said, round off and leave for some questions which I think we've got. Please, operator, if you could invite the listeners to put some questions, and I'll try to do my best to answer them. Please go ahead. Sure. Sure. Thank you so much. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, you will need to press star and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or the hash key. Again, it's star and one if you wish to ask a question. Our first question comes from the line of Herman Eriksson from Danske Bank. Herman, your line is now open. Thank you. Hi, Thomas. Hope everything is good with you. Yes, thank you. I was just wondering on the orders you're seeing in e-commerce, is it primarily large orders from larger e-commerce players, or are you starting to see a better inflow from more small or medium-sized orders as well? Yeah. It's actually a little bit of a paradox because for the first quarter, if you just look at that isolated, we've seen then that when you compare with last year, there are a few less bigger orders coming in from the big international companies. On the other hand, we've seen an increase in the, let's call it, smaller and medium-sized companies who put in orders in the same segment. Of course then, because of the products are smaller, the figures are lower for us. It's a little bit of a paradox then how this is working. It is correct, like you explained it. Okay. Perfect. Just looking at the order intake in the Nordics, is this like very strong growth? Like what customer segment is the primary growth driver behind this or what is driving the growth? It's a growth both in property protection but also in machine guarding. The Nordic areas have had a very strong growth in the machine guarding in the first quarter. Okay. Perfect. I was just wondering, you started a project with LKAB in the mining industry, I think it was last year. Yes. I'm just wondering if you can say anything of how that project is proceeding and w hat will be the next step after that is completed? Yeah. No, it's proceeding, so that's obviously part of this order is coming from this type of company. We are still in some sort of evaluation phase before we want to release it to other markets. Obviously the plan is to release these kind of solutions to other markets where we have so it's got to be certified now that the whole development process is over, and we have certified that the quality is right, et cetera, et cetera. Okay. Perfect. Thank you. That was all for me. You're welcome. Thank you so much. Again, ladies and gentlemen, it's star and one if you wish to ask a question. Our next question comes from the line of Gustaf Stenberg from Carnegie. Gustav, your line is now open. Thank you, operator. Hi, Thomas. A couple of questions to follow up the report from my side. Starting with the price increases, I think it's really encouraging to see them coming through properly. I just have a sort of a clarification here. All we seeing a similar price effect year-on-year on orders and sales, so when you say real organic growth of 15% on sales, does that imply a pricing effect on 12%? Is that the same that we're seeing the order intakes, or that you have sort of a couple of few percentage points volume increase? How should we, h ow should we think about that more, in more detail? Yeah. You are right. There is a slight decrease, of course, in between orders, let's say, it's just because of the timing effect. I think for the sake of simplicity, you can forget it. You're absolutely right. We're talking about a price increase of somewhere between 12% and 16% if you compare quarter-over-quarter. Thank you. Thank you very much. If we look year-on-year on 2021, was there a big step up in prices during 2021 anytime? Just trying to figure out what the year-on-year impact. We'll see the base effect sort of for 2022 coming up here. Yeah, the effects for 2021 was up to 70%, the whole year effect on price. Okay, thank you very much. Thank you. I know you have a very strong market position here, but what are you seeing sort of in terms of this environment where it's more difficult to deliver and you have high price increases. Are you taking share in this environment, or what is your current read? I think the current read is there's a lot of demand in the market generally because of people are continuing to invest and they try to increase the capacity in different ways, just simply because capacity is not there. We are obviously a small part of this process. Now, I personally think we shouldn't write too negative things on the wall, but obviously it is so that if this continues, I think a number of our customers and, you know, other customers in all types of businesses will probably postpone some projects, so there will be a little bit, less of activity in the market level. When that comes and how much it will influence, I don't know, but I'm sure we'll get some sort of reaction. As we said here, we are in the market right now or kind of first quarter, which is quite good. There's nothing to complain over at all. Yeah. Of course, you see the high-end solid level. Yeah. Just to follow up on the price increases. Is most of the price increase driven by the steel price, or are there any other factors that sort of play into that price component as well? In there you have freight of course, which plays an important role and of course also energy, both electricity and gas, prices of the port. If you really single out the most important one, it's still steel, which to us is the biggest influencer if you talk about that. Of course, when we talk about the total need for increases, we of course also include the other things I talked about. Great. Thank you very much. [distorted audio] It also has gone up substantially, for instance, timber or lumber. Moving on to a question on M&A as well. I mean, a re you seeing in this more sort of volatile but still strong market development, are you seeing any changes to sort of how you'd like to conduct M&A? Are there more opportunities opening up, or do you see longer lead times on closing potential sort of targets, or has there been any impact there? There's not been any real impact in quarter one. I think there's too many other things happening in the world that a smallish market like us with [perimeter guarding] going would be influenced, perhaps, based on what you're saying. My gut feeling is that this will create opportunities for us in the M&A market. As I've said several times before, we are quite clearly interested to pursue activities in that, as long as we can defend it from a both economical point of view and from a strategical point of view. To answer your question, nothing really has happened, I would say, in quarter one. You might expect hypothetically that some things will open up a little bit later during the year if this turbulence continues. Got it. Thank you very much for the color, and hope you have a great continuation of the day. Thank you, Gustaf. Nice talk to you. Thank you so much. Once again, ladies and gentlemen, it's star and one if you wish to ask a question. Again, it's a star and one on your telephone keypad. Your next question comes from the line of Jon Hyltner from Enter. Jon, your line is now open. Hello, Thomas. Can you hear me? I hear you loud and clear, Jon. Nice to talk to you. Yeah, nice to speak to you as well. Just one question. When the timeline between price increases and your cost increases is close and you're in balance, will the increases you have put into place now on price be enough to keep your gross margin unaffected in percentage terms? Yes. If everything else is equal, so to speak, yes, we will come back to the old type of margins. We don't see any structural changes, basically. We're just waiting, if you see my point, that the market will stabilize, and I think we will catch up with a delay of a few months. All right. That's all for me. Thank you. Thank you. Thank you so much. Again, it's star and one if you wish to ask a question. All right. Thank you very much for good questions and for listening in. Has anyone got something more? No? There are no further questions at this time. You may continue. Okay. Yeah. I would just like to thank you very much for listening and taking your time and for your interest in Troax. We hope to be able then to talk to you again, and when we report the second quarter result and activities. Then I think a lot of things hopefully will be more clear with, as regards both pricing and market development. That will be in August. Look forward to talk to you again then. Thank you very much for listening in, and take care. Bye-bye. Thank you so much. That does conclude our conference for today. Thank you for participating. You may all now disconnect. Speaker, please stand by.