Systemair AB (publ)

Thank you very much, Anders Hulb, CFO here at Systemer. Me and Roland are sitting today in Skinskatteberg, where we have a lovely summer day. And it's also the day of our annual general meeting that will start here at three o'clock. And of course, extra fun also to present what we believe is a strong report. You will find the presentation that we will run through on our investor relation 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. My name is Roland Caster, 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 number two, which is an introduction to Systemair. Systemair established here in Skinskatteberg in Sweden in 1974, Our last year's net turnover amounted to roughly 1 billion euros. And we're listed on the NASDAQ Nordic Stock Exchange market since October 2007. Today, System Air is a group. We run our own SINF companies in 51 countries. We have 26 factories in 18 countries and have around about 6,600 employees. And with that set up, we export today and serve 135 countries all over the world. Directly switching over to our slide number three, which brings us directly to the report and our net sales in quarter one. The net sales in quarter one amounted to 3.175 billion Swedish kronor, compared to 2.8 billion Swedish kronor in the first quarter of the year 2022-2023. This amounts then to a growth of 11.4%, which is organic 10.7%. On the slide presentation, you see the organic growth development. The dip in the middle is the only explanation for that, the pandemic circumstances, and the recovery afterwards of that. But let's go into slide number four and look into the growth analysis on the growth that we had. 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 be mentioned 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 prone towards both Euro, US dollar and Canadian dollar. So in total, then, a growth of 11.4%. Switching to slide number five. 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 334.9 million Swedish kronors, 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 number six, ladies and gentlemen. The profit after tax. The net financial items for the first quarter amounted to 18 million Swedish kronors. The current effects on the long-term receivables, loans and bank balances amounted to a net of 2.7 million. Sorry for that. The interest expense for the quarter amounts to negative 20.9 million Swedish kronors. On the right side in the staples, you can then see the result of being then the profit after tax, which amounts to 242 million Swedish kronors compared to 217, the same period the year before. Switching to slide number seven, the cash flow analysis for the first quarter. Cash flow from the operating activities in the reported quarter amounted to 388.5 million Swedish kronors, This compared to 309 million the year before. And then the change in the working capital here is 81.8 million Swedish kronors. Last year, we had a change in working capital of 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 exit decisions, is 129.3 million Swedish kronor. And here the 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 177.4 million Swedish kronor, compared to negative cash flow, 152.5 million Swedish kronor 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 1.4 billion Swedish kronor compared to 2.6 billion Swedish kronor 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 number eight. And here you see a split in the supply 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% to 13% of our total share. Other markets grew from 12% to 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 performed, and switching to slide number nine. Starting with the Nordic regions, the sales in the Nordic region decreased during the first quarter by 8.9%, and here adjusted for currency effects, acquisitions such like, the sales decreased by 9.3%. 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 number 10, Western Europe. Here the sales development continued to be really strong during the quarter with an increase of 12.4% compared to the corresponding period last year. And here also adjusted for currency effects and acquisitions, the sales increased by 9.5%. As all West Europe had a really good development, I do want to mention in particular the Belgium, UK and France showed good growth in the quarter. So the development is such in Western Europe, stable and really positive. Next slide, slide number 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 new production hall in Germany. So this new building where the expansion will be in 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 number 12. Going into Eastern Europe and the CS countries. Sales in Eastern Europe and the CS 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 growths, here especially to be mentioned Czech, Poland and Slovenia. The growth excluding Russia would have amounted to 14.1%. On to the next slide, slide number 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 markets showed really good growth in the quarter. Slide number 14. to call the other markets or to be really precise middle east asia australia and africa sales in this region middle east asia australia australia and africa increased by 26.7 percent adjusted here for currency effects and acquisitions the sales increased to 40 percent and is today the second largest region within system app and here i have to mention especially the colleagues in turkey india morocco and malaysia which had a really good growth in the period Switching to next slide number 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 number 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. In total, a little bit more than 250 large air-hang units with and without heat recovery have been delivered throughout Europe for American European car manufacturers. This to a total amount in excess of 140 million Swedish kronor in value. E-mobility production, of course, increases every year, and those leading manufacturers continue to invest in these factors. The great need for ventilation, which is highly adapted to the manufacturing processes. This is a really nice area of growth for System A. And 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 1 on the touch-tone 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 2. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and 1 at this time. Our first question comes from the line of Carl Ragnastam, Nordea. Please go ahead.