Bulten AB (publ) (STO:BULTEN)

CMD 2020

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Feb 20, 2020

Okay. So welcome to Capital Markets Day 2020. My name is Camilla Risad, and I am Senior Vice President, Corporate Communications. And I am really happy to, present an exciting agenda for you today. But first, some practical things emergency exit, you can find here, and also the stairs where you came up Also keep your phones on silent mode. And, I would also like to inform you that all presentations will be, published on our website, of course. So, the agenda I'm going to present along with the Wilton team here today. We are going to start with sustainable growth presented by Anders Nystrom. President and CEO, if you can stand up so everyone can show you as we can see who you are. Going into strong financial platform presented by, Heliana Dennstrom, Executive Vice President and CFO. I am very happy to welcome Marco Suzuki, who comes here directly from from US. And he's here to present PSM International. After that, we will have a coffee break. And, going into the next session, we will start with, our newest member in in the Bolton management team, FedEx Beck. Rome, who is Senior Vice President Production, who will talk about our manufacturing footprint. Then after him, Malena Dilsbeck, Senior Vice President HR And Sustainability. We'll talk about Sustainability as a driving force. And then we will go into something very exciting, something new, something that we are very proud of presenting here today. Philip Leleon, vice president, technology. We'll talk about Bufu E, a sustainable product line that is, just recently launched. And then Magnus Karlinger, Senior Vice President, Marketing And Sales We talk about the stronger Sustain will offer FSP 2.0. Then we will go into a wrap up by Andersonistrom, and the then will be time for Q and As. But, if you have Q and As during, the presentations, please feel free to ask them preferably after the presentations, but we can do it continuously. So, let's started by welcoming Anders upon stage. Good afternoon. And one welcome. I've been looking forward to this day for a long time. I can tell you. As always, when you when you work long and hard at, developing something, in this case, a new or revised strategy for for our company and the set of targets. Of course, it's it's always a highlight to be able to take debaters off of that and showings. And, that's what we're gonna do today. Let me just say a couple of words, about the headline reset for for this session. So sustainable growth. I suspect there's well, 2 of you in the audience think to yourself that that's a couple of corporate customers. I hope that after this afternoon, you will, you'll be convinced that there is no company that fit this through heart and action more than the looked. Sustainable, property aspects. Both economic things ecologically. And, hope that that's going to be convincing to you what you've heard. I'm very excited by, you know, where everything is going. I, also being to, I believe, talk about your shed light excitement about that. Fulton has, a proud history. We're 3 years away from, a century and a half which is quite quite remarkable and most companies that were founded back in those days are part 1. We're still around and we're still developing, which means that we're, as a company, we've been able to combine both, both the the vast amount of experience and knowledge that we've accumulated over those years, we a willingness to change, a willingness to develop, and and to to capture the opportunities that comes with markets and and we've been doing so very successfully over these 100 and 50 years. So change is definitely in our DNA. The way we we go about managing our customer base and our customer relationships is one of definitely one of the uniquenesses of gluten. I wanna run on that for for a minute. As you can see, we have, 3 categories of of customers. It's, oh, heavy vehicle, commercial vehicle OEMs. It's light vehicle OEMs and it's suppliers. Of the industry. And, having a survivor code and being an approved supplier to This many OEMs and having those in our customer portfolio means a lot of opportunity where some of these were dominant players in our in our commodity field. For some others, we were not so dominant, but that means that we are happy to grow. And, the the way we we, handle our customer relationships and the way we intimately contribute, with value to these customers is what's unique in our industry. And we do that not only by providing a mirror hardware, like it started back in 1973, both was a bolt and that's what you ship to your customers. I'm doing much more than that now, which I'm gonna come back to, but I wanna tell you just a short anecdote from my first meeting last year with one of our our biggest customers. And after 35 years in this industry, I can tell you that I have never before the passenger supplier making the addition of the top 30 strategic suppliers of an OEM. It takes a lot for a faster supplier to make that list. And when this customer showed me their not only their list of their top strategic suppliers, but also the performance rating on those, we were the number 1. And by by a long way, actually, in that second So, there is recognition in our customer base of the value that we provide to them. And that's something that we we aim to to continue to build on and to capitalize on and, develop. And I was talking about hardware versus software and what we what we actually provide in terms of value to our customers. These are our 4 products. If we had stayed, we only merely providing those. Probably wouldn't have been as as successful as we are. We've expanded that in terms of products to also provide, those types of components that we do not necessarily manufacture ourselves, but we we outsource them and we provide them through full service contracts to our customers. And maybe, of course, importantly, with those customers that we have an FSP relationship, we also provide engineering, testing, design, procurement, logistics, and line feeding. And this is not merely engineering and developing fasteners but also helping the customers to optimize their systems and subsystems to make the whole product more competitive and to standardize across their systems. And do things that that, the OEMs traditionally don't do the way they are being organized. As I am feeding, the product all the way up to the assembly part on the assembly line. And and actually there are a couple of more companies out there that that do similar things, but I I think we we can stick our head up and say we are the only ones to do this in our list. We have value words like like most companies do. And I just want to to explain a little bit what these means to us. Being professional, is something that we we pride ourselves in in in being, everyone one wants to be professional. I think we are all very professional. Of the board because we are looking to, to, and reach the customer and have them succeed. And we use our our collective experience to do so. We're innovative and that doesn't meaning only being an innovative and important engineering sense of the word, but also inventing business models that are, win rates for awesome and and the customer. Mhmm. So, yeah, I guess 3 of doing that. And are people are extremely dedicated? It's something that I could experience in stepping in from the outside and joining this company 1 year ago. That there is a certain built in culture and a built in spirit, with extremely dedicated expertise. Most of them with a lot of seating working. We're empowered. It's it's a value word that's also able to put on a power on-site, but this is this manifest itself in in the way that we go outside the customers and they are acknowledging that with Fulton, they are not up against fighting bureaucracy. They meet people every day in their operations that are empowered to make decisions when it's critical and do that with a fast turnaround time. So it's also something that we pride ourselves in, and, that's not just, a word or an output. The other uniqueness that that I would like to point out, it sets sets us apart from from our competition is our presence, our geographical presence. Yeah. The red orange dots on, would it be a represents where we have manufacturing presence. We're in in Sweden, Poland, Germany, US, Russia, and China. With, our own manufacturing sites, and we're extending that also through the, the acquisition of the Italian Group to come back to. Freddie, we'll take you through the minutiae of, of our manufacturing footprint. But it's it's important point out that there there is nobody out there that's gonna ask cookies as we are already serving customers with global platforms. And this is also important to understand that that our customers may deal with the same products everywhere around the world. And if it's not the exact same vehicle, it's based on the same platform. And, of course, they won't source this once, not source it. 3 times 4 times from the developer platform, that means 3 times 4 times the validation costs. And, that's why we were we're benefiting from from being below the spread. I should say also that, we are taking that's an integral part of our our strategy to, well, become more truly global we we want to increase our presence in in regions where we haven't been where we haven't had stated before. We are we have been in the US and in China for a long time. Now we're really really focusing on on becoming a global company with scaling all those regions, and becoming a a little bit less European centric from 2019, was a special year. It was a difficult year for very many in our industry. The year had lots of promises that met headwinds, in the market, the car market, the logger walks thrown at it, from different directions primarily for audio competitions, with confusing statements about, diesel cars being allowed in cities or not, new emission legislation, and and taxation, not making it very easy for consumers to decide on what ought to buy or if to buy. And we have Brexit, which also didn't make life very easy. So in 2019, the total local car market out were between 4% 5%. And, that's what we were out against. Now we were, able to maintain more or less not top line. Probably means that we gain a bit of a market share. But we have to take some decisive action. So what we did during 2019, we did we took some some very, very exciting action for the future. We also took some painful but necessary action. The year is started with new CEO. I'm not sure if that being fed into the the painful or the exciting category, but, I'll leave that up to to others to to to judge. But we, we did, execute on our previously communicated plan to transfer oil production China from Beijing to Tianjin, significantly increasing our, our capabilities in China. We had a crack opening of that plant in, in November. We one of the painful things we have to do which award was, to to right size our cost structure in our German operation. And then that was because of of some of the headwinds in, in the product range that our economy is, is producing. So that was absolutely necessary. That we did some really exciting things in terms of the acquisition of PSM, which we published just before Christmas. Probably when most of you just went to the last year, party for, for the season. But that's when we finalized the, the contract and and, and we're extremely excited about that. We also completed the purchase of the land in Poland, which we had announced previously that we would And for the entire year, almost at least a good portion of the year, we work to, take cash out of our warehouses. Which was also, our dear consequence of, the market headwind that we met, that we our production rates were were higher than going into 2019 than they needed to be. And that had a had an impact on our results for the year for the results. Now on the year in in numbers and and, you're probably very welcome to release numbers. We've studied our reports, but, 3,100,000, of sales was a slight drop less than the market, though. Compared to 18. I wanna wanna draw more your attention to on this slide is, the 4th quarter. Because we've been been telling you about our backup of orders taken contracts that are about to rev up and get launched and, in the form of new vehicle and setting the road. And, during 2019, we experienced some delays in those product lawn for our customers. But in 44, we could see them come through. And, Vodafone was a bit of, a trend right for us. To be the sales, about 5% up compared to, before 'nineteen', which wasn't a bad quarter, by the way. Order intake of 13.6 percent versus 18. So this is, how we ended difficult and very eventful year and and that gave us a good jump off point in 2020. So here we are, leaving 19 behind us. And, with a fresh strategy. Some exciting actions being taken. And the part of the new management team, some additions to it, and we're facing 2020 and beyond which is extremely exciting. I can tell you. I'm looking forward to that. Scroll did 24, by the way, just to to explain that. When when we we started our strategy revision in, February of last year. We gave it this name. It was stronger. Here's a name that I've been using in Bolton for a long time. So it's, it's an allegory Our products are strong, strong connections, and we want to be a stronger company, significantly stronger 5 years from now. Than we are today. So it was a natural war to use stronger in 2024. As part of, of the, the strategy work, the reestablished the vision and the business concepts. And the mission for for the organization. And, everyone who's done this at some point or a couple of points of their careers you probably know that they're trying to to take what you want to do with the company. I mean, there are so many aspects of of the developing exercise again. Or in that down to one sentence and cash of the essence of it. That's difficult. So we spent a lot of time on this, because we thought it was important, to really be as Chris so we could could explain this to the quote. And then we came down where the sentence you see on on this slide here and on the the roll up. We say recreate and supply the most innovative and sustainable, fascinating solution. That some of 65 square days opens about. And we continue we're giving that additional meat saying that we continuously deliver market leading customer solutions requirements on efficiency, quality, price, and sustainability. With clear objectives, global presence, responsible conduct and the latest vintage working information. We are the company that makes the difference. Grades the great disparity. That actually gets home. Process an organization. It's dryers. It's wherever headed. That won't take it through for every word on on this slide, but use an additional piece of meat that gives more more granularity. But really what it is for saying here is that we as I alluded to, we're taking our centering and a half of of knowledge and experience. And and we build on that. I I used the allegory before both of them have a fortress We're not gonna tear anything down, but we're gonna build on it. We're gonna add a wing and add a power and that's what we're doing. And we're going to continue to provide, complete solutions, not merely customers not merely the hardware that you can hold in your hand, but use our knowledge in every aspect and help. Customers succeed based on those complete solutions, continue to be innovated on products and business models. And provide new functionality and new services that we haven't provided before. And you will see some of that language column, it would take you through how we're developing, get speed on set. And you'll understand what we mean by that. And sustainability and cost efficiency. Sustainability being one of the headlines, one of the 2 words in the headline, of this afternoon, except for probably everything we do. And Physics and Frederic's presentations will will make help you understand better, you know, what that means when we make but take that from trouble or to action. So we'll treaty knew that. And, what are we what are we building all of what are we adding? Milton being, a strong end PSD with a lot of uniqueness and a lot of aspects that that, had made us successful in the past. It's not necessarily, entirely what it takes in order to be successful in the next five or ten years. So are you seeing, personal strategy already being being, materializing? First step is the addition of DSM, which I'm really excited about. But also a company that that brings, a lot of value to to both of them and and in a true sense, I think we can to use, an old old allegory for making 1+1 3. I think it's very possible. In this new context. I think about half a 1,000,000,000 of of sales to the group, with very healthy markets. 10% and, not the least, the stronger position in Asia Pacific and the U. S. I mentioned before we're we're a global company. We're we're a truly global company. PSM, helps us very much to to add scale, both in terms of manufacturing, but also, and then maybe 1st and foremost, in, customer portfolio, product O'Oreal and a sales person in those regions where we wanna, rewound that we think we're on the utilized And then we have admissions potentially sorry. In in the headroom to market. You saw the these are customers. We're dominant to sell those customers, not so dominant with others. We know it's all dominant in the Chinese market, if you look at our market share. It doesn't take it doesn't take many percentage. Decimal points of market share in China with our 20,000,000 units a year to to significant people that need to lower, you know, on our sales in in China. So we have a lower added material there. Adjacent markets and products. What we mean by that is, moving into no more than just being in, in light vehicles and, in the vehicles, but also in in other products. Peter Simon has has, successfully done that. And as you will see from Marshall's presentation, a portion of of our sales call from from other industries. And, that's gonna help us not capitalize on the product range that we traditionally had and and, and, also showcase those to to those markets the request for sustainable solutions. Again, it could have popped more buckets, but our customers are faced with, gigantic penalty fees today for being a CO2 inhibitors. They do that based on some criteria today or the criteria tomorrow, but our customers will be desperate for CO2, lower carbon, products. And that's what we're gonna capitalize. And, potential additional acquisitions. And I wanna just point out we're not we're not going on the shopping spree. And, some of you have waited a long time for the PSM team or something similar to that to act. No. It did happen. It means that we've we've we've selected our target with a lot of care and and a lot of analysis. And, you know, we we're not on the shopping spree, but we're gonna continue to look for good companies that will add to the fulfillment of our strategy and the right technology and the right geographical presence all the right product completion completion of our portfolio. So that may happen going forward as well. Now the strategy will be nothing without delivering results. So We also want to, to communicate to you our our revised financial targets. And all of this is gonna take us in 2024 from the 3,100,000,000 today. Or in 'nineteen to, 5,000,000 in 20 24. That's a 65, 70% growth 10% catered it would take. That's an ambitious goal, but we're we're confident we'll get there. EBIT, above 8%. An ROCE of 15%. This is not gonna come for free. It will be a lot of hard work. There are some drivers and some cornerstones that they didn't read. Again, we have a strong position, and and the uniqueness of the SSP concept, the geographical affinity for our customers, and the stable solutions that makes up the stall offer that we have today. We have momentum in our organic growth. Through the contracts that we've we've acquired. We have people say momentum in our in our own organic growth as well. Rear PSM being the, the first step. And the margin expansion will come naturally from acquisition synergies from our strengthened position in China and the US, the sheer scale of of moving our, our top line upwards. And we will also, Also, shift gears when it comes to our efficiency work, and we have regular recruitment opportunity both in production and in distribution. Probably more so in distribution, it's gonna be, very much a focus area in 2020 2021 for us to work on. Technology is is a great enabler and the financial platform that allows us to act it's not an indicator that we have a strong time for which getting on to talk more about. That means that that we also at a certain freedom to do what we need to do to to get to these goals. So with that, I want to leave the stage to, Leon, our CFO. Thank you. So, yes, we have a strong position to support further growth. Today, I will touch base on the financial targets on market development and our, on our financial platform. But first, I'll comment on the RFP key in financial key ratios in relation to financial targets, 29 volumes and strategic initiatives as well as stock adjustments affected the outcome of 2019. So in this perspective, we are looking at the figures, excluding the items that affect the comparability. And that is the one in the middle. So our sales were down by approximately 1.2%. But with our pipeline of contracts, we're in a good position to continue to take market shares going forward. Our profitability with an adjusted operating margin of 4.8 percent was affected by the volatility market and to our stock effort short term. Adjusted return on capital employed of 8.1%. Is lower than our target due to the lower profitability and then higher investment level. And the board, they suggest an unchanged dividend of 4 Swedish crowns a share divided into 2 payments, one in April and 1 in October. So all in all, 2019 was a middle year for Bolton, affected by a cautious market and initiated programs of measures. So we now start off 2020 stronger in a better position. And it has been a very exciting year mapping out the future of the company. And this resulted in the our strategic agenda, stronger 24 with new vision and new financial targets. The stronger 24 has developed our vision beyond Europe And Automotive Industry. And then it's also reflecting in the financial targets. As we aim to improve our efficiency and productivity. More about the financial targets within short. But with our sustainable approach, strong customer offer and core values, we create great benefit for all our stakeholders. Some words about the market development and LMC production predictions. So looking in a longer perspective, the industry forecasting LNC Automotive estimates the gradual improvement of production weakens to years to come. LNC Automotive forecast a global increase of 1.1% for light vehicles compared to 2020 compared to 2019? And a decrease of 7.3 percent for heavy commercial vehicles 2020. And weighted for bolt on exposure, this means a decrease of 0.1%. And the market in short term view, in 2019, the light vehicle market amounted to about 90,000,000 units and the largest markets are a China followed by the U. S. And Western Europe. And it was a turbulent year for the industry as a consequence of new regulations the political climate and the uncertainty around Brexit. A new tax regulations linked to CO2 emissions introduced in a number of the European countries during 2020. Also add some uncertainty. But we maintained our market shares in 2019. And going forward, we will focus on growing globally. That was a little bit quick. No? Yeah. That's right. Okay. Some more comments about net sales and order intake then. And despite a continued cautious market development, molten's net sales and order intakes differed quite well during the fourth quarter. Net sales increased by 5% an order intake by 13.6 percent, which indicate that the deliveries of already contracted business are now gathering momentum. And this is, of course, is a very good sign. But as I just mentioned, There are some uncertainty about the economic situation, the outcome of Brexit and effects of coronavirus. So we need to pay close attention to this. And the coming months will be a little bit difficult to predict. Looking on the right side here, we can see the number of production days. So Bolton is actually not exposed for traditional seasonal variations, but the year reflects quite well our customer production days. So we have actually three quarters. That's a quite even, but the third quarter is lower production days and also lower net sales and earnings. We predict a stronger, built in organic growth versus the market. But of course, the market uncertainty, as I just mentioned, may have an impact on the volumes. However, we will underline that the more we have a good pipeline of 1 contracts. And in this slide, you can see the different ramp up contracts. And we what phase they are of the implementation. And during 2019, several contracts went into full pace And new contracts have entered into ramp up phase, which have balanced the fact of the market volatility and the model shifts. But still, we have 1,000,000 of new contracts that has not yet gone into production. And this will support Fulton's growth even further in the years to come. Now some comments on our new financial targets. The new growth target is to have a profitable growth to SEK5 billion. Within 2024, corresponding to a compound annual growth rate of 10%. And as I said, with our pipeline account, we are in good position to take market shares going forward. And with the expansion of our business through the contract of acquisition of PSM, that will also help. Of course. So we are in on our way to become a truly global company with sustainable growth. With the margin expansion, the new financial target is an operating margin of at least 8%. We actively run our organization to be profitable over time and create a sustainable business with good financial leverage? The margin expansion will happen through the production and distribution efficiency, economy or scale, technology and, of course, acquisition synergies. And then finally, the strengthened global position will also add on. The target of return on capital employed remains at least at 15%, considering the IFRS sixteen effect. The key ratio reflects the new target of the profitability and the target of efficiency in utilizing the capital. With our strong financial platform, we can create great benefits for all our stakeholders. Golden's strong financial position provides flexibility and preparedness for the future. Both when it comes to investment in increased capacity and for strategic acquisitions. In the beginning of 2020, the agreement then acquired of PSM International Holding Limited will be finalized? And during the and this acquisition will strengthens Bolton's position in the international fasteners market and provides a strong platform to continue growth globally. And during the first half of twenty twenty, we will also start to build our new facility in Poland. An important production and logistics plant to meet future volumes. And this will continue to strengthen Bolton's market position in the to come. And we are aiming for green financing through a green certificate for the facility. Embraer is a leading sustainability assessment method that really ensures enhanced that the well-being on people who live in work in them and help to protect natural resources and make for more attractive property investments? And we continuously also invest in increased capacity and efficiency, but more about that within short. We have an equity ratio of 55.2 percent atendof2019 affected by the outcome of the market in 2019. And the IFRS 16, but still on a very solid level. So some financial guidelines, just to be clear, it's not considered to be financial targets, but just will guide you through it. So the guidance for average net working capital in relation to 12 month sales is about 20% to 25% going forward. Depending on the growth pace. And in the end of 2019, we had a level of 25.5 percent, which is slightly above our guidance. But activities are ongoing to reduce that level. In guidance for the capital expenditures, as a percentage of 12 month sales, we are in a level of 7.1 percent, an evidence, and evidence that we actually invest in the future growth activities. But the guidelines are to be 2% to 3% for maintenance of equipment and additional up to 2% for capacity, depending on the market development. And the guidelines for depreciation is a 12 month sales in is 4.25% considering IFRS 16. Without it's between 2% 3%. And in the end of 2019, we're in line with that guidelines. And finally, the guidance regarding our tax rate is between 24% 28%. But in the end of 2019, the average tax rate was for 1.7% and it was mainly caused by the relocation and the negative result in China for that period, which has an overall impact, on the calculation for the group, If we exclude black, we are in line with our guidance for with the 26.3 percent. Now both in invest and develops its business at deliveries. And then only the investment pays for maintenance of liquid matters. January 15, 2.3% of the annual but many short term when adapting to high volumes or high degree of retirement. Be additional up to 2% from the sales. And for the coming months, oh, yes. It would be a bit higher as we have, as a result of work, investments to increase No. We are talking about the new facility as well as adding value investment in the industry. But these investments will probably improve both the reduction in patients even further. Both of them was listed on Nasdaq.com on 20 or May 2000 and 11, and we have a strong, known founders. Our largest shareholders is Lincoln and 2nd largest person, and they are also representatives in our board and are both here today. And as you can see, both of these and mom, the top 5 shareowners, through, the share 5 These we don't know whether to change the forward. Let me now use 1,000,000 shares in that transitional. Yes, ma'am. That EPC didn't come from a lawyer's office chair group and the description group is a front dotcom. Yeah. So that does not recapture the development of the booster before heading forward and at the next section. For the start date to be a part of. Anything was introduced to a stock market. Yeah. So that's an advantage. And 2013, we had an prudent maneuver of 3,000,000,000. 2014, we divested what is top of the group. But in the same time, it actually grew 34%. Because there are some percentage points in the very morning. You'll put it with Grandpa for Julian contacts that we implemented up here. Those are the they continue to do with 12 exam. And now we actually managed to get back to the breaking model in 6%. Through our compensation program? We are pretty good to have that one in development in 2016, which we also have. But during that year, we were quite far to consolidate an optimizer organization. So in which each paid off quite well with an improved margin improvement. In 2017, it started to grow slowly. And in 2018, we were back, and it's a normal level. We had an And as we have mentioned before, 2019 were a supplement here in the industry as a consequence for new regulations the political climate influencing the arms of trade in many countries, and, sergeant dealers surrounding Brexit. Poriums and located in initiatives as well as blockages, mass effect is out on the plan of marketing. And I don't think it doesn't come as precise, but, I'll do doing market in many aspects. It's a little instructive change. And this change is influenced by several long term trends. Some of them such as sustainability, and electrification are today involved in all our customers. And these trends in combination with the implementation of new base stations makes the industry more complex. And suppliers by custom, we need to pay close attention to that development. But through the pattern or contract, and that position of PSM. We've allowed, to our geographic presence, and they come onboard a little bit. Company to a 5 minute company in 5 minutes. And we're actively running our organization to profitable over time. And thanks to these, we can create sustainable business. And we have a strong financial platform. Does it work for the group? And our sustainable approach, we create great benefits for all of our stakeholders. Thank you. Alright. Here we go. Okay. I wanna remind you of what it was we, we did what we announced just before Christmas. We did announce, that we were going to, purchase PSM, at a, price tag of $24,500,000. And, being in the profession, profession you're in, I'm sure you've done the math on multiple already, so I don't need to explain that to you. Why we did we do this? Well, there were a number of driving forces behind that. We would wait a long time to find the right target and PSM was attractive to us because it gave us exposure in markets where we have not been that strong before. I mentioned that to you previously, the US and China, where PSM are are very strong, PSM are not so present in Europe, from a sales perspective, which is our home market, and and we're very European centric, as you know. From a product standpoint, to make it very simple, you could say that on boltzmann with external threads, Both the Nissan M6 and up, PSM, M6 and down, and not sending internal threads. So there's an extremely good fit and actually very little overlap between our product ranges. Also on the customer side, and the market segments we're in. We have a little bit of overlap on OEM customers, but it's quite small, which means that the exposure is is, the the increase of our exposure is great. So those are the primary driving forces behind PSM is also a very competent company. It's a strong brand, with, a great organization, and we're excited to to work together with them. So with that, I have the pleasure to introduce Marco Suzuki, who is the, President and CEO of PSM. Marco has an extinguished career in, in, the automotive industry. He's been working for, Toyota for Sumitomo, for ImPro. 25 years plus in senior positions, working both from the US, from Japan, China, and Europe. So right now he's joining us from from the US, and, welcome, Marco. Hello? Thank you. Good. So I see the quiz. Thank you. Many people does not get the right for PSN name. So if you say, share it with you. But after this presentation, you still don't remember the PSM, then it shouldn't have me. So Okay. This is a PSM highlight. This year, we are 89 years of operation. PSM has responded to 89 years ago, 1931, currently, globally, we have about 350 people, employees, and the, production in China, Taiwan UK, with our facility, distribution, we have, over 22 countries. The most of people from, China and Asia, China have about 60% and Taiwan, 20%. So majority of our employees is from Asia. The finance performance 2019 is a very challenging year for everyone compared to 2018, we have in past 2 years, try to get the more business. Many pieces from China drop a lot. Some customer dropped 80%, 20%, 50%. So, 2019, as a result, we have about 2 or 3% growth, to cover new projects, covered, a drop, a lot. And for our EBITDA, we have about 19% growth through many initiatives in past suites, including the restructuring, including we do a combination consolidation, consolidation, a lot of initiative from everywhere. We use our technology to have also, that, for example, finance, we have used a lot of China team to support others, other than we have everywhere have a finance team, for example. So the 2019, is the result If you found the segment and geography, you can see PSM a lot of automotive, and, these 2 years try to develop more parts and more customer for industrial customer. And even within the automotive, we try to get more business for, like, electronics battery related. I will introduce you later. For geography, about 50% half of the business from Asia, including China, Japan, South Asia, So this is an precision screw manufacturing, PSM. This is a history we have. We started from UK, this, from William Home UK, and, in the past several years, We have, go to Taiwan, 1982. Everybody know Fasteners are very famous in Taiwan. It's it's It's a very strong supply chain. At 1982, it does not did not have much fasteners. We bring our machine from UK to Taiwan. So starting to boom in Taiwan fastener industry. And in 2002, we we started China very early, And later on 2017 10 years ago, EQT acquired PSM, in the 2016, we moved to a new facility, to Wuxi. I joined PSM in, on April, 2018, almost 2 years. In the past 2 years, it's a challenge years. Last year, we set up a 88th anniversary. The 8th number is in China as a blocking number. We have double 8 last year. But also we have a double punch last year. Number 1 is Brexit. We are U. K. Company. So first punch, Brexit, The second pound, you have a lot of business for China. So we have, Mr. Trump have, trade war between China and USA. We do a lot of things to try to minimize the risk. We try to have something in u UK. We can produce in China so we can reduce the Brexit risk And we all we luckily, we have Taiwan. We can we do many things in China, and we can move something for Taiwan. So from Taiwan to USA, we don't have, trade, text from that. So in the past 2 years, we are, we open expand our core form expansion in China. We opened a 0.2 and 0.3 and come to the 2020. We have a button together. This is our global footprint as we have covered 22 countries, we have, our distribution, especially for Asia, For example, we have an office in Singapore, a warehouse in Singapore, Thailand, Malaysia. We have an agent in many, southeast, the China. Other than in USA, we have several office. For example, we are office in the West Coast, in California to serve, APO and Tesla, for example, Wisconsin, which cargo. And the manufacturing, we just introduced. What is who is our customer and where our parts go? 70% of the business go to automotive. For example, this is our we are some OEMs Most of our customers for automotive is the Tier 1. For example, we have a scheffler, Molly, and CATL. Many people maybe know, CATL is the, battery manufacturers. It's largest. Other than Tesla. Recently, last year, CTO invested 1,000,000,000 in Germany because they are going to, to grow the business with these BMW and others. We are the key supplier for CATO last year. It's a new business last year, Uso Beep, CATO that it that their Tier 1 supplier to choose, the parts. But they find out the 3rd, the 30% of business 30% of problem for quality deliveries from inserts for plastic. So CTO back all the, purchasing power that selects only 2 supplier, in the world to supply their inserts for plastic. And we are one of them. We are very excited because they are expanding to Germany. And later on, we have a German with Bolton, we had grown more opportunity with those facilities. And the other one with point out is the thermal management module is for Schifler. They are they are very we are the only first one supplier can localize in China successfully do that, with the code form plus machining plus the sentence grinding, multiple applications. Other than auto model, we also have an industrial, especially these 2 years, we try to go get more diversified ourselves. For example, we have, we get a 5G, for Huawei business. There's an antenna They're growing very fast, in China. And we also have, watch If you have a data's most popular watch in your hand, it's a model 5. It's a full watch. So we have a 15 very small screws in this watch, maybe many people cannot image how small it is. So I will just take a look. A small, we have 15s in that watch. Other than that, we have GEs, Sony and others. For example, My Ray is the largest medical equipment in China. We help them to consolidate the parts from 100 more part number to 25 part numbers. So we become the 1, only one supplier for them for their inserts. So you can see PSM tried to go to several industries growing and more advanced and the combination with the multiple application together, including co form machining, grinding, as many as much we can add in one component we have a more higher barrier to prevent our competitor to come into our business. Okay. So new journey for 2020. So what happened? I think, and as already introduced Synergy, I would like to dig a little bit more to tell you what to, from prospective or PSM. From product perspective, PSM has been doing this for 189 years for the nuts and our main customer is Tier 1. And the button very foremost on the boat, We have one product. It's a combination we call compression limited assembly, both and the nuts. And together, and we assembly that. That exactly is a combination between PSM button. So we can get a more good price from Button, and we have good assembly capability so give us more competitiveness to our market. And from the customer base, It's to ensure you see this page before. Most of customer major for button is OEMs. They go to Vovo, Jaguar, and for PSN, we morse go to the Tier 1. Suppliers. So from the perspective of full service provider, we are vertically integrated each other, including product and customer. If you found a global footprint, we'll leverage each other putting very, very strong in Europe, and we have a strong in Asia and customer. So these two combination And, coincidentally, in Ohio, we have bought them there and we are there. So we have a more synergy each other. Combined in North America. When you talk about the most thing about the bolt on synergy, we can play the different game in China. PCM have in near Shanghai area, Don't worry. It's not corona, okay? I I have 2 home. 1 is in in China, Wuxi. 1 is in Chicago. Okay? So I left the China in January 20th. So and past 2 weeks in Chicago. So I I'm safe, so no worry about current. So we are in very close to Shanghai. And later on, we have a partner in South China, making that small part also. And now Putin have a plan in North China. So for customer or for China, we can cover entirely for manufacturing, for our sales, sales team will cover China. That is, we think, is great, synergy between these two companies. This is my final one, and I just heard we have a Taiwan, and also like, and as mentioned about, they purchased a lot from Taiwan. This morning, I am very surprised from the call, our senior VP, he told me great news because, the the purchase team, I say, can you introduce this Taiwan supplier to us to our China Taiwan team? They have conversation, they call have a conference with a Taiwan supplier. And this morning, called Tommy, the Taiwan supplier tell them, tell them we're going to cost down for you, the major part of the 8%. So only I think I can more call every day to, that supplier so we can get a signal together. So 2 34 years combination, grade synergy, we are very excited 2 looking for 2020. Thank you. So hope you'll feel refreshed after the coffee break. My name is Friedrich Eckstrom. I'm the SVP of production of Bolton since December 2019. So obviously not yet an expert in Fasteners. I must recently come from ARCAM, a manufacturer of 3 d printer for metal, de listed 2018 when acquired by General Electric. So quite new to the business, but very, very excited to be here on this journey. So has a very strong manufacturing footprint. By producing near our customers, we can provide them with instant service and a shorter lead time. Also, by our manufacturing strategy, We're combining the best of 2 worlds: high volume production of our own internal specialized product and a wide wide range of fasteners needed for to serve our customers complete range of products. Through our Central European units in Halstajammmar, Bergcommon, and Belskobayalam, Poland. We manufacture our core, the individually core range of products that are specialized in a manufacturing perspective to make the plant as efficient as possible. With our units in Hudson and Tianjin and Nishni Novgorod, we are producing a complete range of automotive fasteners for that specific market. With the additional footprint of the manufacturing facilities of PSM, we will be able to strengthen our regional and local presence to become even more flexible when it comes to suit our customer needs. The total production capacity in Europe, as defined is by how many tonnage we can produce through our T treatment. And the combined volume now in Europe is roughly 50,000 ton annually. With some capacity to grow still, which is interesting for the stronger 24. And also remember that I said it is actually in the heat treatment that the cap that is the capacity constraint. When Philip is talking about what we are doing on the product side, that will shed some new lights on what we are doing. With PSM in our group, there will be significant synergies between the two companies. With the cold forming, where we are at Bolton or specialized in external threads and PSM are specialized in internal threads as in specialized nuts, we can combine our manufacturing capabilities in sourcing production that is currently sourced from outside vendors, but also making sure that we are specializing each factory to what it's best suited to do. So probably moving some from both the factories to PSM factories and from PSM factored into both the factories. In Machining, PSM has a very strong position, complete factors for this. This gives an excellent opportunity to to utilize those resources for Fulton products. Heat treatment is an area and even surface treatment is an area where Boulton has a very strong position and PSM has none. So we're currently at the PSM side, sourcing a lot of those activities outside the company. So by bringing them in, we will get better revenues and increase margins. Side footprint, Marco already mentioned this. There are a few low hanging fruit there especially when it comes to our U. S. Operation, we do have a close proximity in the U. K. And Also in Taiwan, there is a big opportunity. Not previously released Bolton had plans in order to start up some kind of sourcing office in Taiwan. The need for that may no longer need is needed when we have a very, very strong sourcing team under the umbrella of PSM. Marco revealed some really good news there previously. Also, when it comes to, share broad material suppliers, Fulton has a sourcing range, which is much wider than PSM. By much, much higher tonnage. PSM will be able to piggyback significantly on our big volumes that we are sourcing in the Rod segment for instance. So these synergies will come. So for those of you who are not familiar, what is the actual production process of a bolt So in its simplest form, making a bolt is you form it, you heat it, you coat it and then you ship it. So that's very easy. And that is basically the core of what others, when you remember those circles that you have, the core of them. However, there are a lot of additional value add that can be made in the production process afterwards. So this simple routing here is not the case for the majority of our products. If we talk about our production strategy when it comes, what products we are making, where, we can start out by looking at the Polish plant that we just saw on the movie. The Polish plant is specialized in smaller dimensions and with a lot of value added to it, typical size range from below M10 and the more the labor content and the more specialized, the higher they can go. Our our German facility, they are, let's say, in a sweet spot where we are very standardized, extremely high volumes, very low labor content, and it's by far our most efficient when it comes to produced number of screws per employee hour. So very specialized in a very narrow segment. Our Swedish operation is going towards much larger dimensions. They their most extreme one is actually 30 millimeters by 300 millimeters. That's a severe bolt. It can lift 54 tons. So one single bolt. Quite heavy, quite heavy duty, but also in the special range, they can meet this. Stainless steel and high temperature application is specialized by our Swedish operation. Our markets in China Russia and the U. S, they provide the fasteners needed for the customers we currently are serving there at this point. So that means that they cover the full range. When the operation is growing and we will become much stronger on the market. We will probably see a specialization even there from a perspective specialization gives higher margins when possible. As you can see, there is a gap here of micro fasteners and micro fasteners typically something you would find in a smartwatch. There's also a gap on the internal threads. Nuts, special types of nuts. And this is where, the PSM comes in now. So With the addition of them to our production portfolio, we will be able to handle fasteners from the size 0.8 millimeters up to 30 millimeters in dimension and Marco, how short are your shortest fasteners? They've just maybe 1 or 2 millimeters, right, up to 300. You saw a small one? Yeah. Yeah. Yeah. There's a small, if you if you snees, they will go out all of them. So that's how small they are. So, flexible by standardization. Bolton has, concept when it comes to how we standardize our machines, our toolings and our operation systems that allows us to have a great interoperational flexibility between different units. We also have a shorter ramp up when we're starting a facility like the one in Tianjin, we can add resources from our existing facility and provide that over to them to help them ramp up. It also gives the emergency handling when, for instance, in 2018, Halter Hamar ran capacity due to unanticipated demand, we could flexibly shift that operation over to our German and our Polish operation. And since we are using standardized machines, we will also reduce CapEx quite significantly. Combining our sourcing volumes to a few of the suppliers. Of course, we can leverage our barging power when we go out and buy more machines and buy more equipment. So preparing for profitable growth, built in 2020, stronger 2024 calls for a significant growth in volume. That volume will come from existing capacity in our current facility. We have still some growth potential in our Central European factories. It will also come from new operations and you have already seen the information about our Tianjin factory and the purchase of a plot in Poland. A quick snapshot about our Tianjin facility that we inaugurated last year. We did a successful move without interruption for our customers. That by itself is a great achievement, It is expensive not to meet the customer's demand. The size is roughly 9000 square meters, 100 employees, And it's a fully equipped factory right now. We've taken the CapEx for that, so it's a fully equipped. Ready to grow, ready to ramp. So it's going to be exciting to see the volume increase there. From a sustainability side, it can be interesting to, so know that the surface treatment in a special environmental zone, which means that, We have the local community government taking care of all the residuals from the plant, making sure that there is zero waste from our operation here. Is very, very important when it comes to especially the surface treatment. So our new plant in Poland, it's in a place called, if you can say it, Radji Obji, Vapers. In short, we call it RAD. And I think you all understand why. It its plot size that is roughly 100,000 square meters. And in the initial Facebook plan for a facility size of about 25,000 square meters. You can compare that to the size of the Tianjin factory. Initially, we will in source a very expensive operation the surface treatment, it's done at a subcontractor in the region. Currently, we are struggling with that supplier when it comes to all aspect of operation, pricing going up capacity, not sufficient, lead times high, and also quality issues. By bringing that inside, we will have a significant better position when it comes to our own operation. And we also have the possibility, as we said, with the facility to incorporate more operations heat treatment, for instance, is one of those should it need it? We will move our logistics center, from Vilkevichire and put it in the same building. And, from a logistics and transportation cost and sustainability cost, that's a huge advantage bit because we eliminate a lot of transportation. So we will reduce lead times significantly when it comes to that and cost. What else? Yes. Helian already mentioned the green financing we will have through the Breen So a lot of efforts go into making this a very sustainable building, both when it comes to the design of the building itself, but also the surroundings of it. And an interesting point when it comes to sustainability about this in China, the local governments think that the waste is so hazardous. They don't trust anybody with it. Here it's the opposite. We, will have 0 contaminated water from this facility. Exactly 0. And how do we do that? Yes, We will recycle it through a evaporation and then condensation. So which means we'll clean the water. We'll get completely 100% clean water back. The slurry that's remains will be dried and left of many cubic meters of contaminated water will be tiny, tiny, tiny cake of material that we actually can sell on the market. So a very, very comprehensive cleaning procedure in that facility. So margin expansion also part of the of the stronger 24 very important, of course, to have money in the pocket when you want to go increasing your volumes. So, how we will do that? Well, the quest for increased margin, that's an never ending story. You just continuously need to do that. But some of the activities we will undertake is production consolidation. It will come partly from the acquisition, from PSM, where we will move production from one site to another. And in sourcing of externally sourced production. It will also come from the fact that when you are entering in a full service provider agreement, time to market is of essence, Magnus will talk about our full service provider concept later on, but sometimes when you take over a supply chain, it's it's not as efficient as it should be. So from the source, the source components, it can be that the OEM has provided you should only purchase from them. So a possibility to resource and re insource that type of component, we'll give some margins. Already mentioned the way we are in sourcing high margin operation from the outside, heat treatment and surface treatment examples of that. Distribution network efficiency, understood briefly about that. We do have some parts that are well traveled, we can say. So they've been around the world a little bit. So there is significant savings to be made there. We're currently running a project around this, probably reducing our warehouse footprint reducing transportation costs also around the world. Localization of production, producing in a foreign country, shipping it with trade cost, that is a, waste. So Bolton is one of the few that has the opportunity to actually produce near all the customers. That gives lower cost. And we do have projects around that as we are good, but we are not super great. So there is actually, measures to be made there. So I think that the fact that the plants have been allowed to run, be run rather independently means that the units that are excellent in one area does not use the center of excellence of another. So by combining the best practice from all units, we will achieve additional operational efficiency. Bluetooth Production System, it's great, but it needs to be implemented to a fuller extent. Also coming from the 3 d printing industry where the production units are I would say they are 100 percent digitalized. There is very little manual information. I think there is an untapped opportunity when it comes to industry 4.00 as well. We can be better at digitalizing our factories and using more modern technologies when it comes to digital improvements. And last but not least, sustainability efforts they will lead to reduced costs. So it's not pro bono work we are doing when it comes to sustainability. It's actually core, we will save money on this. That leads us to sustainable operations. Already talked a little bit about what we're doing in the Polish plant. This is actually on in our old Polish facility where we have installed solar panels to the capacity of roughly 100,000 kilowatt hours in yearly production. Significant contribution to our electrical consumption in that factory. And by already in the design phase of the new building incorporating this, we can achieve a very, very efficient solar panel installation without having to retrofitting. It's much, much cheaper when you do it from the beginning. So These oh, sorry. Sorry again. Even more. Sorry. So in total, what we are seeing on those parts of the building here, that corresponds to roughly 450,000 kilowatt hours per year. That will cover roughly 16% of the total consumption there. This is a rather cool feature. It's actually a customer parking. So if you have electrical vehicle, you will get the electricity from the roof shading it here. So Maybe not the greatest contribution, but still it shows the customers that we are carrying. Also part of the plot here, a big portion of the land is reserved for what is called a solar farm that will actually be completely dedicated to the production of electricity. And in combination with all these, it will be well, not 100% but large, large, large portion of the total electricity consumed at that plant. And once again, it's not pro bono, it's it's actually something that is, giving us higher margin saving costs. So, as I'm quite new, I can take absolutely no credit for this, but I'm so immensely proud to show these figures anyway. So these are the CO2 footprint reduction from our oldest factory in an operation founded in 1873. So you don't have to do you don't have to start from scratch. You can actually do significant amount of work and so. And, yeah, systematically working to reduce our CO2 footprint gives excellent result. And when we come to Marlene and Phillips, then keep this graph in mind, these two numbers, it's a teaser for what will come. In Sweden, it's easy here to reduce your CO2 footprint because there is clean energy available. You can buy clean electricity. But even in our, in our German facility, we've been able to reduce it with 1 third in over a couple of years and the graph continues down like this. So It's actually something we will continue to work with. So Well, that ends the sustainable growth session on the production. Any questions about our manufacturing and our manufacturing footprint crystal clear, like the sewage water from the Polish surface treatment plant. So let's talk about, ability as a driving force. And I am quite sure that you understand that I'm a very happy person today as I'm heading up the H or M sustainability. Function in the company. So by talking about sustainability as a driving force, I think we should ourselves one important question. And that is who is deciding our future? Besides ourselves. And the suggestions? Come on. Who is who is important, who decides the future of both of them. And Mr. Jason? Customers. Thank you. And you. What I'm talking about is a what we have been working very consciously with the last years is our stakeholder mapping and model. By saying that, as a company, it's important to really understand who are your stakeholders because they are actually deciding your future. This is the stakeholder mapping that we have done in Bolton and we have been working with this for a couple of years. We have, of course, identified the customers, but also some other high level groups of stakeholders. But that is not enough to only focus on the stakeholders, of course, because you need to put everything into context. And this model is showing 2 aspects, 2 examples of aspects that is really key for us to understand. And that is What is going on globally? What are the global trends or the global movements? And the next question is what will drop over to become a legislation? Because we know I know you know that what really drives change is normally what comes into legislation. So that is really a key for us. And this is what we have been working for, really hard for some years. By saying that, I can give you one example of a global trend. Do you remember like 2017 what the 3 biggest global trends were? 1, you can probably guess? Well, it was digitalization, shared economy, and sustainability. And the Paris agreement was just a few years old. And one of the first leg relations that came into force that really had a big impact on businesses and their sustainability work was actually the reporting initiative. 2017, almost all European companies had to start to re put out formally on their sustainability efforts and work and start to measure. And present that officially transparent. That was hard work at that time, but I can promise you that these days it's even harder. So what do you think is the most powerful or aspect that impacts the global trends today? According to World Economic Forum, which are identifying global trends annually, last year, they identified that the environmental aspect, the negative environmental aspects is actually the key contributor to the global transfer, almost Well, at least a majority of the global trends are really impacted by the environment and especially the CO2 footprint. We know this. There's no news. We all know this, but that is really showing the fast speed in this, around us. So what is currently the key driver and what is around the corner? What is coming around the corner? For our stakeholders? Well, I think we should try and focus on 1 group today and the customers. So why don't we listen So what is really the key drivers for our customers this day? I would say that avoiding penalties is probably the most important thing these days. And you know about that We have heard about this earlier today that all the European all OEMs that are operating in the European market, they are facing big penalties because of the new legislation that says that you can only emit a 9 to 5 gram of CO2 per driven kilometer. And no one, none of the OEMs are meeting that demand today and not even next year because the penalties will be even higher next year. So by saying that, you could say that the tail pipe emissions that we are talking about right now has really driven the electrification. But what is coming up now? The next thing, if you look into the trends and legislation, it is actually something which is called this lifecycle CO2 footprint of the products of the cars. And this means totally new demands on our customers and on us, of course, because we are part of their life cycle. This is one picture. This is one example of how our customer of ours is describing the CO2 lifecycle emission. And it starts with the production with starch supply chain, we are part of supply chain. The next thing is the production. It's the OEM's own production. And then you have the next phase, the geoser phase. That is about fuel and energy supply and energy consumption of the car. And then you have the end of life, which is about recycling. So all the full lifecycle emission will be taken into consideration and that will for sure be the next legislation coming up. And we know that. So what are the customers doing now? They are actually putting in place systems to measure the CO2 impact, which comes from their supply chain, which comes from us. And we are prepared for this. And why are they doing that? Because they have committed you saw the movie, they have committed to meet the Paris's commitment. To reduce with 30% per car by 2025. It's only 5 years ahead. So, for sure, I would say that the quote from Volkswagen, which we have here in the bottom of the picture is really telling the truth, but it's also an opportunity. They say in the future, there is to be a sustainability rating which will be taken into consideration in the assessment of suppliers. Sustainability is to become a selection criteria that will be just as important as cost, quality, technological competence and innovative strength. And all our other customers are also saying the same thing. Today. So stronger 24, built an aim to be number 1 in our business when it comes to sustainable development. And we have a road map for that. And this roadmap is taking care of the stakeholder mapping. The value chain of ours, we know, of course, where we have the biggest impact and where we can make a difference. It's also taking into consideration the global context but now it's also integrated in our business strategy. Now these are the five areas that we are focusing on. We focus on the corporate governance and business ethics We focus on responsible and sustainable supply chain because no one can sell this by themselves. We need to work together. So we also need to work together with our supply chain. Sustainable owned operations, for sure, we have initial implants and Frediqu just told us about some of the plants we have. And then sustainable product offer that both Filip and Magnus will talk more about very soon. And this is carried up by our organization, which is characterized by diversity and inclusion. So how do we know if we are on track or if it perhaps even are in the forefront? I don't know if you have heard about any third party assessments, but actually we as a supplier we are asked on a regular basis from all our customers to participate in different assessments. As you can understand, it's not we no one is in a position to say no. So of course, we do this happily. And we are very proud about that Ecoveris, which is one of the biggest global players when it comes to since our assessment, they assess about 60,000 companies. There are more of 450 global big companies that are using ecobodies to assess all the supply chain, but also to find new suppliers. We made this we went through this assessment and third party analysis last year and we actually came out with a gold medal. And what does that mean? That means that we belong to the 5% of the global companies, the top 5% of companies globally when it comes to CSR and sustainability And as you can see, we actually are positioned in the top 1% of companies within our own business. So I think we have some evidence that we are for sure on the right track and that we are even in the forefront. So by saying that, we are ahead of the game. What is it about then in the end? How can we deliver the vision that we have that we want to create and supply the most innovative and sustainable fastening solutions. We have heard the story today, the strategy we have, a little is actually about developing new products and services and you will, for sure, hear more about this. It is about manufacturing approaches. Freddie talked about that, but Philip will also talk a bit about that as well. And it is about our relations with customers and stakeholders really to understand the context and the stakeholders and act upon that. So why is Bolton well positioned when it comes to take on this lead? It is based because of we are an old company and we are here for a reason. Our values is really key to us but also the creativity. The technology and the innovation power And for sure, you will hear more about this and also ask a lot of questions that we hope that you have. And this gives an expertise. So this is really what is framing, why we strongly believe that we will be number 1 when it comes to sustainable development in our business. So before I hand over to Phillip, I thought that I would share with you the voice of the customer. I am we had some teasers in our social medias right before we, we published our press release for today, meeting and the book for air. And One of our biggest customers, I will not mention who but the person who is the head of global sustainability immediately posted a shot with me. And he said like this. Marliana referenced to your LinkedIn post. So how is it possible to reduce the CO2 footprint for bolts? And then I answered him. Hello. Just wait a few more days and then you will get to know more. And then he answered. All right. We are working now exactly with these questions. Please send me more info. But I think that is a really good example, and I say timing is everything. So Philip, please. Come and tell us more. Oops. Thank you. Thank you. Thank you very much. And I think that we have a very good understanding of the context and why it's so important that we are developing new solutions that really make a difference when it comes the carbon emission. First of all, when we, understood that reducing carbon emission is actually business critical for us. We we asked ourselves this question. What is the carbon footprint of a bolt? Does it really matter? Can we make a difference? So we set out to try and understand what the average EU bolt production, actually, how what is the carbon footprint? And, what's the energy energy consumption and what is it in each and every step. And this is the result, and we can clearly see that, talking about energy consumption alone, it actually heat treatment stands for more than half. And in CO2, it's more than 30%. So naturally, heat treatment is on top of our list for, improving this. And now I'm really, really happy to be able introduce Bufe, which does exactly that. Before I tell you a little bit more about how it works, I wanted to give you a, history lesson about Goofill, the brand Goofill. It's short for BU is built in, obviously, but F 0 is actually, Puhell. Professor Carl Fochelle back in 1918, invented a product, which was the first of many innovations, which actually established Buffful and Bolton as the technology leader in, high quality and high strength boats. So we are doing the same thing again, in another context here. We are now, launching the the first high strength bolt, which is also eco friendly, which makes it very natural to add just an e to this, Bradley. So how does it actually work? I know that most of you are not engineers, so I would try to make it very simple and understandable. Our customers, they require a certain strength from all our boats. And we have these tools to make that happen. We have the material properties, our cold forging process, and we have the heat treatment. So, the normal process looks like this. We receive a material with a certain, strength. We call forge it and by work, deformation, it actually, work hardening it gets a little bit stronger but then we put it in the oven, and we heat it up twice. This is why we have so high energy consumption here, because we have to heat it up to make it strong and then heat it up again to make it, to, to make it to, to debrittle it Otherwise, it's too hard and it will break. With Beautiful E, we use a slightly different material, But the key is this, the cold forging. This material has hardening mechanisms, which are triggered by deformation. And with our know how and our testing, calculation, and development, we have figured out how we can consistently get the required strength just by forming the ports, which we already do, making this very energy consuming carbon emitting process redundant. So we achieved this. 30 percent less CO2e. CO2e is actually, carbon emission equivalent. 50% less energy per bolt, but there are other benefits. And Frederick said some thing about how we measure the capacity of our operations and what the heat treatment can, can process. So, obviously, we can increase capacity if we take away the bottleneck, which is heat treatment, We don't need to invest in increasing capacity by adding even more, carbon emitting ovens. We can reduce the lead time because we're taking away one of the steps in the process. And as a matter of fact, the biggest source for quality issues is heat treatment. So by removing that, We have a possibility to actually improve quality even further. And we are releasing this now this week to you and our customers simultaneously. And you've already heard the reason and the timing for this, all the customers now ask us for solutions just like this. To give you a very specific example, I know that you have already had, lots of examples from Malena and and others, but Volvo cars, specifically, they've said to us that we want you to challenge the traditional ways of doing things, because we know that it's impossible to reach these goals by doing the same thing as we all have done in the past. And BUFOE is really challenging the traditional way of making bolts, which is by heat treating them. Another example from, from Daimler is that they are working on finding a a way to make steel from iron ore into steel billets without using, blast furnaces. Last furnaces are one of the most, common emitting processes that we have. We're not solving that problem with before you, but at least, Daimler, if they choose before you, they don't need to heat it up heat up the steel once again to make it strong. We do that by our cold forging. Instead. So it's 30% enough. Well, it's enough to meet the, the, the goal for, the Paris agreement, but we do we think that we can do more. If we look into every step of the process that we either own or control and optimize those, we believe that we can cut the, emissions in half. So, reducing 50%. And this is without adding renewable energy. If we bring in that as a factor, we can do even better. So solar farms, renewable energy from, from from the sources that we have in Sweden, I mean, this is we have the possibility to really make a difference here. The, the obstacle to that we have to overcome to achieve this is the traditions. The, specifications that the industry have today. So we really need to to get a, we need to find a way, to let the customers let us help them. And we think that our full service provider model is a part of that solution. Because when they give us the confidence to control the complete value chain of fasteners, then we can start doing all these incremental improvements step by step. And then we can deliver not only the, the least carbon footprint, for our products, but also as Frederick and others said before, probably the best price as well. And, I will hand over to Magnus. He will tell you more about how full service provider works. How eco efficient solutions and quality and built in advanced to it in a natural way? Thank you. Thank you. So my name is Magnus Karlinger. We're working with sales for 25 within Woodlands. I just realized that I'm the oldest them personally in this room today? There I have. Our FSB concept is not the new invention for now. Actually, the success story was introduced 20 years ago, but it has been developed through the years to the state where we are today. And, we work in an industry with heavily loaded abbreviations So now it's a quiz for you. What do we mean with FSP? Anyone? Thank you. Perfect. Yes. So welcome to the Bolton full service provider, Internity, I will give you a picture of our updated FSB concept. Where we have strengthened the customer offer by taking an increased responsibility of the supply chain. And this is a sustainable supply chain. Fasteners is the complex commodity that requires its focus. And we are convinced by optimizing the structure to the optimal solution of one point of contact all stakeholders will benefit out of a win win perspective. However, Bolton, we are always interested in winning, gaining new business from a single part order to a complete full FSP contract, because we had to be reminded that a single port order can develop into a FSP solution. And an FSP solution, as such, is the Crown Yuval of Bolton's offer to the customers, and that is for sure an award of trust in a relation between a customer and Wilton. We can ask ourselves, what is the reasoning behind starting to sell in the FSP concept? And it is true that Fastness is a challenge for the automotive industry. It's really a complex commodity with a lot of part numbers and it's difficult to control the total cost 10,000 different components that has to be assembled together. And out of these 8 to 15,000 components, 20% to 25% of them is Fasteners. Then if you look into the purchase value of the components. Fasteners represents roughly 1%. So it's a huge number of parts to a port by port very low cost. And complex. This is the basics for Bultem entering to the arguments of FSP. On top of the complexity, we are all meeting new demands. And much related to the environment. And this is something where we, as Bolton, want to contribute and take responsibility of the complete supply chain. So with resources from Fulton, we can support them with customized optimized solutions, one point of contact, and last but not least, a global footprint supporting the customs locally. And as of today, we have a new product line which we really hope will trigger the engineers to work close with ULTEN, and that is the view for E. And I'm excited to go out and meet the engineers today and here, are they willing to start to question on the tradition standards that are controlling the fastener specifications today. Time, money and resources are based daily when design and organizational processes grow out of control. What do we mean with this? Yes, this is an environment that we meet when we meet the customers on a daily basis. First of all, time and resource is required a lot though in terms of developing cars. And today's, we are forced by short lead times to get out with new products on the market. We have manage process chains, meaning that fasteners as such, imagine a core company they have design areas in everywhere that the single point of contact is fasteners without a control of the fasteners, they will grow to a massive number of port numbers. Last but not least, there is a variety of suppliers providing fasteners and challenge the efficiency. There's too many steps from order to delivery. And you can always ask the customers, how do you utilize your resources wisely. The built in customer offer is an experienced partner, 147 years of faster engineering, capable to understand all specific customer requirements. Putinton is a partner where we can source, produce 100% of the demand for assembling a car. And in the jungle of suppliers, the one point of contact will simplify the relation with your fastener supplier. What is the base for Boulton when we're entering the the full service provider system. We are going in, in the beginning, with a clear objective to make it more efficient. And as someone mentioned before here, entering an FSP concept can be very, very complex. And, complex and cost driving build them want to take responsibility and start to work. Through our work, we can step by take improve the margins for Boulton, and that is a lot many times through commonization. Commarization means that we are reducing the number of ports and increasing the volumes produced per port. That is crucial. Simplified assembly. A screw can be designed in many ways. And without support from a competent partner, this is costly. We are focusing on costs when the part is assembled in the car. Is the same as in place cost. This is a tradition for bulletin for many years. And then sustainable solutions, challenged the traditions, new materials, new solutions, and as of today, due for full service provider. We say it is modules. And why do we say it's modules? Yes? FSP is not a one solution fits all. We will find out together with the different customers their request how they want to see the relation between their work and built in as their supplier. It can be from a single port supply to a complete chain from our research and development to the aftermarket. And we had for sure the competence to implement whatever solution suited to make change for the customer. And the change is something that we see is the difference. And we do it in different modules engineering, for example, we can support with faster, faster engineering services. We can be on-site from Mondays to Fridays at customer, supporting them in fastener questions, or we can be off-site supporting them with their root demands. The crucial thing is that right part from the beginning, will give you a speedy development phase and a cost efficient solution. Speed is important why we are focusing in rapid prototyping. If we can come up with an ID today and supply prototypes tomorrow, we have a great advantage towards our competition. And important is that we can also secure the test and validation of each and every individual fasteners. Manufacturing, We have innovative technological, advanced products. Some of them you can find here. I had a interesting discussion during the break about the new steel material and how we have solutions for adopting fastening solutions for high strength materials. They are here. You can go and watch them later on. We are producing something that is mentioned Taptite, Taptite 2000, FASTite, FASTI 2000, which are specially designed fasteners for different types of assemblies. We have a strong manufacturing footprint with production in China, in Poland, in Russia, China, in United States, which are enabling every custom to get the local support. In each site, we have the same competence support our customers with the same questions. Procurement capabilities. This is one of the substantial part of our FSP system where we are supporting the customers with a 100% requirements for an automotive assembly. It's also a good guidance for Fulton to check the market pricing on the global market level. Logistics, by using FSP system, we are able to have control of the end to end distribution. How do we load our shipments we are not we are trying to eliminate shipping air, maximize the lowering of our containers coming to Europe. And we also have a distribution network of suppliers where we can ship goods in an optimal way throughout our facilities. Packaging is another topic where different suppliers are using different types of packaging. Bulletin are customizing the packaging upon requirements to the customers, simplifying the way our delivery looks like day out, day in. I will give you some examples where bulletin have made difference to the customers. This is a customer using a very expensive locking nut system. On various assembly points in the car. Our engineers went in and analyzed the requirement, the need of this special looking feature They made tests and validated that it worked without this looking feature and by the end of the day when we introduced a new solution we could save the customer €800,000 a year. That is substantial savings, and this is for fasteners. Another part is a screw designed for steering column. A tricky assembly where the fastness was hard to assembly. Same here, our engineers looked into it, and optimized the design, took away some features that were unnecessary. And the savings for one single port numbers was 100,000 a year. There is a reason to engaged with an FSP supplier, you can find savings. What we do focusing now in FSP 2.0 is the echo arguments, Echo Engineering, what do we mean by Echo Engineering? Yes, we are talking about optimized design. Lightweight materials, elimination of waste, correct material from the beginning Reusability, there are fasteners that you can reuse that today on a service are disassembling as grabbed. You can use parts that you can reuse again without scrap. That is waste to take scrap. And last but not least, Beauforthe, a potential for the future. Eaker Manufacturing, coldforming, cold format as a technology such is an eco product with very limited loss of material, be due today, secondary machining, but if designed optimally, you can avoid to do secondary machining. Heat treatment, as Patrick said, Philip said, we do not need the heat treatment in the future. In house manufacturing, create the value internally, what Frederic said, take control of the total process chain from raw material to a finished product. Reduction of nonrenewable energy initiatives that we are doing in every investment to do in the future. Can we do something that is supportive for this environment? We will do it and increase the usage of raw material from electric arc furnace with a high degree of recycled material. Procurement. We have a wide global supply base, but they are committed to work with carbon emission reduction. They are committed to support a 0 defect policy because defects is waste. The right thing from the beginning will improve the, the, CO2 emission. And also internally, we were talking about the boost in production system and the lean manufacturing. With a higher focus on lean manufacturing, we will avoid doing mistakes. Mistakes is waste. Logistics, this is a very interesting topic where we are looking into how can we improve the way that we transport goods, green ships, trains, how can we identify a supply base located where we can utilize trade, air rail and green ships? And again, this is a really strong topic that we have to work with our customers, where they have a variety of ambulages from plastic boxes, plastic bags, carbon bags, if we could standardize that to a more unified system. We have a lot of benefits to do not only for bulletin, but also for the customers. So Bolton, yes, we deliver a value chains that makes a difference. We have the competence we have the eco sufficient solutions. We have the echo voris, and the echo voris is something that we within building are really proud of. Talking to the customers, and we are mentioning Ecovadis, they really raised their eyes. Oh, because they are talking about in their sourcing strategy, echo Voris is one point that pushing you in the forefront when choosing a supplier. That is what is said today. It will be very interested when it comes shop to a quote if we have to quote a little bit higher price. If EcoVodies overruns the price. Quality, for sure, bulletan is a renovated renovated supplier within quality. The improvements made through the years is a very good evidence of the right actions made within Moulton. Last but not least, that really makes this difference is the culture. Fulton are seen as professional. Fulton are seen as innovative. Built in our dedicated, and built in our empowered. No matter who you meet within our organization, we will always do whatever we can to find a solution. So the vision, we create and supply the most innovative and sustainable forces, fastening solution. This is the new built in. Thank you for listening. It's time for wrap up. I hope I'm just going to show you this last slide, which you recognize from, from the introductory session earlier today. In achieving our goals, we said we have a strong position. We have growth momentum. We have actions in place to drive margin expansion, and we have a strong financial platform. And I hope that from from the presentations you've seen this afternoon that you recognize what is what it is we're doing, the substance that we have behind all of these drivers and all of these building blocks of reaching our goals. So I'm not going to repeat them, but there are a couple that really stand out, the introduction of the Bufu E. The PSM acquisition that gives us a unique set of synergy opportunities both when it comes to revenue and when it comes to cost efficiency. And all in all, I I hope that that that you've seen why I'm so passionate about the journey we're on with Bolton and that, you wanna wanna come along with us. Okay? That concludes the presentations, and we're going to go into, there's an opportunity to ask questions. So I would like the presenters to common stage, please. And we'll try and manage the microphone here. We have a hand by so we can use the hand mic for questions as well as pass that around for answers. Hey. So, a a couple of questions on various subjects First, the financial targets of reaching 5,000,000,000 of sales in 2024. Do you need any additional acquisitions except from the PS, PSM side? Well, you have to see. I mean, as I said, we have a good momentum when it comes to organic growth. We have a good momentum when it comes to non organic growth. And the, it's in the nature of it that when you identify a target that could, you can't determine the size of that target ahead of time, but it will definitely contribute once we get there, you will see whether that makes us overachieve or okay. Then also, with the full service provider concept, have that been used also on the PSM side, or is that an opportunity Not in the same way. I think, Marco mentioned a few examples where PSMs really helped customers to, to achieve their goals and to save costs and improve performance. In a way, I don't think that you're unfamiliar with it, but all of the building blocks of the FSP, we think we're actually the only ones applying right now. So that could be an opportunity for the future, maybe. Yes, there is an opportunity. And the reason why I say this is that looking into Europe, you have, Europe seen as a small part of the globe. But even in Europe, you'll have regions where different supplier have been stronger and protected by the customer base. Already now, and I don't think you might more of a notice that, since last week, we get close, in the name of Guilter DSM. In regions where Guilter has been weak. So there is for sure an opportunity to grow to get the PSM where the portfolio PSM is much, much broader today than it was a year ago. And also if we look at the history of both that you used to belong to, a larger group with the boofab, as well, which is more of a trading company right now, but they will come to some trading on industries outside of the automotive and you used to become traded on Automotive alone. And with the PSM acquisition, it opens up more. So are you seeing yourself going for the full service provider concept also for other customers outside of automotive, maybe, to be more direct competitor to BOFA, for example, I I'm not sure that we can claim that we would be oh, sorry. Direct competitors to do that because our product offering completely different. Yes, we will touch the customers, but we do it on in our way. To the extent, for instance, a white goods sort of similar electronic company would like to go into more of an FSP relationship. We're going to be open for that. Okay. And finally, a few ones on the BUFO, product then. The material you use is that very much more expensive than than the traditional material? Fortunately, no. It's not that much more expensive. And, by, eliminating the equipment the, the small increase in cost of materials for the production. Okay. So You heard me? Yeah. We'll we'll we'll use still go for charging higher prices for that one then? That question, I have to pass over to the States department, of course. I mean, we deferred that to the pricing ocean. Okay. And then also, I learned from way back, I'm a mechanical engineer, that the trick in getting a hard outside and a soft inside in a bolt, you get by heat treatment. And some Chinese low cost producers have difficulties getting the right qualities and heat treatment has been the trick in getting that done. So now when you can do the thing without heat treatment, are you afraid of being more copied and afraid of more sort of low cost production, or do you have some patents or something protecting the process? Let me take that. What what we're doing is moving the the know how from the treatment process into the, you know, forming process instead because this requires quite a lot of know how we we've been doing 14. We've been forming metal for 150 years and and, that means that that we've figured out a thing or 2 about how cold forming works and what that does to the grain structure of the metal. So that that's where the sequencing source is. So do do you in this transition, do you need new machinery or or can you use? No. Okay. I think that's all for me. Thank you. Yeah. I could sort of join Kenneth there, but looking at, what does it need for, for the, from the customer to use the new fasteners before technique be besides, testing it, is it sort of a given that they sort of see the opportunity in reducing the CO2 footprint, or is it more like while we need to test this for a few years or how when could we see a potential ramp up of We've we've done the testing and validation to prove that the, the product is equal, in terms of performance. The customers are buying today. But what they need to get used to the thought of not trading or not buying to a standard, but buying to an engineering specification. And given that the sort of fast in our content of the car was well, maybe 1% is the CO2 footprint, a larger part of the car, or could you give some sort of Please ask that question again. No, I mean, the fastener content of a car, I mean, you've mentioned it 1% or something like that, then could it be the CO2 footprint is that first and then create? Is it a larger part of the CO2 footprint for the whole? Well, I'm not sure. I fully understood the question, but Let me ask you like this. There are, several thousand passengers in each car. One doesn't make a huge difference. But considering that we, in one of our plants, produce 5,000,000 parts per day, the, combined, reduction of CO2 will have a huge impact naturally. When it comes to the, you remember the picture that, Malena showed you. Of the life cycle. You have, the supply chain is about, 6 tons of CO2 emissions. We believe that, for each car, we are about, 1% of that. So it's not big. In that coffin, it is it's not that big. But, also, again, looking at the example from the video, by just reducing half a percent if you could it's the equipment of, as far as the size of Shanghai when it comes to, sequester carbon emission by Platten Street. So let me Let me just add to that. I mean, having having spent all my career in the automotive industry, been through the weight chase that's been going on for decades. When when you and I think this is very similar. The CO 2 chase is gonna be very similar to the weight chase. Where, there is no way if if you're you're taking 200 kilograms out of a out of a passenger car, There's no way you can do that from 1 or 2 systems. You have to optimize every single component and you cannot afford not to do it on every single component. Have to take, 30% out of life cycle CO2, you need to go at it exactly the same way. And and the the suppliers that cannot provide that reduction, they they're gonna run off the road. And were determined to be at the head of that and to be the only supplier that they can afford to choose. And you are the only ones applying this kind of technique at the moment so far, yes. Then about the financial target there, I just wondered, I mean, you talk about this synergies in sort of the PSM acquisition. And I guess, are those synergies involved in the target to full extent, or do they come later than 2024? I'm sure we will find synergies on the other side of 2024 as well, but the synergies are a great enabler for us to reach our targets. And the targets then, I mean, 2024 it's couple of years ahead, should we expect the do you expect to reach the, is it, are they back end loaded? Is it sort of things that are up in 23, 24, or how should we see it? Is it a straight line? I will be to give guidance. I think you have to, have to be patient there. The questions? The full service provider concept, I really like it. I didn't think about it that way for PSM before because most of our part, we we go very closely with our customer, we do the design and tailor made for that. Some part, we have a at the general part numbers. But after we think about the the combination for Fulton and PSM, vehicle based energy for for PSN2. For example, they, return as a full service provider and then buy a lot of info from outside and now they can switch to PSM. That's number 1. And number 2 is from PSM perspective. We have already have a the prior code for many customers, including the, OEM tier 1 and even we have a score, like the Tesla, for those kind of related. We we talk about that during that our break. We are the largest fastener to fire for just didn't show an implementation. So we we will we will bring Fulton to our supply chain. And, USB, we can supply part of that for for the or not. But now we can it's been always, in power for the volume including importance. Uh-uh. So that's CSM become our customers, full service provider. It's on no more questions. And, I think we're Just coming back to the before year, technique there. Do we expect this, or could it be that the heat treatment, capacity you have in house will be redundant? Or is it sort of complimentary to could you, I mean, could these fasteners be used in your whole offering this technique or is it more sort of a niche part? I think it's overestimating that all customers will switch to Buffy immediately. So One scenario could be that we are increasing the capacity in the other assets while not increasing in them. And thus meeting the capacity demand for the $5,100,000,000 target that we're talking about in 2024. You can always see it before you have the growth opportunity rather than replacement and I'm sure that the demand for heat treated also will be there for a long time. They are there are differences. Load can be replaced, the accretive parts that we of the customer we see is today, some can't be, and also there is a lot more to learn because the this technology, the people in technology, has actually invented, other than just producing CO2 or or increase the capacity, which we show. There were, properties, that increases petite, resistance, it hasn't been wrinkle issues that could be solved with this. So but they this has, has to be researched and developed murder. Not only the, the heat treatment for my experience in China, Brazil, Malaysia, especially for China. Because the environmental regulation gets the most stricter and stricter. For example, for many cities, in China, there's no more license for plating, and it's more stricter and stricter for the heat treatment. So heat treatment applies getting higher and higher. And the license will be smaller and smaller. The system is not easy to get a license for heat treatment. And he treatment the pit, the the decant getting longer. So even the the price is thin, without key treatment, but it's raw material, you know, higher or something to pay the pay off even. But for the lead time, getting more shorter. The other one is in the risk because you are getting harder to find a huge supplier or getting those type of things, that will be a great benefit to, to your cost for your lead time. That means your competitiveness, competitiveness in the market. Okay. I guess I've concluded. And, Thank you very much ladies and gentlemen for spending the time with us this afternoon, and pleasure. And, I wish you, a good continued late afternoon evening, and I'm sure I will see most of you soon. Okay.

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