Systemair AB Q3 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : It's Carl here from Nordea. A couple of questions from my side. Firstly, could you start off with commenting on the FX impact on EBIT in the quarter? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2021 / 8:00AM, SYSR.ST - Q3 2021 Systemair AB Earnings Call

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : And what magnitude are we talking about? Is it possible to quantify a range for that?

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Okay. Perfect. And also on the Nordics, I mean the organic growth is looking a bit on the soft side. I mean, both in absolute numbers as well as sequential development. So firstly, could you please give more granular explanation what is behind that, if you can split it up by the end markets? And also if you can see improvements in the Nordics at the end of maybe Q3 or going into Q4? And also another question on that is, of course, if

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Perfect. On the gross margin impact also, could you comment that? I guess the Nordics is one of your most profitable segments, so I guess this is driving a negative mix effect in the quarter. Is that correct?

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Okay, perfect. And also on -- I mean, there's been a lot of discussions on the raw material prices, both steel and copper have rallied the last couple of months. I mean, how has this impacted you in Q3? Have you implemented price increase as you order to offset this? Or are you planning to implement price increases in Q4 or Q1 instead? Or how do you manage this?

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : And do you feel confident that you are able to fully offset the raw material prices through price increases? Or how do you view that? Or are you planning to take out a bit on internal efficiency as well or --?

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Okay. Perfect. And another one from my side. Given that COVID came in the middle of the high season for air conditionings last year, would you say that there could be still a pent-up demand for air conditioners now that we once again are entering or slowly entering the high season?

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Perfect. And then the final one, sorry, for a lot of questions. But it's been a while ago since you did a fair number of M&A. Could you please update us on your pipeline or short list? How is it looking currently? Also, I mean, the somewhat slow pace in the past quarters, is it due to COVID make it more difficult for travel and meet targets? Or is it mainly due to you being a bit more picky or -- I don't know how should we look at that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2021 / 8:00AM, SYSR.ST - Q3 2021 Systemair AB Earnings Call

Question: Carl Ragnerstam - Nordea Markets, Research Division - Analyst : Yes. And the focus is on distribution and no new production units or --?

Question: Marcela Klang - Handelsbanken Capital Markets AB, Research Division - Analyst : Very good questions from Carl. I have a few more, but he asked a lot of relevant questions. Maybe if you could talk about any kind of improvement already seen in February compared to the third quarter? Or is the trend continuing? This is the first quarter with positive organic growth. Has the trend continued after you closed the books? Or have you seen any other hiccups after Q3?

Question: Marcela Klang - Handelsbanken Capital Markets AB, Research Division - Analyst : And can you just speak about the Nordics and Eastern Europe, both in negative organic growth territory right now and both high-margin areas for you? Are you seeing positive signs in both of these? And is it any specific segments where you want to grow in order to bring the margin improvement back on track again? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2021 / 8:00AM, SYSR.ST - Q3 2021 Systemair AB Earnings Call

Question: Marcela Klang - Handelsbanken Capital Markets AB, Research Division - Analyst : Yes. And then you also mentioned some interesting product launches. When do you expect some significant effect from these? Is it in a year or 2?

Question: Marcela Klang - Handelsbanken Capital Markets AB, Research Division - Analyst : Sounds good. And the final question. You mentioned 47% of your product portfolio now you think some are being aligned. Can you talk about your targets, where you want to be next year and then 2023, when this becomes compulsory?

Question: Marcela Klang - Handelsbanken Capital Markets AB, Research Division - Analyst : And you actually are at a very high level right now compared to some of your peers.

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : A few questions from my side as well. Starting off with the Menerga situation. I noticed that you continue to hire people there. Can you give us an update on what's going on in Menerga specifically?

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : And would you be able to give some sort of time frame on when you expect this to sort of normalize? And also the additional hiring, previously it has not been driven by demand. Is that still the case?

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : I believe in the previous quarter we talked about you needing to hire additional staff to comply with the regulatory COVID demand in that specific region, right?

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : But still, if it's more demand-driven hire? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2021 / 8:00AM, SYSR.ST - Q3 2021 Systemair AB Earnings Call

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : Okay. I understand it's difficult, but is it possible to give some sort of time frame on when you expect Menerga to be sort of normalized? Or basically where you want it to be in terms of setup?

Question: Douglas Lindahl - Kepler Cheuvreux, Research Division - Analyst : Okay. You've had another topic. You've quite recently announced several new products, the Topvex and heat pumps for commercial buildings. What can you say with regards to the market's reaction to these products so far?

Question: Hjalmar Jernstr÷m - Erik Penser Bank AB, Research Division - Analyst : I was wondering if you could elaborate a bit on the organic growth in the U.S. and the drivers? And perhaps on the dynamic, whether there is a linear growth or is this all focused towards particular months? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2021 / 8:00AM, SYSR.ST - Q3 2021 Systemair AB Earnings Call

Question: Hjalmar Jernstr÷m - Erik Penser Bank AB, Research Division - Analyst : And perhaps could you elaborate some on the selling expenses? So this like-for-like decrease continues and could you shed some light on your presumption of the sort of the long-term normal state? When will you sort of achieve this long-term stable level of selling activities?