Good morning, everyone, and welcome to Verkkokauppa.com's Q2 and half year results presentation. My name is Elisa Forsman. I am the Head of Investor Relations, and I'm joined here with our CEO, Panu Porkka, and CFO, Jesper Blomster. We'll start with a presentation by Panu, where he will go through the key highlights of our Q2 results. We'll then move on to the Q&A session with both Panu and Jesper. We have a few of our analysts joining us live here in Helsinki, so we'll take their questions first before moving on to the online questions. Just a reminder, if you want to ask a question, please type them into the question box on your webcast panel. I will then address them in the Q&A session. With that, I think it's time to get started. Panu, please go ahead. Good morning also on my behalf, and welcome to our Q2 presentation. I will start my presentation, first of all, with the operating environment. Then we will jump into the report published this morning, so highlights from the financials and also from the strategy execution. We will have market outlook and guidance and then key takeaways at the end. As Elisa mentioned, we will have a separate Q&A session after my presentation where CFO Jesper is also joining with me and available for questions. I start with the operating environment, the consumer electronic market here in Finland pretty much stayed the same. It has been muted for quite long period of time. We did not see significant changes in the consumption or discretionary shopping. We did see some early positive signs. If you look at the consumer confidence, it started to improve during the second quarter and during June time, it has been the best since three or four years. If you look at consumer's own views on economics, it has been going into the right direction during the second quarter. With that, in a muted market, we were still able to report decent growth figures, and we gained market share. If you look at the revenue development, the growth was driven mainly by our online business, which is the key part of our business. 71.5% of all revenue is generated through our online parts of the business. The strongest category, the strongest segment was our B2B business, which was growing by over 18%. During the second quarter, we have season sales regards to spring and summer sale. It is not a huge season for us, but it's still important part of our business. We were successful in our commercial operations during that period of time. Once again, the key highlight in growth perspective was our international business growing by as much as 63%, driven by our success in the Swedish market. If you look at the Finnish market, our spearhead of the strategy, fast delivery capabilities, is gaining momentum, is gaining our market share, volumes again growing significantly during the second quarter by 45%. It now amounts to 30% of all online sales. We have been systematically working on our margins. It's good to bear in mind that previous year gross margin had the positive impact of our consumer financing business, which we sold last year. That negative impact is bigger than we have currently the delta to previous year. We have been working hard to mitigate the loss, we are getting closer and closer to previous year levels. With dynamic pricing, successful commercial activities, also the season sales, improved supplier terms, better negotiations from that side, but also category management and healthy inventory are contributing positively to our margins. The profitability was obviously positively impacted by our volumes, growth with good margin levels yielding in gross-profit improvement. At the same time, cost efficiency improved. Again, some increase in personnel costs, other operating expenses going more down than that. In total, cost efficiency was improved, and this all yielded into operating result EUR 2.5 million, comparable operating result of EUR 2.4 million. Clear improvement to previous year. We have been stacking up certain categories during the first part of the year. We saw that there will be increases in component-driven categories. We have done wisely so. The overstocking in certain category has been mitigated with positive category management and inventory management activities. We are now actually on lower level and absolute figures than we were previous year. We have still good availability in those component-related categories, that will be a positive impact going forward the third and fourth quarter. Overall, the inventory turn has improved, and the inventory is on a really healthy level currently. On financials, obviously the positive execution and operations are reflecting in our balance sheet as well. Cash flow was a strong one, significant improvement to previous year, obviously related to the inventory level development. Net debt on a low level, if you exclude the lease liabilities, it's even on a negative side. Strong cash position and equity ratio now almost at 25%, significant improvement to previous year. Low amount of invests as we have an investment-light business model. Few additional notes. First of all, we have been refinancing the business during the June time, now we have rolled over the EUR 15 million term loan and EUR 20 million revolving credit facility if there's a need for that in case. Secondly, we started, it was probably one of the fewest, maybe the first, share buyback programs of the company, amounting to a total value of EUR 5 million, and it's ongoing as planned. Thirdly, due to the really good financial position of the company and good execution, the board decided this morning that the second installment of the dividend will be paid out with EUR 0.048 per share. Thank you all investors and owners for your support. Few words about the strategy execution. We are proud in the way that we are transforming the Finnish consumer electronic market and being the trailblazer in making fast deliveries the new norm. Like I said, the volumes grew by 45%. Even more important for me personally is that more and more consumers are adapting to this new way of shopping. The customer base increased as much as 65% during the quarter. We have also slightly expanded the coverage of fast deliveries, now we are really dominant with this approach to the market. If you look at the areas where we are offering fast deliveries, almost half of all online sales are tied up to fast delivery capabilities, that is huge. Secondly, we are proud to be the market leader in the Finnish market. We are gaining market share, this is not enough. We want to have additional growth outside of the Finnish market. We have been systematically building these capabilities, and the international business grew by 63%, driven by the success in the Swedish market. In the Swedish market, we have platform partnerships with CDON and Amazon. Both were contributing positively during the second quarter, as well as our own channels, where we are selling directly to the Swedish consumers. We have a positive development in our partner network in Central Europe, so we try to find always new good partners where we can distribute our high-qualitative products. We are building the brand that is standing out also when comparing best in breed, so not only in the Finnish market but internationally as well. We are proud to see that our marketing efforts are being recognized internationally as we won the Silver Lion in Cannes for our TikTok currency viral payback campaign. In addition, our customer experience is benchmarked to the best in class, not in Finland, but Nordics and Europe and globally. We were renowned to be best in Finland, best in electronics in general, and third overall in Omnichannel Index during this year. What do we expect from the latter half of the year? Like I said in the beginning, we see the first positive signs of a recovery. The consumer confidence, most of the time has been a leading indicator, which is then transported in consumption and discretionary shopping. That is the one. Secondly, consumers' confidence in own economics is also going in the right direction. The bank institutes' views are also expecting GDP to starting recover. Probably it will be a slow and gradual improvement, not something abrupt, but these are positive signs that should be transported in consumption. Regardless of the market, we are confident that our business model stands out, and we are able to gain market share and have growth regardless of the market development. Therefore, there's no need to update our guidance. We do believe that we will be having a growth year this year, and the comparable operating result will improve from previous year. Previous year, the level was EUR 14.8 million. If I sum up the second quarter, it was totally in line with our own internal expectations. The market is showing the first signs of recovery, but that didn't have any positive impact on consumption during the second quarter yet. We maintained our growth path and gained market share while working on our profitability, cost efficiency leading into this EBIT improvement. As we are doing it, at the same time, we are transforming the Finnish market. We are executing our strategy and gaining momentum outside of the Finnish borders. Thank you all, and now we will jump into the Q&A. All right. We're now ready for the Q&A session, and as mentioned in the beginning, we'll start with the questions from the live audience. I saw Maria had your hand up first, so let's start with you. Can we bring the microphone to Maria? Maria. Yes. Thank you. Maria Wikström from SEB. I had two specific questions. First one is on the price inflation that you're currently seeing on your recent purchases. Given that you quite a lot sold your already little bit higher inventories that you took in the beginning of the year. Now when you go to the market again, what kind of price inflation you see across different categories? Well, thank you, Maria. It's a good question. Like I said in the presentation and during the first quarter, we were doing additional purchases in certain categories where we had the view that the prices will be going up towards the end of the year. We still have a good amount of those carrying in our inventories. That we are below the previous year is basically mostly due to the reason that we had the successful season sales. We have been selling through better grills, ACs, ventilators, and these kind of products. That has a positive impact on the total level of inventories, as well as obsolete stock is on a healthy level, and certain category management decisions are also positively impacting. We have still a good position if I look at the availability and going forward to the third quarter, where we have the first really big season back to school and back to business. Obviously, we are already preparing for that, and the preparation started already at the end of second quarter. What kind of price inflation, if we talk about this, especially the components, where you were expecting that you are going to see these price increases and therefore you were stocking up ahead of the curve. What kind of price increase inflation you would see there? Well, currently, we don't see any significant movements at the moment. The biggest movement we saw at the beginning of the year as the category of components where the prices somewhat doubled or fourfolded, for example, in certain cases. I think those are already in the prices that we see in the market at the moment. If nothing extraordinary happens, we don't, at the moment, expect any significant price increases anymore. Let's see how the market evolves. Okay. My second question is about your success in Sweden. If you could a little bit discuss what kind of actions you think to facilitate this growth in the second half of the year. Just to catch up on the, you talked about the direct sales channels in Sweden. Can you describe what were these direct sales channels besides CDON and Amazon platforms? Yeah. If I start with the platforms. Like I said, in both of them, in CDON and Amazon, we had a positive development. What we have done, I think we have also learned how to operate and how to maneuver in a platform. What is the pricing and then how do you campaign there? What kind of marketing is needed? What kind of categories, what kind of products at what time are demanded? Learning from the customer insight and then perfectioning the operations. We are getting better and better at that. We have also slightly expanded the assortment in both cases. Certain categories don't necessarily have the same development in Sweden and in Finland. Sometimes you can have positive outcome in Swedish, while the market in Finland, for example, is on the other direction Secondly, I think we are pretty much faster than we were before. In best cases, it takes two days to be fulfilling an order from the Amazon site to our products. When we started it, some cases took even six days or five to six days, which is not acceptable. We have been addressing the supply chain and the last mile in those cases. Being faster is the second. Thirdly, probably as people are seeing us there and seeing our products, the trust starts to build up and you get more momentum on the customer base. I think both parties also had improved their performance. Our products were better to be visible and we had better traffic. A lot of smaller things, smaller commercial things regarding that. We are selling through our daughter network, e-ville.com, directly to Sweden. For example, TV categories is quite big in that channel. The customer is ordering from our site, and we are selling it directly. Obviously, we are utilizing same delivery network as we probably have for the other ones, as all products are fulfilled either from Jätkäsaari or from our Voutila outsourced warehouse. All of these, they are basically about the same size, and all of them had a positive impact yielded in Sweden in total to be doubling the revenue. Perfect. Maybe one more, if you could give comments on the good success in B2B sales in the quarter. Yes. Well, there are many drivers. If I start in general, I think we have been more successful in utilizing the strength that we have in consumer business, also transporting that into B2B business. The fast deliveries is also a key competitive advantages for many businesses, or at least should be. This is the easiest way of making sure that your people, your employees, are having the devices they need for the work. Secondly, we have had some positive new clients, new mid-size or bigger clients in the Finnish market. Thirdly, also the international B2B business was successful. On many fronts in small mid-size, in bigger companies. It was quite broad-based, the growth that came. We are not executing in these big tenders, so there was not a big tender that we won and had the big one-off, for example. In those, we are not currently representing, and that's not impacting our business. Arttu Heikura from Inderes. I have a few questions. First of all, do you have an estimate on the market growth during Q2? We don't. The figures for June, at least yesterday, were not in. Before that, I think it was flat. We believe that it was close to flat. The whole quarter? Yeah, we believe so. Okay. You said about the June that it was a little bit better in terms of the market or consumption. What is your view on the market development after Q2? Well, like I said, the early signs are out there. It seems that every morning you need to look in the newspaper to see if there's something happening geopolitically, which then might be impacting barrel prices, or then you see some turbulence in Europe or interest rates, for example. Those typically have impacted the consumer confidence. It seems that the consumer is somewhat also decoupling their own confidence from these geopolitical shocks because it seems that they are the norm at the moment. It's always something happening. If all these take place and the consumption is positively impacted by the consumer confidence, then you will see that in discretionary shopping, and that will be a positive boost for the Finnish economy during the second quarter. This is what the Bank of Finland is anticipating, and this is what we also believe that could be happening if we see some continuation in these positive drivers. There will be salary increases still to come. The purchasing power of the Finnish consumers should be on a positive side. All right. As in Q1, the gross margin declines on what due to this divested finance business and campaigns. Could you describe more clear that which one of these had the most impact on the decline? Well, the decline for the second quarter was more from the consumer financing business than the overall decline was. There were underlying improvement beneath the 16.6% margin. Dynamic pricing, better commercial terms, healthy inventory, all those contributed positively. Also good to note that the campaign activity was still fairly high during the second quarter. The good and successful actions that we executed then offset the impact of those, and we got closer to that previous year level despite of the consumer financing divestment. What do you see the development in H2 given all these factors? Of course, reliant on the market environment, but we have positive momentum ongoing. The actions that we are executing are yielding results as we saw now in the second quarter. Of course, the anniversary of the consumer finance divestment is coming closer. We closed the divestment in September. In that sense also the comparison is more equal in the second half of the year than in the first half. All right. Last question. The other operating expenses also declined some 10%. What were the main drivers behind that decline? The biggest driver was the consumer finance investment or the divestment. Of course, good cost discipline. We still grew close to 6%. There are lines on operating expenses that increase in relation to volume. Despite of that, we were able to offset that with the good cost discipline that we had and with the benefit of the consumer finance divestment that we did late last year. One thing to mention also, we continue to invest into marketing. It's not that we would have cut marketing spending and get the result that way. We continue investing in our brand and in our awareness. All right. Thank you. Good. We move on to the online questions. We have a few from our analysts. Mika Karppinen from Danske had a similar question to Maria's about our inventory level and component. I think we don't need to do that again. Sanna Perälä from Nordea Markets had a question about the operating environment. Can you elaborate more on the operating environment? How was it different from Q1? Was it in line with your expectations, and how about the competitive environment? Yeah. I can take that. I think, well, it was pretty much what we expected. If we look at the first part of the quarter, it was quite similar to the first quarter. We saw some improvement going towards the end of the quarter. Typically that you have then you see on traffic volumes and how the behavior is on the site, et cetera. We have a lot of metrics to be utilizing and analyzing on what is the customer activity. Slightly improving towards the end of the quarter, but a big significant tailwind was not happening, was not to be seen, but maybe that the headwind was getting milder. I think that is probably the best way to put it. Yes. Sanna's second question is, what in the seasonal sales succeeded well? Were you satisfied? We were satisfied. I think, well, we don't typically want to talk about the weather, the Finnish people don't. This year, I think that the weather was in favor of selling air conditioning, fans, and those categories. It seems that the Finnish people started to grill again. The grilling category in general was a positive one. Certain other categories that we have for spring and summer, it's not a huge season for us, but it is important. It is a positive growth driver, and it's also a positive margin driver. If you are able to sell those categories for the planned normal price through and you are not forced to start campaigning or sales activities, summer sales activities already beginning of June, for example. The delta on margin is quite big. Overall, we were really satisfied with that season. Good. Sanna's third question is about our inventory. How do you view your inventory level now and ahead of the back-to-school campaign? You do not see a risk in the inventory building. No. Not at all. Maria was questioning that did we utilize all the power we had during the second quarter? No, we have still good levels of stock with good commercial terms when purchased in. We are happy with the situation. I think we are really well suited for the upcoming season. Good. Sanna's last question. After H1, your EBIT should grow at least 3% in H2 to reach your guidance. How do you plan to achieve this? Well, I think we have the same activities and the same components which we have had for a certain period of time. I think we have displayed that we can gain growth while improving the profitability side of the business. All the growth drivers are adding positively on our EBIT and actually adding positively on our EBIT margin. Growth makes sense for us. We don't purchase sales, or we don't over-invest margin to gain market share. We have been somewhat decoupling our EBIT from the price environment. We can mitigate certain areas where we need to invest with other areas where we can have then healthy margin. Systematically doing the things that we have been doing and finding new growth channels outside of the Finnish border, continuing gaining market share in the Finnish market. I think in B2B, I think I said it in the capital markets day or during the first quarter, I think there are opportunities. It's not that, okay, I said it and now second quarter we have 18% growth. I think we still have opportunities in the B2B segment to be more dominant in that market. In a way, we are in a consumer financing business. In addition, I think we have not overperformed when it comes down to additional services or retail as a media. All of these are really high EBIT contributors. There are a lot of opportunities still that we can benefit from. Good. We have a few questions from Miika Ihamäki from DNB Carnegie. This one is mostly about categories. You indicated that demand began to improve towards the end of the quarter. Was this improvement broad-based across categories in June or focused in specific areas? Additionally, has trading in early July continued at a similar pace, increasing your confidence that the demand environment is improving sustainably? I will start with the latter part of the question. I think Jesper mentioned it or was it myself? The current momentum is the same that we have seen during the end of the quarter. At the moment, what we know and what we understand is that it might be getting into the better direction if looking at consumption. At least all the activities that we have started and all the efforts that we have put in are yielding positive results. Therefore, we are confident that this will be maintained, at least our approach will be maintained. If you look then more specific towards the categories, like said in the report, obviously, we are not matching the levels in entertainment basically due to TV sales last year. We are losing levels of sales in those categories quite significantly, but we are mitigating that with other categories. Household appliances, small domestic appliances are doing really good. Also relations to the season sales. IT, we have been doing really well for many, many years. We are the clear market leader in IT, in PCs, in laptops in general. Other categories are showing maybe a mild positive impact. Components, on the other hand, are not on the level that they were last year because of the price increases, but it's not a huge category as such. We can mitigate if there are two, three or four categories which are not contributing positively as we have a broad-based category with a lot of growth drivers at the moment. Good. Miika's second question is about other operating costs that were partly answered already. Looking into H2, is it fair to assume that other operating costs will also decline or are there areas of cost pressure? Well, for the second half of the year, of course, the seasonality is a big driver in the other operating cost, especially marketing. Somewhat depending on how much we decide to invest into marketing will be then visible on the other operating cost. Of course, our aim is to continue driving the business lean, cost-efficient. That's not going to change. Of course, we will assess the market situation and the investment needs while we go along during the second half. Good. We have a question from Sanna. Where exactly do you still benefit in terms of cost discipline? You already have very lean operations. Right. Well, I think every company can always improve. It's not a big secret that we are a quite technology-driven company, and we have internal development work ongoing. Obviously, we are in a really good position to utilize technology, analytics, automation, and AI. There are a lot of components in our business where we can scale the business really, really nicely. We don't need additional people. We don't need additional hands. Most of the processes are being worked on and they are automated. We still have some room to go, I think with this kind of business, we can have significant amount of growth and not be in the position that we need to increase labor or any parts of the business. We have volume-related parts of the business in logistics and some in sales, those are getting smaller and smaller from the impact to the total levels of our cost position. Well, secondly, we are always looking in all parts of costs. Is there something that we can negotiate, or can we utilize the position of the company or the volume growth when negotiating with our partners? Not only suppliers, but other partners as well. We are big in last-mile and logistics and deliveries, obviously, that gives us a good momentum when we're negotiating. Thirdly, we don't need any additional fixed cost, meaning warehouse locations or store locations. Big part of the business is really fixed in relations to cost. The additional growth is really scalable. Thank you. Mika has another question about our guidance. What are the key risks that could prevent you from achieving your 2026 guidance of higher comparable EBIT? Well, I can take that. We don't see currently any key risks. Obviously, risks in general are if something big happens in the geopolitical landscape, which then impacts the consumer behavior. That is always a risk in retail, which nobody can mitigate. I think we have decoupled ourselves from the fluctuation that we have been seeing throughout the years in demand in general, that we are in a position to gain growth besides the market development. It's therefore also immense important that we have international growth. It seems that the Finnish market is the most muted in most of the cases. Swedish market at the moment seems to be fairly doing good. There is good underlying demand, so we want to utilize that. Norwegian market or Danish market or Swiss market or Central European markets. The markets are always different, therefore, it's important for us to have that in addition, to be not that dependent only on the Finnish consumer landscape. Good. Thank you. That was it for the online questions. Do we still have questions from the live audience? No. This brings us to the end of this Q2 webcast. If you have any further questions, please contact us at Investor Relations. Just a reminder, we will publish this presentation on our investor website shortly after this. Thank you