Hello, everyone, and welcome to StrongPoint's Q&A session, following our Q4 results. My name is Ian, and with me, I have our CEO, Jacob Tveraabak, and our CFO, Marius Drefvelin, to answer your questions. First of all, if you want to ask more questions while following this stream, you can do so with a button in the bottom left corner of the presentation. So we have some questions that have been sent in already. So first of all, for you, Jacob, obviously, it's been a tough quarter. Do you have any additional comments to the Q4? Sure. Yeah, I mean, clearly, this is a weak result that we're not very happy about. It should be said in the quarter, though, that it's very, very, very rare that we operate with one-offs, but there's actually this quarter, we actually have some one-offs. One of the one-offs just wanted to get it out there has been the restructuring cost following the announced cost reduction that we have been going through now in Q4. So as of January 1 this year, we'll be having a cost base of NOK 20 million less per annum than we had earlier. And of course, there are some severance pay and restructuring costs following that in the order of magnitude of NOK 7 million. And then we've had internal write-down of both an IT system as well as some inventory. So, whereas the results, you know, are not good, there are some explanations for why they end up where they did. That said, you know, even without these non-recurring items, we are ending up at slightly negative and obviously not where we want to be. So, as an investor, of course, you're asking yourself: Well, then what? You know, why is this happening, right? You know, I think we're right now seeing the effects of, on the one hand, at least a delay or a halt in investments by grocery retailers. While on the other hand, we are investing in very significant breakthrough customers, of which we have only to date been able to announce one of them, namely, Sainsbury's. So we believe that it's the right kind of investments to do, although it hurts us very much now also in the short term. All right. Thank you, Jacob. The next question I'll direct to you, Marius. Why are you not paying dividends as you have been doing for so long? Certainly. So this is a combination of a few things. I think, first of all, we have received a covenant waiver from our bank until the Q4 this year. This will ensure that we will not breach our covenant for the next quarters. And while having a covenant, it is not possible for us to pay dividends. Moreover, we've had, obviously, a challenging financial performance in 2023, and finally, and perhaps most importantly, we have to prioritize the and complete the ongoing commercial investments, which will generate future revenue. All right. There's one more question here about the non-recurring items that you mentioned as well, Jacob. The question is: Can you talk about the non-recurring items in Q4? Sure. I think, Jacob touched upon it. It consists of two, two major cost items. It's the severance pay and the, the M&A costs. Both of these were completed in the Q4 with the additional restructuring costs. And secondly, obviously, as a project-based business, we have had some, pressure on the inventory levels, i.e., we have done a write-off on certain parts of the inventory. And there was a, as Jacob mentioned, an IT infrastructure project, which has been fully written off in Q4. All right. There is one question here, Jacob, about obviously, a tough quarter, but what were you most happy about? Well, I mean, in isolation, I mean, obviously, you know, the revenue growth that we've seen in the Baltics and Spain, with 22% and 35%, respectively, is something to be happy about. That's where we want to be. But I think maybe even more so is the underlying traction that we're having, that, you know, we cannot yet show or reveal, I would say, unfortunately, to investors. But those are some of the both major projects that we have been talking about in the past. You know, we have the Iberia project and others, but also the buildup of a organization, both in the UK and in Spain, to enable us to really grow into these areas where there is so much potential for us, both in the medium and longer term. I think that's the, those are the things that makes me most proud of in the Q4. All right. Mentioned in the quarterly presentation that there has been a challenging market. Can you comment on the current market and outlooks? Sure. I mean, to a large extent, we experience being, you know, hit by the grocery retailers' investment hold. I mean, it, you know, we, we've said before, and I'll be happy to say again, I mean, the grocery retail industry as such is a resilient industry. I at least have yet to hear about any grocery retailer going bankrupt or being in any such shape, right? You know, we don't really have any losses on accounts receivables, as an example. But that said, we're seeing grocery retailers holding back investments, and they have been doing so for many quarters now. I both believe that the investments will come at some point in time, regardless of how the macroeconomic environment goes or if it's the same as today. But obviously, also with improvements in the general economic climate, you know, inflation coming down, as an example, you know, in general, for us. So difficult to say that there is an immediate switch now that we just changed year. It'll have to come and will come at some point in time, and regardless, right? We have very solid customers that are not just willing to, but sort of have to invest in technology going forward. That's part of the solution of staying ahead in the industry. All right. Thank you, Jacob. We have a threefold question that has been sent in now. I think I'll just take them in order. The first one is the U.S. pilot status. I guess they want to have a status on the U.S. pilot currently ongoing. For you, Jacob. Okay, sure. Excuse me. So U.S. pilot, I mean, that's the click and collect locker pilot that have been ongoing for quite some time. You know, I'll be very careful about sort of making any kind of promises, but let's put it like this: you know, we wouldn't be keeping on a pilot and having that on unless we were positive about the outcome of that. We have to respect these are very significant grocery retailers, and as we've seen in the case of Sainsbury's, this kind of maturing of the client and investment decision, an ink on paper takes time. It has taken time already in the UK.... U.S. already, but I'm still positive about how this pilot will be unfolding over the next few quarters. Very good. The second question sent in here is about the Iberia order. We've said several times that it's very soon, something is coming. Could you give a bit more or give an update on that project? Yeah, I mean, I completely understand the market questions regarding the Iberia order. Those of you that have been following us would recognize that, last year, when we did the strategy update session, we had the unfolding of full CashGuard Connect. And we honestly believed that we would start the pilot in store during Q3. Obviously, that didn't happen. There's been a number of predominantly internal reasons for why that hasn't emerged. This is a product development jointly with a very significant customer, and it takes time to ensure that we have the performance that both we and the client is happy about. But I'm absolutely certain that we will get there as well. So I'm not gonna tie myself to a sort of timeline without sort of saying that, you know, we will be seeing, we will be seeing and communicating, something which I believe is going to be absolutely, very well received and, and, and revolutionary in the cash management market in not too long now. Very good. I'll see at the questions here. There is one question here regarding Pricer ESLs in, in Finland and UK. They're asking: "Is StrongPoint the only supplier of Pricer ESL in, in those two markets? Well, first of all, I think it's a question to, to Pricer, but from what we know, we are the only supplier of Pricer ESLs in, in Finland. In the UK, which is such a big market, I'm actually not sure about the very latest status. Clearly, when you have very big customers or, potential customers, Pricer themselves are also involved. But we are certainly is, the most preeminent and, and most significant partner in, in both these two countries as well. Okay, and I think the next one should go to you, Marius. Also with a couple of questions in the same message here. But first of all, what is the chance of breaching the loan agreement and a follow-up stock emission, you reckon? So, obviously, we cannot speculate in either of these two. We appreciate the question. What we can say is that we will work quite hard to stay and remain within the covenant reporting, which again, starts in Q4 at the end of this year. It is important for us to complete these investments that we have spent so much time on. As far as a share issue, it's not something we can comment on specifically, and that's a, you know, question that is reevaluated if commercial opportunities come up or any other events from that perspective. Okay, thank you. And, see, the Iberian deal has already been answered, so I'll skip that one. And, next question, also to you, Marius. When will we see revenue of the Sainsbury's deal? Certainly. So, so this is coming back to being a pure software deal. And with this kind of project, especially with this one, which is a significant project for us, there is new functionality to be developed. There is a need to onboard, not only from our side, but also to have a successful customer success team on the customer side. So to answer more specifically, this will be there will be revenues in 2024. There is a need to plan and roll out the current service for the next 6-9 months. And then when this has been done, there is obviously, as with any other major software rollouts, a need to have time to be fully onboarded once we start to roll out the software. And then obviously, it's a matter of the number of transactions, et cetera, that will materialize from 2024 and really create a visible, pure software-related, recurring revenue for us going forward. Let me just elaborate on that, just a bit on what you're saying, which is, of course, 100% correct. I mean, as this is a significant project to be rolled out, fortunately, we also have some professional services revenue, but of course, that's not the reason why we did this deal. The deal itself is very both important and profitable for StrongPoint. It sort of gives back on the investments that we have been doing for many, many years. I do also want to put on the lenses of just looking beyond, you know, quarters and maybe even 2024, is the fact that this is the first solution we're delivering to Sainsbury's. And if we believe that we will be able to serve Sainsbury's in the same way that we have been serving other grocery clients over many, many years, there should be a lot more potential. I'm saying that both because some of the solutions we offer communicate together. You know, one of the very evident one is the sort of electronic shelf labels and the pick-by-light, combined with order picking. It's a very natural and value-adding service or solution for the customer. And also because that when we look at the number of solutions we have been providing other grocery retailers over time, that's not one, but actually it's 4.7. So if you take the top 10 grocery customers we have today, we serve them on average 4.7 with 4.7 solutions, and that obviously should and will be the aspiration also for Sainsbury's over the years to come. All right, thank you. Let's see. There is a question here regarding AutoStore. Simply saying, AutoStore update. You have anything to update on there, when it comes to that, product area, Jacob? Sure. I think in terms of, in terms of, AutoStore, we are now finally putting in place the last touches on the, on the software and the, and the test runs of the Haugaland Storhusholdning, frozen or three temperature zone, zone AutoStore. Obviously, that with, with frozen capabilities, that will be, first of all, magnificent for the customer, and secondly, also a, a true, a true testament for what we're able to, to deliver, right? So I have high hopes that, that, the first, frozen AutoStore solution will also gain interest with other, customers, elsewhere. So that's, that's one. And then secondly, as I said earlier, as we're gaining or, you know, building our organization, gaining traction on the client discussions we're having both in the UK and Spain, we're sort of seeing a nice pipeline, sort of building up also for AutoStore here. So we'll obviously get back when we have something concrete, but I'm sort of positive about the general outlook for how that will turn out. Very good. I see there's coming in quite a few questions here. The next one here is regarding Finland. We fairly recently announced the acquisition of a company there, and the question is: What can we expect from Finland in the coming years? Well, so Finland is exciting. So we did the acquisition of Hamari Group, the Pricer partner in Finland. Obviously, the reason why we looked into Finland is because we believe we have a number of solutions for which the Finnish market is ripe. Maybe contrary to what many believe, you know, Finland has more in common with a country like Estonia, rather than Sweden. So when we look forward at the prospects in Finland, that's going to be something that's going to be done together with the Baltic organization and Estonia in particular, rather than the Swedish organization. That's on the sort of managerial and operational side, but we are, of course, very, very positive about how the Finnish market is, not only for electronic shelf labels, but also for e-commerce. Despite Oda pulling out of that market, there is a growing e-commerce market with the major grocery retailers there. We have our Vensafe solution, our self-checkout solution, other solutions that we own ourselves that we are very prosperous about getting into the Finnish market. But again, it's Finland, 5 million people, so when you compare the long-term potential of that market compared to a UK market, obviously, that's smaller. But we've seen that getting good cash penetration in Nordic countries is something that can provide significant value for StrongPoint and obviously our investors. Very good. There is one here regarding our 2025 goals that have been communicated over a longer period of time. The question here is: Why are you scrapping the goals for 2025 without replacing them with something new? Wasn't it a few weeks ago when you repeated the goals in a presentation? So it's correct. We—you know, since February 2020, we have been communicating our 2025 financial ambition of NOK 2.5 billion Norwegian kroner revenue and 13%-15% EBITDA margins. What we've now seen is that... Well, first, firstly, there's lots that has happened between 2020 and now, right? You know, pandemic, war, and now an inflation and interest rate regime not seen in many, many years. And when you, on top of that, get a delay in some of the major projects, and what I'm talking about then is, in particular, the Iberia project, but just projects taking longer, then we saw it as necessary to inform the market that reaching the 2025 ambitions as we set them is going to be very challenging or unlikely. That doesn't mean that, you know, we're totally scrapping them. I mean, what we're talking about here is mostly about sort of providing more time. It'll take more time to achieve the ambitions that we've set, and of course, with that, a revision of the targets. And so whereas I would have hoped that we could sort of provide that immediately now, we also want to make sure that we have a solid foundation for what new ambitions should be, and not least, also what kind of timing we're talking about. So we'll get back to that in the strategy update session that we have in April, along with the Q1 and annual general meeting. But it's a delay. It's a resetting of ambitions, but it's not a complete scrapping of ambitions. I mean, it's pretty much following the same path and trajectory that we were hoping for earlier. Okay. So everyone make sure to tune in on the strategy update session in April, then, for more, for more information. Moving on here, there's quite a few more questions coming in, so I'd like to thank everyone for their engagement today. This one perhaps for you, Marius. Question is: In your report, you comment some of our customers are continuing to postpone the implementation of planned projects. The projects have not been canceled, are expected to be delivered when the market conditions improve. Can you please elaborate on this and your understanding about what will be the trigger for these investments? So we think this is mainly market-driven, and we have seen this, basically since last summer of 2023, for the previous 6-9 months. The projects that have been in pipeline and even what we could refer to as order intake have not necessarily been canceled as such, but our customers are obviously prudent in the current market conditions. And this relates to financial, not necessarily instability, but there is a need to see a more stable environment going forward for our customers. Now, I think it's important to repeat that obviously it's not a funding issue for our customers as such. They have solid balance sheets and, definitely, a spending environment where they could do it. But usually, in these kind of markets, it's quite natural for the customers to be prudent and, and, maybe postpone some of the classical or typical investment cycles. So I think that's one aspect, and kind of the next question is what will trigger these investments going forward? Well, it comes back to the, the inflation, the interest rates, obviously. But what we have seen is that, history has shown us when you have a routine of doing investments and you postpone for a certain amount of time, there will be a catch-up effect, where these investments have to be put back together. Replacing the products that are not necessarily out of life, but have to be refurnished and, and remodeled. And with that, also, we have the service revenue. Obviously, we cannot say exactly when this will be. We are seeing some positive signs, but it depends on the markets as well, as we have been explaining throughout the report. All right. Thank you, Marius. Let's see, there's one more here as well. On your backlog, you commented that the 2022 was strong due to pent-up demand during the pandemic. Did any of these tailwinds also affect 2023, or is 2023 normalized and can be viewed as trough levels, and you will grow from here? Sure. So, so 2023 is not normal. Just take that straight off right away. I think, you know, what we've seen in the market since, since the pandemic, or since the sort of last wave of the pandemic was first a boost in a way, because there was a lot of investments that were put on, put on hold, and there were also a lot of, a lot of, shop fitting work that was pushed out in time. But when the pandemic was then or the, the restrictions from pandemic were released, we saw a, you know, massive, growth in, in, in, in the market. Now, going into 2023, more than sort of pandemic, it's been the sort of general economic environment. Most of our customers have seen a revenue growth, but a volume decline, meaning there is a tough market out there, also for grocery retailers. People or general wholesale is holding back investments, and that's affecting what we're seeing now. So it's clearly not a normalized or expected market that we see right now. Right now, there's more uncertainty than ever, at least in many of the industries that we serve, but also in general, in the countries that we are operating in. All right. Thank you, Jacob. Let's see here. There's one question, one question, regarding Vensafe. The question is, we've had many Vensafe pilots in the past with no results. What can we expect here? Okay. So I think, you know, this is, this is exciting. I mean, Vensafe, in particular in Norway and partly in Sweden, has always been the natural way for, for customers to purchase, tobacco, in particular, cigarettes, snus, as we call it. That's the natural way of, of buying it. And to some extent, we've in a way struggled to get the Vensafe out to other markets when that's been the use case. To explain, as an example, you don't sell tobacco in grocery stores. You go to specific tobacco stores. And in the UK, there's a myriad of regulations that needs to be solved, and typically, tobacco is sold over a specific or dedicated service till, a tobacco till, separate from all the other tills. So there's been all these challenges with Vensafe for tobacco sales. Now, you know, one fortunate, if I may put it like that, event for a company like StrongPoint is that what's being observed in the market is the rise of theft. And that rise of theft is, it's seen across all markets, but it's most prevalent in the UK, where theft is a significant industry challenge. You actually see CEOs rallying up to ask the government for more measures to combat theft. Some of our customers are actually equipping their staff with video cameras, like American police officers would have, to avoid their customers... Sorry, to avoid their employees getting into issues related with theft. So my point is that it's very, very high up on the radar, and what we're seeing now is a use case for Vensafe, not for tobacco as such, but also for high-value items. And that is obviously a new use case for Vensafe, but it's very exciting. And when you compare with other kind of theft prevention solutions out in the market, we're very prosperous about what we can actually achieve with Vensafe there. Okay, very good. I see the clock is now 11 exactly, so I think we need to close it there. But again, I'd like to thank everyone for sending in their questions, for all their engagement, and we'll talk next time.