Hello, and welcome to the Axfood Webcast Host Teleconference Q1 2022. Throughout the call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I'm pleased to present CEO Klas Balkow and CFO Anders Lexmon. Please go ahead with your meeting. Thank you, and good morning, everyone. Let me also thank you for joining today's call. As you heard, with me today is our CFO, Anders Lexmon, and we are both happy to present to you the first quarter report for Axfood. In the investor section of the Axfood website, you will find the presentation for today's call. A recording of the call will also be made available on the website. With that, we'll start the presentation, and please turn to page number 2. Now, to our agenda for this morning. First, I would like to provide you with a brief market overview, and I will then go through the first quarter performance for Axfood. I will then hand over to Anders, who will take you through our financial position. Following Anders' part, I will give you a brief update on our strategic agenda and also give you an update on the integration of Bergendahls Food. The last part of the presentation is a reminder of our outlook for 2022, and after the presentation, we'll open up for questions. Please go to next page. Let me now start by giving you a brief update on the recent market developments. Let's again move to next page 4. During the quarter, the post-pandemic shift in consumer behavior has continued. The change in consumer behavior was especially accentuated from mid-February and forward following the easing restrictions. We have seen a strong recovery for the café and restaurant market and as well the service trade. We also see in-store traffic picking up where central urban store locations have had especially strong increase in traffic. Cross-border trade towards Norway has made a comeback during the quarter, and Norwegian consumers are yet again traveling to Sweden to shop for groceries. However, e-commerce is still struggling to meet very high comps, and it's negatively impacted by customers returning now to physical stores and the overall strong recovery of the cafe and restaurant market. Please now go to next page, number five. Let me also take a minute to reflect on the current situation in Europe. The people of Ukraine are enduring a tragedy and a humanitarian catastrophe brought by the Russian invasion. In this serious situation, naturally, we are trying to help those that are most affected. Currently, we are contributing by various initiatives and are donating to and cooperating with established organization with a presence in Ukraine. However, the current situation in Ukraine has not had much impact on the food supply so far. It causes increased instability and makes future market impact difficult to predict. Please turn to the next page, number 6. One of the consequences of the situation in Europe is food price inflation. The inflation increase has escalated during the quarter to higher levels. There are several factors causing this, for example, the significant increase in fuel prices, transportation, fertilizers, and energy, but also currency fluctuations. More expensive raw materials and increased cost of packaging is also driving the inflation at this stage. Please go to the next page number 7. Let's now go through the market development in more detail. The graph on the left side on this page shows market growth rates on a monthly basis year-over-year. The graph on the right side shows quarterly food price inflation year-over-year. The market growth has been affected by negative calendar effect due to late Easter and high comps for e-com. Market growth for the first quarter was 1.3%. The graph on the right in this slide shows that the inflation rate continued its upward trend during the first quarter and amounted to 3.9%. This development was driven by price increases across most categories and escalated during the quarter as the inflation rate in March was 5.8%. Please turn to next page number eight. On this slide, it shows the monthly growth rates year-over-year for physical stores and online, respectively. As evidenced by the data, there has been a continued pickup for physical stores driven by increased traffic, mainly in the city centers. However, the trend for growth in e-commerce has been weak, mainly due to high comps. But compared to pre-pandemic numbers, share of e-commerce sales have more or less doubled. That sums up the market overview. Can I please ask you to go to the next page, number nine? With that, we will move into Axfood's performance during the first quarter. In short, it has been a quarter with strong growth, continued market share gains, and increased earnings in all segments. Before I go into the key ratios, let me just start by commenting on the divestment of Mat.se to Mathem, so please turn page. The merger was approved by the authorities in February and completed on the first of March. The capital gain for this transaction totaled 221 million SEK and was reported in Q1. Axfood's holding in Mathem is classified as a financial asset measured at fair value through other comprehensive income. Mat.se was divested in exchange for shares in Mathem, which gave Axfood an ownership of 16.5% in Mathem and made Axfood the second-largest owner of Mathem. Since the completion of the transaction, Mat.se operation has been transferred to Mathem, and the long-term delivery and cooperation agreement between Dagab and Mathem has entered into force. Logistics and warehouse operations are gradually being transformed from Dagab to Mathem. I will now comment on the first quarter development in more depth, so please go to the next page 11. Our total retail sales grew strongly at 4.1% during the first quarter, which is clearly higher than the market growth rate of 1.3%. In the online segment, we continue to outperform the market, although growth was negative at 16.6%, while growth in the market was negative at 19.1%. When we extract Mat.se, our online growth during the first quarter was negative at 11.4%. Please turn to next page 12. Our total net sales grew by 25.7% during the first quarter and amounted to SEK 16.6 billion. Bergendahls Food, which was acquired on October 1, 2021, contributed SEK 2.5 billion for the first quarter. Net sales, excluding Bergendahls Food, increased by 6.6%, mainly due to strong like-for-like sales development in Willys, solid like-for-like in Hemköp, and strong increase in Snabbgross. E-commerce sales was down mainly due to high comps but also increased traffic in our stores. With that, please move to the next page. Our operating profit amounted to SEK 835 million in the first quarter, and the operating margin was 5%. Reported operating margin includes item affecting comparability of net SEK 182 million. Adjusted operating profit, excluding items affecting comparability, amounted to SEK 653 million compared to SEK 565 million last year. The increase in the adjusted operating profit was supported by increased operating profit in all business segments. The consolidation of Bergendahls Food resulted in a dilution of the operating margin, excluding items affecting comparability of -0.4 percentage points. In all, I must say a strong quarter with higher profit across the board. Let me now walk you through segment by segment, so please turn to next page 14. Let me then start by commenting on the Willys segment. Net sales growth for Willys amounted to 5.4%, and like-for-like sales increased by 4.1%, a development well above the market. We saw a significant improved performance of Eurocash during the quarter, even though sales levels are not yet quite back at reported levels before the pandemic. Our operating profit increased to SEK 367 million behind positive like-for-like and less losses for Eurocash. Please go to next page, 15. With that, we are moving on to the Hemköp segment. Our efforts in strengthening Hemköp continues, and net sales increased by 2.2%. Total store sales growth was 1.6%, and like-for-like growth was 1.3%. Total sales stores as a development slightly above the market. We saw a solid like-for-like growth for the group on Hemköp stores, mainly due to increased traffic at stores in central urban locations. Our operating profit for Hemköp increased to 66 million SEK, and the operating margin increased to 4.2%. The increase is mainly attributable to positive like-for-like sales growth and good cost control. Let me now comment on Snabbgross, so please go to next page, number 16. Once again, Snabbgross had a great quarter and reported its best first quarter ever. First quarter net sales increased by 26.9% in total and 24.7% in like-for-like sales. The strong growth is partly attributable to low comps, the easing of pandemic restrictions, and an overall favorable market development. With the positive development in like-for-like sales, Snabbgross operating profit more than doubled in the quarter and amounted to 30 million SEK. The operating margin was also sustainably higher at 3.2%. Please turn now to page number 17. With the contribution from the acquisition of Bergendahls Food, sales for Dagab increased by 26.8%. Even excluding Bergendahls Food, net sales growth was strong at 5.6%. The sales growth was driven by increased sales to group food retail concepts, as well as increased demand within the cross-border trade and the service trade. Overall, a solid performance from Dagab in the first quarter also combined with a very high activity levels in many areas. Moving on to Dagab's profitability. The reporting operating profit of 429 million SEK, including items affecting comparability. As previously stated, the divestment of Mat.se resulted in a capital gain of 221 million SEK, which was reported in the first quarter. Also, Bergendahls Food integration cost of SEK 33 million and SEK 6 million connected to the restructuring of the logistics operations are items affecting comparability. The adjusted operating profit amounted to SEK 247 million, and the adjusted operating margin was 1.6%. The consolidation of Bergendahls Food resulted in a dilution effect of the adjusted operating margin amounted to 0.1 percentage point. With that, I let you, Anders, guide you through Axfood's financial position. Please go to next page 18, and over to you, Anders. Thank you, Klas. Let me begin with the cash flow for Q1, and we are now on page 19. We continue to show higher operating profit compared to last year, mainly due to the capital gain of SEK 221 million from the divestment of Mat.se. However, excluding this one off, we saw a strong underlying performance in all operating segments. We have a positive deviation of SEK 275 million in net working capital compared to last year. This is mainly explained by this strong development in accounts payable. The investing activities for the period increased with SEK 273 million compared to last year, mainly due to our automation investments in Bålsta. The AGM decided the total dividend for 2021 to SEK 7.75 per share, an increase of SEK 0.25 per share compared to last year. SEK 4 per share was paid out in Q1, and the remaining amount of SEK 3.75 per share will be paid out in September. To summarize, the total cash flow for the period amounts to SEK -356 million, which was in line with last year. Let's then go to page 20. Total investments for the first quarter amounted to SEK 531 million, 239 million higher than Q1 last year. The investment in our retail operation was below last year, mainly due to lower pace in acquisition and establishments, and refurbishments was in line with Q1 2021. Investment in our wholesale operation increased with SEK 312 million, mainly due to automation investments in Bålsta. The investment in our joint operation was slightly down SEK 10 million. Let's turn to page 21. During Q1, the net working capital as% of sales was -3.8%, a setback of 0.1% compared to 2021. The net working capital is negatively impacted by the UTP regulation and the dilutive effect of the Bergendahls transaction. Despite UTP, we have continued our focus on working capital with improved payment terms on accounts payable, and our SCF program also helps us increase the accounts payable. Going forward, we will focus on continuing our efforts to mitigate the UTP effect and the dilution due to the Bergendahls and City Gross acquisition. Let's then turn to page 22. Looking at net debt, excluding IFRS 16, we have increased net debt position with SEK 412 million in Q1 to SEK 1,648 million. This is mainly explained by the dividend payout of SEK 836 million and the automation investment that I mentioned before. The net debt EBITDA ratio remains unchanged at 1.5, and the equity ratio decreased with 0.8 percentage points to 17.6% compared to Q1 last year. The decrease in the equity ratio is explained by the Bergendahls and City Gross transaction. Let's then turn to page 23. The capital employed increased with approximately SEK 3.2 billion compared to Q1 last year, also that due to the acquisition of Bergendahls and the RCF drawdown of SEK 1.65 billion at the end of March. Return on capital employed was 26.5%, which was in line with Q1 last year. Let's then turn to page 24. In line with previous communication, Axfood is planning for a share issue of SEK 1.5 billion with preferential rights for existing shareholders. On the 23rd of March, the AGM authorized the board to complete the rights issue during the second quarter this year. The share issue will ensure and maintain a long-term strong financial position for Axfood. The majority owner, Axel Johnson AB, representing 50.1% of the shares, has undertaken to vote in favor of the board proposal. That, Klas, was the end of my presentation, and I thereby hand over to you again. Thank you, Anders, we are now at page 25. Let's now move into the strategy part and the focus areas going forward. Please move to the next page 26. On this page, you can see the six growth promoting and inefficiency enhancing priorities that we work with to become the market leader in affordable, good, and sustainable food. Today, I will focus on just three relevant topics within the areas of customer offering, supply chain, and sustainability. Please move to the next page 27. Related to the customer offering, to have a relevant offer, price value is key. Maybe even more so in uncertain times when many consumers face increased interest rates on their mortgages, volatility in electricity prices, and fuel price inflation. To safeguard price value, we are continuously streamlining and increasing efficiency throughout our supply chain, in our assortment, purchasing, and warehousing, as well as distribution. Also, we have a constant ongoing constructive and proactive dialogue with our suppliers and daily alertnesses in finding alternatives due to factors such as shortages, pricing, and transportation problems. Due to current changes in the market in the wake of the pandemic, current inflation levels, and instabilities in Europe, we expect the product mix to shift. Customers will move away from their normal basket as consumer prices changes, and exactly how this will pan out is yet to be seen. Moving on then to the supply chain part, and please go to the next page number 28. Here, I would like to comment on the integration of Bergendahls Food into Dagab, and that this part is proceeding well in line with our plan. As previously communicated, expected synergies are SEK 200 million on a yearly basis from year 2025. Let me also remind you of the estimated integration cost of SEK 120 million in 2022, of which SEK 33 million were reported in this first quarter. During the quarter, a common sourcing and business organization has been established, while we from now on will refer to Dagab Hässleholm instead of Bergendahls Food. As a next step, the Hässleholm warehouse integration will be started in the end of this month, and the integration of City Gross 42 stores will start in May with the first pilot. An e-commerce integration will be starting end of 2022. I must say a tremendous work is being done by many employees and in all aspects to make this integration as smooth as possible. Let's now move on to the final part, sustainability, and we'll go to next page 29. It's important that in uncertain times like this, we need to keep up the pace and level of ambition in our sustainability agenda. I will mention now just few of our initiatives that we've done in this quarter. Today, we have announced the procurement of a solar power facility made up of more than 16,000 solar panels, corresponding to approximately 80,000 sq m of the roof of our new logistic center in Bålsta, outside Stockholm. This will be the largest roof-mounted solar power facility in Sweden and another important step in our green transition. The expected yearly production from the facility is 7.8 GWh. In addition to sustainability initiatives in our own operations, we also engage in industry-wide solutions. One example of this is the declaration of intent concerning increased material recycling of, for packaging of frozen products that became a reality during the quarter. Axfood's first product with more sustainable packages are already actually available in both Willys and Hemköp's freezer cases. In the quarter, Axfood has also engaged in supporting the new Swedish platform for risk crops, where more than 20 participants represent a large part of the value chain. This is a network where the members share experiences and update skills to reach sustainability improvements. Focus now is on a more sustainable production and consumption of risk crops such as soy and palm oil. Finally, I would like to highlight that Axfood has been awarded by EY She Index for the important work we are doing to put our core values related to diversity and inclusion into practice. These are just a few examples of sustainability initiatives in the quarter. Now please go to the next page 30. I will now turn to the outlook for 2022, and the guidance we gave last quarter is changed. Let's go to page 31, and we'll go through it. The 2022 operating profit will be charged with certain structural costs associated with the transition of the new logistics center in Bålsta outside Stockholm and the integration of Bergendahls Food, totaling approximately SEK 340 million. The majority of these costs are expected to be incurred in the second half of the year. Capital expenditures are expected to amount to between SEK 2.6 billion and SEK 2.7 billion, excluding acquisitions and right-of-use assets, of which SEK 1.3 billion pertains to Bålsta. 100 million SEK pertains to the nationwide warehouse for fruit and vegetables in Landskrona, and 110 million SEK pertains to IT costs related to the acquisition of Bergendahls Food. The investments in our logistics operations are mainly related to automation. As a reminder, we plan to increase the rate of expansion to establish 8-13 new stores during 2022. With that, please turn to the final page of this presentation, page number 32. To sum up, the first quarter of 2022 has been a quarter with strong growth and solid profitability in a market difficult to predict. We have strengthened our market position, and we are happy to see the customer base continue to grow. The integration of Bergendahls Food is proceeding according to plan, and the activity level is high in all parts of our business, and we see good progress in our investments for the future. That ends the presentation from our part today, and I'll now hand over to the operator to open up the line for questions. Thank you. Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero and one on your telephone keypad. We have a question from Fredrik Ivarsson, ABG. Your line is now open. Please go ahead. Thank you very much. Good morning, Anders and Klas Morning. I've got three questions. Let me take them one by one. First one, maybe on the pricing environment. Do you believe that you can sort of fully offset the price increases that your suppliers are asking for? Because, I mean, it seems like there's been a sort of a discrepancy between purchasing prices and consumer inflation for quite some time. If you could talk about that. Well, I think this is obviously the topic at this stage as we're coming from a period with low price inflation in Sweden, and now we're seeing a significant increase. It's actually started also before the Ukraine and the war in Europe that has actually escalated this inflation pressure. Currently we are working on this constantly. As you're all aware, we are, you know, somewhat low margin business across the categories in our industry. If I look at historical data, the pricing will be more or less transferred over time. Obviously this is a constant work at this stage where we're also working right now with suppliers to make sure that the primary production is getting, you know, paid in that aspect. We're also working with the general pressure on the inflation to handle that to make sure that we also are still very competitive, and we offer the consumers as good price value as possible. We are in the early phase of this. Yeah. Yeah, I appreciate that. Second question, on the underlying margin in Willys, because it seems like the actual underlying margin, if we adjust for Eurocash, was down by around 50 basis points, if I do my math correct. That is despite a quite decent like-for-like. Maybe can you explain what is driving that underlying margin contraction? Well, I'm not sure you're absolutely on the spot there, but we're still making losses in Eurocash. Obviously we are also coming from a very very you know I think most likely some of the highest like-for-likes that we met. We have one of the highest comps from last year. Obviously we are meeting a very strong quarter last year in that aspect. We you know we are very confident with the performance of Willys and how they are operating at this stage, and we will continue to drive. We are pleased to see that sales is, you know, we are gaining shares despite, I must say that we also are having, you know, a fairly large calendar effect in this quarter as well that makes the quarter somewhat difficult to compare as well. I don't think there are any major concerns there. Maybe just a follow-up on that one then because I think we discussed Eurocash losses last year in the tune of like SEK 60 million-SEK 70 million and in this year you say almost breakeven or slightly loss-making, but that should be a delta of like SEK 60 million. It seems like really the underlying margin is decreasing. Or what am I missing? I think you are missing that in the end of the quarter we are closing up to a breakeven, but we had fairly large losses in the beginning of the quarter. Okay. Not breakeven for the full quarter? No. Okay. Understand. Good. Last one, on Dagab. You say higher fuel prices impacted negatively. Can you give any sort of numbers to that statement? I'm not sure we need to go out with that, but I mean, we have some significant fuel prices and also some negative currency in Dagab that has, though, been offset by, I think in terms of overall good productivity work within the organization, but also contribution from Dagab Hässleholm. Obviously we are clearly with the high fuel prices, we're also negatively affected, but this quarter we were able to offset it. Yeah. I think fuel prices obviously accelerated throughout the end of the quarter. All else equal, we should expect those sort of headwinds to accelerate in Dagab going forward, right? I think so. Also, I mean, it also swing back a little bit and, we also seen the currency to swing back. It is a changing environment out there. Yeah. Sure. That's perfect. Thanks a lot for answering my questions. That's all. Thanks, Fredrik. The next question is from Daniel Schmidt, Danske Bank. Your line is now open. Please go ahead. Yes. Good morning, Klas and Anders. Continuing on the food inflation topic, which of course has accentuated the question of consumers trading down, going into 2022. Are you seeing that? What is sort of the underlying growth for Willys if you exclude Eurocash in this quarter and also make the correct comparison to last year? Well, first of all, I think as I said, going forward now, I think you are on the spot now that we need to follow and we need to track consumer behavior fairly closely. We see shifts in consumption, various products, and how this will impact moving forward. It's a little bit early on that. I think that price value is gonna be even more important, relates that to you know, the low price concepts as well as price positioning in terms of our products like private labels, et cetera. Yet we, I mean, we are in the early stage of it. I mean, the first quarter here is almost 4% price inflation and it increasing in March. Again, major shifts now is somewhat too early. There are also obviously consumers that is more attracted to campaigns going forward. We need to keep an eye on this obviously very closely. Related to, as a reminder, you know, when we reported the downturn on Eurocash, it was around 2-2.5 percentage points in impact. Obviously we are getting back to that effect now. I mean, if you're not up in full scale yet as we comment on the report, but we are getting back up on that level. Willys has a very strong quarter, but even extracting Eurocash effect is significantly above the market growth. All right. That's interesting. When you talk about sort of shifting product mix or expecting the product mix to shift, are you insinuating also that sort of private label will get an additional boost, or is that in your thinking? I think we are very open-minded, Daniel, at this stage, and I think, of course. I think, in general terms, we will see price value be even more important. Obviously that could play out in the product mix. Private label is one area, but also other areas in terms of you're shifting certain, you know, products from one to another in the vegetables or fruits or whatever that will be. We are very alert in terms of that we are now expecting a somewhat different consumer mix. How this will pan out could obviously. It's a bit early to say something about it, because we are basically right in the middle of it. Yeah. When we talked about sort of compensating for input cost inflation, you said that, looking back in history, we have been able to compensate over time. I think I asked you this question last time as well. Is there any reason to believe that this time is different compared to history? The short answer there is probably no. I think that if you look at our industry it is a very, you know, competitive but also low margin industry and with the rates that is now happening, I think it will be reflected unfortunately to the consumers. Just on that sort of, obviously fuel prices accelerated through the quarter even though they came down a bit as of late. At the same time, the Swedish krona has strengthened quite a bit versus the euro as of late as well. Do you think that those two effects even each other out as we stand right now in Q2? On the spot, Daniel, I have not calculated on it, I must admit, but obviously there are some time lags on this as well. Sure a bit. Also, what happens next week? We don't know. No I don't have an answer on it. No. Maybe into a more important topic then. I think you laid out quite nicely sort of the schedule for the buying of food, the integration with the sourcing organization being established in March and integration obviously in April and so on, City Gross in May. You did sort of, I think if I remember correctly, 130 people received notice in mid-January. Where are you in that process? Given what you laid out, should we expect synergies to start to be visible as of second half of this year? Or when should we see that? I think it's a fair assumption. I think as we have highlighted in terms of the synergies going forward and we have no, you know, other thoughts or that we will not be able to reach them. We are well in plan, I must say. Just to, you know, comment on the progress moving forward, we are converting now the warehouse and then starting in May with stores that will continue up till, you know, mid-fall somewhere. It will take some time obviously, and then it will take time to trim in everything and so forth. We are positive on the plans that we are doing. We work very closely with City Gross and have a good cooperation there, and look forward now to make sure they can also go into our systems and we can work together within our platform. After we've done that, which is naturally, then you start also to trim the operation, so to speak. Given the notice that you've given. Mm-hmm What you're saying in terms of trimming the organization and then trimming in sort of all different parts of it, does that mean that gradually through the coming months you will be less people? Or is that something that will have sort of first effect in the autumn? No. Yeah, it will be more in the autumn 'cause obviously we have worked with the organization. We are now outlining the new roles. We are having, you know, so we'd add more roles in Dagab and the members, the staff is still there. Yeah. They will still be there for some time, and then, but gradually then in the fall, move out. Okay. All right. Thank you. That's all for me. Thanks, Daniel. The next question comes from Niklas Ekman, Carnegie. The line is now open. Please go ahead. Thank you. Yes, a few quick follow-ups here. Firstly, on food inflation, we've seen obviously a very dramatic increase here from just 2% in January to 6% in March. What do you anticipate? How high can this go in the short term? Can it be double digits within the next two, three months? What is the magnitude of food inflation you see now? Morning, Niklas. I think this is the tricky part to answer, and I've obviously had this question several times this morning already because the inflation is driven by many factors at this stage. We saw some start of the inflation as you point out, which was, you know, kind of pandemic effects and now the war has increased this pressure. Impacting factors will be fuel, will be energy, will be raw materials, will be in terms of how what will happen with within the season in terms of how it will work out for the farmers. I cannot give you a number actually. I think it's trickier right now to give guidance on that more than. At this stage we see the pressure is there across the board, and if you look at raw materials across the board today, they are fairly high or really high. Obviously then that how that then lays out in terms of price increases, we'll have to see and follow and track. Okay. Sure. Sure. Fair enough. And a question on Eurocash. When you say that it's not yet fully back to pre-COVID levels, are you referring to the full quarter there or even the end of Q3? Kind of by the end of Q1 and going into Q2, is Eurocash closer to kind of the 2019 level? Yeah, yeah, we are getting into some of it. To be clear then, I'm referring to we are getting close by the end of the quarter. The quarter is as we started, you know, the restriction was fairly high in January and so forth. The last few weeks, if I'm being extremely detailed, was, you know, getting up to almost close to the before the pandemic broke out. Again, it's also a bit tricky with this, you know, seasonal effects and all of that to see how that will go. We are very pleased to see the overall, you know, positive momentum and obviously hope that that will continue. The answer, end of the quarter, we are getting closer. We're talking ten weeks, but for the quarter, we are not there yet. Very clear. Thank you. A question here also on the competitive landscape here. Obviously, you've been gaining quite a bit of share here, particularly with Willys for some time now and with ICA and Coop falling behind. Are you seeing any initiatives by your peers to try to reverse that trend? Is that something that could maybe prevent you from making the price hikes that you are required to do? Well, I think that kind of you know been there five years, and I think we've now been able to have a fairly good progress. It's more than it's many things that is obviously affecting. I think we are you know working hard with our stores. We're working hard with our customer offer in many aspects not only price. Now I think everyone has a high focus on price value and sustainability across the board in our industry. I'm sure the competitors are also working on the same path. In terms of their initiatives, I have to refer you to ask them. Fair enough. Thanks a lot for taking my questions. Thanks, Niklas. The next question is from Daniel Olovsson of DNB. The line is now open. Please go ahead. Yes. Good morning, Klas and Anders. Thank you for taking my questions. I had a few questions also around the food inflation and, starting with, what inflation you are currently seeing in your input cost. I'm thinking here a bit about the lag between the inflation we see in commodity prices and before you end up in your COGS, so to speak. In this quarter, in Q1, how much of the food inflation that we're seeing in commodity prices do you already see now, or is that something that you expect over the next, one or two quarters? That's the first question. Thank you. Well, we are obviously from somewhat competitive reasons, we are not disclosing more than what you see in terms of the inflation pressure that is out there. What we can say is, we are, you know, we are fairly similar to what you've been reported out in the market in terms of price pressure. You relate to what's happening at this stage. Obviously as we have some significant increase for certain raw materials, and there you may know that we have a time lag in terms of our pricing processes. We have moved away from that pricing process in certain areas where we are making sure that the price increases actually is very much related to the primary production which is important obviously from a Swedish point of view. We've already started to open up that very early. In that aspect, we're already now seeing effects on the raw materials that is happening in the market. Perfect. Thank you very much. Then another question. I was actually going back to 2008 when we had a kind of a food inflation period. I think that Swedish food inflation by then reached 8%. When I look at the two quarters when that kind of happened in the market, Willys actually took a lot of share and the margins was up about 100 basis points, then 40 basis points next quarter year-over-year. For Hemköp, you basically saw a loss of market shares and margins were down quite a lot. I'm just thinking about how the business looks today and thinking about back on that period. Is it fair to expect a similar progression this time around, or do you see anything big that has changed since that period? I must admit that I've looked at the numbers as well to see, but I was not part of the time, as you know. Obviously, when we see these shifts, one part that is important is obviously to keep control on your own costs, and particularly also making sure that staff hours is in order. I think if you look at it as you see now in the report in this inflation time, Hemköp is performing well and actually is performing better than the market. Also, I must say having a good cost control. Obviously it's important to when you have these, you know, fast or quick changes and cost pressure, you need to keep a very close eye on it. One question also on the inflation that you see on the rent and wages. I'm not sure if there is any rent inflation given that what you have seen in the retail space overall over the pandemic. If maybe you can comment on those two cost inputs or cost factors, if you see any large inflation in any of them. Well, the rents are, you know, they are index related, so we're not seeing, you know, that doesn't impact on that, particularly at this stage at least. What was the second one you said? Wage inflation. Wages. Wages, all wages is also, you know, we have that part is set for this year, and the changes is set from the, I'm looking for the word in English, kollektivavtal. That is set now, and it's been implemented, slightly above 2% that comes now in the spring. The next discussion on that will be next year. Perfect. Great. Then just one question also on the private label side. We have seen some international players, retail players talking about that share coming up quite significantly. If you would see the same, could you mention what is the difference or give any rough idea between your private label margin and when you sell third-party goods in your stores? It varies a lot obviously, but in general terms, obviously, when we sell private labels, we have a, you know, a slightly better margin, but it also varies actually between different products. Also fair to say that as you know, we also in our private label is affected by significant increase in raw materials, et cetera. Overall, if I generalize it in general terms, it's not a disadvantage to have a strong private label sales. Okay, great. Just one final question also. I was thinking about the quite ambitious project now for your solar panels, et cetera. Is that having any impact on CapEx, few years out? Is that anything that you can guide on already today? I can guide you on that it will not have any CapEx impact, because it is a PPA deal. We have committed to buy the energy from the panels over a long period of time, which obviously gives a good energy prices and also obviously good for the environment. There is no CapEx involved. Perfect. That's all my questions. Thank you very much. Thanks. The next question is from Magnus Råman, Kepler Cheuvreux. Your line is open. Please go ahead. Thank you. A lot of questions and answers already, but just to follow up on synergies, you then expect annual synergies of SEK 200 million from 2025. You mentioned here before that it's well on plan. Would you even say that integration and synergy extraction is happening at a quicker pace than you originally expected? Good morning. I am not surprised, and I expected the question, but I must say that as I think I also pointed out in the presentation, that it is an early stage at this stage. I would like then to come back to that part. Because we are just about to convert the warehouse operations, we are just about to start the conversion of the stores and integrate the stores. We are positive about the plans, but to be honest, I want to see it happen now and to see that it works out well in good progress. Before I can make any comments on how and fast the synergies will roll in. All right. Fair enough. Then also on private labels, we had a lot of questions here and you stated just recently that of course you have a better gross margin percentage-wise on a sold sort of private label item compared to the comparable A brand product. But you would also then of course sell this item at a lower revenue point. If we would speak about actual gross profit per item, is it fair to assume, of course generalized, as you say, it varies a lot product by product, but generalized, it also derive a better gross profit in absolute terms on private label compared to an A brand? It's very difficult to give you a crystal answer on that because obviously it's about in terms of you know how we are attracting how we're able to fill the basket. I want to state that, and I think it's important to say that I think that the mix here is important to be able to have a very attractive offer to the consumers. We are pleased to have the good mix around this. It may be so that the mix will change somewhat, but I think the mix may change within private labels and A brands. But also to think most likely it will also have a mix shift within the A brands and a mix shift within the private labels as well. As you're obviously saying, if you're selling a lower price product, general terms, your sales is almost slightly lower obviously. Now you're coming into gross profit, it obviously depends on how different that part is. It's very difficult to generalize. Yeah. The reason for asking is I think there was an example at some point from Anders Lexmon regarding this calculus that maybe we can come back to that. I also just wanted, when you talk about product mix as you've all already done a lot as well, I mean, if there are negative effects from moving out of sort of higher margin type of goods to lower margin goods as one effect and then a move into private labels as another effect. Even if it's early days, as you say, your best assessment is that that type of mix shift would possibly be at the benefit of you with the concepts you have? I don't see at this stage at least a negative, but again, it's early, so we'll have to see how it falls out. Great. All right. Just a final question. I asked this before, but it relates to the rationale behind the now decided share issue. I mean, you have a very low net debt to EBITDA if we exclude leases at 0.4x and you generate positive cash flow. So what is the reasoning behind actually performing this rights issue? Should we view it as the fact that you want to maintain net cash position excluding leases as a strategic sort of priority for you or can you comment on that? Well, Magnus, we have a history of a very strong balance sheet and we want to continue to have that over time. This rights issue is perfect for us to continue to have a strong balance sheet going forward as well. May I even add on since you have seen after we announced, you know, part of this as well, that we have the acquisition of Bergendahls, but we're also continuing to invest not only in the logistic center in Bålsta but also in Landskrona and in Gothenburg. We have some strong investments going forward that we look forward to. All right. Thank you very much. Thank you. Thank Thank you, Magnus. There are no further questions at this time. Speakers, please go ahead. Well. We- Sorry. Sorry. We just received another question from Daniel Schmidt, Danske Bank. Okay. Go ahead, Daniel. Thank you. Just two short ones. Starting with the Mat.se, which was deconsolidated as of first of March. Could you give us any indication of what sort of the contribution on EBIT was in January and February from that business? Well, we didn't disclose the contribution when we had it, and I'm not really going to do that now either. I think that we've been fairly open in terms of it's been a loss-making, and you're seeing it's more or less similar to the other players in the industry, and you've seen the volume. With that, I think you can make a fair assumption on it. Yeah. No reason to believe that that pattern changed as of late? No. No. That's maybe you usually don't comment on the current quarter, but given the discussions that we've had on the border trade, it was almost back to normal or pre-pandemic levels by the end of March. Now it's sort of been through Easter. Any reflections of that progress into April? You're touching on the Q2 now, but it's probably the only one I've been a bit open about is your cash in terms of after the quarter we presented. I could be stating the same things. We are pleased with the continued development. Having you know Easter is also a big event for the cross-border trade as well. As much as I can say, I think it's been a good progress. We hope now that that will continue. Good progress also continuing after Q1. Just following up on that, given that you did say that you did make a loss in Q1, and I can understand that given January, but then again, a good recovery from February and onward. Is there any reason to believe that if this business returns to pre-pandemic levels, that the profitability that you showed before the pandemic would not be reached? No, I don't think there is any reason for that. If we are getting back the volumes, I think we should be well in line with that. I think maybe a reminder for all of you that you know cross-border trade has some seasonal effects. The large parts is more around the summer versus the winter time. Obviously there are some lower volumes during the first quarter and even if we're getting closer, it is not really the most profitable quarter we have in a normal period. That's all for me. Thank you. Good. Okay. Thank you. Thank you. Operator, any other questions? There are no further questions. Okey-doke. Let me thank you all for listening in, and thanks for a lot of relevant questions. Hope you all have a good day. Thanks a lot. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.