Welcome to the LMK Group Q1 2023 presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to the speakers. CEO Walker Kinman and CFO Erik Bergman, please go ahead. Good morning to those of you joining us for this presentation of the first quarter results for the LMK Group. My name is Walker Kinman. I'm CEO of the LMK Group. I'm joined by Erik Bergman, our CFO. We're going to give you a short intro on the company and then take you through some prepared remarks on the first quarter development and financials before opening up for questions. First, a little bit about the LMK Group, and our business. For the past 15 years, we have been transforming people's eating habits and thereby define our purpose as innovating the mealtime experience. Our local brands in Norway with Godt Levert and Adams Matkasse, in Sweden with Linas Matkasse, and in Denmark with RetNemt all have a rich history of entrepreneurship and innovation, all geared towards making our customers' lives easier. Our focus is on delivering delicious, well-balanced, and inspiring meals that make cooking a joy while also promoting good eating habits, and freeing up valuable time for quality family moments at the dinner table. We take the stress out of meal planning and shopping so our customers can focus on enjoying their meals. Our meal kit business model is demand-driven. That allows us to maintain very low inventories and minimize food waste generated in our operations. Our local chefs and dietitians create recipes that reflect local taste preferences while offering the broadest selection of recipes available in the markets where we operate. We provide a highly personalized customer experience across all our brands, powered by our in-house technology platform. The customer experience we deliver capitalizes on AI technology, driving, for example, meal selection options, and our recommendation engine. This level of personalization is supported by the capability to produce each order individually using pick-to-light and automated production solutions. Our supply chain is well established, strong, and scalable, enabling us to efficiently purchase and distribute our products in each country where we operate. Furthermore, we are constantly integrating our supply chain, enabling us to take advantage of sourcing opportunities across the Nordic region. Turning to slide 5, let's talk about some of the highlights for the quarter. As we reported in our trading update, net sales for the first quarter landed at SEK 287.8 million, which was down 17.4% on a common currency basis for the same period last year, but a reduction from contraction rates we have seen in previous quarters. We noted last quarter that Q1 would mark the final comparative quarter that was affected by COVID infections in the Nordics, restricting travel, and public events. Much of the year-over-year contraction is due to this factor, combined with the general macroeconomic weakness that has affected e-commerce and online food retail. Our contribution margin climbed at 31.6%, which was up 7.2% points from last year, which is a fantastic number in this industry and puts us well on track to hit close to 30% on an annualized basis. Because of the solid contribution margin, reductions in G&A structural costs, and a more efficient marketing spend, we delivered an adjusted EBITDA result of SEK 24 million compared to a loss of SEK 4.1 million in Q1 of last year, an improvement of SEK 28 million despite lower volumes. Average order value on a common currency basis increased by 13.6% in the quarter, largely due to price increases, and delivery fees introduced last year. Order frequency saw a decline of a bit over 13% in the first quarter. Increase in the total number of new customers, and the weight of new customer sales during the quarter, combined with a return to normal winter school holiday routines, as well as the general macroeconomic situation, explain the change in order frequency. All else being equal, a mix shift towards more new customers will lower order frequency due to high early cohort churn rates. Let's focus briefly on the overall question of profitability. In the new financial targets that the board released together with the last report, we noted that our immediate priorities were to be self-financing and to stabilize and then profitably grow volumes. Our return to meaningful profitability in Q1, combined with a contribution level that stands out in our industry, should help alleviate any concerns about our commitment to be self-financing. We have not taken any shortcuts, and it has taken time to readjust our cost structure to lower volumes, but we are there. This, in turn, gives us further confidence to continue issuing dividends, and focus on the stabilization, and return to growth on the top line. Let's turn to this question by looking first at market developments. The recent interest rate hikes by central banks in the Nordic markets have resulted in significant increases in homeowner variable rate mortgage expenses. Coupled with inflation and economic uncertainties, these macroeconomic issues are expected to continue affecting consumer purchasing power for some time. Public indexes we track in Sweden and Denmark have shown a continued contraction in the online grocery market in these two countries, and we expect that to be similar in Norway. Online groceries were down a little over 14% in Sweden during Q1. The data in Denmark lags a bit more, but we can see it was down 13% in January, and 5% in February. During Q4 last year, it was down 11% in Denmark. For the first quarter, this meant that sales by market showed a local currency decline in Norway of about 19%, in Sweden of around 10%, and in Denmark, just over 30% during the quarter. We have identified three must-win battles to stable and profitably grow volumes that we shared in our last report. The first of these is to increase marketing excellence with the ambition to drive efficiency and lower costs for customer acquisition and retention, which I'll discuss briefly on the next slide. Due to our focus here, during the first quarter, we saw a 14% increase in new subscriptions versus the same period last year, despite a reduction in sales, and marketing costs of SEK 14.6 million. The WeightWatchers partnership announced last year has exceeded expectations and accounted for a significant portion of the increase in new subscribers. This highlights how partnerships and closer work with third parties, such as WeightWatchers in Sweden, Rode and EVO Fitness in Norway around the health and wellness space can be an important way to drive new subscribers and traffic to our websites. We are changing our ways of working, and one example of this is different themed menus that we are now rolling out across multiple brands with common marketing creative content, as well as go-to-market activities that lower the cost profile of these efforts. Since first announcing our focus to increase marketing excellence, we finalized the rewrite of our website's technical platform, which was completed in Q1. This common structure, as well as code libraries, allows for a much faster development cycle across all four brands simultaneously and has helped solve some of the basic tracking issues that have hindered us from being more effective in the placement of performance marketing, as well as enhancing our search engine optimization efforts. Last week, we took the first step of many in upgrading our telephone program, making it easier to send invitations across social media, SMS, and other links. We further have closed the feedback loop by allowing customers to track when their friends have taken their first order, also triggering their own benefit. This is an example where new functionality using a common code library are rolled out across all brands at the same time, enabled by changes to the technical platform. Let's take a closer look at our second must-win battle, our effort to cultivate epic customer experiences. Operational excellence is central to the customer experience, and this has been a recurring theme for us since I joined LMK Group. It remains a decisive factor in minimizing errors that affect the customer, driving higher operational efficiency, and lowering costs related to food waste inside and outside the meal kit. The cost savings benefit of operational excellence further allows us to reinvest in a better customer experience and is the foundation of a sustainable business model with sound financials. During Q1, we continued to see further improvements in efficiency with a sequential improvement of 6% from Q4, more importantly, demonstrating a 31% increase in deliveries per hour of production labor compared to Q1 last year, despite lower volumes. The change is largely a result of systemic work by our hardworking production teams to improve efficiency, this is after the recent implementation of 100% custom printing production, as well as an introduction of in-line menu printing technology at the start of last year. Steps to improve efficiency often resolve issues that also cause problems for the customer. We have also been pleased to see that complaints across our brands, as measured by% of deliveries with a recorded incident, were down by 1.5 percentage points in Q1 versus the previous year. Credits to customers due to complaints are less than 1% of net revenue. We also saw a relative improvement of roughly 30% decrease versus last year here. Finally, to help minimize the lead time for the customers, the weekly order cutoff date for Linas in Sweden was changed in Q1 from Monday to Tuesday, making it more competitive for new customer acquisition and customer planning. The third must-win battle we have identified is to increase delivery volumes in Denmark. A week and a half ago, we announced the acquisition of customer relationships from a competitor in Denmark. This transaction allows us direct, exclusive access to just over 3,000 active customers of Kokkens Hverdagsmad as they have chosen to exit the meal kit space and will discontinue deliveries in mid-May. We have already seen a solid increase in new account registrations since the effort began to migrate those customers to our RetNemt brand and remain optimistic that this will help drive higher volumes. The technical platform changes discussed earlier directly affects our efforts to increase volume with improved conversion, better tracking tools, improvements in search engine optimization, and better affiliate performance. Increasing delivery volumes in Denmark has a clear intent in the near term to return to profitability in this market. With that in mind, we have also been working diligently to improve unit economics and optimize the cost structure of our operations in Denmark, and we saw operating profit before depreciation reduced to a SEK 1.6 million loss in Q1 compared to SEK 9.3 million in the same period last year. With this, let me now turn it over to Erik to take us through the financials. Great. Thank you, Walker. Good morning, everyone. We can move on to the next slide. I'm pleased to present the financial update for the first quarter of 2023. As you will see from the report, we have achieved some positive results. Net sales for the first quarter amounted to SEK 287.7 million, which was 17.4% lower than last year, adjusting for exchange rate differences. The macro environment remains challenging as external macroeconomic trends, and declining consumer sentiment continue to affect demand. Active customers were 16.1% lower than last year. Acknowledging the tough macro environment, we are glad to see a more efficient marketing during the period, where we saw new customer acquisition being 14% higher than the first quarter last year. Order frequency was down 13.4%, driven by the mechanics of having a lower active customer base than last year, at the same time as we see a higher new customer inflow, as new customer cohorts tend to take fewer deliveries. Order frequency was also affected by winter school holidays in the Nordics, where we saw a more clear return to historical subscription pausing patterns. We had an increased average order value by 12.2% or 13.6% adjusting for currency. This was to a large extent driven by price increases. During the last 12 months, we have increased prices of 11%-16%. This is below the annualized food inflation that we see in our markets. Let's move on to the next slide to see some trends for our active customers. Yeah, so we are excited to share with you some insights from our report, where we noticed a positive trend in our active customer growth. We mentioned in the report that we saw sequential growth in active customers. I want to spend a minute to explain what we mean with that, and why we talk about it. In the year-over-year comparison, we saw a decline of 16.1% in active customers. However, Q1 shows a trend change where we achieved a sequential growth of 18.4% from the fourth quarter. This is something that we haven't done since the first quarter in 2021, as you can see in the graph. The reason for us to highlight this KPI is that it is an indication that we are on our path to revenue stabilization. Let's move on to the next slide with the contribution margin. We are very proud in delivering contribution margin of 31.6% for the quarter. This was an improvement of 7.2 percentage points versus the first quarter last year. This was a great effort throughout the organization being in control of our unit economics. The margin was helped by the price increases, that is not the only factor. As I mentioned in the previous slide, price increases during the last 12 months did not fully meet the annual food inflation. Several initiatives have been successful to contribute an improved contribution margin. These initiatives includes Nordic sourcing agreements, menu control measures, increased logistics efficiency, and continued production efficiency gains. As an example, product... production efficiency as measured in deliveries per hour increased by 6% from the fourth quarter, and was up 31% compared to the first quarter in 2022, despite lower volumes. Another example is that due to the more efficient logistic with route optimization, we have managed to limit increase in our average logistic cost per delivery to only 2%, despite the high fuel inflation seen across all our markets. Let's continue to the next slide, looking at the profitability. As we announced in the fourth quarter release, we achieved a EBITDA profitability in the first quarter, with an adjusted EBITDA of SEK 24 million. We are focused on being on top of our of our unit economics, and we maintain a disciplined cost structure. Although net sales was SEK 65.1 million lower than last year, the improvement in contribution margin in combination with lower spend in sales and marketing and central function gave adjusted EBITDA improvement of SEK 29.5 million. EBIT amounted to SEK 12.1 million, which equals to 4.2% of net sales. Last year we were at -4.9%. We have adjusted our operating expenses to reflect the lower volumes. Personnel costs for the quarter amounted to SEK 53.5 million, which was 21% lower than the same period last year, mainly via normal employee turnover with limited rehiring. Lower employee costs and less use of consultants are the main explanation why our cost for central functions were SEK 11 million lower than last year. In summary, we have delivered solid performance in a challenging quarter, we are confident we have a strong foundation for future growth and profitability. With that, let's move to cash flow. At the end of the quarter, cash and cash equivalents amounted to SEK 87.3 million, which was an increase of 31.3 million from the Q4 2022. Cash flow from operating activities, excluding changes in net working capital, contributed with a positive cash flow of SEK 16.8 million, which was an increase of 32.4 million versus same period last year. Cash flow follow a seasonal pattern where we do have a good cash position in the end of the Q1. It will follow the seasonal pattern with a lower position during summer months. Our cash flow is, to a large extent, affected by changes in net working capital. We have a negative working capital model. Most of our customers pay shortly after the delivery, whereas we pay our suppliers later. They had a negative effect in Q4 due to timing, which we now see the opposite effect of in the first quarter. Our cash flow will continue to be affected by the movements in the net working capital. Cash flow from investment activities during the quarter were mainly related to capitalized development costs of the tech platform. We expect a lower CapEx in 2023 as we during 2021 and first half of 2022 have been investing in the integration of our Danish operation and the conversion to 100% custom production. Both investment programs were finalized during the first half of 2022. We are confident that we will remain self-financing, and continue to generate cash from our operation. In line with that assessment, the dividend of SEK 0.3 per share were approved at the annual shareholder meeting held last week on April 27. This equals a total dividend of SEK 3.8 million. In general, we believe that we have a good cash position to navigate the current business climate, helped by the fact that we have no structured debt on the balance sheet except for the IFRS 16 lease accounting. Let's move on to the next slide. Our target is profitable growth. On a short-term perspective, that means to stabilize revenue development, which means to discontinue the contracting trend. Turbulence in the overall macro environment gives a degree of uncertainty in the top-line forecasting. We see a continued contraction during first half of 2023. We will continue in our efforts toward a contribution margin approaching 30% on an annual basis, balancing profitability and customer experience. The contribution margin is expected to follow our seasonal patterns. With that, I would like to hand it over to Walker for a quick summary. All right. Thanks, Erik. Let's turn to the conclusions here, and then we'll open it up for questions. A couple of takeaways from our first quarter. First of all, we delivered solid profitability and good cash generation in the first quarter. We had good unit economic development, better than expected performance of WeightWatchers partnership, and also the recently announced acquisition of customer relationships in Denmark, all have helped get the year off to a good start in a tough environment. Volumes are down, and that trend will continue through the first half of the year, but it is less contraction than we've seen in previous quarters. We have seen a lower order frequency, but it's partially offset by stronger gains in average order value, and we're also encouraged to see the sequential growth in active customers for Q1. We have continued to advance our progress on our must-win battles and are pleased to see better customer acquisition efficiency, improved production efficiency and quality towards the customer, and tangible steps to increase volumes in Denmark. Finally, the improvement in cash generation and cash position helped support our directive to be both self-financing as well as confidently issue a dividend. In conclusion, I take great pride in the hard work and dedication that's displayed by every member of our organization in what has been navigating a difficult operating environment and getting the year off to a good start. Although the challenge of 2023 will persist, I'm confident in the ability of this team to deliver. With that, we're gonna turn back the call to the operator and start handling your questions. If you wish to ask a question, please dial star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Clément Genelot from Bryan, Garnier & Co. Yes. Good morning, Walker and Erik. Only two questions from my side. The first one is on the review of the customers. You mentioned the new, you mentioned that the new subscriptions were up by 14% year-on-year in Q1, but active customers were still down by 16%. Does it mean that churn was actually up by 30% in Q1? My second question is around the pricing. What's your view on pricing all over the rest of 2023? Do you consider crushing the prices given some food, main inputs are rising, and also to try to boost the demand? Thank you. Thanks, Clément. Good morning. Let's take the first question there, which is, as you highlight, the new subscriptions were 14% higher than last year, although active customers were actually down by 16%. This is a combination of a couple of different factors. One does have to do with increased churn rates. The other has to do with when we think about... Sorry, but I'm thinking about order frequency, and that wasn't part of your question. There is an increase in the churn rates in terms of the first quarter. We are seeing that, also the, you know, our loyal customers have had a change in their purchase behavior, because of normality after, the COVID, as well as, we have also seen that reactivation rates that we would normally experience at this type of year have also been slightly lower. A lot of this is we feel attributable to the market that we're actually environment operating in and what we see with, the market related to how the overall market for e-commerce food is developing. When it comes to the question of pricing, we are always looking at pricing. At this point in time, I think we've covered the gap that was necessary to address inflation. We have had very high inflation in the Nordics. Coming back and talking about price cuts, I think the question isn't so much about price cuts, but as a question of price perception. Adjusting pricing positioning in our model is probably more important than actually going out and looking at price cuts. I think even though inflation rates will come down on foodstuffs, it doesn't mean that there is deflation. It just means that they've stopped growing from a higher level. I missed a bit of your last question, Clément, on boosting. Was this boosting margins? It was just about more of boosting the AMEND just to... Yeah. How about for the link with the price cut to that topic? Okay. Yeah, I think we're at a level where it's really about balancing customer experience and also balancing where the market's at and the trends in the market. We don't feel that we're going to be putting a lot more pressure on upward pricing at this point. Understood. Thank you. Yeah. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. Okay, we've received a couple of written questions. I'll share those with you now. The first question, is the target still to spend 13% of revenue on marketing in 2023? Central costs are down in Q1, and on level with Q4. Do you plan to stay around this level during the rest of the year? I think, let's take the first part of that question. We do continue to target 13% spending on revenue for 2023, with a slightly lower spend on a relative basis in the first quarter that quite clearly gives us good ammunition and dry powder for the rest of the year. This is something that was clear to us when we looked at the situation last year. We were in some respects, forced to be even more conservative in spending in the second part of the year because of the situation in the first quarter and the adjustment in the market. I think when it comes to central costs, these are at a level where, from an absolute terms, we are quite happy with. I think the question will always remain about seasonality. There are some fluctuations due to different types of costs that come in throughout the year. I don't have any further comments on how the seasonality on central function costs would affect the equation. We have three comments from Forbes Goldman as well. Let's take the first one of those. Is it correct that you in Q2 expect a year-on-year net sales decline but improved profitability margins? Yes, we are expecting that Q2 net sales to be lower than Q2 last year. As commented, we are seeing contraction rates be less. I think when it comes to profitability margins, there are a couple of things that happens in Q2 which is different. Volumes are slightly lower, some of the effects of as we come to the holiday period, volumes will decline towards the summer, which means that from a economics of scale perspective, there will be slightly no change in overhead, but less volume. You would expect contribution margins to be somewhat lower. When it comes to the actual EBITDA margins or profitability margins, bear in mind that the second quarter we will reduce spending, as is seasonally typical for us, from a historical basis, for sales and marketing spend. That will, all else being equal, will have a further positive impact on profitability, at least during the second quarter. Bear in mind that we come back to the opposite side of that equation in Q3, when the spending volume goes up, as well as have more decline in volumes because of the full-on summer months in July and a fair share of August. The second question from Forbes here is, can you provide more details about the partnership with Viktväktarna or Weight Watchers and how it contributed to the increase in new subscriber acquisitions during Q1? The parts that I can talk about there is from a collaboration perspective, we're actually helping WeightWatchers in terms of composing recipes that work within our production technique, and with the ingredients that we use, as well as do that at a unit economics level that is commercially viable and makes sense for our business. They in turn receive compensation for being a channel for acquisition, and therefore the volumes that we generate together, they receive economic compensation for that. When it comes to customer acquisition during Q1, This was launched late Q4. We saw good uptake. I think when we talk about the increase, one of the main things I mentioned was that when it comes to the increase in new subscribers that we experienced in Q1, we can attribute quite a bit of that related specifically to the partnership from WeightWatchers. It has given definitely a boost in terms of new subscriber acquisition during Q1 at very good acquisition terms for us. The third part of Forbes' question is, you mentioned a decline in order frequency during Q1. Do you consider this an issue or just a natural consequence of the strong customer intake? What are your plans to address this in the future? As mentioned in the comments, there are some technical dynamics to the portfolio that would affect the portfolio of customers that would affect the order frequency. One of these is simply that from a new customer acquisition perspective, new customers acquired in the meal kit branch have a very high churn rate early in their lifetime, which means that already in January, customers acquired in January would see upwards of 50% churn rates already within the quarter. With those types of early customer churn rates, when we increase the number of new customers coming in, it will have a natural effect to decrease the order frequency. We also see that we have a lower customer base. As a mix of the overall customers that we have in Q1, of the overall active customer base, this would also be a higher rate of new customers in there, further contributing to sort of the effect of the lower order frequency. I think the last point of order frequency, though, is really the economic environment. With reduced purchasing power, we see that probably also affecting the wallet. Then there's one last technical point, which is the winter holidays. Winter holidays trigger pauses in the Nordics because people are traveling frequently. That means that with no restrictions on travel, and with no changes, we're back to seeing a typical seasonal pause pattern, which would affect order frequency during the first quarter. You asked what are the plans to address this in the future? I think order frequency is something we look at all the time. When we talk about the epic customer experiences that we're working with, one of the fundamental elements of this is to drive lower churn rates, to drive longer retention of customers, and in consequence to also help trigger customers to purchase more frequently. I think we are in an uphill climate with regards to that as we think about it from the overall economic environment, but it is quite central to our second must-win battle of epic customer experiences. We have one last question coming in through the web call access. We'll also check our email account to see if there's anything coming in there. The last question from Carl, could you tell us a little bit about competition on the market? I think the first things to highlight about competition on the market is that some competitors are leaving. We have seen, obviously with the acquisition of the customer relationships of Kokkens Hverdagsmad in the Danish market, that this is a competitor that has decided to focus on other parts of their core business. We have noted over the last 6 to 12 months, several other competitors who have either gone into liquidation or have exited the Danish market. We saw in Marley Spoon's report here, not too long ago that they had taken the decision to retract from the Swedish market, so there's one less competitor in the Swedish market. I think in general, there is a decline in some activity from some competitors. I think from a, from a competitive situation, it's clear that there's a lot more focus on profitability. We're seeing competitors take actions to address profitability issues, everything from increasing prices as necessary to address inflation in the market, as well as taking steps to change the service that would allow them to be more efficient or more profitable. I think getting into more specifics, I think what we're obviously trying to do is be as competitive as we can be. A very clear part of that is to be very effective in our marketing, and also to be profitable because in the long term, capital out there is very constrained. Companies that are growing fast but making losses are not quite as attractive, you might say anymore. I think we're addressing that to make sure that the business that we're delivering to shareholders is both sustainable, and in it for the long term by having a sound financial basis. All right. I don't see any further questions coming in from the conference call itself, and we have checked and we don't see any questions that have come in through our email investor relations channel. Thank you again to everybody for tuning in. Thank you again to all of our employees, and partners out there helping to make Q1 a good quarter. Glad to get the year off to a great start, and we'll close the call with that. Have a good day. Thank you.