Welcome to the Clas Ohlson Q2 2024-2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing key five on their telephone keypad. Now, I will hand the conference over to CEO Kristofer Tonström and CFO Pernilla Walfridsson. Please go ahead. Good morning, everyone, and welcome to the Clas Ohlson Q2 report presentation with me, Kristofer Tonström, CEO, and CFO Pernilla Walfridsson. We'll, as always, go through a short business update that I'll take us through, and then we'll go into the financial development, the events after the reporting period, and the summary and Q&A. Starting by headlining a bit the second quarter and also the start of Q3, we can conclude that Q2 sales came in at SEK 2.8 billion, which is an organic growth of 8%. Also, operating profit was up approximately 11% versus last year, to SEK 307 million, which also then translates to a margin of 11%. We can also conclude that online sales now represent almost a fifth of the Clas Ohlson sales now in the second quarter. It's obviously clear that driving profitable growth online as well is driving the results. Cash flow-wise, also came in slightly above last year, and we ended the quarter with a net cash position of SEK 211 million. Also, the start of Q3 was solid with a 13% organic growth in November, and we'll get back to a bit more details there. Business update, and starting a bit from our strategy and then moving on towards the activities we worked on during the quarter. Overall, there are three big things that really set us apart that we view as our competitive advantages, and that's our assortment, our brand, and the customer meeting, and the combination of the three. We do focus our attention and resources on really differentiating to ensure we have the resources behind those three areas to really set us apart. The ambition is to develop a scalable and efficient operating model that is cost-effective, and we see that the changes we've done over the last few years are helping with leverage in terms of top-line growth. We also want to generate a strong free cash flow that we can then reinvest into further strengthening our position across assortment, brand, and customer meeting. Since we updated our strategy a few years ago, we also have concluded that we are very much a multi-niche player versus being a generalist. So, we are focusing our attention across five niches that we call our Consumer Missions, and you can see them at the bottom here at the slide. Also, you see the brands Teknikdelar and Batteriexperten, which is part of the Spares Group that we acquired now one year ago, which is part of the whole Connect and Enjoy Your Home. Looking at our targets, our ambition is to grow organically 5% a year and deliver an operating margin of 7-9%. We also want to be industry-leading when it comes to sustainability with ambitious goals over the next few years. Looking then a bit at what we have done across the second quarter, linking back to executing on this plan and strategy. First off, when it comes to our assortment, the ambition from us is to build a strong all-weather portfolio that is very much relevant all year round. I do think we have a few good examples looking at the second quarter. First, overall, all the five niches are growing. We have had a continued high pace in terms of reinventing our assortment. We have launched a lot of new products, which drives a lot of traffic, and that also then drives big sales on the base business. We also see that the second quarter, from a pure seasonal perspective, has been fairly weak when it comes to seasonal products. It's been a warm quarter. We have sold less heaters, etc., but thanks to the assortment strategy, we're compensating by being strong across other areas that are extremely relevant to our customers. The second part is growing online in a profitable way, and I think we can conclude that we're doing that. As said initially, almost a fifth of the sales now goes online, and to us, our omni-structure is very much a competitive advantage. We do see that the combination of our store network with our relevance online goes hand in hand and delivers and enables a very high customer satisfaction, no matter where you choose to interact with Clas Ohlson. We also see that a big part of the online volume, in one way or the other, flows via the store network, which again shows how important it is to us to have a solid omni-structure. Looking at the Spares Group, that now, as of November, it's gone one full year since the acquisition of the Spares became part of the Clas Ohlson Group. And here we reported sales of SEK 211 million, so that's included in our online sales now. The third big focus area to drive growth is to work with our store network. Here we have added four new stores across the second quarter, and we're on track towards delivering 10 net new stores for the fiscal year. We also work a lot with the store network that we have. We have seen strong like-for-like growth over the last six months across the store network, so it's also important to continue to improve the store network that we have. There are several moves and rebuilds underway and also executed. When it comes to enablers, communication and being close and relevant to customers is obviously extremely important, and we do see now that more and more customers associate Clas Ohlson with our prioritized niches or missions than before. It shows that we are even more clear in our offering. Second, cost base. We do have a more efficient organization, and we are doing everything to ensure we keep a solid overhead cost structure so that we get leverage from the sales growth and the growth drivers above. On our sustainability agenda, a lot of things are obviously happening on an ongoing basis. To name one across the quarter was that we were named one of the most equal companies by the Allbright Foundation in Sweden. Then, looking at the most important part, our customer relevance and satisfaction, then this links very much back into our assortment, brand, and customer meeting. So, starting with products, we are a product company. Having the right assortment and high satisfaction behind the products we're selling is crucial. We continuously get a high number of reviews of the assortment and the products we're selling, and we are also consistently delivering very high scores when it comes to the product reviews. The second area is, from a brand point of view, to be always very affordable, and here we benchmark ourselves to the low-price and discount competitors. We do see that we are affordable, and we are delivering value to our customers. Then the last point on the customer experience and satisfaction, we constantly measure NPS every day across our interactions. As reported before, we are constantly slightly above 60, which is a high level versus the retail average benchmark. Moving on then, not going through too many details, but as said, looking at our five missions, the five niches, this is really what drives traffic to Clas Ohlson. We have seen strong traffic growth across the quarter and the month, and these five areas drive relevance, and it really enables customers to come to us when they have a specific need in one of those areas, and they can then find a product they need, and they usually leave the store with a few more products that they found when visiting us, and usually products they really also need. A couple of examples. We are constantly launching new products and always trying to look for new, simple, smart solutions for our customers to solve needs. Here on the slide, we see some examples of organizing your shoes. I guess everybody can relate to how much space shoes take. So, having these types of simple, practical solutions to help customers in the day-to-day makes a difference, but also to repair products and then also to clean the home. Just a couple of examples of things that we've been launching. Also, cleaning and tidying up your home is a key part, but it relates to cleaning also your shoes, as an example here with a fantastic product, cleaning white shoes, but also very practical solutions for home fixers that maybe do not have the skills to work with power tools, etc. Magnetic hooks, hooks that you can push through the wall without using drilling, etc. These are just a few examples of the typical Clas Ohlson products, quirky, smart solutions to everyday problems that you want fixed. With that, I'll hand over to Pernilla to take us through the financial developments. Thank you, Kristofer, and good morning, everyone. I'm very pleased to once again have the privilege to guide you through the financials of a really strong quarter. As previously communicated, total sales was up 14%, of which 8% is organic growth, - 3% relates to currency effects, and the acquired Spares Group stands for 9%. Looking at the organic growth in detail, 4% comes from like-for-like and 4% comes from new stores. Online sales grew in the quarter by 6%, excluding Spares. Excluding currency effects, online growth was 9%. Including Spares, online sales was SEK 527 million for the quarter, which adds to an online share of total sales of 18% rolling 12 months. Looking at the sales per market, consumer confidence remains relatively weak, but despite this, we see positive development in all markets. I think it is impressive that we have such good momentum in sales despite the macro climate. There are, however, as always, some external factors that impact us. Firstly, it is positive that freight prices have declined during the autumn. The previously higher prices for transport will keep affecting us the coming quarters, as we have different types of transport agreements and a lag effect due to the turnover rate of our stock in trade, but we will see positive impacts on this recent decline later on. When it comes to currencies, the weak NOK impact us immediately due to a larger share of sales in Norway, and the U.S. dollar has been challenging for quite some time, with a further increase in relation to the SEK during November, up to as high as SEK 11 for $1 in mid-November. All in all, gross margin declined by 1.5 percentage points to 39.8%. Looking at what has impacted the margin, there are, of course, a lot of components affecting the gross margin. The main positive effects come from reduced cost for sourcing and transportation compared to Q2 last year. Currency effects, including hedging, impact us negatively also this quarter, and the structurally lower gross margin for Spares Group also impact gross margin negatively with slightly more than 1%. If we disregard the Spares effect, things we have actively worked with ourselves are strengthening the underlying profitability. The operating profit amounts to SEK 307 million compared to SEK 245 million last year. We have no one-off effect during the quarter, and the comparables include last year's write-down of IT systems and costs relating to reorganization. Looking at the first half of the fiscal year, operating profit has increased to SEK 510 million. The EPS for the quarter was SEK 3.6, an increase from SEK 2.7 in last year's Q2. Looking at the inventory, we see the effect of the usual build-up for the third quarter sales period, which, of course, includes Christmas sales, as well as longer lead times with the current longer sea freight routes. The inventory is sound and supports future sales with good balance between different products and categories. Please also remember that the inventory now supports more stores and includes Spares Group's inventory as well. Cash flow for the first half of the year was strong. Cash flow from operating activities totaled SEK 230 million, an improvement from SEK 520 million last year. Free cash flow for the first six months amounted to SEK 176 million compared with SEK 211 million last year. The cash flow was strengthened by the increased result, but the early build-up of inventory and higher investment were key factors behind the slight drop from last year. As previously stated, we define free cash flow as cash flow after investing activities, including amortization of lease liabilities. Net debt/ EBITDA, excluding IFRS 16, was - 0.2, so we maintained a net cash position and well in line with our financial targets. With that, I hand back the presentation to you, Kristofer. Thank you, Pernilla. So, looking at events after the reporting period, we also today reported our November sales numbers. So, the first quarter of Q3, or the first month of Q3. All in all, we saw strong sales development across November, growing total sales SEK 165 million and with 13% organic growth. Here, we do not see the same currency effects. We're now meeting a slightly lower base on the Norwegian krone, so no currency effects from a sales point of view. Also, broad-based growth in November. Sweden and Norway, strong double-digit organic growth. Finland 4% and Spares grew 4%. So, all in all, a good start to the Christmas season. And across the board, good execution from the Clas Ohlson team welcoming a lot of customers during this very busy season for us. Also, the store network has increased 14 stores compared to the end of November last year. So, wrapping up before we move into Q&A, we're going to continue to execute on the long-term plan and in line with our simple strategy. It's all about ensuring relevance for our customers, ensuring that every customer that visits Clas Ohlson leaves happy and well taken care of to ensure that they come back more and more. We are continuously working with the store network. We haven't announced any number of new stores for next fiscal year, but for this year, we are on track versus the net 10. And we are satisfied with the stores that we have opened, and we do see strong like-for-like developments on the ones that we have, so we're going to continue with that. Also, we're going to continue building a profitable online business. Now, online sales rolling 12 months is surpassing SEK 2 billion, so it is a significant part of Clas Ohlson. And continuously working with this, making it more and more efficient and more and more customer-friendly is a key priority. And we will always continue to be very cost-focused and cost-conscious. There are still macro challenges that we need to mitigate and balance, but at the end of the day, it's about being cost-conscious to ensure that we get scalability in the business, but also that we can deliver the absolutely best value to our customers. So, with that, we can move into Q&A. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Simen Aas from DNB Markets. Please go ahead. Good morning, guys, and congrats on strong sales figures for November. I have a few questions, and I'll start on the gross margin, actually. I'm looking into Q3. You mentioned it briefly, Kristofer, but you're meeting easier comps on the Norwegian krone, and obviously, we don't know how that will be moving. But how should we think about the gross margin here in November and into December? Is it fair to assume that the pressure on the margin should be lower from external factors, or am I wrong in that assumption? So, good morning, Simen. So, I think the Norwegian krone, let's see what happens during the coming months, but we can conclude for November that there is less pressure from the Norwegian krone. That's correct. Also, remember what we talked about during the summer. We saw high transportation cost increases during the summer, and then we indicated that those will not start hitting the numbers until Q3, Q4. We do not know the impact of that, obviously, yet, but that is a factor to remember. And then, apart from that, obviously, we are continued to be very disciplined in how we work with pricing, promotion, etc. But let's see, hopefully, a small positive on the Norwegian krone side, but we also need to remember the transportation cost. I think those are two general comments. Anything to add, Pernilla, on just factors to think of? Okay, that's clear. And then on the timing of Black Friday this year and online trade, should we expect some of the sales in November to be booked in December, given the timing here, or how should we think about that? November, the calendar effect of November was the same this year now as 2019. It was a bit difficult to forecast, to know exactly what would happen. We did see, for us, Black Friday is an event where customers are out shopping, but it's not a big part of our focus. We are focused on Christmas sales, and of course, we do see Christmas coming earlier and earlier. There was a lot of Christmas sales happening throughout the Black Week, but also the weeks prior to that. Then, of course, as you state, the month ended on a Saturday. Of course, there might be some spillover of e-comm orders, etc., into December, but we have also seen a lot of Christmas sales early on in November. Let's see where that takes us for December. But yeah, the calendar effect, the best comparison is 2019, I think, where the calendar looked similar, and we didn't have that big break between Advent and Black Week. Yeah, okay, that makes sense. And then my last question here is, how do you consider your inventory position? Obviously, it's up somewhat, but are you, and given the strong sales trend so far in Q3, do you think it's sufficient to meet demand here, or should we expect some sell-out issues later in December? No, all in all, we feel pretty good about the inventory level. I think it's, I mean, looking at the sales growth in November, we were able to secure good availability of products across sales channels. And then also remember that the inventory levels are obviously driven by some that we took, we have taken home goods a bit earlier, given the Red Sea challenges. There's also some structural numbers in there based on the Spares acquisition. But all in all, we feel pretty good about the inventory moving into December now. Okay, thank you. That was all for me, so I'll jump back into queue. Thank you, guys. Thank you. The next question comes from Niklas Ekman from Carnegie. Please go ahead. Thank you. Yes, my first question is on customer recruitment. I think you mentioned this as a major driver of your sales in the past year and a half, and I'm curious how much of the growth in Q2 and also continuing into November now is related to new versus recurring customers. Is there any change here, or are you still seeing a very good inflow of new customers? That's essentially my question. No, I think all in all, looking at Club Clas members, obviously, we have grown 400,000 members over the last year. There is, of course, a combination of new and recurring. We do also see the activity rate in Club Clas being very high. I don't have any exact numbers, but I think it's a combination of new and recurring customers. Okay, fair enough, and on November sales, just to clarify, given that we've seen kind of how Black Friday has gone to be a Black Week, to Black Month, have you seen higher markdowns than usual? Is that like an industry phenomenon you're seeing, or would you say that your markdown levels have been fairly similar to previous years in November? Yeah, for Clas Ohlson, it's fairly similar. We haven't been more aggressive on promotions, campaigns, etc. We are very much focusing on having the right prices on a going basis. So, of course, we have done some campaigning, but not more than previously. Okay, very clear. Also, you talked about stores here. You've net opened 14 stores in the past eight months, but you only have four contracts now over the next 12 months. Any indication here of what we can expect? Are you looking at, I think, for fiscal year, you net opened eight stores last year, you've opened, and I think it looks like you're opening 10 stores this year. Are you expecting a similar pace going into next year, or any reason to assume a slowdown? Now, for us, it's all about quality versus quantity. So, of course, it's about finding the right store locations. I don't think there is any reason to expect either a big break or acceleration of store network expansion. We're very much evaluating the stores we have opened, and in general, we're very happy with the development, and we see continued strong like-for-like. So, we hope to be able to keep a similar pace, but of course, it's always dependent on finding the right long-term locations and ensuring quality. So, we'll come back to that with some further guidance on that as we enter the spring, but hopefully, we can continue in a similar pace as we have done over the last two years. Very clear and can you just help me clarify? When you talk about online sales now being close to 20%, and almost half of that is related to Spares, so you're a little above 10%, or around 10% in online sales, is that with or without Click & Collect? So, basically, what's the percentage of Click & Collect sales? Yeah, it's including Click & Collect. So, online sales is every transaction that closes on our e-comm sites, and then the customer chooses how to pick that product up. But any transaction that closes on our e-comm sites is regarded as online, including Click & Collect. What is the rough percentage of Click & Collect in Clas Ohlson stores? Is that like 50% or more or less? In general, I would say approximately half of the volume online flows via our physical stores, and then we have different ways of getting the product, so Click & Collect, we also have what we call Collect in Store, where you can order online and then pick it up, pick up the order in store, and then we also have the feeder store, so all in all, approximately half of the volumes flow from DC, and the other half goes via the store network. But we haven't specified exactly what percentage Click & Collect is, and that also varies a lot between quarters and months. But approximately half via the store network is a good rule of thumb. Yeah, very good. Thank you so much. Thank you. The next question comes from Magnus Råman from Kepler Cheuvreux. Please go ahead. Yes, thank you. Good morning. A lot of the questions have already been answered here, but I can ask one about the capital structure. I mean, you run now on a net cash position. If we exclude leases, interest rates are going down. You actually have a financial target to be at below two times. So, I mean, do you see a limit here where you think you're overcapitalized, or do you rather view it as a positive to be prepared for potential investment needs, acquisitions, or other in the coming several years? If you could respond to that. In general, we want to be in a very strong financial position, and we want to always act from a position of strength. But then, of course, over time, it's important to ensure the right structure. But in general, we view it as a positive to be in a position where we can invest back into the business. So, yeah, I think that's in general that we want to be in a strong position. Right, and just coming back again to the questions around the gross margin, just the factors that you mentioned here or the drivers in the presentation. First, you mentioned the Spares addition, and now, I guess, looking forward, that is annualized. So, I presume that we should expect small, if any, effect from that on a year-on-year basis going forward. Could you also acknowledge if freight, you mentioned here, is going to consider that a headwind both Q3 and Q4 with this lag, but turning positive thereafter, considering current spot rates? Is that correct? And then third, maybe if you could talk a little bit more about the balance here of your efforts or the effects of your efforts to concentrate your sourcing and find efficiencies, if that is much annualizing, looking ahead, or if you see further positive drivers from that? Thank you. In Q3, we expect less negative effect on the NOK. As Kristofer mentioned before, due to the comparable figures are much easier. But we will also see no benefit from the positive timing effect we had last year. So, on the other hand, the recent weakness of the SEK in relation to the U.S. dollar will have a negative effect going forward, but we don't expect that that will hit us in Q3. Then we talked a bit about the freight prices, but I think you answered that before. So, maybe you will add. Yeah, exactly, on the freight prices, yes, so Q3, Q4, and then looking at the current trend of the freight prices, hopefully, that headwind will ebb out after Q3, Q4, I would say. But let's see what happens. But right now, obviously, it has a good trend, and it was a big peak during summer that will impact mostly Q3, Q4. It's correct to assume small effect on Spares as it has been annualized now going forward? Yes. Yeah. Yes. All right, thank you. The next question comes from Philip Ramqvist from Sveriges Radio Ekot. Please go ahead. Yes, hi. I have three questions. I will take them in Swedish, and I hope that you could answer them in Swedish as well for our listeners. So, [Foreign language] Black Week [Foreign language] Black Friday, [Foreign language] 14% in November. [Foreign language]? [Foreign language] Clas Ohlson [Foreign language] Black Week [Foreign language]. [Foreign language] Black Week [Foreign language]. [Foreign language] Black Week [Foreign language], [Foreign language] Black Week. [Foreign language] Black Week? [Foreign language]. [Foreign language]? [Foreign language]. [Foreign language]. MSB [Foreign language]. [Foreign language]? [Foreign language] Clas Ohlson [Foreign language]. [Foreign language] prepping [Foreign language]. [Foreign language]. Thank you. [Foreign language]. The next question comes from Andreas Lundberg from SEB. Please go ahead. Yeah, good morning. Thank you for taking my question. Andreas with SEB here. Back to the cash position, relatively solid. Q3 typically very strong cash flow quarter. How will you utilize the cash you have? Even though I realize that you would like to keep a strong position, but where do you see allocation in the next two years? So overall, I don't know whether I want to comment in detail over the next two years, but if I look currently, obviously, we are reinvesting into the business when it comes to the store network. We're also investing a little bit into the IT infrastructure. And then, of course, the key focus for us is to allocate capital in a smart way also moving forward. But for now, I think we are reinvesting into the business. We want to have a strong position, but I don't want to give any further outlook on the next few years there versus what the financial targets and the position that we're currently starting from. You have a repurchase mandate now. How is your thinking about that? So yes, we have the mandate, but we haven't announced any intent to use that mandate here. But it's important to also have that as part of the capital allocation toolbox on a more longer-term basis. So the mandate is there, but we haven't announced any intention of using that now. Finally, on OpEx now, when Spares have been included for a year, how do you see what are the main drivers of OpEx up or down going forward? Thank you. Obviously, overall on OpEx, we want to ensure that we stay very disciplined on the overhead. We have made a lot of changes to shrink the overall overhead cost pool, and we want to ensure that continues and thereby get leverage and scale as we grow. Apart from that, of course, it's about investing in the customer meeting, investing in the business, but I wouldn't say I would expect any big ups or downs. It's really about finding that good balance between keeping a solid cost structure in place and then investing when we have opportunities, but not expecting any big swings, I would say, looking forward. Okay, cool. Thank you so much. Thank you. The next question comes from Martin Eriksson from Sveriges Radio. Please go ahead. Hello. I also wish to take my question in Swedish, if that's okay for our listeners. [Foreign language]? [Foreign language]. [Foreign language] Sveriges Radio [Foreign language] Dalarna, [Foreign language]? [Foreign language]. [Foreign language]? [Foreign language]. [Foreign language]. Okay, [Foreign language]. As a reminder, if you wish to ask a question, please dial pound key 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 or closing comments. Yep, to begin with, we do have a couple of written questions from the webcast. It's Anders Rudolfsson from DNB Markets commenting another strong result. Well done, looking into 2025. How sensitive is Clas Ohlson to a lower rate, do you think? Looking into 2025, obviously, we hope, of course, that it will have a positive impact on our customers' private finances and economies. Obviously, we view that as a good thing, that the purchasing power hopefully will go up. But I think we have shown overall over the last few years when it has been a challenging macro environment that it's all about being relevant, selling need-based products, and having high value for money in everything that we're doing. Of course, we'd rather have a positive economic outlook than a negative, but I think we have shown that also in a challenging environment, we can grow significantly. Let's see. We hope that it will have a positive effect, but we're very much focusing on what we can influence, which is, of course, then the relevance in assortment and the right price points and the right service. Then we have a question from Filip Pareto. What was year-on-year revenue growth in November adjusted for new stores? The like-for-like growth in November, I think it was 10%. Let me double-check the like-for-like in November. Yeah, I think it's around, yeah, so 10% like-for-like growth in November. Sorry, I just wanted to double-check. Yeah, and then we had a comment here from another participant asking why we answered questions in Swedish, and I apologize for that, and of course, respect that this is an English-speaking forum. The two questions that came were from Swedish Radio and thereby wanted Swedish answers. It was not related specifically to the quarterly report, and also the comments were not specifically giving any more details or guidance on the report in itself. I apologize for that for our English-speaking audience. That was not really planned. Finally, we have a question about the organic growth for Spares. Was it above or below 4% during the first six months? So we haven't reported the organic growth for Spares. November is the first month where we report organic growth because it was November last year when Spares was fully included into the books of Clas Ohlson. So this is the first month when we start reporting organic growth also for Spares. So that has not been done before. And by that, oh, final question. Do you have like-for-like for Q2 and split between regions for both Q2 and November? Yes. So I think like-for-like for Q2 was 6%. Let me just double-check here. So like-for-like growth Q2, yes, 6% across Q2. And then the split between regions, you can find that in detail across the report. You see the exact numbers. I'll refer you to the report where you will see the regional split sales-wise in Q2 and also in November. But in general, we have seen very strong organic growth across Sweden and Norway with double-digit growth. And then in Finland, in November, we saw 4% organic growth. But you'll find all the details in the report. And by that, we don't have any more written questions either. So I'll hand back for just some final remarks. Great. Thank you very much. Thank you for good questions and good discussions. And obviously, our focus now is to do everything that we can to also deliver very high customer satisfaction across December. So we'll all see each other back when we report the numbers for Q3. So thank you very much.