Ladies and gentlemen, welcome to the Desenio Group Audio Cast with Teleconference Q1 2022. Today, I'm pleased to present CEO, Fredrik Palm. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question- and- answer session. Speaker, please begin. Thank you very much, operator, and welcome everybody to Desenio's Q1 results presentation conference call. With me today, I have our CFO, Kristian Lustin. Presentation materials are available on our we bsite and the Q&A session will follow at the end. Slide two, please. The Q1 2021 was exceptional due to COVID-related lockdowns, with net sales growth of 125% or 61% organic compared to the same period 2020. In Q1 this year, we met these strong numbers while at the same time operated in an extraordinary situation in the markets. However, we can conclude that sales came in well above market expectations, although it decreased 29% to SEK 288 million in the first quarter compared to the previous year. We will, as stated in the year-end report for 2021, also meet tough comparables in the first half of Q2, but expect our operational initiatives to translate into double-digit growth during the second half of 2022. Our build-up of the organization and marketing initiatives in North America continued according to plan. This includes the establishment of our own logistics center, which is planned to be operational during the third quarter of this year. Our new logistics center in Bor, Czech Republic, continued to refine its capacity in Q1 with further increases in efficiency, lower cost, and shorter delivery times. This means that we, together with the new logistics center north of Stockholm in Sweden, now have an efficient setup for deliveries to the whole European market. Slide three, please. I always want to show this slide to remind us what a great position Desenio Group has in the market. Although we currently operate in a difficult market. We are the leading online provider of affordable wall art. We have successfully established ourselves in 35 countries, which shows that our data-driven strategy and unique product offering sets us apart from competition. This expansion has been done while at the same time growing our profits and generating great cash flows. The key to the success has also been our focus on not only growing our customer base, but also making sure that our customer satisfaction is best in class. We are in a great position to capture the growth opportunities that started in the Nordics, continued in Europe, and now also continues into North America. Slide four, please. Now let me turn more in detail to our Q1 performance. As I mentioned, net sales decreased 29%. However, gross margins increased year-over-year to 83.2%. Adjusted EBITDA margin decreased to 12.7% compared to 15% in Q4 2021, but was considerably lower than in Q1 2021 due to higher net sales and lower marketing spend in Q1 2021. Our active customer base increased 9%. With that, I hand over to Kristian on slide five. Thank you, Fredrik. On slide five, we illustrate the development in graphs. As you see, net sales decreased 29%. It's an effect of lower search volumes than in Q1 last year, which is quite natural considering the different market sentiment relative to boost our market experience during COVID-19. Regardless of this, mid Q1, the run rate was higher, but the start of the war in Ukraine subdued the positive momentum. The gross margin was slightly higher in Q1 this year than last year. The increase is a result of price increase in preparations for expected increases in purchase prices. The adjusted EBITDA margin decreased to 12.7% compared to 15% in Q4 2021. It was considerably lower in Q1 than in Q1 this year due to higher net sales and lower marketing spend last year. Page six. The number of site visits decreased in lively markets, which was also reflected in the number of orders. Since we increased our conversion rate slightly, our number of orders decreased less than our traffic. Slide seven. Our cash flow from operating activities decreased compared to last year to SEK -49 million. The negative cash flow is explained by lower cash flow from our operating activities and negative changes in working capital. I now hand over to Fredrik again. Okay. Thank you, Kristian. Slide eight, please. Now let us look closer at available search data in Google Trends. Germany is our largest market from a net revenue perspective, and as you know, it is important for future growth in Europe. This slide shows the index development of brand searches for Desenio, Poster Store, some peers, and for the most important keyword in Google searches in Germany, which is poster. As you see here, the search activity decreased for all companies on our market during the quarter. You can see that it especially decreased when the war started in Ukraine, end of February. Slide nine, please. Looking at the index brand search volumes for us and affordable art specialist peers. Again, we cannot see any signs of losing market shares. On the contrary, we believe we gain market share during the quarter again. Slide 10, please. The same set of graphs for the U.K. Also in the U.K., Desenio and Poster Store brand search volumes were lower than in Q1 2021, which is in line with our competitors, but except for King & McGaw here. Slide 11, please. Also in the U.K., Desenio and Poster Store brand search volumes were lower than in Q1 2021, but in line with the competitors, except for King & McGaw. In the U.K., we also here, as in Germany, see no signs of losing market shares. Slide 12, please. In the top graph, you see your conversion rates for all the Desenio sites, and in the bottom graph you see the sessions, the visits. The conversion rate has been stable during the last four years, which you see the top graph here. Again, the traffic volumes have gone down. Slide 13, please. Looking at the development of the gross order intake, we can conclude that it was 23% higher in the quarter compared to the same period in 2020. The level compared to 2021 is obviously lower as a result of the extraordinary situation caused by COVID-19 last year. Slide 14, please. In addition to major material impact, the Russian invasion is expected to have major economic and financial consequences both globally and in Sweden. We have no operations nor sales in Ukraine, but we follow, of course, the development of the ongoing war closely to catch early signs of possible changes in customer behavior, and then be quick to adapt our business and marketing. We also continue our efforts to build a strong position in North America and, at the same time, expand our operations in Europe. With that, I would like to conclude the presentation for today. Now we'll be more than happy to take your questions. Over to you, operator. Thank you. Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press zero one on your telephone keypad. The first question comes from the line of Carl Deijenberg from Carnegie. Please go ahead. Thank you, and good morning. A couple of questions from my side. First on the gross margin here, holds up well here in the quarter while you're also warning slightly for increased input costs here going forward. I'm just curious, sort of on an approximate basis, if you could share how much you have been raising your prices here to mitigate these rising input costs during Q1. Also maybe if you could elaborate a bit on the effects that you're expecting here going into Q2 and the rest of the year on these costs and on the gross margin development going forward. Thank you. We still think that any increases in purchase prices we can pass on to consumers because historically that has been working well. It's important for us to be affordable. Since we have some products that it's not so easy to compare price and also the price points are rather low, so a few percent up and down doesn't matter that much to the consumer. Then the design and aesthetics of course matters much more. With that, we have increased prices the second half of last year with approximately 10%. We see the effect of that now in Q1 because the larger part of the increases that we expect the purchase prices to have is yet to come. We believe they will come during 2022. We also plan to, if needed, increase prices again with around 10% during 2022. Okay. Thank you very much. My second question is on the fulfillment centers of yours. Just if you could share a bit, on also on an approximate basis of how much of your total volumes are going through your new European center today, just to understand the developments and shipments. Yes. Currently it's around 25%-30% that goes out from Bor, Czech Republic. Going forward now, what happened during Q1 was that we merged the logistics centers in Stockholm. We closed down one logistics center in Stockholm, merged that with the other one in Stockholm. The next step now is to relocate the Stockholm European volumes to Czech Republic. We plan that Q3. Also to open the new fulfillment center in the U.S., and that's also planned for Q3. Okay. Very well. Thank you. My final questions are around the cash flow development here in Q1. My first question is on the inventory levels. I mean, they are at just above SEK 80 million in absolute numbers, which is quite high in absolute numbers also comparing it with the quarters when demand was much higher than it's been in this period. I'm just if you could give some clarification here, is this due to sort of the supply chain disruptions that you're proactively ensuring the inventory in order to have stock at hand? If you could just elaborate sort of the inventory levels to sales and why it's quite high here in Q1. Yeah. There's a combination of factors here. First, with more fulfillment centers, naturally inventory levels will come up because we need to have the same articles in more places. But then the next factor is that, well, as you all are aware of, sales have been lower than expected the previous year. Inventory levels are higher than what we did expect, let's say 6-9 months ago. The positive part of this is that we with all the disruptions we have in the global logistics now, that doesn't affect us because we have more than enough in stock right now to supply us. Okay. It's rather a function of keeping stock in your different fulfillment centers than effects such as collections not being sold or old inventory that can't be used. Is that the right interpretation? Yes, I would say so. For us, I mean, if you call it fashion risk is very low for us. The largest part of the value of frames is very low fashion risk in. When it comes to prints, it's well, slightly higher fashion risk, but still low if you compare to many other industries. Okay, perfect. Then a follow-up on the cash flows as well and the paid tax versus the reported tax in Q1. I know it's been looking at Q1 last year was also quite much higher in Q1, the paid tax versus the reported tax. Could you just sort of remind us of the dynamics, also if we look throughout the next few the coming quarters in 2022 and sort of the tax dynamics between the P&L and the cash flow statements, just to understand. Just for tax you mean? Yeah, exactly. In general, we pay tax on a profit, and that we do with, I mean, quite regularly, continuously during the year. It's adjusted a bit based on our expected profit level. That will probably continue, even though it could be a little bit higher now since we did a year-end closing, you did all the calculations and so on. Otherwise, I expect it be quite even during the coming quarters. Okay. Because I'm just referring to the difference between the paid income tax in the cash flow versus the reported tax in the P&L. It's SEK 38 million in the cash flows versus. Yes. Yeah. Now I don't have it in my head. Yeah. I mean, we have the tax cost in one period, and then we pay it later. That's why you have difference. Yeah. Yeah. Okay. Yeah. Well, I think that was all from me for now. Thank you very much. Thank you. Thank you. The next question comes from the line of Johan Brown from ABG. Please go ahead. Good morning Fredrik and Kristian. A few quick ones here. You're breaking up. Is it us or Johan? Do you hear me now? Yeah. Yeah. I hear you. Great. Yes. Firstly on the gross order intake here, and the graph on monthly development. Looks like you ended March in the likes of SEK 85 million in gross order intake. Is that a fair proxy for us, where you ended the quarter in terms of sales as well? Yeah, I think that's a fair interpretation of the growth. Great. Thanks. Then a question on customer acquisition costs in general, and if you sort of break it out in a pre and post-war climate and also where we stand today. Do you see large differences here in terms of when the war started and how it's running at the moment? Yeah. If you first look at development last year, from end of May going forward last year, there was a higher customer acquisition cost, making us, well, somewhat forcing us lower down in the funnel to find better return on invested marketing spend. The second half of Q4 last year, we saw much better momentum, better conversion rates, going into the first half of Q1 this year. As you mentioned, the war in Ukraine started, and we could see that the willingness to consume, if you like, went down, which means that we have had to spend more in customer acquisition costs to actually turn consumers to customers. That's basically what's been going on the past 12 months in terms of the marketing spend. It has come up in the second part of Q1 this year. Do you see any differences in terms of when the war started and where we are at the moment, one month into the second quarter? Yeah. As we wrote in the report, we could see a bit better run rate towards the end of the quarter than compared to when the war started. On the other hand, as you may know, Q2 is the low season for us. Spring comes, people care more about outside activities and other things than interior design, which is natural. Coming from the start of the war into a bit better traction towards end of Q1, we're also now going into the low season for us. Then the last question for me as well, and you spoke about this previously as well in terms of the inventory position, which is quite large. But I'm curious about the supply situation here and how it, and in particular the frames which I know you to some degree source from from Asia. How does the supply situation look here? Are you able to get the goods that you ordered? Yes, we are to a very large extent. They are. I mean, the past, well, 1.5 years or so, there have been some delays in some shipments, but nothing that have had a major impact on us. A part of the explanation is again that we have sold lower volumes than we purchased for. Therefore, we've had products in stock, and that's also part of the explanation why stock levels are quite high right now. Thank you very much. Thank you. Operator, any more questions? I think it's Johan still on. Is it? Yeah, operator. Those were all of my questions. Seems like we might have some technical issues on the operator side here, unfortunately. Unfortunately, if it was someone else that had questions that can't come through. All right. Unfortunately, seems to be some issues on the operator side. Let's end this conference call here. If you couldn't get through with your questions, please reach out to us. Thank you everyone. Speak soon and stay safe.