Welcome to Nelly Group Q1 Report 2024. Today I am pleased to present CEO Helena Karlinder-Östlundh and CFO Niklas Lingblom. After the presentation there will be a question and answer session. Participants are able to ask questions in written form on the audiocast page. Now I will hand over to Helena Karlinder-Östlundh, please go ahead. Thank you very much and a very warm welcome to the 2024 Q1 Call for Nelly Group. My name is Helena Karlinder-Östlundh and I'm hosting today's call together with Niklas Lingblom, CFO for Nelly Group. Let's begin with a brief overview of what we will cover in today's presentation. We'll start with a short introduction to the Nelly business and our customer base. I will then provide some high-level commentary on the Q1 as well as our transformation journey to date, before handing over to Niklas for a more detailed financial summary. We will then open for questions from you before concluding today's call. Also, a brief reminder at this point that you can send us your questions at any point during our presentation. Let me begin by providing you with a brief introduction to the Nelly business and our customer base. Nelly was founded in Borås in 2004 and has now been a staple in Nordic fashion for an incredible 20 years. At the time it was founded, Nelly was considered a true pioneer in online fashion, initially for young women only, but menswear was then also added to the offering in 2008. To this day we continue to be primarily an e-commerce business, but we are delighted and proud to now also be operating a successful flagship store on Drottninggatan in Stockholm, where we have welcomed both existing and new customers since we opened our doors in September last year. At Nelly we see it as our mission to help our 900,000 active customers look, and more importantly feel, their best every day, whatever the occasion. We do this through the 1.8 million orders we pick, pack, and ship from our warehouse in Borås every year. Overall we have built a community of 2.4 million amazing Nelly members who love fashion as much as we do, and we have 1.2 million followers across our social media platforms. As I mentioned earlier, it is our 20th birthday year this year, which we of course will be celebrating together with both our customers and our closest external brand partners. Now, let's move on and look at the Q1 of 2024. Pleasingly we delivered an operating profit of SEK 1.4 million for the Q1, which has historically been the most challenging quarter of the year for Nelly. This was a marked improvement on the same quarter last year, which we closed with an operating loss of SEK 33.7 million. We saw continued positive trends on many of our key metrics during the quarter, not least our gross margin which improved significantly year-over-year. We are pleased to see these clear signs that our long-term strategy is starting to deliver results, but we will not let this impact the determination with which we continue our transformation journey going forward. As we have continuously emphasized throughout this journey, the strength of our assortment is a fundamental prerequisite to becoming a healthy and profitable business. During the Q1 of 2024 we saw further progress in both assortment breadth and depth. We offered a much more curated product lineup with considerably fewer variants compared to last year, and once again we sold significantly higher quantities than previously of our top-performing styles. This is entirely in line with our strategy of creating a truly attractive and easy-to-navigate product offering that guides our customers towards key trends and looks. We furthermore solidified our position in several important everyday categories, T-shirts, tops, and jeans in particular, which, together with pants and jackets, made up a significant proportion of our sales. These categories are core to our business and to our mission of helping our customers look and feel their best every day, whatever the occasion. As of the end of the Q1, our current spring and summer collection had achieved both a better sell-through and a higher full-price share compared to the equivalent point in time last year. In addition, our Nelly brands performed very well during the Q1 and grew as a share of our total sales, while our efforts to prevent unnecessary returns also paid off and resulted in a significantly lower return rate compared to last year. We still have further potential to realize in the strength of our assortment going forward, but these are clear signs that we are on the right path. We once again demonstrated solid cost control during the Q1. Our marketing costs were lower than last year due to a more efficient spending on paid traffic and a continued focus on generating organic traffic. We also improved our fulfillment and distribution costs, both in absolute terms and as a percentage of net revenue, despite lower order volumes. We will continue to drive improvements both in our costs and the customer experience in this area, not least as we went live with a new delivery checkout and transport management system during the Q1. Lastly, as we continue to operate our business with a smaller but strong Nelly team, we can maintain disciplined control over our salary costs. We are proud of the progress we have made in our transformation journey so far, and still there is more potential to be realized. Over the coming quarters we will therefore continue to focus on delivering the next wave of improvements. Most importantly, we still saw a negative trend in the traffic to our sites during the Q1, and our conversion rate was lower compared to the same period last year. The effect of fewer orders on our net revenue was partially mitigated by an increase in our customers' basket size, but to reverse the negative trend in traffic and conversion we'll need to continue to refine our assortment, further optimize our pricing, and strengthen our customer communication going forward. We also see further untapped potential in expanding how we work with both our flagship store and our external brand partners to deepen customer engagement and build our brand. As previously communicated, during the Q4 of 2023 we took major steps in starting to overhaul Nelly's core systems architecture by entering into agreements with several new vendors and initiating key projects. These projects are now well underway, and while they require both significant investment and dedicated time from our organization, we see them as critical to our future success and will therefore continue to prioritize them both this year and into 2025. So to summarize, the Q1 has been a positive start to 2024 for us. We delivered a markedly improved operating result compared to last year, and with our CFO Niklas Lingblom now also on board, our leadership team is complete and we can, together with the rest of the organization, focus fully on delivering the next phase of improvements on our transformation journey. I will now hand over to Niklas to take you through the financial summary for the Q1. Thank you for the introduction, Helena. Please let me provide some more details on the quarter one financials. Net revenue declined by 5.1% in the Q1, which was an improvement compared to all previous quarters in 2023. The main driver was lower sales before returns. Additional factors contributing to the decline in sales were lower B2B sales and lower freight income. We saw a significant improvement in the return rate, which decreased to 33.4% from 37.8% last year. The improvement mainly derived from strategic actions on our assortment composition and customer base. The campaign activity was high in our markets and the competition for customers continued to be tough. In addition, our own brand share improved to 39.9% of sales, a 4.1 percentage points improvement year-on-year. Looking at gross margin, we saw an increase by 8.2 percentage points to 49.1%. A continued focus on profitability entailing a more selective campaign activity contributed to the improvement in gross margin. Secondly, a higher owned brand share also had a positive effect in the quarter. Currency effects slightly offset this effect. As a result, gross profit saw a strong improvement in the quarter with an increase of SEK 13 million year-on-year. Moving on to the cost side of our income statement, in total, the warehousing and distribution costs were SEK 11 million lower than last year, mainly driven by lower volumes. Measured as a share of net revenue, we saw an improvement in warehousing and distribution costs of 3.8 percentage points to 14.6% from 18.4% for the quarter. Marketing costs amounted to SEK 21 million in the quarter compared to SEK 24 million a year ago. The main reason for the lower marketing spend was lower volumes of paid traffic in accordance with our continued focus on profitable marketing. Admin and other operating costs were down SEK 8 million compared to last year. The decrease in costs was mainly driven by lower payroll costs. All in all, we see a SEK 35 million improvement in EBIT for the Q1 of 2024. To summarize, net revenue declined by 5.1%, but at a lower rate than previous quarters. The significantly higher gross margin in combination with a lower cost base resulted in a solid improvement in EBIT of SEK 35 million, resulting in a positive EBIT of SEK 1.4 million for the Q1 of 2024. Now, let me comment on a few other key takeaways for the quarter. The lower spend on performance marketing has led to lower volumes of paid traffic to our sites and traffic in the Nordics declined by 15%. Lower traffic in combination with a somewhat lower conversion rate resulted in a 15% decrease in the number of orders in the Nordics. In regards to the last 12 months, however, we still see an active customer base of more than 900,000 customers in the Nordics. Average order value saw an increase of 6.3% in the quarter. The average order value is the product of the average number of items per parcel and the average value of these items. For the quarter, the increase is mainly driven by higher average item value. Our return rate for the quarter improved by 4.4 percentage points to 33.4% and was the result of a strategic effort on improving assortment composition and reshaping our customer base. Moving on to our operating costs. Total operating costs decreased by SEK 21.7 million in the quarter. The Q1 is seasonally a weaker quarter and cash flow from operations amounted to SEK -4.5 million. However, SEK 49 million improvement year-on-year. Cash flow from operations was mainly derived from a stronger operating profit and lower inventory value. Investments in non-current assets amounted to SEK -9.6 million and were primarily attributable to IT and technology-related projects. Total change in cash amounted to SEK -25 million compared to SEK -61 million last year. Cash at the end of the quarter amounted to SEK 126 million and short-term credit lines were still unutilized. And as such, we also like to note that Nelly has no interest-bearing debt apart from government tax credits. To conclude the financials, we are very pleased to see a solid improvement in our financial performance in the Q1 of 2024, and in particular, the strong improvement in EBIT, and we look forward to keep working on our strategic efforts to strengthen the operational and financial foundations of Nelly going forward. And now, I'd like to hand back over to Helena. Thank you very much, Niklas. This concludes today's presentation, but before we open for your questions, I would like to take this opportunity to once again thank our wonderful customers who continue to inspire us on our transformation journey, and of course, the incredible Nelly team. It is a true privilege and pleasure to work side by side with such a passionate, dedicated, and capable team. Thank you. Now, without further ado, let's open for questions. Thank you, Helena, and thank you for submitting questions before and during the presentation. Let's jump straight to answering our first one. We have received a few questions if we could elaborate on what we will do to generate traffic and conversion. Helena, will you please comment on this? Yes, a very valid question. So as we have communicated all along throughout our journey, we have been very focused on achieving profitability as a first step. And the reason for this, of course, is that we need to build a profitable base from which we can then grow. And unfortunately, there is no silver bullet, no one silver bullet that will reverse the negative trend we've seen in both traffic to our site and conversion, but rather a number of areas that we need to continue to work on. Our assortment, of course, being one and the most important one, together with refining our pricing and also, of course, strengthening our customer communication, among other things. So in effect, it is the complete customer proposition as a whole and our brand, of course, that will in the end reverse the negative trend. So many different areas that we need to work on. Thank you. Moving on to our next question. How do you look at geographical expansion? So again, we have been very clear that we are for now focused on our core markets in the Nordics. This transformation journey has really been about doing the key things really well. And so for the moment, that continues to be our core markets in the Nordics. But we don't close any doors for the future, of course, but for now, that remains our focus. Thank you very much. The next question is, gradually, we see that private labels are increasing in share of sales. What is the plan going forward? How large a share is planned to be bought of this range versus external brands? And in round terms, what does the profitability look like in the different ranges? Yes, good question. So when we select and curate our assortment, we always do it from the point of view of what will constitute the most attractive product offering for our customer, of course. And so we have seen a very positive response from our customers to our own brand assortment, particularly over the past year. But it is really the balance between our own brands and the external brands that is our customer proposition, and therefore it's not given or fixed ahead of any season. It will be determined by what's right for the customer ahead of that particular season. So yeah, it's a difficult question to give a specific answer, but rather it will depend on what we know our customers will want. Thank you very much. What margins do you have on owned brand products compared to external brands? Yeah, it's no secret that we have strong margins on our own brand products. We can't unfortunately comment on specifics here. But I would again just like to emphasize that what we want to offer our customers is the best mix between our own brands and the very best external brands that we know our target audience really loves. So it will continue forward. Regardless of margins, it will continue to be the best of both for our customers. Thank you very much. Moving on with our next question. In Q1, your private label sales increased significantly by 4.1 percentage points to 39.9% of sales, at the same time as return rates also decreased by 4.4 percentage points to 33.4% of sales. Typically, these two KPIs are negatively correlated, but not in this quarter. Why is this? Do you expect this ratio to be sustained in current trading and in full year 2024 as well? Yes, thank you, Anna. So firstly, we are very pleased with improvements this quarter, both the increase of private label sales as well as the return rate decrease. The return rate is mainly impacted by the assortment sales mix, which is part of the strategic assortment change that we made during the year. This is an integral part of our business, which we will continue to optimize going forward. Thank you, Niklas. How much do you expect to increase your marketing costs during 2024, and how will this affect the profitability? Yes, thank you, Anna. So also here, we need to put this in perspective. What we have done is a considerable change, which is how Nelly ran the business before. So we are pleased with a new level of marketing costs as part of revenue, and we expect marketing costs to remain stable seen as a percentage of net revenue. Thank you very much. We are now wrapping up this Q&A session by answering the last question. The competitive landscape is challenging, with several players in Sweden and the Nordics fighting for the same customers. How do you see Nelly being able to grow stronger over time? Well, there is always fierce competition in the market, and we've also seen that many of our competitors drove deep and extended discounting during this Q1 of the year. We still firmly believe that it is the best customer experience that gets you the win in the end. So again, that, of course, in large part is down to the assortment together with pricing, customer communication, delivery options, and so on. There are many factors that together make up the customer experience. So that's what we will continue to focus on making better and better over time. Great. Thank you very much. That concludes today's call. And yeah, thank you. Thank you. Thank you.