Slides
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Interim Report Q4 2024 February 21st 2025
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T oday's Presenters Göran Dahlin CEO Fredrik Ideström CFO
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Agenda 1. Pierce in Brief 2. Financial update 3. Looking forward 4. Q&A
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4 Online leader in a fragmented market • Pierce is a leading e -tailer in the European market for Gear, Parts and Accessories for motorcycle riding • The total European market, which was estimated to some 100 bnSEK in 2021 1 • The market is still fragmented, mainly served by traditional offline retailers while well suited for ecommerce and will likely consolidate at some point • Pierce is the clear leader in the Offroad segment and one of the larger players in the Onroad segment • Pierce is the only true pan -European company in the market with localized sites in 16 markets • Pierce has a uniquely attractive assortment, offering a wide range of top brands as well as the largest range of own brands in the market • Pierce has a turnover of approx. 1.5 bnSEK , HQ in Stockholm and 320 2 employees across Europe Strong private brands 1) ‘Pierce Group AB prospectus, Rights Issue 2022, page 52 . Market estimated to have declined in size since 2021, but no official market data is available. 2) Total headcount of which ap proximately 200 white -collar employees and 120 blue -collar employees. Blue -collar workers are employed in the warehouse 3) Net revenue, freight income and other fees. Pan -European company Motorcycle specialist One -stop -shop offering Net revenue split, Q4 2024 LTM THIS IS PIERCE Brand revenue split3, Q4 2024 LTM 32% Nordics 68% Outside Nordics 63% Offroad 32%Onroad 5% Other Net revenue split, Q4 2024 LTM 55% Gear 20% Parts 20% Accessories 5% Other Net revenue split, Q4 2024 LTM 59% External brands 41% Private brands
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5 THE MARKET FOR MOTORCYCLE GEAR, PARTS AND ACCESSORS The market for Gear, Parts and Accessories 1 100bn SEK market where the majority is still offline 1 Source: (1) Data from Pierce Group AB prospectus, Rights Issue 2022, pages 42 and 52 . Market estimated to have declined in size since 2021, but no official market data is available. PARTS GEAR ACCESSORIES STREETWEAR MOTORCYCLES (NOT INCLUDED IN MARKET SIZE) • Anything installed on or in the motorcycle • High wear and tear - demand dependent on intensity of riding • Ideal for online when combined with navigation tool, such as Fit - My -Bike • Motorcycle themed clothing from motocross and motorcycle brands • Popular among enthusiasts and share online characteristics with regular apparel • Protective clothing, such as helmets, boots, suits. • High wear and tear for frequent riders (especially offroad). • E.g. helmets is regulated and therefore owned by all riders • Products used with the motorcycle that are not mounted, e.g. mats, stands, tents • Standardized tools and equipment making accessories suitable for online • Pierce does not currently sell motorcycles as the value chain is very different, with lower margins and require retailers to offer service stations ~30% ~30% ~20% ~20% Online market 2021 SEK ~20bn1) Online market potential Online expected to grow faster than offline – key drivers T otal market 2021 SEK ~100bn1) ONLINE MARKET 2021 ~19% online penetration1) SELECTION, AVAILABILITY AND CONVENIENCE NICHE WELL-SUITED FOR BUYING ONLINE INCREASING BASE OF MOTORCYCLE RIDERS
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6 FRAGMENTED LANDSCAPE Competitive landscape Notes: (1) Assessed primary go -to -market Leading online retailers in Europe Brick-and-mortar Leading European omni channel retailers General / diversified online and marketplaces Direct-to-consumer Direct Competitors Player Home Go-to- market1 Ownership Comment Pierce Nordics Online Listed Nordic Champion. Pan European leader in offroad FC-Moto DE Online Private DE champion online, onroad Motoblouz FR Online Financial, Part of Polo Group FR champion online, onroad Sportsbikeshop UK Online Financial, Part of Polo Group UK champion onroad Motocard ES Omni Financial ES champion, onroad Motea DE Online Private PB Parts & Accessories onroad Polo DE Omni Financial, Part of Polo Group Offline leader with online presence. Louis DE Omni Financial Offline leader with online presence Maciag DE Online Private MX (and MTB) online challenger offroad.
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7 Q4 SUMMARY SEKm Q4 2023 Q4 2024 Variance Reported Local currencies Net Revenue Private Brands 382 160 451 175 18% 9% 19% Adjusted EBIT -7 1 8 Adjusted EBIT % -1.9% 0.3% 2.1 ppt Net Profit -49 -1 49 Operating Cash Flow 51 30 -21 Adjusted EBIT • Adjusted EBIT improved from -7 SEKm last year to 1 SEKm • Our Overhead costs increased from 72 SEKm to 76 SEKm • Obsolescence, transformation cost and brand depreciation impacting Adj. EBIT in Q4 • The outcome of the efficiency program from 2023 has mitigated effects from underlying inflation and investments in the modernization of our IT infrastructure as part of our transformation journey • Onetime costs related to some role adjustments in the quarter Solid cash position • Cash end of Q4 was 297 SEKm • Stock levels expected to increase going forward due to seasonal effects, to ensure availability before season start and capture growth opportunities in line with strategy Net revenue +19% in local currencies, +18% in SEK • Q4 showed strong growth Y oY following ambitious approach vs last year • Looking ahead, the global geopolitical situation drives increasing uncertain consumer sentiment across Europe as well as uncertain in-freight prices and trade terms Continued profit improvements • Priority in Q4 has been to maximize Gross Profit in absolute terms and to reverse the trend of a declining customer base. • Gross margin decreased vs. last year with 1.5 ppt to 43.2%.
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8 KPI HIGHLIGHTS LTM Resilient private brand revenue 646 650 623 631 641 640 638 635 624 639 39% Q3 2022 39% Q4 2022 39% Q1 2023 40% Q2 2023 41% Q3 2023 42% Q4 2023 41% Q1 2024 41% Q2 2024 40% Q3 2024 39% Q4 2024 Net revenues, Private brand LTM (SEKm) Net Revenue, Private brand (% of net revenue) Stable Trustpilot score, 4.3/5.0 Q3 2022Q4 2022Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Q3 2024Q4 2024 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,3 4,4 Aggregated Trustpilot scores
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9 KPI HIGHLIGHTS LTM (CONTINUED) Active customer base has turned to increasing AOV on similar level as previous quarter Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 1,163 1,165 1,106 1,083 1,070 1,021 1,016 1,004 1,001 1,042 Active customers LTM (000), end of period 941 955 972 999 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 1,761 1,749 1,641 1,587 1,548 1,021 1,456 1,055 1,447 1,070 1,434 1,090 1,433 1,088 1,502 1,084 Q3 2022 +13% Average order value LTM (SEK) Number of orders LTM (000)
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Agenda 1. Pierce in Brief 2. Financial update 3. Looking forward 4. Q&A
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11 QUARTERLY REVENUE DEVELOPMENT ▪ Q4 and FY 2024 has shown growth following a period of declining sales ▪ Conservative approach in Q4 2023 led to decline which has now been more than recovered ▪ LTM Net Revenue growing 427 345 441 369 382 356 456 365 451 0 50 100 150 200 250 300 350 400 450 500 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 -10% +18% Net Revenue 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 400 0 1 000 100 200 300 500 600 700 800 900 1 100 1 200 1 300 1 400 1 600 1 700 1 800 1 900 1 500 Q3 2023 1 628 Q4 2023 Q2 2024 Q3 2024 Q4 2024 Q1 2024 1 670 1 595 1 585 1 537 1 5481 581 1 563 1 559 Q4 2022 Q1 2023 Q2 2023 +6% Net Revenue LTM
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12 340 472 451 450 441 45645% 46% 46% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 50 100 150 200 250 300 350 400 450 500 550 2019 2020 2021 40% 2022 2023 44% 43% 2024 CAGR +6% A HISTORICAL PERSPECTIVE ON GROWTH AND MARGIN CAGR from 2019 which is considered the last comparison point prior to COVID Q1 Q2 Q3 Q4 268 308 369 345 356 46% 45% 48% 46% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 50 100 150 200 250 300 350 400 450 500 550 2019 2020 2021 41% 2022 40% 2023 42% 2024 420 CAGR +6% Gross Margin Gross Margin excl Obsolete Net Revenue 291 329 361 373 365 47% 46% 44% 43% 45% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 50 100 150 200 250 300 350 400 450 500 550 2019 2020 2021 39%39% 2022 31% 2023 46% 2024 369 CAGR +5% 344 414 413 382 47% 50% 45% 43% 43% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0 50 100 150 200 250 300 350 400 450 500 550 2019 2020 45% 2021 38% 2022 2023 42% 2024 451 427 CAGR +6% Obsolescence change
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13 Revenue growth in local currencies – profit improved YoY • Net revenue growth during Q4 by segment: ̵ Offroad 16% and 18% in local currencies ̵ Onroad 30% and 32% in local currencies ̵ Onroad revenue share higher in Sweden • Profit after variable costs grew with 16% in Q4 and 41% FY • 2023FY negatively impacted by change in obsolescence assumptions, growth excluding extraordinary increase of 44 SEKm in Q3 2023 was 20% • Profit after variable costs improved vs last year in both Offroad and Onroad segments GROUP FINANCIALS Profit after variable costs (%) 80 93 Q4 2023 Q4 2024 382 451 18% Net revenue (SEKm) Profit after variable costs (SEKm) 20.9% Profit after variable costs = Gross profit less Direct marketing, Invoicing costs, Outgoing freight and Packaging materials Growth in local currencies 19% Profit after variable costs (%) 256 361 2023 2024 1 537 1 628 6% Net revenue (SEKm) Profit after variable costs (SEKm) 16.7% Growth in local currencies 6% 20.6% 22.2%
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14 ADJUSTED EBIT -7 1 4 Q4 2023 6 Effect from change in obsolescence 1 Amortisation of trademarks -12 Q4 2023 excl. other unusual items Q4 2024 Effect from change in obsolescence 2 Amortisation of trademarks Transformation costs Q4 2024 excl. other unusual items 5 6 -69 25 23 19 7 10 YTD 2023 38 Effect from change in obsolescence 1 Amortisation of trademarks -29 YTD 2023 excl. other unusual items YTD 2024 Effect from change in obsolescence Amortisation of trademarks Transformation costs YTD 2024 excl. other unusual items • Items affecting Comparability in the period mainly related to organizational efficiency initiatives • Adjusted EBIT ̵ Adjusted EBIT in Q4 2024 strengthened from -7 SEKm last year to 1 SEKm ̵ Adjusted EBIT YTD 2024 improved from -69 SEKm to +25 SEKm • Several items, not included in Items Affecting Comparability, however impacted Adj. EBIT in 2023 and 2024 and are illustrated in the graph form comparability ̵ Effects from the changed obsolescence assumptions since Q3 2023 ̵ Amortisation of trademarks ̵ Estimated costs for transformation • Excluding these items the Adj. EBIT would have been ̵ Approx. 4 SEKm for Q4 2024 ̵ Approx. 23 SEKm for YTD 2024 • Note that GW impairment was included in Items Affecting Comparability from Q1 2024 and 2023 financials were adjusted accordingly -4.5% 1.5% -1.9% Adjusted EBIT margin (%) Adjusted EBIT improved vs last year, excluding unusual items 0.9% 1.4% Adjusted EBIT (SEKm) 0.3% -1.9% -3.2%
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15 GROSS MARGIN Gross margin development since Q4 2022 • We observed slight increase in -freight costs in Q4 2024 vs the previous quarter and an increase of 0.5 ppt vs the same quarter previous year. • Market shipping rates from Asia for in -freight have generally been higher in 2024 than in end 2023. They have also been more volatile. • In -freight shipping prices impact cash and net working capital when inventory is purchased but are accounted for as costs of goods sold in the P&L at the point of sale - hence fluctuating shipping prices do not materialise in the P&L immediately. • We foresee continuing volatility in market freight prices (but unclear near -term trend in overall levels). We are taking active measures to limit the impact of volatility on actual (average) prices paid and manage any impact on future margins. Shipping costs in relation to revenues • Market remains highly price sensitive - ambitious purchasing and sales strategy vs last year with focus to increase profit in absolute terms • Q4 therefore saw slight decrease in gross margin with a change of -1.5 ppt vs last year to 43.2% and with -2.4 ppt vs Q3 . • Shipping costs however increased in Q4 previous quarter and same quarter last year 42.8% Q3 2023 44.7% 43.1% Q4 2023 45.6% 43.1% 37.8% 44.1% Q4 2022 43.4% 39.7% Q2 2024 45.5% Q1 2023 45.2% 42.1% Q3 2024 43.2% Q2 2023 42.0% 30.7% Q4 2024Q1 2024 Gross margin (%), reported Gross margin (%), exlcluding the effect from obsolescence & scrapping Note: The negative gross margin trend since 2021 primarily attributed to escalated shipping and supplier costs. The effect of thesecost hikes have gradually been mitigated by passing them on to customers, initiated in Q1 2023. The significant drop in the margin during first half of 2022 was due to our focus on generating cash and reducing net debt. 21 30 24 27 19 21 16 17 14 18 14 22 0 2 4 6 8 10 12 0 5 10 15 20 25 30 5.0% Q1 2022 6.6% Q2 2022 6.4% Q3 2022 6.2% Q4 2022 5.5% Q1 2023 4.9% Q2 2023 4.4% Q3 2023 4.4% Q4 2023 3.9% Q1 2024 3.9% Q2 2024 3.9% Q3 2024 4.8% Q4 2024 In-freight (SEKm) Cost in relation to Net revenue (%)
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16 OVERHEAD COSTS DEVELOPMENT ▪ The restructuring program from Q4 2023 has mitigated underlying effects such as underlying inflationary pressure ▪ 2024 has been impacted by transformation costs, mainly related to our tech stack upgrade – Costs for external consultants and costs associated to systems not yet in use amounted to approx. 6 SEKm in Q4 and 10 SEKm for 2024 in total – Costs for inhouse staff not considered ▪ Items Affecting Comparability (6 MSEK) refer mainly to one-time costs in Q4 related to role changes primarily in the commercial teams to accelerate our development 57 71 61 67 67 72 59 69 65 76 0 5 10 15 20 25 0 10 20 30 40 50 60 70 80 15.2% Q3 2022 16.6% Q4 2022 17.7% Q1 2023 15.3% Q2 2023 18.1% Q3 2023 18.8% Q4 2023 16.6% Q1 2024 15.1% Q2 2024 18.0% Q3 2024 17.0% Q4 2024 Overhead costs Overhead costs % of net revenue
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17 NET WORKING CAPITAL DEVELOPMENT ▪ Net working capital (NWC) has during the fall 2024 increased from a low point in Q2 as a result of work to improve stock and availability ▪ NWC decreased vs previous quarter and is at similar level as Q4 2023 – T otal inventory increased with SEKm 74 Y oY ▪ Due to seasonality, NWC in relation to Revenue LTM has historically normally been lower in Q2 (end of high season) and Q4 (end of campaign season) compared with Q1 and Q3 ▪ NWC expected to increase going forward due to seasonal effects, to ensure availability before season start and capture growth opportunities in line with strategy NWC at similar level as previous year 280 246 272 227 179 107 86 37 127 99 0 5 10 15 20 25 0 50 100 150 200 250 300 16.9% Q3 2022 14.7% Q4 2022 17.0% Q1 2023 14.3% Q2 2023 11.3% Q3 2023 7.0% Q4 2023 5.6% Q1 2024 2.4% Q2 2024 8.1% Q3 2024 6.1% Q4 2024 Net working capital, NWC (SEKm) Net working capital, % of Net Revenue, LTM (%) Extraordinary obsolescence provision 44 SEKm
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18 Debt-free, net cash positive and a solid equity position FINANCIAL POSITION ▪ Cash positive since new share issue in 2022. ▪ Solid equity position of SEKm 666. 31 Dec 31 Dec SEKm (unless stated otherwise) 2023 2024 Interest-bearing liabilities¹ - - Cash and cash equivalents 222 297 Net debt excl. IFRS 16 -222 -297 Equity 627 666 ¹ Interest-bearing liabilities does not include leasing liabilities.
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Agenda 1. Pierce in Brief 2. Financial update 3. Looking forward 4. Q&A
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20 Pierce 2.0 - Strategic goals Becoming “ The undisputed leader in e -commerce for motorcycle equipment and accessories across the European market” Strategic Goal Progress 2024 T o achieve uncontested leadership in the Offroad segment and drive profitable growth in the Onroad segment • Increased the number of MX-riders in our organization to improve our technical assortment where we have lost some momentum in the last years. • Re-balanced our marketing resources more towards 24MX. • Focusing our efforts on XLMOTO in the most profitable markets and the most profitable products. T o attain the highest customer loyalty in the industry • One of the largest improvements ever in our stocked assortment. Increased the number of stocked articles with close to 50%. We now have the largest stocked range in Europe. • Implemented a more amicable and swift way of treating our customers in our customer care. • Large improvements in delivery transparency. • Launched our first ever loyalty program, which was done in our 24MX store. T o develop a simple and effective go-to- market strategy • Pending new tech stack. T o be the best in the industry in pricing and procurement • Launched new state-of -art pricing software end 2023. • Implementing new approach, working more closely with our core suppliers to attain mutual gains. • Changed part of the supplier base for our own branded products to achieve better cost/quality ratio T o establish market-leading "value-for-money" own brands • Consolidated our own brand portfolio from 8 to three brands, and we are preparing for the largest expansion of our own brand ever. T o build a modern and scalable IT platform • The complete change of our tech stack is progressing. We are implementing state-of-the-art, modular, and cloud-based systems. These exhaustive changes take time, and we expect the project to continue throughout 2025. T o culture a lean and agile organization • Established a lean and agile organization through the re-organization Q4 2023. • Reduced the white-collar workers from 250 to 201.
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Agenda 1. Pierce in Brief 2. Financial update 3. Looking forward 4. Q&A
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22 Appendix Appendix
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23 Q4 SUMMARY – PROFIT AND LOSS SEKm (unless stated otherwise) Offroad Onroad Other Intra-group Total Offroad Onroad Other Intra-group Total costs¹ costs¹ Net Revenue 258 87 37 - 382 300 114 37 - 451 Growth (y/y) (%) -9% -19% -1% -% -10% 16% 30% -1% -% 18% Gross Profit 120 34 17 0 171 137 45 16 -3 195 Gross margin (%) 46.5% 38.9% 45.1% -% 44.7% 45.8% 39.2% 42.1% -% 43.2% Variable sales- and distribution costs -59 -23 -9 - -91 -66 -28 -8 - -102 Variable sales- and distribution costs (%) -22.8% -26.8% -23.8% -% -23.8% -22.1% -24.3% -20.8% -% -22.5% Profit after variable costs 61 11 8 0 80 71 17 8 -3 93 Profit after variable costs (%) 23.7% 12.1% 21.3% -% 20.9% 23.7% 14.9% 21.3% -% 20.6% Overhead costs -72 -76 Overhead costs (%) -18.8% -17.0% Adjusted EBITDA 8 16 Adjusted EBITDA margin (%) 2.1% 3.6% Depreciation, amortisation and impairment -15 -15 D&A (% of net revenue) -4.0% -3.4% Adjusted EBIT -7 1 Adjusted EBIT margin (%) -1.9% 0.3% Items affecting comparability (IAC) -38 -6 IAC (% of net revenue) -9.8% -1.4% ¹ Intra-group costs, consists of exhange rate revaluation of net working capital items which are not divided between segments. Q4 2023 Q4 2024
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24 CONSOLIDATED FINANCIAL INFORMATION SEKm (unless stated otherwise) 2022 2023 2024 Net Revenue 1,670 1,537 1,628 Growth (y/y) (%) 5% -8% 6% Growth in local currencies (y/y) (%) 1% -13% 6% Growth in private brand sales (y/y) (%) 7% -1% 0% Gross Profit 657 607 724 Gross margin (%) 39.3% 39.5% 44.5% Variable sales- and distribution costs -405 -351 -363 Variable sales- and distribution costs (%) -24.2% -22.8% -22.3% Profit after variable costs 252 256 361 Profit after variable costs (%) 15.1% 16.7% 22.2% Overhead costs -256 -267 -270 Overhead costs (%) -15.3% -17.4% -16.6% Adjusted EBITDA -4 -11 91 Adjusted EBITDA margin (%) -0.2% -0.7% 5.6% Depreciation, amortisation and impairment -49 -75 -66 D&A (% of net revenue) -3.0% -4.9% -4.0% Adjusted EBIT -53 -69 25 Adjusted EBIT margin (%) -3.2% -4.5% 1.5% Items affecting comparability (IAC) -15 -42 -7 IAC (% of net revenue) -0.9% -2.7% -0.4%
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25 SEGMENT FINANCIAL INFORMATION SEKm (unless stated otherwise) 2022 2023 2024 Offroad Net Revenue 999 952 1,017 Growth (y/y) (%) 3% -5% 7% Gross Profit 412 393 477 Gross margin (%) 41.2% 41.3% 46.9% Variable sales- and distribution costs -235 -205 -220 Variable sales- and distribution costs (%) -23.5% -21.5% -21.6% Profit after variable costs¹ 177 188 257 Profit after variable costs (%) 17.7% 19.8% 25.3% Onroad Net Revenue 569 496 530 Growth (y/y) (%) 14% -13% 7% Gross Profit 208 178 213 Gross margin (%) 36.6% 35.9% 40.2% Variable sales- and distribution costs -142 -122 -125 Variable sales- and distribution costs (%) -24.9% -24.7% -23.7% Profit after variable costs¹ 66 55 87 Profit after variable costs (%) 11.6% 11.2% 16.5% Other Net Revenue 102 89 81 Growth (y/y) (%) -14% -13% -9% Gross Profit 41 37 36 Gross margin (%) 40.1% 41.1% 44.8% Variable sales- and distribution costs -28 -23 -18 Variable sales- and distribution costs (%) -27.7% -25.9% -22.7% Profit after variable costs¹ 13 14 18 Profit after variable costs (%) 12.4% 15.2% 22.1% 1) Excluding intra-group costs, which are not allocated on segments, of SEKm -4, SEKm -1 and SEKm -2 respectively. Intra-group costs refers to exchange rate revaluation of net working capital items that are not divided between segments.
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26 QUARTERLY CONSOLIDATED FINANCIAL INFORMATION SEKm (unless stated otherwise) Q1 Q2 Q3 Q4 FY22 Q1 Q2 Q3 Q4 FY23 Q1 Q2 Q3 Q4 FY24 Net Revenue 420 450 373 427 1,670 345 441 369 382 1,537 356 456 365 451 1,628 Growth (y/y) (%) 14% 0% 3% 3% 5% -18% -2% -1% -10% -8% 3% 3% -1% 18% 6% Growth in local currencies (y/y) (%) 10% -3% 0% -3% 1% -22% -7% -9% -15% -13% 2% 2% 1% 19% 6% Growth in private brand sales (y/y) (%) 9% 9% 7% 3% 7% -15% 5% 7% -1% -1% -2% -2% -7% 9% 0% Gross Profit¹ 172 178 146 161 657 137 186 113 171 607 162 201 166 195 724 Gross margin (%) 41.0% 39.5% 39.1% 37.8% 39.3% 39.7% 42.1% 30.7% 44.7% 39.5% 45.6% 44.1% 45.5% 43.2% 44.5% Variable sales- and distribution costs -110 -109 -85 -101 -405 -83 -98 -79 -91 -351 -80 -98 -84 -102 -363 Variable sales- and distribution costs (%) -26.1% -24.2% -22.8% -23.7% -24.2% -24.1% -22.1% -21.4% -23.8% -22.8% -22.5% -21.4% -23.0% -22.5% -22.3% Profit after variable costs 62 69 60 60 252 54 88 34 80 256 82 104 82 93 361 Profit after variable costs (%) 14.9% 15.3% 16.2% 14.0% 15.1% 15.6% 20.0% 9.3% 20.9% 16.7% 23.1% 22.7% 22.5% 20.6% 22.2% Overhead costs -62 -66 -57 -71 -256 -61 -67 -67 -72 -267 -59 -69 -65 -76 -270 Overhead costs (%) -14.7% -14.7% -15.2% -16.6% -15.3% -17.7% -15.3% -18.1% -18.8% -17.4% -16.6% -15.1% -18.0% -17.0% -16.6% Adjusted EBITDA 1 3 4 -11 -4 -7 21 -32 8 -11 23 35 17 16 91 Adjusted EBITDA margin (%) 0.1% 0.6% 1.1% -2.6% -0.2% -2.1% 4.7% -8.7% 2.1% -0.7% 6.5% 7.6% 4.6% 3.6% 5.6% Depreciation, amortisation and impairment -13 -12 -13 -12 -49 -14 -14 -15 -32 -75 -16 -18 -17 -15 -66 D&A (% of net revenue) -3.0% -2.7% -3.4% -2.8% -3.0% -4.0% -3.2% -3.9% -8.4% -4.9% -4.4% -3.9% -4.6% -3.4% -4.0% Adjusted EBIT -12 -9 -9 -23 -53 -21 6 -47 -7 -69 7 17 -0 1 25 Adjusted EBIT margin (%) -2.9% -2.1% -2.4% -5.4% -3.2% -6.2% 1.5% -12.7% -1.9% -4.5% 2.0% 3.7% -0.0% 0.3% 1.5% Items affecting comparability (IAC) - -1 -6 -8 -15 0 -4 -1 -38 -42 0 0 0 -6 -7 IAC (% of net revenue) -% -0.3% -1.6% 1.9% -0.9% -0.0% -0.9% -0.2% -9.8% -2.7% -0.0% 0.0% 0.0% -1.4% -0.4% ¹ Revaluation of working capital items -1 -2 -2 2 -3 - - -1 - 1 -1 -1 2 -3 - Number of orders (000) 462 483 371 433 1,749 354 429 332 342 1,456 344 416 332 411 1,502 Average order value (AOV) (SEK) 910 933 1,004 985 955 974 1,028 1,110 1,119 1,055 1,034 1,097 1,100 1,098 1,084 Net revenue from private brands 171 179 138 161 650 145 187 148 160 640 142 185 137 175 639 Active customers, LTM (000) 1,165 1,167 1,163 1,165 1,165 1,106 1,083 1,070 1,021 1,021 1,016 1,004 1,001 1,042 1,042 1) Exchange rate revaluation of working capital items are included in cost of goods sold. 20242022 2023
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27 QUARTERLY SEGMENT FINANCIAL INFORMATION SEKm (unless stated otherwise) Q1 Q2 Q3 Q4 FY22 Q1 Q2 Q3 Q4 FY23 Q1 Q2 Q3 Q4 FY24 Offroad Net Revenue 241 243 233 282 999 207 248 238 258 952 217 264 236 300 1,017 Growth (y/y) (%) 9% -9% 3% 8% 3% -14% 2% 3% -9% -5% 5% 6% -1% 16% 7% Gross Profit 103 103 95 110 412 86 111 76 120 393 104 124 112 137 477 Gross margin (%) 42.8% 42.5% 40.7% 39.1% 41.2% 41.5% 44.8% 31.9% 46.5% 41.3% 48.0% 46.9% 47.3% 45.8% 46.9% Variable sales- and distribution costs -63 -58 -50 -63 -235 -46 -52 -48 -59 -205 -48 -55 -51 -66 -220 Variable sales- and distribution costs (%) -26.1% -23.9% -21.6% -22.5% -23.5% -22.3% -21.1% -20.0% -22.8% -21.5% -22.1% -20.7% -21.5% -22.1% -21.6% Profit after variable costs¹ 40 45 45 47 177 40 59 28 61 188 56 69 61 71 257 Profit after variable costs (%) 16.7% 18.7% 19.1% 16.6% 17.7% 19.2% 23.7% 11.9% 23.7% 19.8% 25.9% 26.2% 25.8% 23.7% 25.3% Onroad Net Revenue 134 197 131 107 569 102 183 124 87 496 106 186 123 114 530 Growth (y/y) (%) 33% 14% 2% 8% 14% -24% -7% -5% -19% -13% 4% 2% 0% 30% 7% Gross Profit 50 73 49 36 208 37 71 36 34 178 42 76 50 45 213 Gross margin (%) 37.5% 37.2% 37.4% 33.2% 36.6% 35.8% 38.9% 29.2% 38.9% 35.9% 39.8% 40.6% 40.8% 39.2% 40.2% Variable sales- and distribution costs -34 -48 -32 -28 -142 -26 -43 -30 -23 -122 -25 -41 -32 -28 -125 Variable sales- and distribution costs (%) -25.0% -24.5% -24.8% -25.7% -24.9% -25.6% -23.5% -24.2% -26.8% -24.7% -23.1% -22.3% -25.8% -24.3% -23.7% Profit after variable costs¹ 17 25 16 8 66 10 28 6 11 55 18 34 19 17 87 Profit after variable costs (%) 12.4% 12.7% 12.6% 7.5% 11.6% 10.2% 15.4% 5.0% 12.1% 11.2% 16.8% 18.4% 15.1% 14.9% 16.5% Other Net Revenue 45 10 9 38 102 35 10 6 37 89 32 6 5 37 81 Growth (y/y) (%) -4% -5% 22% -30% -14% -22% -4% -29% -1% -13% -9% -40% -16% -1% -9% Gross Profit 20 4 4 14 41 14 4 2 17 37 16 3 2 16 36 Gross margin (%) 43.9% 36.2% 39.6% 36.6% 40.1% 40.1% 40.6% 24.4% 45.1% 41.1% 48.6% 44.7% 40.7% 42.1% 44.8% Variable sales- and distribution costs -13 -3 -2 -10 -28 -11 -2 -1 -9 -23 -8 -2 -1 -8 -18 Variable sales- and distribution costs (%) -28.9% -25.0% -25.7% -27.4% -27.7% -30.3% -23.0% -18.1% -23.8% -25.9% -23.7% -26.5% -25.6% -20.8% -22.7% Profit after variable costs¹ 7 1 1 3 13 3 2 0 8 14 8 1 1 8 18 Profit after variable costs (%) 15.0% 11.2% 13.9% 9.2% 12.4% 9.8% 17.6% 6.3% 21.3% 15.2% 24.9% 18.2% 15.1% 21.3% 22.1% 1) Excluding intra-group costs, which are not allocated on segments. Intra-group costs refers to exchange rate revaluation of net working capital items that are not divided between segments. See previous slide, row "Revaluation for working capital items" for quarterly details. 20242022 2023
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28 QUARTERLY CONSOLIDATED NET WORKING CAPITAL 1) Defined as cost of goods sold LTM divided by end of quarter inventory. 2022 SEKm (unless stated otherwise) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Physical stock 414 420 401 317 283 274 233 280 301 Goods in transit 74 44 58 60 61 58 74 121 118 Inventory 488 464 459 377 344 332 307 400 419 Working capital assets 20 30 28 20 14 25 27 26 24 Working capital liabilities -262 -223 -260 -219 -251 -270 -297 -299 -344 Net working capital 246 272 227 179 107 86 37 127 99 As % of net revenue LTM 14.7% 17.0% 14.3% 11.3% 7.0% 5.6% 2.4% 8.1% 6.1% Stock turnover¹ 2.1x 2.1x 2.1x 2.6x 2.7x 2.8x 3x 2.1x 2.2x Inventory % of net revenue LTM 29.2% 29.1% 28.9% 23.8% 22.4% 21.5% 19.7% 25.7% 25.7% 2023 2024
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29 CONDENSED CONSOLIDATED STATEMENT OF PROFIT/LOSS SEKm 2024 2023 2024 2023 Net revenue 451 382 1,628 1,537 Cost of goods sold -256 -211 -903 -930 Gross profit 195 171 724 607 Sales and distribution costs -141 -137 -515 -505 Administration costs -60 -76 -196 -212 Other operating income- and expenses 1 -2 5 -1 Operating profit -5 -45 18 -111 Financial net 9 -7 24 13 Profit/loss before tax 4 -51 42 -98 Tax -5 2 -6 2 Profit/loss for the period -1 -49 36 -96 Oct-Dec Jan-Dec
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30 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION SEKm 31 Dec 2024 31 Dec 2023 Intangible assets 281 310 Property, plant and equipment 15 15 Right-of-use assets 54 53 Financial assets 6 3 Deferred tax assets 2 8 Total non-current assets 358 389 Inventory 419 344 Other current assets 29 15 Cash and cash equivalents 297 222 Total current assets 745 582 Total assets 1,103 970 Total equity 666 627 Leasing liabilities 25 24 Deferred tax liabilities 25 26 Provisions 0 0 Total non-current liabilities 50 51 Leasing liabilities 27 30 Trade payables 111 81 Other current liabilities 248 181 Total current liabilities 386 292 Total equity and liabilities 1,103 970
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31 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW SEKm NOTE 2024 2023 2024 2023 Operating profit A -5 -45 18 -111 Adjustments for non-cash items B 18 36 69 122 Paid interest -1 -1 -4 -5 Received interest 2 1 8 3 Realised currency derivatives 1 4 4 9 Paid/received tax -1 5 -4 3 Cash flow from operating activities before changes in net working capital 15 1 92 21 Changes in net working capital C 28 71 13 105 Cash flow from operating activities 43 71 105 127 Investing activities Investments in non-current assets D -3 -3 -6 -8 Paid/received blocked funds 0 -0 -2 0 Cash flow from investing activities -2 -3 -8 -8 Financing activities Share issue costs - - 0 - Change in utilised credit facility - - - - Repayment of liabilities to credit institutions¹ - - - - Repayment of leasing liabilities E -8 -7 -29 -28 Cash flow from financing activities -8 -7 -29 -28 Cash flow for the period 32 61 68 91 Cash and cash equivalents at the beginning of period 261 171 222 136 Exchange rate difference 3 -9 7 -4 Cash and cash equivalents end of period 297 222 297 222 Operating cash flow before IFRS 16 interest A+B+C+D+E 31 52 66 81 Interest IFRS 16 0 -1 -2 -3 Operating cash flow 30 51 63 78 1) Including capitalised interest expenses. Oct-Dec Jan-Dec
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32 RECONCILIATION OF ADJUSTED FINANCIALS SEKm 2024 2023 2024 2023 Net revenue 451 382 1,628 1,537 Cost of goods sold -256 -211 -903 -930 Variable sales- and distribution costs -102 -91 -363 -351 Other costs¹ -98 -125 -342 -367 Operating profit (EBIT) -5 -45 18 -111 Reconciliation of adj. EBIT and adj. EBITDA Operating profit (EBIT) -5 -45 18 -111 IAC related to: IPO-costs - - - - Restructuring expenses 0 -21 0 -25 Share-based payments 0 0 -1 -1 Share-based payments (social costs) 0 0 0 0 Goodwill impairment - -17 - -17 Other costs (XO) -5 - -5 0 Adjusted operating profit (EBIT) 1 -7 25 -69 Adjusted EBIT margin (%) 0.3% -1.9% 1.5% -4.5% Depreciation -9 -8 -35 -33 Amortisation -6 -7 -31 -25 Goodwill impairment - -17 - -17 (of which PPA amortisations included in adjusted EBIT) -2 -18 -7 -18 Adjusted EBITDA 16 8 91 -11 Adjusted EBITDA margin (%) 3.6% 2.1% 5.6% -0.7% 1) Other costs mainly consist of non-variable sales- and distribution costs, administration costs and other operating expenses/income. Jan-DecOct-Dec
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33 Pierce Group's mid to long term financial targets Financial targets • Net revenue growth: In the medium to long term (3 -5 years), organically outgrow the European online market for motorcycle gear, accessories and parts. • Adjusted operating margin (EBIT): In the medium to long term (3 -5 years), achieve an adjusted operating margin (EBIT) of 5 -8%. • Capital structure: Net debt/ EBITDA * not exceeding 2.0x, subject to temporary flexibility for strategic initiatives. • Dividend policy: Over the next few years, the Company plans to use free cashflows** for continued development*** and does not intend to pay dividends to shareholders. * Net debt in relation to last twelve month adjusted EBITDA, excluding IFRS 16 effects. ** Free cashflow refers to cashflow from ongoing operations and investment activities. *** Development means investments in, for instance, IT -hardware, IT -development, expansion of distribution warehouse, marketing, customer acquisitions, business acquisitions and acquisitions of net assets.