Hello, and welcome to the Pricer AB Audiocast with Teleconference Q3 2021. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer section. Today, I'm pleased to present CEO Helena Holmgren. Please begin your meeting. Okay. Thank you. Hi everyone, and welcome to this presentation with a special focus on the financial results for Q3. Before we get started, I'd like to welcome Susanna Zethelius, our new CFO, who joined us end of August. I will be hosting this presentation today, but if you have any follow-up questions on the financials, you're more than welcome to contact Susanna directly. Let's skip the first slide and start off with some of the trends we are noticing in the market on page three. We can conclude that the growth in e-commerce continues to be a very big topic, particularly when it comes to fulfillment methods of e-commerce orders. There are lots of different models being explored around the world. We see everything from picking in stores, automated fulfillment centers, various forms of dark stores, and micro-fulfillment centers within existing stores. So far, there is no obvious winning strategy yet, but as always, when there is exploration and new business opportunities, it also opens up for new players to fight for a share in the market. In Sweden, for example, we have examples like Foodora Market that is entering the grocery scene, and there are, of course, numerous similar initiatives around the world. Particularly considering that the last mile delivery of an online order is the most challenging and costly, we expect to see more of this type of exploration going on. On the opposite side of the same coin, we see brick-and-mortar retailers putting lots of effort into getting shoppers to come back to the physical stores. Providing a more personalized experience in the stores seems to be a very popular theme for retailers, and particularly within the grocery segment. However, in order to be more personal, they need more data and more analytics to understand behaviors and expectations of shoppers, and they do need it real time when the shopper is physically in the store. The increased need for data, it goes hand in hand with the changed consumer and the consumer behavior and the effect of e-commerce on what is today perceived as a good shopping experience. Shoppers today are much more sensitive towards price mismatches between sales channels, and they expect more service and more guidance to support their buying decisions. Living up to these expectations are not easy in an analog brick-and-mortar environment, which is, of course, pushing the adoption of technology and digitalization. Adding to this, we can also conclude that several countries face real challenges in finding personnel for their stores, which in combination with increased labor costs, are major drivers towards more automation in the stores. Last but not least, we have the point of sustainability. Shoppers today expect retailers to ensure waste is kept to a minimum, and that locally sourced products are available on the shelves. Since consumer loyalty is one of the key ingredients to being a successful retailer, this has put sustainability very high on the agenda of retailers. As you can see, the underlying trend toward continued automation and digitalization, they remain very strong, and we firmly believe that the adoption of digital labels will accelerate. Moving on to the next slide. Looking at the financial results for the period of January to September, we note a growth of 18% in net sales year-over-year. The distribution between quarters has been somewhat different compared to last year. In Q2 2020, we saw pandemic-related delays in deliveries as stores were closed. In this year, we have a more even distribution between the quarters, although with some acceleration in delivery volume during the third quarter. Operating profit is slightly lower than last year. Aside from negative currency effects, we have cost increases for components and freight that put pressure on our profitability. Next slide, please. If we look instead at the geographical distribution of net sales, it is somewhat similar to last year, but with the growth being seen in Europe and the Asia Pacific region. Moving on to slide six, please. Digging into some of the market highlights from the third quarter, I'm pleased to inform that the large customer project in the U.S. is nearly completed. This means that we now have a chain-wide deployment with almost 1,000 stores deployed across the U.S., and that shoppers in every state of the U.S. get to enjoy our solution when they do their electronic shopping. We are also pleased to report a very strong momentum in Canada. We have delivered large volumes of labels to be installed in several major retailers in Canada. As the penetration rate of ESL is increasing rapidly, the market is really taking off, and the interest in ESL in Canada is higher than ever. There is also continued high activity levels in France. France is the country with the highest penetration rate of ESLs in the world. Despite that, it continues to be a very strong market with a good mix of new and existing customers. In more mature markets like France, we see continuous cycles of upgrade projects with existing customers, which provide a solid foundation year after year. It's almost unheard of that a retailer that has invested in digital labels go back to paper labels. We can expect more replacement cycles going forward and this being a bigger part of our recurring business as time goes by. Although we have a very good relationship with Carrefour and that we continue to expand our use cases together, there is a delay in the French ESL rollout. We have extensive pilot programs ongoing in Carrefour outside of France, but for reasons not relating to Pricer, the upgrade program in France has been delayed. We'd also like to mention Italy as an increasingly interesting market for us. For several years, there have been government-sponsored tax subsidies on technology investments, which has benefited the adoption rate of ESL. The subsidies are decided from one year to the next, and that of course, has caused some vulnerability in the market. As the penetration rate reaches a certain level, it becomes very challenging for retailers to compete unless they have similar capabilities to change prices and work more efficiently. Just like we see in Canada, we believe that Italy has reached a tipping point where the tax subsidy, in fact, becomes less important for the continued strength in the market. Moving to the next slide, please, page seven. Looking at the financial results for the third quarter, we can conclude that the performance is strong, but that the comps from last year are very tough. We have a high delivery activity in the quarter, taking us to a net sales of nearly SEK 500 million. However, as we see pressure from currency effects as well as cost increases in supply chain and freight, we do not reach the level of profitability of last year. Next slide, please. The order intake of SEK 307 million is based on a stable run rate of small and medium-sized orders. Although it doesn't fully reflect the level of activity we see in the market, it's well-distributed across customers and geographies. We have mentioned before that the timing of large customer orders will continue to cause some fluctuations in our order intake between quarters. It's more interesting to look at the development over time, which continues to support the growth we see in the market. Next slide, please. We had a large backlog with us from Q2, and we are pleased that we have been able to catch up on some of that backlog during the third quarter. Lead times are much longer than normal, and we have been working hard with our supply chain and logistics to get products to our customers around the world. Although backlogs remain on the high side also at the end of the third quarter, we feel that we are now back to a steady flow of products and deliveries. Next slide, please. From a gross margin perspective, we see some significant pressure from various cost increases. There is a component shortage in the world and the unpredictable lead times that drive an increased need to store on the spot markets at higher prices to keep production going. Aside from that, several of our standard components, like for example, the ASIC, have also increased dramatically in price. This is, of course, due to the shortage in semiconductors. Adding to that, we also have a higher freight cost than normal, which is a direct consequence of the global transportation crisis. All of these increases are somewhat temporary, but based on what we hear from our suppliers, we predict that we will continue to see some high cost levels also going into 2022. Next slide, please, page 11. An operating profit is, of course, a result of the gross profit less the operating expenses. As we gave proof of last year, we have a highly scalable model where we can support large customer projects and large delivery volumes without adding much cost. However, as we continue to invest in our market presence and product development to support further growth, we do have a higher cost structure this year than last. Our sales cycles are very long, typically more than a year, which means that business development efforts that we invest in today are likely to bring fruit in the coming years. Supported by strong macro trends towards digitalization and retail automation, I believe that Pricer is well-positioned for further growth. In addition to providing the best performing ESL system, we will continue to develop Pricer Plaza and adjacent capabilities to support data collection and data analytics. With this, we intend to strengthen our competitive position further with the ambition, of course, to also increase our recurring revenues over time. Page 12. In the beginning of 2021, we noted a significant extension of lead times. Transportation times from Asia increased by several weeks to Europe and North America. Backlog was building up and customers were frustrated to not get deliveries. We have worked very hard to get back on track with shorter lead times, but this also means building more inventory and increasing the capital tie up. To manage this temporary situation, we have increased our credit facility with the bank to 200 million SEK from October. As the global freight situation returns to normal, we also expect our balance sheet KPIs to come back to more normal levels. Next slide, please. A quick recap of the third quarter. We did feel a continued strength in the market and the market trends driving the need for increased automation and digitalization continue to accelerate. We have a stable run rate business with good distribution across customers and geographies. Large customer projects will come on top of run rates, but not in an even flow, and hence some continued fluctuation between quarters. Our production is going at high speed, and we keep a good delivery pace to our customers. We feel well-positioned to meet an increased need for data and analytics in brick-and-mortar retail. With Pricer Plaza and our Pricer ShelfVision, we look forward to engaging more with customers and ecosystem partners on this topic going forward. We announced last week the decision to add production capabilities in Europe. We believe that this will improve our competitiveness, particularly in the European market, as we will be able to offer customers shorter lead times, more customization, while at the same time reducing our carbon footprint. Moving production closer to our customers has been a strategic ambition for some time, and it's thanks to the design of our new labels that we can increase the degree of automation to the extent that this becomes financially viable. Being able to mitigate geopolitical risks and reducing our dependencies on Asian production is something we are very proud of. With that, I'd like to conclude the presentation and open up for questions. Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will just be a brief pause while any questions are being registered. Just as a reminder, that was zero one on your telephone keypad if you wish to ask a question. We have a question from the line of Sebastian Johansen from Pareto Securities. Please go ahead. Sebastian, if your line is on mute, can you please unmute yourself? Yes, sorry. Thank you very much for your presentation. Two questions on my side. First, maybe could you remind us the number of pilot projects you may currently have and where are they? A second question is about your inventories, which has increased significantly in Q3. You explained during the presentation that you are building inventories for shorter lead times, but could you give us more color and also explain what kind of inventory is it? Thank you. Yeah. Hi, Sebastian. On the pilot projects, we never comment on ongoing customer dialogues, let's say. As always, we run multiple pilot programs in all geographies, in fact. Very few retailers would invest in a new technology like ESL unless they have started with a pilot project or pilot program. That is a part of our, let's say, recurring or ongoing sales cycle. We also run pilot projects on expanding use cases. That is also a very interesting area. That would be pilot programs with existing customers that intend to further explore the value creation from their ESL systems. When it comes to inventories, it's primarily on the label side. We do have a, let's say, a significant extension of lead times. What happens is that we are having inventory of, let's say, goods in transit. They are not sitting in a warehouse, but they are somewhere on a boat or waiting for a plane to be brought to the customer, and that's in fact where most of the capital is being tied up. It's on label side. It's of course to manage deliveries on the backlog, but also on the, let's say, the run rate business to make sure that we can keep lead times to somewhat decent levels. I hope that answers your question. Yes. Thank you. Helena, interesting point you mentioned in the presentation is that your customer is using more and more ESL with new functionalities like the blink. Yep Other things. Maybe could you help us understand for the moment the proportion of your customers that use SmartFLASH and other interesting features, and how do you think it will evolve in the future? What we are seeing is that more and more customers are utilizing the flashing capability in the label to address in-store process efficiency, and that would be for replenishment, click and collect, the pick-to-light for increasing the speed of picking online orders. We also see an increased utilization of the product location capability in our system. This is of course a very interesting data point, not only to support in-store efficiency, but also to enable other programs or other analytic capabilities, basically to utilize this information. For a retailer to know where the shoppers are, and then being able to match that with where the products are located, that provides them new and very important data points. While Pricer is not providing information on where the shopper is located necessarily, we do have a unique capability to tell the retailers where the products are located. That we do by understanding where the label is located in the store, and that way we can map out a real planogram of the store. We see a huge interest for these data points with many retailers around the world. Thank you very much. As there are no further audio questions, I'll hand it back to you, Helena. Okay. Thank you very much for listening in. If you have more questions, then feel free to reach out to Susanna or myself. If not, I look forward to speaking to you in a few months again. Thank you. Bye. This concludes our conference call. Thank you all for attending. You may now disconnect your lines.