Okay, time's up for the next presentation here at ABG Investor Days. My name is Simon Granath, and I work as an equity analyst at ABG, and I will be moderating this session, where we have the pleasure of welcoming Magnus Larsson, who is the CEO of Pricer. For the coming 15-20 minutes, he will present the company, and then we will follow up with a shorter Q&A session. So with that said, Magnus, please go ahead. Thank you very much, Simon. Hello, everyone. I'm happy to be here. I'm sorry that I'm doing this presentation in English, because we hope that people will be streaming it also outside Sweden. So if you have any questions in Swedish, I'm happy to take it afterwards. So I'm here to speak about Pricer. Known to a lot of people, but probably not known to everyone, so I thought I would actually start with just a very brief setup, who we are. Founded in Uppsala in 1991, currently located in Stockholm. We are working in the retail tech business. Some of you might have seen StrongPoint before, that's one of our partners, so I wish I could have seen them, but now we will focus on what I have here today. We are a little bit more than 200 employees. We had a turnover last year of a little bit less than SEK 2.3 billion. We are on a growth path, in a growth path, and we have the... I will speak a little bit more about our targets and how we see the market in the following slides. But you can basically find our customers across the globe. We have customers in more than 17 countries. We have today done roughly 300 or more than 300 million labels, deployed to more than 20,000 stores. So we have a large footprint. We are leader on the market. And takes me to the next one. What market am I talking about? So Gartner made a study, they call it the CIO Priorities 2023 study. It was released in May, and they were actually then looking at what are the challenges the CIO in the retail space face this year. And of course, inflation was the number one concern for most of the CIOs. But also availability of staff, and this is something that's been present on the U.S. market for quite some time, but we also see it in quite a few other markets, where the lack of staff is actually a problem in doing the work, having the tills open, making sure they have staff to replenish the stores. We've seen a clear growth on the U.K. market now after Brexit, where basically there is no staff to do the work. On the U.K. market specifically, you could see that two years ago, from a retail tech point of view, digitizing stores was not a priority at all. This year we've seen the change, and next year we actually do believe that there will be major changes. We have also seen that over the last years, there's been a lot of challenges with the supply. It's getting better now. It's actually gone much better, but this was one of the key concerns when they were actually looking at the concerns they've had and what they could see for the future back in spring. What do they want to do? What are the objectives when they actually choose to invest? As you see, there's quite a few areas, but you could basically say that in essence, there are three that are more or less addressing the same thing, or three big ones. The first one is the shopper experience in the store. There is, of course, a fear from many of the retailers that there will be an increasing degree, or actually the increased degree of shopping online will actually be sustained. So they want to take the online experience and put it into the physical store. So that's actually a lot of investment going there. But I think what we see also now is that we have online, a lot of online players, where first we could see Amazon started their own stores, now we see Lyko starting up stores. I even heard from a colleague earlier that also Netflix is now looking at opening stores, which is sort of unexpected move, at least for myself. So the customer experience in the store is central for many of the investments. Then, of course, getting more money. How can they actually make sure that the people and the shoppers in the store, their customers, spend more money? How can they make sure that they have a list of items they want to buy, that they actually buy more than planned? And which ties quite tightly together to the experience in the store. How can you actually make the experience on a level where it actually makes them want to buy more? And the third one, the one that we've traditionally been working most with, is the efficiency. How can they actually do more with less staff? How can they serve the customers better with less staff? So, so these are the key three, three things that we actually need to address. We need to help them to really improve the operational efficiency and get the cost down, to do more with less. But we also need to participate in growing the revenue, and, and here you could see in the middle, a setup for where we have imagined a do-it-yourself store, where to get the sales up and inspire you, do a combination of, of moving images and different kind of screens. There is a, a lot of money being spent on advertisement in, in some markets, like the Anglo-Saxon market, there is a lot of money being spent on campaigning, and traditionally, they've been using plastic, cardboard, basically unconnected TVs. And this is where we see the markets actually now starting to merge, that you make an investment in digitizing the store, and why limit that digitalization only to the price changes and the store efficiency? So here, what we want to do is we want to make sure that we help the customers actually get the same, or the ability to promote, do campaigns, and actually get money from their suppliers in a different way. And of course, we want to improve the shopper experience. So these are basically the three, you can say, customer pains that we're actually addressing with our solutions. And consequently, in this space, our vision is really to be retail's first choice when it comes to the in-store, all communication and automation. So we want to make sure that regardless if they want to communicate with the shoppers, if they wanna help their vendors, Unilever or Coca-Cola or whomever they are, or communicate with the staff, we should actually make sure we provide a platform, and we enable them to do that communication. What's happening on the market? We had a capital market day last year. At that time, when we were actually doing that, building our business plan, we have a certain feeling for the global growth of the market. It was pretty hard to assess what it actually is. We were discussing with different analysts. We were looking at what competitors said. We were actually doing our own analysis, and I can tell you that whatever we guessed was wrong because it seems like the market is growing much faster. And we can see that it's difficult to say if it's 25%, is it 30%? Is it above 30%? I would probably believe it's 30% or above. But one of the key things that we see right now is that large markets where you typically have had a very low penetration of digitalization, like the U.S. market, the U.K. market, Australia, even Japan, Spain, to mention a few. There you see large Tier one and Tier two companies actually making a real move. They are planning for investment. They've been assessing it. They see the need, they actually do the investment, and they announce the investment. Here, I think that the exclusive agreement we got with Carrefour and announced in April is a really good example. We have worked a lot with them in France, then we worked with them in some of the other countries around, but now it's large. They do France, they do Spain, they're looking at Poland, they do Italy, they do Belgium. We are discussing also Latin America because they see it's critical for them to actually address these points that I was discussing earlier. And this is something we really see now. We've seen really large—we've seen Walmart make an announcement that they will digitize. Carrefour has made it, and there will be more to come. We announced SOK now in, was it September? August or September. It's the Finnish coop organization. They announced that they will do 300 stores over a couple of years, but the plan is being accelerated. We can see that in addition to the stores that actually said that, "Yes, this is what we wanna do," we can see a clear interest now from all the other stores in the chain to say that, "We also wanna do this, and we wanna do—jump on the bandwagon as soon as possible." So it's definitely happening. Signage. It's been in a lot of discussions. Now, these discussions start to be tangible. Now, we have customers said that, "Actually, it has to be part of the deployment. We want to have a signage solution in specific areas of the store. This is actually the target for our investment, and we want it to happen quite soon." So I think that we will see that first larger investments might actually happen already next year. That's, of course, our hope, even though it's nothing I can guarantee. But it's a different kind of discussion, and we see that it's actually happening now. And what's even more important, and interesting, is that this market has, of course, been crowded by people doing paper tags, they've been doing stickers, they've been doing billboards. In discussions and meetings with also these companies, and these are billion-dollar companies, they say that we believe that the future is agnostic, which is a quite drastic change in the way they actually see the world. Where they say that, "We believe that it will be a combination of electronic shelf labels, there will be digital displays, and there will be paper." And I think that's the next big thing. How can we actually, together with partners, build this kind of future where we see that we will help out and really make sure that there will be communication regardless of material or screen? We have a target to do 10% recurring revenue, and I'm happy to see also that all discussions that we actually have with retailers now is around clouds, and they want to have the cloud-enabled technology. Thank you, Simon, for coining this last year. I really like it because it's exactly what it's all about. We have had a market which been really conservative. If they're gonna do IT, they want to have a server, which should preferably be standing somewhere in the back office of the physical store. But that has changed 100%. The only customer where we're not discussing SaaS services is the American Army, where we're actually supplying all their food stores. For reasons you can imagine, they refuse to have any connectivity to the outside world. But for the rest, everyone is looking for it and asking for it. And here, Plaza, our SaaS solution, is really the key to the entrance and entering this world. For those of you that seen a few of my presentations, I've spoken a lot about four-color labels. I would say it starts to happen now in Sweden, a very large retailer. There is not that many that we sell to have actually said that their preference is that all stores using ESL should be four-color because it's simply the best way of actually promoting the products and promoting the brand. We see the same in Australia, which pretty much only buying four-color labels now, and that's a market that's taking off as we speak. New Zealand is going from three-color to four-color. If I look at our own performance, I don't speak about the business outlook, but if I look at what we've actually done this year, in these three countries, Sweden, New Zealand, and Australia, this year, orders for four-color has been more than 25% of the total invoice the deliveries that we've done to these countries. In Q3, the order intake was more than 30% of all our order intake for these three countries was four-color labels. So we can see it's happening, and we can see it also across the U.K., U.S., Canada, so many of these markets where they have a lot of campaigning. On the financial development, it's been ups, and there's been downs, and luckily, I'm happy to announce that we're now on a path where there are more ups than downs. We had a gross profit that has been going down for some time. We could see that it was stabilizing now in Q1. It was improving further in Q2, and then took a step in Q3. And actually, we see that there will be continuous gross profit improvements also now dare to say in Q4, but also across into next year. Of course, then we have the EBIT development that has been. It's been pretty much flatline on the wrong level. So now what we've done is what you've seen over the last one and half years, is that we have focused on the growth story. So we went from a company that didn't grow, where the market was growing. We started to actually get the growth in place. We have secured financing. So as you know, we had a direct and rights share issue this year, so we have the financing in place. I think the next thing is actually to look at the EBIT development and look at our operative costs. So what we've done is that we've launched a number of initiatives to actually address it, to actually get the cost down short term, but also that we look at longer-term initiatives as well. So I'm not happy with the level of operational costs, and they will be lowered into the future. What have we done so far to actually continue this growth? Well, we have invested quite a lot in sales and delivery capability. So we have the factories in place, we have the R&D in place, but we also need to make sure, especially on the growth markets, and here, Spain, U.K., Italy, even France, which I thought was a mature market, has showed that it's not a mature market, it's actually a growth market for us. We have the additional investments. We've done the very same thing in the U.S. Of course, we are looking at—we will be looking more carefully at where we will actually add resources next year, but resources will be added where we need them. We have opened a second R&D site in Taipei. We now have more than 10 people employed doing R&D work. I expected it to be good, but I have to say that I've been positively surprised. Not only did we manage to get the right people on board, but we also managed to get people with capabilities that's harder to come by in Sweden. In Taipei, we have the proximity of the display manufacturing companies, the semiconductor business, the processor business, and we got a lot of that knowledge into the company, which is actually helping us to achieve better COGS, to improve the gross profit. On supply leadership, we have spent a lot of time on actually getting the COGS down. We've been numerous negotiations with all our vendors. We've got the new vendors. We have now started our factory in Germany. It's been progressing a little bit slower than I was hoping, but it's actually we're producing, and we're actually delivering, and we're shipping, and it's very appreciated by the customers, especially in the European market. On the cloud tech side, well, we have done a lot in investment, moving away from some of the traditional hardware engineering to more software engineering. So today, we actually have more software engineers than hardware engineers, despite being mainly known for our hardware products. I think this is the last slide, and I think I've actually run out of time. So, Simon, any questions? Of course. Thank you so much, Magnus. A very good presentation, I must say. I'd like to stay on the demand topic and outlook topic, because in 2022, we talked about that the inflationary environment has been a driver to your orders, and- Yeah. We have also seen that in the numbers. How would you say that outlook has changed, if so, given the recent weakening economic terms and also that perhaps inflation is now coming down? Yeah. So what we've seen is that it's actually two things. We've seen that in some markets, like in the Swedish market, here, the inflation has, of course, pushed the cost of consumer goods and groceries up. And if you look at the public debate, there has been a lot of criticism towards some of the retailers saying that you have increased the prices too much. So many have felt that they will need to actually keep the pricing down, especially when they compete with hard discounter. So this has slowed down investments from franchises, and I would say, but this is quite specific for Scandinavia or for Sweden, we haven't seen it that much in other markets. But we had a chat with one franchisee of ICA. He said, "Well, I will make the investment, but I will actually do it next year, because right now, I just want to make sure that we continue to focus on our business and delivering our results." So the belief is still the same. What has been surprising is that I can see that the... It's not actually surprising because we could see it already last year, is that all the Tier ones, Tier twos, Tier threes, where you have large chains, where they have their own stores. They set the budget last year, and they've done budgets that actually span across several years. That's why you see companies like, or organizations like SOK, make these kind of plans for investment and speed them up because they see the benefit they get out of it, and they have the money. So that's actually helping them to also fight inflation because they made the investment with budgeted money, and they know that that will make them more efficient and actually get salary cost downs in the store. So I think also from that point of view, inflation is actually still helping us quite a bit. And I do expect, even though inflation level hopefully will actually stabilize, many of these projects have now been initiated, and we can see that the return that actually the retailers get out of the investment is actually encouraging them to continue this journey. So I have a very positive view on the future as well, and on next year. Very encouraging. And speaking of the return, have you made any assessments on the return on investment? How long does it take for the customer to eventually earn back the money spent on your product? Actually, we asked Forrester to do commissioned research on the ROI, so they interviewed three of our customers. And this was actually done one year ago, so it was before inflation really started to go very high. It's actually one and a half years. It was almost two years ago when we started to do the study. That showed an ROI of 18 months and a net present value of 270%. But it has actually sped up quite much because that was assuming regular number of price changes in the store. Now you can see that many stores, they are, if they have a sizable store, they will do 10,000-20,000 price updates per week, which is almost impossible to do with staff. I spoke with an investor that had the opportunity to actually speak with the store owner, and said: "Well, I'm investing in Pricer, and I want to know what is the truth. How fast did you get your return on investment?" He said: "Well, it was actually six months. Mm. So, they don't normally want to tell us because then they know we'll try to increase the prices even further. But I think somewhere between 6 and 18 months is probably the right, right answer, depending on how you use it. Interesting. Would it be fair to assume that the larger retailers understand this return on investment, whether it's six months or 18 months? Eight- ... while the smaller ones might not understand it as much? They absolutely do. And it's, I mean, for all, it's an investment criteria. For some of the franchisees, they said: "Well, I normally calculate the ROI, but I see that I need it, so it's not really an option not to do the investment. Interesting. As you pointed out during the presentation, the gross margin has recently started to improve. Can you talk about the drivers of that improvement and how we should think about the gross margin in general terms going forward? Yeah. So there's been a number of drivers. Of course, one has been that you have a general cost decrease on components, transportation, which is helping. Then we have done a number of renegotiations, which has been driving the costs down more than the expected market decline or the market lowering. We have done new designs of some of our products. So the design of our products is now in a set that will actually make it cheaper to produce. We have added new vendors, so there's been a lot on the design and negotiation part, but it's also the product mix. We have sold more premium labels, we have sold more full-color labels that we typically sell with better margins. We have had a more favorable product mix, also, reflecting both on the market and on this premium labels. We have also done a few price negotiations where we actually increased the pricing with certain large customers, which also, of course, have a positive effect. So I would say... Since we don't guide on future profitability, I can only say that we still expect gross margin to improve also into next year. Mm-hmm. Yes, we do have targets, but even though we have not communicated it. That's fair. And into 2024, which areas would you say that you currently prioritize, both in general terms of the company? You did mention a couple of them during the presentation and now during the Q&A. And also in terms of markets, which markets do you see the largest growth opportunities in? I would say that, of course, the U.S. presents the single largest market opportunity, but I would say the U.K., I'm confident that we will start to see some large movements next year. Spain, it's happening now. We have actually had already discussions with our biggest customer, Carrefour, in Spain, and we've done the joint planning for next year so that we know that we will have growth. I would say Australia, we see that there will be major growth. We are, of course, in Finland, where we will do a major rollout. We do believe that there will be growth also more in the Asian region. Japan, it's very difficult to assess. We can see there's a lot of interesting dialogues, but it's hard to actually be able to know, will that materialize in something in 2024? Will it be 2025? So and then from a product point of view, focus will be very much on software part to actually achieve our recurring revenue targets, and then to make sure we have changed the entire way we work and design ESL, which gives us a new flexibility to meet market requirements. If we have a large customer said, "I want to have an ESL of this specific size," two years ago, that would take us roughly one year to actually get that model in place and to do a working prototype and then actually have known that we'll be able to produce it at market price. This process takes less than a month for us now. So we have standardized the components, we have standardized the way we work, we have standardized manufacturing. So, there's still some work to be done on that side. So now focus is also looking at... Imagine if you go to a car exhibition and have this concept car. We have now developed the concept ESL for the future. So it's something we have only presented to a very small number of people. It's something we might actually not even produce, but it's something that in the customer dialogues is creating a lot of interest. And of course, being retailers' first choice also mean that we need to be in the forefront of innovation. And I see here that for the first time since I got the opportunity to be acting CEO and then CEO, I feel that we have something really compelling where people say, "Wow!" when they see it. This might not actually materialize in sales of this specific concept or that it will even be manufactured, but it's certainly helping in the dialogues we have with our customers. Very interesting. Unfortunately, we have now run out of time, as we are running a bit of a tight schedule. But thank you so much for attending here today, Magnus, and also to the rest of the audience. So with that said, we'll leave this session, and welcome to the next presentation in about five minutes. Thank you, Simon. Thank you so much. Thank you, everyone.