Welcome to the Readly webcast and teleconference Q1 2022. Throughout the call, all participants will be in listen-only mode. In other words, there will be a question & answer section. Today, I'm pleased to present CEO, Mats Brandt, and CFO, Johan Adalberth. Please begin your meeting. Thank you. Good morning, everyone, and very welcome to our Q1 presentation today. My name is Mats Brandt, and with me here, I have our CFO, Johan Adalberth. As some of you may recall, I joined Readly as interim CEO in late January. Last week, I was appointed permanent CEO, effective May 20. I'm, of course, very grateful for this confidence from the board and energized by the opportunities ahead. I do feel much inspired to continue working with our talented team on our transition to become an even more product and user-centric company. There are many possibilities within this going forward. We will look at some of the steps we have begun to take and some that we will be taking near-term. Before we do that, I want to acknowledge that I am aware that our shareholders have expectations to hear about, and above all, see good traction on the route to grow in a more sustainable manner and to become a profitable company in not too long. I want to ensure you that we have begun to execute on this already and that we are aligned with the new strategic direction that was set out at the beginning of this year. This is at the forefront of the leadership team and myself every day. We firmly focus on executing at a faster pace now, and we do see some early indications of strength from actions we have made, we have taken recently. Next slide, please. The digital transitioning is accelerating in the media industry. With current dramatic changes we see in the world around us, we expect this to go even faster for several reasons. We do appreciate that uncertainty at large has increased a lot recently, but for us, we do expect this development to open up for even more opportunities to serve publishers and customers even better by extending our offering in several ways. This should increase user time spent on Readly, as well as open up new business opportunities and eventually new revenue streams. The shift in consumer reading habits plays in our favor. Expectations on easy access, great explorability, and flexibility to access relevant content anytime and anywhere in a cost-efficient manner is guiding our product development efforts. With a strengthened user experience and our unrivaled content, our strong partnerships globally through cost-effective distribution and a great user base already spread over more than 50 countries, we do believe that we are quite well-positioned in an industry estimated to be worth $150 billion. We have an ambitious and talented team spread across our core markets, Germany, UK, Sweden, and now France, that we also will continue to develop and strengthen to further accelerate our execution capabilities. Now let's have a look at our progress during the first quarter. Next slide, please. We delivered a first quarter with solid growth and improved profitability. Total revenues increased 41% year-over-year. Organic growth was 26%. Our subscriber base grew 70% to 465,000 compared to the same period last year. The reduced marketing spend have had an impact on the subs growth in the quarter, and that was expected. Consequently, our organic growth slowed down somewhat in Q1. As we communicated in the last quarter, marketing prices have substantially increased and to adapt and improve our unit economics, we have reduced our marketing spend and allocated investments to the markets with the best return. For example, in Germany, Austria, Switzerland. We have also adjusted allocation between channels for better efficiency. During the quarter, we have communicated the new strategic direction, which means a reduced and more selective spend on marketing, but equally important, also increased investments in product development. Readly must secure future long-term profitability growth by ensuring that we offer the best possible reading experience at all times. That, in turn, will lead to even better subscriber loyalty and more valuable users. All in all, we think we're closing a good quarter where we continue to show good top-line growth and further improved results. Next slide, please. The new strategic direction implies that we shift our focus from heavy investments in user acquisition to a more balanced approach to where we, with better precision, invest in growth, where we see that we achieve greatest return while also investing in product development. We have also initiated a cost reduction program that includes a decrease in the workforce with around 30 FTEs, including consultants. This restructuring is progressing well and according to plan. It is worth pointing out that this will not have any negative impact to our investments in tech and product development. Lastly, we are now evaluating our price levels and have initiated price increases in some markets. We do see some early promising positive results from this change. With this initiative, we aim to improve our financials substantially and to increase our maneuverability to enable future essential investments. Next slide, please. I have mentioned our increased focus on product innovation a few times, as part of our new strategic direction and the importance of it on our path towards long-term profitability. We are rebalancing from primarily marketing-driven growth to more product-driven sustainable growth, and that is why we are investing further to accelerate our pace in strengthening the Readly user experience. We need a user experience that is even more capturing and sticky, and thus will increase user engagement, time spent on our app, all this to increase subscriber lifetime value. One of the things that we're focusing on right now is to extending our offering with different types of audio content. During the quarter, we have developed prototypes, as you can see on this slide, and conducted promising user tests with podcasts. The plan is to launch audio services such as podcasts to increase usage and customer loyalty, as well as to become an even more attractive on the mobile. Thus also attract a younger audience in a more compelling way. Please note that these mock-ups are just that, only mock-ups, and The Guardian is just only used as an example for the prototypes here. I much look forward to share more information about this exciting path and our progress with new offerings in coming calls. Now, let's take a look at our progress in numbers at a greater depth. With that, I would like to hand over to you, Johan. Thank you, Mats. With that, next slide, please. Now we're on page number six, financial targets. Just a quick walk through of our financial targets that you may recall was slightly amended in the first quarter. It was the first target on revenue growth that was amended to 25% total revenue growth on a CAGR basis for the next three years, 2022 to 2024. As Mats already showed, we delivered revenue growth in Q1 that was much above this target with +40% growth year-on-year. This is the highest year-on-year revenue growth figure we have shown as a listed company, although we saw some great contribution from the French acquisition. Our second financial target, reaching a long-term gross margin of 35% remains, and I will soon show you that we are on track to deliver on this target. Our third financial target, reaching EBITDA profitability by 2025, also remains. I will soon walk you through that we are on the right path also on this target. Next slide, please. Page number seven. If you start looking at the top chart for revenues, we're pleased to show that we continue to grow our revenues. In Q1, total revenues was SEK 144 million, and this is up 41% compared to Q1 last year. The French acquisition contributed with some 15 percentage points, but we still report a solid 26% organic revenue growth for the quarter. Also +20% adjusted for currency effects. ARPU, Average Revenue Per User, was 97 SEK in Q1, up with 6 Swedish krona compared to Q1 last year, where it was 91 SEK. This was partly a currency effect, but also due to a changed market mix with higher ARPU in DACH and in France. On top of this, we expect to see a positive effect on our ARPU throughout the year when price increases come into effect. On the bottom chart, we see the number of full paying subscribers, FPS, as we say, that was 466,000 at quarter end. This corresponds to a year-on-year growth of 17%. We acknowledge that the FPS number has reduced slightly compared to the year-end number. This is partly due to the shift in allocation of resources, but also an effect of our new strategic focus, which implies a somewhat slower growth pace than previously due to reduced marketing. Next slide, please. Page number eight. On this slide, we see sales figures for our core markets and rest of world combined. We saw good development in the DACH region led by Germany, which continues to be our largest market with some margin. Net sales in Germany was SEK 49.4 million in Q1. This corresponds to 28.7% growth year-on-year, 24.2% adjusted for FX. Germany and DACH is a good example of a region where we continue to see good growth opportunities, and we will therefore continue to allocate significant resources here also in the coming quarters. Sweden and the UK progress well and continue to be important markets for us. Growth in Q1 was somewhat lower than in Germany, which was in line with expectations. Sweden grew 8.9% year-on-year to SEK 25.6 million. UK grew 19.7% year-on-year to SEK 27.4 million. Adjusted for FX, growth in the UK was 10.7%. Our latest market edition, France, contributed with SEK 15.7 million in sales in Q1, and we aim to launch Readly to French users later this year. Growth in rest of world remained favorable, and revenue increased 42.6% compared to Q1 last year and totaled SEK 22.7 million. Next slide, please. Page nine. On the top chart, we show gross profit and gross margin. Gross profit was SEK 48.8 million, a strong increase by 44.2% compared to Q1 last year. Gross margin development was also positive with 34%, and we are only one percentage points away from reaching our long-term target of 35%. Gross contribution, now what is left after we have paid both publishers and for all marketing expenses, that was +SEK 19.2 million, which corresponds to a margin of 13.3%. Compared to Q1 last year, this is a significant improvement by almost 30 percentage points and marks the shift for our strategic focus in accelerating our path to profitability. Next slide, please. Page 10. On this slide, we show adjusted EBITDA for the past five quarters. We're pleased to see this positive trend with five consecutive quarters with improved margins. If we, for instance, look back at Q1 last year, 2021, our EBITDA margin was then -53.2%. Now in this most recent quarter, adjusted EBITDA margin was more than cut in half with -22%, and we have not yet seen the effects of the cost measures that was communicated on 31st March. Back to you, Mats. Thank you, Johan. Next slide, please. During the quarter, we initiated 30 new collaborations with publishers and welcomed 353 new titles to Readly. That includes several titles from Australia's largest niche media company, Universal Media Co, plus Vogue in the Netherlands, and National Geographic History in Germany. We continue to broaden our portfolio of dailies with the recent additions of 160 British regionals, such as the Liverpool Echo, Manchester Evening News, and the Bristol Post. We focus on measures to increase time spent on our platform, as I mentioned, and adding newspapers just does that very well. We will therefore continue on this path as it also has a positive impact on discovering our broad offering of magazines. The dailies now represent every fifth open issue globally. In markets such as Germany and the U.K., we see that newspaper reading has doubled and tripled, respectively, during 2021 compared to the previous year. Around 40% read both newspapers and magazine, and we expect the numbers to grow as we continue to add more newspapers in combination with more precise marketing efforts. During 2021, the average number of newspaper readers who used Readly on a daily basis increased by 28% compared to the average for 2020. Next slide, please. We continue to build and expand our network of commercial partners to drive cost-efficient growth and wide distribution to strengthen our brand and reach. During the quarter, we launched 20 new partnerships, including Currys, U.K.'s largest electronics retailer, Wizz Air, Shell, and SJ, where Readly will be available free of charge on trains via our Readly Guest function. Wall Street Journal's member club, WSJ+, also launched a new exclusive offering that gives members access to Readly in 2022. In terms of expanding partnership across market, Tchibo is a great example, a leading retail and coffee chain in Germany that has been successful and is now expanding into Austria and Switzerland. Next slide, please. Finally, just to summarize, we delivered a good quarter with a total revenue growth of 37%. For the fourth consecutive quarter, we improved the results. We are definitely following our path towards profitability. Germany, our largest market by far, continues to deliver very well, and we see great potential for further growth in this high potential and important market, which is why we continue to focus resources to Germany in the coming quarters. Other markets, which accounted for around 70% of the total revenues in the quarter, also performed well, with particular strong growth in Austria, Italy, and Switzerland. We have communicated our new strategic direction with focus on accelerating our product development to enhance the user experience in several ways. Finally, we believe firmly that we are well-positioned for good growth ahead. We have a leading position already in major markets in Europe and are supported by strong consumer trends, such as higher demand for sustainable and trustworthy reading options, and external factors such as rising paper prices and distribution costs for publishers. In summary, money market dynamics are at play to our favor, and the digital shift in the magazine and newspaper industry is accelerating faster than ever. I much look forward to work with the Readly board, the leadership team, and all staff to ensure I will accelerate in execution and in accordance with the strategy to deliver great shareholder value going forward. With that, we would like to open up for questions. Next slide, please. Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your questions, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Our first question is Derek Laliberté, ABG. Please go ahead. Thank you very much, and good morning. Also great to see you, Mats on board on a permanent basis. That's settled now. My first question I'd like to ask on the FPS decline, like Q on Q in the quarter. I was wondering if you could elaborate a bit more on this where this took place. Was it in Sweden and mainly or basically where did this occur and for what reasons? Thank you. Yeah. Firstly to put it in perspective, it's less than 3% decline, but yet a decline. I think more importantly, it was expected as we reduced our marketing spend dramatically to the tune of SEK 20 million in the quarter. We're actually positively surprised, so to speak, that the impact hasn't been greater. What's even more important to highlight is that this makes room for investing for the coming quarters. I mentioned the product development efforts that we're taking, and we expect the growth to come back. Cool. That sounds really encouraging. On the price increases that you mentioned here lately, what are you planning for this year? Apologize if this is mentioned, but are you planning price increases across all your markets during this year, or how should we view that? Thank you. Yes. Before I'd like to add as an answer to your previous question there, Derek, that it's important to note that on revenues we are growing. Back to this question then. Yes, we do see. Yeah. Yes, we do see absolute opportunities to raise price points. You know, to put it in a perspective, we haven't raised prices for almost 10 years, and we have gone from 40 to 7,500 titles. One can argue we've been systematically lowering price in a way. Being humble to the changes around us and that it's been a lot about a lot of discussions about the sensitivity on subscriptions of various formats. We are humble to the challenge, but we do see strengths that there is a willingness among users to want to pay for quality content. We feel somewhat confident in this. It will have, of course, as I mentioned before, quite powerful impact on our finances. Great. Finally on the partnerships, I mean, you had a really, I think, impressive development with tons of partnerships throughout the years here and also a lot of exciting ones signed recently. Is there a particular one that you would like to highlight in terms of expectations for subs contributions of the latest ones and which would you say are your top partnerships right now? I think yes, but to be fair to everyone that won't be mentioned, I won't. Just to reiterate what you said, that it's a key strategic growth path for us because it's a very powerful and cost-effective way to own. But without naming a company and maybe a little bit more answer your questions, the travel sector, airlines and trains, are quite important here. Great. Okay. Okay, thank you very much. That's all for me right now. Our next question is Christoffer Bjärn-Sjöquist from Handelsbanken. Yes. Good morning, guys. First of all, congratulations, Mats, on being named the permanent CEO of Readly. First I would like to build on what Derek asked there about the FPS decline, right? You say that it was kind of expected in Q1. On the back of that, you are spending less on marketing this year, should we expect, I mean, a flat-ish rate going forward or even a decline on the subscriber line? Yeah. Hi, Christoffer. Good morning. I mean, as Mats said, there is a lack of visibility out there, and as you know, we don't provide any forecast. I mean, we do expect a slightly slower growth pace ahead, and this is of course a result of the new strategic shift that was communicated in Q1. Without giving any forecast, you can expect slightly slower growth pace ahead. Still, as Mats reiterated, we continue to grow our revenues. I mean, that's the most important thing. Even though we've become a perhaps slightly more slim company, we continue to focus on top line revenue growth. That's what matters in the end. If we have to stay on that topic, you continue to absolutely grow your revenue. I mean, if you're losing subscribers, it makes the route towards that 25% annual revenue growth target a bit trickier. Could you please help us understand then how much of that growth is supposed to come from subscriber uptake, and how much is supposed to come from price increases? It sounds very much tilted towards price increases. Price increases will be a natural way going forward. As Mats said, I mean, there is an increasing willingness to pay in general. We've added lots and lots of more great content. Price increases, yes, it will be important. I mean, as you say, naturally, I mean, fewer subscribers will eventually mean slightly slower revenues. I mean, we continue to focus on building top-line revenue growth. I mean, long term, of course, we do have strong measures to continue to grow in a more sustainable and organic way. Short term, we might see an effect, of course, as you say, because, I mean, people are more cautious, we see this throughout, it's not only us. I think, we see here that we continue to grow our revenues. That's the most important thing ahead. I would like to add to that also that one of the key KPIs we're looking at is the engagement time with us. As that continue to increase, we will, of course, improve the quality of the customer base and the value of the users. We're also thinking that this will have a bit of a viral effect as well. We're humble to the challenges, but we feel confident in the direction we set out. Great. If I may ask on the marketing investments, we saw them come down to around SEK 30 million in the quarter. I don't know if I heard it correctly, but sounded like you mentioned, Mats, a run rate of SEK 20 million there somewhere, maybe I misheard that one. I guess we can expect the SEK 30 million to come down a bit further in the coming quarters, right, on a quarterly basis. Is that correct? Yeah. If I may answer that, Christoffer. I mean, the SEK 20 million Mats referred to was the year-on-year change. I mean, we saw some SEK 50 million in marketing expenses in Q1 2021. Now we saw some SEK 30 million. I think we should keep in mind here that, I mean, the new strategic shift here in the quarter, maybe that came into full effect end of February, which means you have a full January and also a good portion of February that was, you know, more the older strategic direction. I think it's natural, as you say, that Q1 is not fully reflecting our new strategic shift ahead. Q2 will be even more sharper, if I may say so slightly lower marketing spend. As I said, also, the cost measures that was communicated, that was the last day of the quarter, 31st March. That's yet to be seen in, especially in H2. Right. Just on the cost savings, I mean, you have said H2, but should we expect anything in Q2 or do we need to wait until Q3 on those? I think you'll see something in Q2. I mean, as you know, it takes a bit of time to cut down. I mean, there are negotiations. It's a natural lag when you do this cost measure. A small impact in Q2, but I think especially in Q3 and beyond, you will see these effects. Right. Thank you. I mean, we know that you have this new strategy focusing on the right subscribers. In my view, seems unlikely that you will expand to new markets. On the flip side, should we expect you to actually exit markets to focus resources on, I mean, the core markets you have? No, I would not at all. We are a growth company, and we are definitely looking to expand into new territories as we move on. It would not be a value per se, just to put out another flag there, so to speak. We will look for where we see opportunities and grab them and then be systematic about going after profitable growth. We are shifting with a heavier focus on our core markets near term, and that's simply because we see there's great potential there and we see synergies between the different type of reach we have there, anything from acquisition marketing to partnerships. Got it. If I may, on Sweden, we have seen the growth slow significantly over the past two quarters. What's behind that? Is it, like, increased competition? I mean, is there a clear route to change the course of that? I think Sweden continue to be a important market for us. It's our home market, the first market where we launched the service. Looking at the addressable market size, I mean, the penetration we have is about 15%, which is high. I think for us, it's more natural in Sweden to look at pricing and see some maturity there ahead. It continues to be a focus for us in the long term. Although other markets, perhaps short term and midterm will be more in the focus. If I could just add to that, we are entertaining a number of dialogues to strengthen the offering in Sweden as well. Got it. Final one for me. Sorry for the lots of questions here. I mean, we have heard a lot about your new strategy, and you mentioned something about new revenue streams might pop up, right? We also know that you have a couple of adjacent services in Readly Insight and Readly Ads. Maybe you can just talk to us about how they fit into your new strategy. Yes. Well, to mention one of the areas where we look at, maybe not directly answer that last part, but I am elevating that we do have some business to business business, so to speak. It's early days, but we see promising results there, and we think the affordability there is different. It's different business logic and mechanics into it. It looks promising. When it comes to specific products and services that we do offer, they will be evaluated all the time, and they will play a role, depending on the markets and the publishers we're incorporating with. More than that, I don't wanna go into specifics here and now. Okay. Thank you.