Welcome to the Rugvista Q4 conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to the speakers. CEO Michael Lindskog and CFO Joakim Tuvner, please go ahead. Thank you and good morning. I am happy to see all of the participants in the call. I'm also happy to be joined today with Joakim, who joined here for in about four weeks ago as the CFO. The focus today will be, as we typically do, to first go through a little bit of highlights then business updates on the strategic initiatives, and then the financial updates and finish off with a summary and Q&A. To kick things off, let me initiate just with a few of the highlights for Q4, where overall we were able to achieve good profitability. Uh, and despite the, the continued challenging market conditions, uh, our EBIT margin for, for the quarter was, uh, almost 18%, so 17.8%. Uh, and then this was really achieved, uh, by the continued focus on, on efficiency and cost control. Um, we, uh, in addition to the, the strong operating performance, we, we also, uh, managed to, to release a total of almost SEK 62 million in, in cash, partly of course, from the operating, uh, activities, but also a bit of working capital. Um, we, we do see that the, uh, the market, uh, economic climate continues to be, uh, somewhat, uh, somewhat depressed. Uh, consumer sentiment is-- it continues to be low, uh, and, uh, it did stabilize during the quarter, but at a low level. We, of course, like we've discussed before, this puts a downward pressure on purchasing power across the households in multiple markets. Our net revenue for the quarter was right above SEK 204 million, which was about 7% down versus last year and - 13% in organic growth. The focus on profitability and the challenging macros are driving that result. However, we feel still very strong from a financial position perspective. Our net cash increased. We still carry no debt, and operational performance is profitable. Finally, the looking at our strategic growth KPIs, they had a bit of a challenging quarter. However, our NPS, so customer satisfaction scores, continue to be outstanding. Moving into a bit more details on the business, I think let's start off with the strategic KPIs. Starting off, actually at the right, we see from a growth perspective, both customer acquisition and order counts, are slightly down versus last year. The worth noting is of course that the decline year-over-year is slightly lower than the, than the revenue decline, which of course would indicate a slight decrease in average order value. However, like I said before, looking at the left of the slide, we have continued very strong NPS ratings, despite the decline year-over-year. A 64 rating is still a very good number. Looking at the full year average, we ended the year at 68, which is increase over the 67 we achieved last year. We had a little bit of a challenge in certain areas during the Q4 on the satisfaction perspective, but the year as a whole was also very good on this dimension. Moving forward a little bit in terms of just getting a sense on consumer sentiment, the we've been using this throughout the year. What we can see and we're highlighting these three markets: Sweden, Germany and France, as all of them are important to us. What we can see is that things stabilized during the quarter, but at a very low level. Even in both Sweden and in Germany, we saw all-time lows essentially. Moving on to some of the successes and highlights for the year. I think we've spoken about the Rugvista Essentials earlier. Wanna highlight that once again. Rugvista Essentials, if you remember, is the sub-brand where we have developed an assortment specifically targeting first-time homemakers. Those who are who we see are a little bit younger, a little bit more fashion-forward and those who seek exceptional value for money. That collection has that or that part of the assortment has performed really well during the year, and then I would argue slightly even above our internal expectations. The next highlight I'd like to make is we've spoke a little bit about the before we've spoken about initiating the brand building journey. We've spent quite a bit of time during the course of the year getting ready for that. Our perspective when it comes to the rug is it is an item that really deserves to be in the focus. That's an important aspect of the room and the home itself. It creates an arena for life and as you know, rugs are very diverse. With that in mind, what we've, what we actually created is this communication platform, which will be the basis from where we start in terms of building the Rugvista brand and what we call "Set the Scene" really ties into how we see the importance of the rug in the context of creating beautiful homes. As part of this effort, we recently introduced our updated visual brand identity, and what you see here is of course our new logo. With that, of course, there will be more efforts within the brand building journey throughout the or in the future. We are now starting to see the initial steps being visible to all of you, so to speak. With that being said, I'd like to hand it over to Joakim who will take us through the financials. Thank you, Michael. For quarter four, we have a tough comparable with our all-time high revenue in Q4 of 2021. We also have a change in the macroeconomic climate that Michael mentioned, and our focus has been on profitability. It is in that context we need to see the group net revenue that came in for quarter four at SEK 204.1 million, representing a - 6.7%. The organic net revenue decreased by 12.7% when excluding the positive currency impact. In the tables to the right, you can see the regional development in our B2C segment, whereas the DACH and the Nordics were more affected than the rest of the world region. Michael just showed, consumer sentiment hit all-time low since the financial crisis in both Sweden and Germany. These are the core markets in these two regions. A definite bright spot though is our B2B segment, which continued to grow. It grew by 7.9% versus last year, and it is the customer group interior designers that continue to drive the demand within this segment. MPO, they meet the same market conditions as B2C, but our focus on profitability had a larger negative impact on the Amazon customers when we compare it to our own web shops. All in all, in a tough environment, we still managed to sell SEK 204 million, which is close to the Q4 number of 2020. Moving on to the gross margins then. All in all, we had a stable gross margin compared to prior year when we adjusted for the one-off effects we had in Q4 of 2021. Gross margin declined by 3.1 percentage points versus last year, out of which 2.9 percentage points was this positive one-off effect that we had in Q4 of 2021. The margin was also impacted by the continued high freight cost due to the fuel surcharges and also the high season surcharges in Q4. Looking at the margins for the segments to the right in the slide, the B2B stand out with less decline. B2B, we had a favorable country and product mix, and also the impact of bargain shopping or deal hunting, if you call it that, is less present in that segment. The main explanation here to the drop in margin is the one-off effect of 2.9 percentage points in the comparable number for Q4 in 2021. If we take a look at some cost ratios after the gross margin, cost of goods, we have driven initiatives to lower the cost base and focus on profitability. If we move to the line, other external expenses, these are down with 1.4 percentage point compared to prior year, mainly due to the focus on marketing spend efficiency, but also down due to other cost initiatives. We see a stable personal cost ratio, and it is stable despite the lower net revenue. In the line other operating expenses, we have the foreign exchange effects on transactions and the revaluation of assets and liabilities in foreign currency. This effect is slightly positive this quarter, 0.8%, and slightly negative prior year, 0.4%. It sums up to an 1.4 percentage point improvement. The depreciation and amortization is mainly the amortization of our rights of use assets. The actual amount is up just slightly, and as sales was decreasing, the percentage is slightly up with 0.3 percentage points. The bottom line is that we almost reach our prior year EBIT margin coming in 0.6 percentage points below, arriving at a 17.8% EBIT margin this quarter. Despite the drop in sales, despite the margin comparables, and thanks to the focus on profitability and a bit of help from the currency developments, we have, under the circumstances, a continued good profitability. If you take a look at the year 2022, it started with a tough first half with macroeconomic headwinds, but we adapted in the second half. We realized the price increases in quarter three. We focused on marketing efficiency, and we focused on driving the cost base down. We still came out with 11.7% EBIT margin for the whole year. Next slide. Inventory. The peak of our inventory in quarter three has come down in quarter four with SEK 12 million, and as a percentage of the last 12 months revenue, it has also dropped down to 27.3 percentage points. In an uncertain external environment, we want to safeguard our service level to our customers. Still, this share is above the target range, which is to be within 17.5 percentage points and 22.5 percentage points of the last 12 months of sales. I'd also like to make a quick comment here, regarding the situation in Turkey. As some of you or most of you know and what we communicated before is that Turkey is an important production area for us. We have many partners in Turkey that produces goods for us. The earthquake did happen close to one or the city where many of our of those producers are located. We of course are very heartbroken by the sheer number of lost lives due to the earthquake and our hearts really go out to those affected by this tragedy. We have been in trying to get in contact with all of our partners there. So far at least we've not heard of any casualties within those organizations. Still, the situation is very dynamic and we don't have the full picture. In terms of potential impact on our production, that is something we're in the process of trying to fully assess. It is something that we're monitoring. O f course, if there's something that we can do to help the human suffering down there, and that is something we'll try to do. Thank you, Michael. We'll switch slide into the net cash position. A good operational performance with an EBITDA of SEK 39 million and a working capital increase. We had a good cash flow from operating activities, and it grew well, although not entirely after the prior year numbers. Cash flow from investing activities is minor, and as you've seen in the prior quarters, this year we are capitalizing the investment of the development of our new web platform, and this is what drives the investment here in quarter four. The net cash position improved from quarter three to quarter four from SEK 55 million up to SEK 112 million. The decrease from prior year, of quarter four of prior year, SEK 78 million, is mainly driven by the dividend payout of SEK 52 million and also the working capital increase. All in all, we have a strong balance sheet, sound finances, no interest bearing debt to financial institutions, and we have a good position in cash. I hand over to you, Michael. Thank you, Joakim. Just to do a little bit of a summary here. As I think the year, as we've said, was undoubtedly quite challenging. It was also a year where we really could prove the strength of our direct to consumer business model. We, despite the challenging macros, I'd argue that our performance was quite solid. Yes, we had a net revenue decline of about 9%, that of course was driven by consumer sentiment and the general economic conditions with inflations and such. But also, the fact that we did take a conscious decision to really focus on ensuring a good and healthy profit level. As we said, achieving an EBIT margin of almost 12% in this type of environment, we see that that is quite strong and that the actions that we implemented during the second half of the year did achieve the desired effects. We are also when looking into looking into the into 2023, we start off the year very strong from a financial position basis. Especially during H2 for 2022. We were able to really improve, further improve our financial strength from an operating performance perspective, especially. As part of that context, the Board of Directors will be proposing to the AGM a dividend payout of about SEK 1.5 per share, which represents about half of our earnings for the year. All of the actions we've taken and implemented during the course of H2 really puts us in a position where we are quite comfortable in terms of facing the challenges that we undoubtedly will see in 2023. But also puts us in a position where with the financial strength that we have to capture any potential opportunities, and once things change, I'm quite confident that we'll be able to capitalize on those on that changing changing market environment. We've also throughout the year had progress on several of our strategic initiatives, which are all designed to make our customer proposition even stronger. So we spoke a little bit about Rugvista Essentials. We mentioned our work around developing and clarifying and making our brand position more crisp. Those are two very important initiatives. Also, we've spoken previously about the new freight booking platform we implemented earlier in the year, which really is the reason that we were able to introduce more than 10 or introduce local heroes or local suppliers in more than 10 markets during the second half of the year. We've also taken actions to adapt our fixed cost base to the current current outlook. With all of that being said, we are still very aware that the near term is uncertain, but we have a good starting point to navigate continue to navigate that environment. With that being said, we will open up for potential questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Niklas Ekman from Carnegie. Please go ahead. Thank you. Yes, a couple of questions from my end. Firstly, if we can start with the last topic you talked about here, the view on 2023. I realize that it's the visibility here might be very poor. You're talking about a challenging market. We know that the Similarweb data has continued down in January. On the other hand, the energy prices turned out to be a little bit less severe for many households. You face much easier comparisons. You talk about the consumer confidence having bottomed a few months ago. What is your view here? Is the worst behind or are we looking at continued declining volumes, continuing throughout the long period of 2023? Any thoughts here would just be helpful. I think number one is that the degree of predictability is probably less than most years. We don't know. What we can see, like you said, there are certain markets which are showing signs of, let's say, bouncing back a bit. With this unstable geopolitical situation, still a bit uncertainty regarding how the energy situation will pan out also, into the future, and then also the inflationary pressure, and maybe more so for Sweden with the interest rates. It's a lot of big macro topics which are, yes, they are kind of stabilizing at a low level, but I think it's a little bit too early to sort of say that the worst is behind us. What I think we can say is that we've prepared ourselves, and I think also been able to show that we have adapted to this new reality and we are now at a position where we can run and drive a very profitable business in these conditions. Like I said, once things are changing in terms of the economic situation, we've done a lot of work to prepare ourselves for the next phase of our growth journey. Thank you. That's as clear as can be, I guess, in this current environment. If you were to see further weakness and potentially significant further weakness, I mean, fixed costs were much lower now in Q4. If markets would continue lower, what is your ability to do more cost reductions, and how quickly can that be done? It's always, I think, yeah, if you look at sort of, the structure of our overall P&L or income statement, the biggest line items are number one, of course, the marketing expense ratio and then number two, the product cost ratio. On both of those key line items, we have a very high degree of flexibility in terms of adjusting and adapting to changing conditions. If we start off with marketing, and that we kind of did during the second half of the year especially, is, we really looked at making sure every single euro that we spent was being spent at the right marginal cost. That is a big reason why we were able to achieve that improvement. When it comes to the article COGS, or article cost ratio, we with the market we're in, where we offer items or an assortment that is mostly developed by us. So it's only available from us, that gives us a high degree of pricing flexibility, which of course has a large impact in terms of the cost ratio that products constitute of sales. Thank you. Thank you. That's very clear. We talked about Turkey here before. Can you elaborate on how big share of your production is in the area impacted by the earthquake? Turkey as a whole, how big of a production market is that for you? We've, we don't share specifics in terms of a sort of exact sourcing split. What we have said historically as, and can I reiterate that, we have the two major portions of our assortment which number one is the design portion of the assortment and then number two is the traditional. Within the design as portion of the assortment, we do Turkey and India as the two main production sources. Turkey is an important sourcing geography for us. The situation on the ground, as you probably know, in looking at the news, it's, yeah, chaotic and things are, people are, of course, focusing on trying to save lives and all of those things. Once we know more in terms of how this affects our business, of course, we will take appropriate actions in order to ensure that the potential impact is limited. It is an important area that we need to of course put a plan in place for. Okay. Thank you. Just a final question. What are you seeing in terms of competition? Are you seeing competitors going out of business? Given the strong net cash position you have, do you have any updated view on M&A? I think throughout the, like we said before, number one, in terms of potential M&A topic, we continue to sort of be open to looking at opportunities. The focus during the past six months, of course, has been to ensure that we in our core business, our current business, achieve the operational performance we wanted to achieve. But we're still open in terms of people going out of business et cetera. The, just looking at, you know, some of the data points that we have available, doesn't seem to be a strong indication that at least among the somewhat larger players that we face across the different European markets we operate or sell in, that year-on-year, the number of players participating in auctions, et cetera, haven't really changed that much. Okay, fair enough. Thank you for taking my question. Thanks. The next question comes from Benjamin Wahlstedt from ABGSC. Please go ahead. Good morning, guys, and congratulations on a strong report. Good morning. A couple of questions from me as well. Conversion, I noticed still at record high levels at 0.9%. How do we sort of understand this figure going forward? Is there like additional upside here or what do you think is a mature conversion rate? Excuse me. The conversion rate itself is impacted by a lot of different factors. If you just take it from sort of the from the start of the consumer journey, it's very dependent on the type of traffic that you get to your site or to your web shops. So that's kinda step one. Then once you... Once a visitor gets to the shop, then you have, of course, the assortment, how easy it is to find what you're looking for, the pricing of that of the products that a given person is interested in addition to the overall ease of completing a purchase. Of course, the overall trust that a given user has in that retailer's or web shop's brand and et cetera. With that being said, the improving conversion rate by itself is not necessarily an objective. It depends as very much on the type of traffic you buy and all of those things. What we've seen throughout the year, of course, is that we focus on driving more high quality traffic, 'cause that high quality traffic does convert better, and that's part of the reason why it's high quality. Then, of course, that also means that we've reduced some of the less high quality traffic. There's always a limit in terms of the total volume of that type of traffic available. It's always going to be a balance in terms of how we try to improve the conversion rate versus also driving top line. Then the final point I think worth mentioning is part of the reason or a major part of the reason why we initiate the rebuild of our web shop is of course that we want to ensure that our digital experience, so the visits to our web shop, is able to better cater to different user needs. Of course, if we're able to cater to more users more efficiently, that over time, should improve conversion rate as well. Thank you. Mm-hmm. Like, is there anything you want to share regarding, like, early learnings from the Austrian and Croatian web shop, like, on that note? Still very early in the life cycle. We continue to add small features and building on the entire sort of e-comm platform 'cause it's the front. The web shop is only one portion of what we're developing. It's progressing, but we are sort of monitoring and trying to add features incrementally. Once we feel that the sort of entire infrastructure is at a maturity level, we'll of course start rolling out more and more. Mm. Mm. Loud and clear. Thank you. Could you perhaps talk a little bit about and quantify maybe as well what portion of marketing improvements, like is a general CPC decline in the market and what part is on, like, on your redistribution of the marketing spend on your end, so to speak? Yeah. Since we are very geographically diversified, right? The situation will depend a bit on which market you look at and also with the two brands that we operate. I'd say the majority of the reason we're achieving the improvement is driven by a conscious decision in terms of where to invest the monies versus the market itself going overall being, let's call it less expensive. Perfect. Thank you very much. Mm. One final one. Is it possible to comment on the number of rugs in inventory year-on-year to get a feel for the change less FX effects please? Yeah, that's a count. That's a number we haven't shared. Historically and not a public number. I think the what we're trying to ensure and a little bit what we've spoken about, is that ahead of the peak season. That kind of we see the sort of high season for us starting in September/ early October in a typical season, is that you typically build up inventory ahead of that. What we did with the effort to improve our assortment at the end of last year. Of course, we put in a fair amount of purchase orders in order to have them delivered prior to this year's peak season. That of course, so we invested in new designs and new qualities and such. So on an absolute count, yeah, we're up for sure compared to last year. Of course with the monies in the inventory that is quite obvious. But it's also a bit of a conscious choice in terms of making sure that we continue to put the best possible product out there. I think it's important to keep in mind also that during the start of the COVID years, for about 1.5 years almost, we had very limited activity in the product development area because of the fact that we couldn't travel and you really need to travel to our producers when doing new product development. Let's call it a little bit of a catch-up effect or whatever in terms of us introducing newness was part of the reason the things look the way they look. It is still to like we said before, that our inventory has a very low degree of fashion risk. When we look at the different, let's say, purchasing cohorts when we bought stuff, all of our entire assortment is moving. Of course, there's certain articles which are moving less fast versus others. Overall we're quite comfortable having inventory 'cause that ensures that we have stuff to sell. At the end of the day, we need to sell stuff in order to drive top line. Loud and clear. Thank you very much. Those were all my questions. Thank you. Please state your name and company. Please go ahead. Hi Michael and Joakim. This is Emanuel Jansson from Danske Bank. Thank you on a good presentation and also congratulations on strong report. I think the most of my question already been answered, but just coming back to the tragic situation in Turkey and as we're already talking about the design carpets, rugs. How easy is it to redirect the sourcing for design rug from India instead versus Turkey? In terms of us buying from one region versus the other, that is very easy for us to adapt, to be quite fair. However, the type of products that we buy from each region is very different. With India, where there we source the handmade design rugs. It's actually produced, you know, by hand, whereas Turkey primarily has factories and machinery that produces the rugs. That's the big difference between Turkey and Indian production. Yeah. Okay, perfect. Mm-hmm. That's clear. Maybe can you comment anything on the lower NPS score in the quarter? Is it anything specific the customers have experienced or? Yeah. It's like we said a little bit in the indicated in the report. We did the reorganization of course which was announced early in the quarter. Then with the high, quite high demand in terms of parcel deliveries across all industries, some of the carriers had challenges in terms of keeping delivery promises and those things. So those are kind of the primary reasons for the slight decline in the satisfaction level during the quarter. Okay. Is that situation better now, going ahead? Yeah. I mean, we... November of course, for all retail in general, is quite a strong month. Many product categories are very dependent on the Christmas and pre-Christmas period that is slightly less important or is definitely less important for our products, product types. Since it's not really a gift giving type of product. With that being said, the sort of total volumes, I would argue in terms of total volumes of parcels that are being sent across Europe at the moment is less than of course it was pre-Christmas. It's so that portion is of course easing, and then our internal operations are stable. Yeah. Okay. Yeah, perfect. That makes sense. Maybe a last question from my side regarding market shares which we already been talking a little bit about. If you're looking at the different regions here, you can see that Nordics have the biggest decline in the quarter. You feel that you're maintaining or gaining market shares, or is the marketing environment or competition environment is it more difficult in Nordics compared to other regions, or how should we view it? Yeah. I think the pandemic, of course, did change sort of the competitive set to a certain degree. Where you had quite a few, let's say multi-channel interior. You know, those selling home interiors, with an offline focus historically. They, of course, had to become more focused on online. I think we continue to see that. That has been one portion of what's been going on in the Nordics. And then, of course, when we've seen that we can get better ROI by, in our markets and in other regions, that of course is a decision that in certain areas we've taken during especially H2. Okay. Yeah. perfect. Well, that's very clear. That was all my questions. Thank you very much, Michael. Thank you, guys. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions. Thank you. We have no written questions. Again, we'll... We wanna thank everybody for listening and appreciate the attention. By with that, we also will end today's call. Thank you and have a great day.