Welcome to the RevolutionRace webcast with teleconference Q3 2022. Throughout the call, all participants will be in a listen-only mode, and afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present CEO Pernilla Nyrensten and CFO Jesper Alm. Please begin your meeting. Hi, and welcome to this Q3 report from RevolutionRace. I'm very happy with the result of this quarter, 50% growth and EBIT margin is fabulous. The running 12 result is SEK 373 million adjusted EBIT. Under these circumstances with war and inflation is even better results. A great congratulation to the team also for all the hard work that you have done. We always start with some movies, so you can get a sense of what kind of brand we are. We are good at social media and content creation, so let's watch a movie and then we going to report the numbers. Enjoy. Welcome back. Now let's get over to the numbers. This quarter we grew by 50%, SEK 367 million and the EBIT margin grew by 61% and gave us SEK 103.5 million. We are growing. The best region for RevolutionRace this quarter is the DACH, where Germany grew by 89% and the DACH region grew by 93%. So but we see a great result even in the rest of the world. As you can see, comparing to last year, where the rest of the world stands for 14% of net sales running 12%, you can see that that is increasing and that's good for us, because we are building the brand globally. RevolutionRace is an active outdoor lifestyle brand, pure digital. That means that we can communicate with our customers on social and digital platforms and the knowledge is in-house that give us leverage, because we know how to handle the digital landscape. We skip the middleman so we can offer the customers great quality product at reasonable prices with really high quality and great fitting. That is Niclas Nyrensten with team that has designed all the products and design is one of the main reason why the customer are buying our products. A huge congratulation to the in-house production team with Niclas in head and making all these great products for us. We skip the middleman so we can give the customers better price point and at an unbeatable price. We are digital native and we know a lot about the digital landscape, so we are reaching out on different social digital platforms, and we also use Amazon. We saw great results in this quarter also with Amazon. Last year we have the 3% net impact from Amazon's platform, and we recently relaunched in U.K. As you can see, 27% EBIT margin in this quarter, even though it's a struggling time with all the inflation. You can also see the reviews is still very high. Trustpilot is up. As I talk about last quarter, it was affected a bit negatively and you can see the numbers are increasing now, and that was because of the longer lead time. Now we have handled the situation. You can also see the 4.5 on Amazon and Facebook have 4.1. It's in line with our own 4.6. Yeah. We have a good product at half the price because we skip the middleman so you get same quality as a product that cost EUR 185 and RevolutionRace same product cost EUR 105. We have several colors to choose from. We have a lot of reviews that actually are helping the customers to find the right size and know which products they need for the different activities outdoors. We use a lot of unique content to localize on different countries. We are good in both the website kind of authentic vibe, and also on social media. An in-house team also produce a lot of content. The numbers, we have increased up to almost 1.3, 1.287 million SEK to be exact, and that give us a growth year-on-year 50% as we discussed earlier. The growth is still here, and we are very pleased with this number. One of the best factor is actually that the EBIT margin is following, and that is because we are focusing a lot on profit after marketing. We are calibrating our offer on different markets accordingly to the demand. We are very fast here, and we can change our strategy within hours. That's very good with the digital business model. The products are very multifunctional with a large age group, both men and women, between the age of 18- 70 years old. You can see that average order value increased by 9% up to SEK 850, so that is also good news for us. That's mainly affected because customers buy more products and also the fact that the market mix, many countries in Europe have higher price point than the Swedish and Norwegian local currency has. We discuss the growth, 50% in this quarter and also the increasing average order value. The gross margin, 73.1%, is also very good news. We have been focused a lot on the gross margin since start, and we try to aim to always be above 70%. All new products that we are purchasing, we have that in mind, so we can have that as an average goal. 27% in this quarter. Key highlights, we launched in Estonia. It was successful, even though it's a quite small country, we saw in the EU site that it was a kind of a low-hanging fruit for us, so therefore we decided to launch in Estonia. Now, for the future, we are going to focus on existing markets and the newly launched markets. It was a. It's a struggling times out there, so we have to work really, really hard because the supply is struggling for us with the new products. We need to place the order earlier to handle the situation because the lead time is double the time as before. That's a good thing for us that we have a lot of cash and EBIT, a strong EBIT development so we can handle the situation. Now you can see it's a clear winner strategy to be profitable and high growth at the same time. Amazon, as I talk about earlier, we think that Amazon is a great add-on to RevolutionRace direct-to-consumer business model. It's very important to us that Amazon actually have that brand store so our customer can get the same feeling and the vibe and understand the brand even on their platform. You can see that we have reached high number one position in the hiking pants category for men. That's a great achievement, and we have the knowledge in-house to handle RevolutionRace Amazon. Relaunch in U.K., because of the Brexit situation, we had some problem, and now all that problem is solved. The relaunch in U.K. went smoothly and really good, so it's a great add-on. Our goal for this fiscal year is to have less than 10% of total net sales coming from Amazon. We have a great result also when it comes to EBIT margin on Amazon. Yeah, it all looks good. It's also important for me to tell you that the plan is to have approx 15% of total assortment on Amazon's platform because we want, of course, drive customers to our own platform. We see Amazon as a new customer acquisition channel because many like to use the Prime, get fast delivery, so when they get in contact with our brand, then we can drive sales, because we don't sell the full assortment there. That's the plan. We have seen that when we look at the data that we're actually converting more customers from Amazon in the long run to RevolutionRace website, and losing less. It's a good economies of scale for us. I talk about the addition of three new markets this fiscal year. U.S. is the most struggling part, to be honest, in this situation with the supply because it's a new continent. We use Amazon to calibrate the offer and get the speedy delivery. It's a little bit struggling for us. The result is promising with the US market, but it could have been even better if we haven't been struggling that hard with the supply, but we are getting there. It's looking really promising for the future, but we have some issues that we need to solve for the future. Switzerland is delivering really great growth results and we are very happy because it's also helping the gross profits because it's higher, the PAM, profit after marketing. One of the best and promising launches when it comes to profit after marketing. It's a nice add-on to the DACH region. Estonia is recently launched, and it's quite small country. It's the size of Stockholm almost. Like I said before, low-hanging fruit, low cost to launch, and we saw the number in the Trustpilot that it was beneficial for RevolutionRace. Now for the future, we are going to focus on existing and these recently launched markets. Strong track record, once again, Niklas and his team has done an amazing job with all these new products because it's not that easy to go in a new category because it's very important to have the high quality, and the shoes has get amazing reviews, very high. Also the backpacks. We sell 18-liter and 30-liter so far and planning to add on more shoes. We have two shoes for now, but we are planning to have more. It all looks good, and they also have high average order value, slightly less gross margin, but in the total it's not a problem because when we are placing bigger and larger orders, we are going to hedge, so we can get healthy gross margin even in these newly launched categories. Market development, yes, I talked about earlier. DACH is a main driver, but that is because RevolutionRace decided that the digital know-how we catch the need and the demand in a very good way so we can calibrate the offer both when it comes to products and specific markets that we see a good development in profit after marketing and new customer acquisition. We see now that Nordic countries is 28%, is flat growth, but that is because that we have decided to focus on other region because it's more beneficial when it comes to the new customer acquisition cost. Many other companies see decrease. We saw from HUI report that actually it went down 14%. To be able to have flat development, we think in this situation is good result. We have 18% in rest of the world, and Germany stands for 54%, with the DACH and Switzerland and Austria. It all look good. We are developing both the brand and the products launches according to plan or we are actually ahead of the plan, if you compare to the fiscal financial goal of 2023, 2024. Average order value increased by 9%. Mainly drivers are that profit after marketing driver and also add-on from our customers. They buy more products and also the marketing mix gives us this result to 849 SEK. Yeah, let's talk about the financial targets and the dividend policy. Almost one year ago, we entered the public environment and promised at least SEK 2 billion, 2023, 2024. As you can see, we are ahead for now, SEK 1.3 billion. Also the EBIT margin has developed very well, and we promised SEK 500 million, at least 25%, 2023, 2024. As you can see for now, LTM, we have adjusted EBIT of SEK 373 million. It's very important for RevolutionRace to keep the 25% at least because we are humble about the fact that the inflation is increasing, but we are handling the situation really, really well. Dividend, 40%-60% dividend, that's what we have said, and, last year, we gave out a 42.1% dividend. Over to you, Jesper. Hello, everyone. Good morning. Thank you, Pernilla. I'll share some views on the financials, less color than Pernilla, but, all the same. Here we go. Net sales development for the quarter, SEK 367 million, which is a very healthy number for us, taking us to a last 12-month number of close to 1.3, sorry, SEK 1.3 billion. This is for the quarter, 50% growth in net sales and 46% in local currency. Global supply and logistics, it remains a tough situation. For us it's especially challenging for the new products where we have a very good position for the running assortment. Gross profit, we have a positive development, also here with an increase in gross profit for the quarter of 52%, taking us to SEK 269 million and getting close to a billion LTM. Not really there yet, SEK 937 million. So the margin 73.1%, and it's impacted positively by the favorable market mix during the quarter. Operational expenses, we continue to have good cost control. Bear in mind that the comparison quarter was an extraordinary quarter, and we're now at a healthy level both when it comes to personnel costs and total OPEX. A good cost control continues. Adjusted EBIT, SEK 103.5 for the quarter, which is, both adjusted and unadjusted EBIT is the same. We have no adjustments during the quarter, and I remind you that the only adjustments that we've had were relating to the IPO costs during last year. 27% EBIT margin in this environment is a sign of good growth and good cost control. Balance sheet, very few developments in total. I'll get back to some parts on the financing side, but I'll skip this slide. Inventory development, we have a planned increase that we have discussed over the past quarters. What is now good is that we have more sellable products as a share of total inventory, meaning less goods in transit. The reason for the increase is to mitigate the supply chain and also to cater to two full warehouses as well as smaller hubs that we have. Net working capital, we have seen a negative development here, but bear in mind that in this quarter, parts of this is related to taking our term loan into an overdraft facility, which is long-term, which means that we amortized or repaid debt of SEK 165 million during the quarter and compare that to the SEK 142. The underlying number is actually negative for the quarter, which is good. Cash flow, we have during the quarter, as I said, repaid term loan and increased our overdraft facility to the same extent. We have lowered our cash position and also our loan volume. We have the same financing capacity as before, so we have an undrawn facility of SEK 220 million, and we have still a net cash position. I think that sums up my parts, and I'll hand over back to you, Pernilla. Okay. Yeah, the growth continues in this quarter, and the quarter we are in now, we can see that we are in line with the expectation from this quarter when we went public one year ago. It's in line with the expectation of this quarter. We are very pleased at the position with the financial goals, both in the quarter and this fiscal year. 50% growth is a strength that we are showing because it's not easy out there, and we show that we have, we want this, we want to build the next Swedish export globally to be the most recommended and loved outdoor brand out there. We do it by happy customers, but also know-how, in-house competence, and when it comes to brand, how we talk to the customers, the communication directly on social and digital platforms, and also the know-how, how to handle our web store. The collaboration, even with Amazon, we are showing that we are able to grow on marketplaces with EBIT margin that are healthy and close to RevolutionRace EBIT margin. It look very good. We have shown that we can handle the situation to become a public company because it's a lot of changes that organization need to handle. I have to give them a big applause to handle this so well. We are still growing fast. We handle the cost control, and we are very focused, and it's a lot of decision behind these numbers. Outlook, I talk a bit about it. It's in line with the expectation so far in this quarter to date. We are humble because we understand that the inflation probably can affect the world, and we are living in the same world as all the others. We are very good at allocate after demand on specific markets, change products on different markets to handle, so we can be able to grow fast. The development of this quarter is in line with the expectation that we put one year ago. It all look good, but we are humble because the situation is like it is. Yeah, I have nothing else to add, so I'm ready for all your questions. Thank you. Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero followed by the one on your telephone keypad. Our first question comes from Niklas Ekman, from Carnegie. Please go ahead. Your line is open. Thank you very much, and congratulations on a very strong set of numbers. First question from me is regarding the Nordics and the slowdown here. You talk about a challenging market, but also a deliberate decision here to reallocate your efforts in other markets. Can you say a little bit on your view here on the Nordics and the potential to bring that market back to growth? Do you see still good growth potential, or is the Nordic market nearing saturation in your perspective? No, I think it's because we are close to the Ukraine and Russia war. I guess the underlying demand is less than normal for now. We believe in our brands, we have not lose the position of our brand because it's actually decreasing in the HUI report of 14.3% to be able to handle with flat growth in that region, even though the decision to allocate on other countries and region with better profit after marketing and new customer acquisition. I believe that we can increase sales over time because we are focused a lot on both the running assortment, and we have been struggling with the recently launched products. When we are having the recently launched product in stock, that also going to help them mature because the cross-selling in mature markets are higher than in new markets. I see two big tools in the toolbox to handle to get back to the growth. Very, very good points. Thanks. On current trading, you talk about the company developing well relative to your financial target. Is there any way to quantify that? I mean, comparisons are easier in Q4. If we look at web traffic, it seems to suggest acceleration. Is that the signs you're seeing at the moment going into Q4? No. Actually, last year we grew by 152% in this quarter, so the numbers are not easy to beat. The numbers that we put on the paper for Q4 is in line with how we trade now. It's with the financials, both it's keep up and also the expectation of the quarter one year ago. Oh, okay. Perfect. Thanks for clarifying. On the gross margin here, and the stability in the gross margin, can you elaborate a little bit here on what the mix of rising input costs and price hikes? You talk about a positive mix effect. Is that a geographic mix effect? Or what are the different drivers here in terms of input cost versus price and geographic mix? Yeah. We handle the situation. We are not having in this quarter that you see, we have not increased prices. We have done that very small increase accordingly to inflation, but a lot less than the actual inflation increase. We are able to handle it because the gross margin is higher in countries outside Sweden because of the strategy that this company actually put in place from the start. The Nordic and SEK is less gross margin compared to U.K. EU countries. That's one thing. This quarter, the expectation of the gross margin. Normally we sell a lot of shorts and T-shirts in this quarter, so it can be a little bit less because of that. We also are going to calibrate our offer and focus a lot on the gross margin, even in this quarter. Perfect. Thanks. You mentioned here when you talk about new markets, you said that going forward here you're gonna focus on existing markets. Does that mean that you don't expect a lot of new markets over the next 12-18 months or so? We promised the market at least two new in the next fiscal year, but for this year, this is the end quarter for RevolutionRace. We are going to focus on the existing and newly launched even in the next quarter as well. After that, we are planning to add more new markets. Okay. Thanks for clarifying. Just the final question here on the inventory. You've gone from exceptionally low levels to quite high levels, over 28% of LTM sales. Where do you see this normalizing in kind of a normal market where you don't have significant supply disruptions? What are you aiming for in terms of inventory levels? A decrease by 10%, or so we are going to be under 20% for sure. It's a struggling time with long lead time, and also that we are building up many new countries and both two warehouses, one in Europe and one in Sweden, but also the add-on on Amazon. That is how we see it. We should be able to aim for that when the world is having shorter lead times. Perfect. Thank you so much for taking my questions. Thank you. Our next question comes from Johan Brown from ABG. Please go ahead. Your line is open. Thank you. Morning, Pernilla and Jesper. A few questions from me. Firstly, comparing sort of the start versus the end of the quarter, regarding you allocating more marketing resources towards the DACH region. Is this something that has accelerated during the quarter, or has it been quite stable throughout? Essentially, have you seen any major trend shifts in regard of return on ad spend between the geographies since the war broke out, essentially? Yeah. In the Nordics, our demand is not as high as its normal are, and you have seen that in many other e-commerce players as well. It's the same view of this quarter as the Q3 for us that we see it. Also bear in mind that the DACH region last year had 200% in growth, so that is quite high numbers to beat. We are allocating our offer both when it comes to products and market share. Don't forget about the rest of the world because that also contribute to the growth of RevolutionRace. It's only the Nordic countries, how we see it, that's struggling with the war in Ukraine for now, with Russia, that have less demand than normal. Thank you. Secondly, on the cash flow, quite interested in the other current receivables which increased to some SEK 61 million, I believe. Is it possible to explain the drivers here to that increase? Absolutely. Bear in mind, last quarter, the corresponding number was 42. Now it's up to 61. It is a consequence of the global supply chain. This is prepayment of ordered goods and accruals of marketing spend, basically. Thank you. Finally, you touched upon it a bit earlier, but the outlook statement here and the change in communication. Historically, I believe you said something along the lines of the growth in the current quarter is strong or remains strong, or something along the lines. Now you have sort of changed that communication a bit. Is it possible to help us understand the nuances here and the difference between the two statements? The statement is that we have been above our financial goals three quarters in a row. Now with these circumstances, with the inflation and the demand is decreasing for many other e-commerce players, we actually trading at the same level as we thought we should be when we put the Q4 number. It's in line with expectation, but we are not above the expectation of our financial goal. We are on target, and that is a really strong signal at least for me. Definitely. Those were all of my questions. Thank you very much. Thank you. As a reminder, to register for a question, please press zero followed by the one on your telephone keypad. Our next question comes from Daniel Irvin from UBS. Please go ahead. Your line is open. Yes. Good morning, Pernilla and Jesper, and thank you for taking my questions. On the overall macro environment here with the declining consumer confidence, et cetera, and also you mentioned here that Q4 started in line with your financial goals. If I calculate from end of last year, that would mean that you should grow on average by around 37% up to 2023-2034 to reach the SEK 2 billion. Can you just confirm if it's around that level that you've started Q4, if you could just comment on that? Thank you. No, because when we entered. If you see the financial goal, it's SEK 2 billion, and when we entered Q3 last year, we had SEK 732 million in net sales, and now we have SEK 187 million. That is the comparable numbers that you can use. How we see it is normal that we increase a percentage of net sales, but we won't deliver like three-digit net sales increase. Now we see that we are in line with the expectation, but I think you are a bit high, and you should consider that because that is not how we see this quarter, and we didn't see that last year either. Okay, I understand. When it comes to the sales development area, you mention also that it's been difficult still to get a hold of products. So have your sales been held back in the quarter by a lack of products? And perhaps if that is the case, can you quantify, and do you not expect it to be held back going forward for that reason? That's the second question, thank you. Yeah. We have been struggling with the new, newly launched products that are delayed that affect the growth potential of the quarter. We are in line with the expectation, and it's still very high growth. Yes, that is affecting the quarter for sure. Perfect. Then the last question also here on Amazon. You mentioned that you're close to your own margin on your Amazon sales. Can you give any indication of the difference? I mean, are we talking a few percentage points or more than that? That will be helpful. Thank you. I don't know if we can tell that numbers. Did we tell the No. It's a percentage difference for sure because Amazon, it costs to be there. We are good in handling the other, like, marketing part and to hedge. It's not too big difference, but you should expect some percentage here. It's profitable and it's healthily profitable on Amazon's platform. Perfect. That's all my questions. Thank you very much. Thank you. There appear to be no further audio questions. I'll return the conference back to you. Yeah. I would end this call by saying we have a great position with our brand, and we have proving ourself for eight years now. Now we are up at almost SEK 1.3 billion in net sales, and that is quite uncommon both in the outdoor industry and in Europe for a single brand. Many other companies that have a lot of brand to be able to have that net sales. We are actually taking a lot of market share. We are increasing our product offering with both the shoes, the backpacks, and all these categories. We have a lot of potential and the know-how, how to handle both new marketplaces like Amazon and show you that we are able to build it profitable and still to build a brand even there, and also handle all these new market launches and still deliver high EBIT numbers. It looks good for the future. We are humble about the fact of the situation with all the war and inflation. For the future, RevolutionRace has a great position when it comes to brand, both how we trade now, how we have traded in line and ahead of expectations. The future looks promising and we have a lot of confidence in building the best most loved outdoor brand out there. Thank you for listening. Thank you. Thank you.