Good morning, welcome to the RevolutionRace Q1 2022/2023 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star and then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. To withdraw your question, please press star and then two. Please note that this event is being recorded. I would now like to turn the conference over to the CEO, Mr. Paul Fischbein. Please go ahead, sir. Thank you, operator, good morning, everyone, welcome to this conference call where we will address the development of the first quarter of our fiscal year 2022/2023. My name is Paul Fischbein, I am the CEO of RevolutionRace as of October 7th. Today, I'm joined by the company's CFO, Jesper Alm. For those of you who are not familiar with RevolutionRace, I will first give you a brief introduction. RevolutionRace is a happy outdoor brand offering a wide range of outdoor products for people with an active lifestyle. We operate with a digital D2C business model, meaning that we skip the middleman and sell our colorful products directly to our customers. By doing so, we can offer quality products with unmatched value. We are live with 18 unique and localized web shops, we reach customers in more than 35 countries. What really makes us stand out is our engaged customer community. We know how to communicate with our customers, resulting in more than 400,000 unique product reviews and around 1 million followers and fans on our social platforms. Now, let's take a look on the highlights during the first quarter. We see that net sales continues to increase by 8.5%, amounting to SEK 276 million, despite a challenging start with lower sales in July and August. At RevolutionRace, we sell products for all seasons, even though we do not like to talk about the weather seasonality, the fact that we had a longer period of warm weather during the late summer resulted in a slight delay in the demand. However, very important, we saw significantly stronger sales during September and also in October, after the quarter ended. We note that our largest region, the DACH region, continues to develop well with the sales growth of 39% during the quarter. The rest of the world region also shows a high growth of 35%, while demand in the Nordics showed a negative growth of 27%. We are not satisfied with the sales decline in the Nordics in the quarter, at the same time, we noted a stronger demand for our products in September and October also in this region. EBIT in the quarter amounted to almost SEK 50 million, corresponding to an EBIT margin of 17.4%. This is below our long-term targets, should be seen in the light of lower sales during July and August, lower marketing efficiency during these months, higher logistics costs related to inbound deliveries, higher inventory levels as well as increased costs to facilitate future sales growth. However, we end the quarter with a positive feeling as we experienced a stronger growth during September and also during October. After the end of the quarter, we saw that sales momentum was stronger. At the same time, ahead of the upcoming peak season, we carried out a stock build-up aiming at facilitating increased sales in the coming quarters. We are now entering a traditionally strong quarter with a wider assortment with many news in stock. Despite a very uncertain environment, we are entering the second quarter of our fiscal year with a very positive view. Moving on to some other operational highlights. Something that characterizes RevolutionRace is that we are constantly looking for new creative ways to develop and strengthen the brand and our awareness. During the quarter, we have initiated several exciting partnerships. One of them is with the organization Generation Pep, where we were involved in the launch of Allemansrättens dag. The initiative aims to increase the awareness of Allemansrätten in Sweden and to inspire more people to spend more time outdoors. We have also launched a new concept consisting of a series on our YouTube channel, the RevolutionRace. The program consists of Swedish profile and outdoor experts competing in the nature. The series is aligned with our motto, nature is our playground, and aims at being an eye-opener and increase the interest in active outdoor life and of course, RevolutionRace and our products. One of RevolutionRace's most important success factors is our direct communication with our customers. For a long time, we have experienced a demand for products adapted for kids and teens, so expanding towards a younger audience is therefore a natural next step. Being able to make our clothes available to the younger generation is part of making nature available to everyone. Dog owners are also a group that appreciates our multifunctional outdoor products, and we are therefore pleased that in October, we were able to introduce our first fleece collection for dogs. In addition to these new categories, during the quarter, we continued to refine and develop existing product categories, including the launch of another shoe model, and by adding additional colors and functions to existing collections. In fact, we also launched a new bag today, the duffel bag. Let's take a quick look at our markets in Q1. In our most important region, the DACH region, net sales increased by 39% to SEK 146 million, and that accounts for 53% of the total first quarter sales. The rest of the world region also reported strong sales growth of 39% to SEK 46 million, and we saw a weaker development in our most mature market, the Nordics, where sales decreased by 27%. Worth mentioning, again, is the approved sales development in September and October compared to August and July, also in the Nordic region. I also want to highlight one of our most important KPIs, the average net order value, which increased to SEK 835 from SEK 793, mainly thanks to a favorable market and product mix. With that introduction, I would like to hand over to the company CFO, Jesper Alm, who will present and walk through the financial performance. Well, thank you, Paul, and good morning, everyone. I will talk you through our financial performance during the first quarter of the new year, and I will start off with our financial targets. Ahead of the IPO in June 2021, the board of directors established our long-term financial targets related to net sales, EBIT, and dividend. When summarizing the last 12 months, we conclude that we are developing towards the net sales target, and the EBIT margin is just below the target at 24.8%. As communicated in conjunction with the full year report for last year, the board of directors proposes a dividend of SEK 0.77 per share, corresponding to a payout ratio of around 30%. The dividend is to be decided on at the AGM taking place on Thursday of this week. Moving on to net sales development during the quarter, and as already mentioned, net sales amounted to SEK 276 million, corresponding to an 8.5% growth in SEK and 6.5% in local currency. Due to seasonality, Q1 is normally a smaller quarter, and sales during July and August were slow. As pointed out earlier, the sales momentum was significantly improved in September. Despite the challenges in the macro environment, we are very pleased by the development in the DACH region and also the rest of the world, with growth rates well above 30% in each region. Looking into gross profit, we notice a good development with a growth of 7%, which is almost in line with the net sales growth. The gross profit in the quarter was SEK 197 million, corresponding to a gross margin of 71.4%. The gross margin was positively affected by a favorable market mix, but offset by a slightly increased price reduction and to some extent by foreign exchange on inbound deliveries of new products, and that is USD related. Moving on to operational expenses, we see an increase in personnel expenses compared to Q1 last year. This is in line with our strategic plan, which has been to future-proof the organization to be able to meet future sales increases. This has driven costs both for personnel and other external expenses. Other operational expenses increased compared to Q1 last year, including higher marketing expenses due to low efficiency in July and August and logistics-related costs. EBIT for the quarter amounted to close to SEK 50 million, corresponding to an EBIT margin of 17.4%. The EBIT margin for the quarter was impacted by higher marketing spend due to the lower efficiency during the outset of the quarter and logistics-related costs. Also, of course, lower sales during July and August. The underlying EBIT margin during September is in line with our long-term financial targets, when demand for our products was significantly stronger. When it comes to the balance sheet, we see minor movements overall, but I will highlight some topics on the following slides. Net working capital as a percentage of sales increased in the quarter, related to increased inventories. This leads us to our next slide on inventory development. As discussed over the past quarter, we have performed an inventory buildup from unhealthy levels a year ago. The reason for the increase is to mitigate the supply chain challenges, but also to cater for two full warehouses, as well as smaller hubs that we have. Obviously, also the weaker than planned sales development has affected the inventory levels. In this quarter, we've also seen an increase in order to meet the expected demand during our upcoming peak season, as well as broadening of our product range. We're now entering a traditionally strong quarter, and we expect the inventory level to flatten out by the end of this year. Cash flow from operating activities was negative and amounted to SEK 71 million, where the operating result was offset by increased net working capital. Cash flow from financing activities was SEK 140 million, and that's mainly attributable to increased usage of the overdraft facility. Our net debt remains very solid and amounts to SEK 25 million. I think that sums up my part, and I'll hand over back to you, Paul. Thank you, Jesper. After the weak sales in July and August, we see a clearly improved sales development in September and October. We have an organization ready for growth. We have an inventory consisting of a balance between running assortment and new products adapted to the season, and a competitive customer offer. We have a positive view of the future. We have a clear focus on customer satisfaction and are pleased to see that it results in high engagement among our customers. We have a strong brand position. Our financial position is solid, as we just heard, and we now look forward to an interesting future where we believe that we are well-positioned to continue to increase market shares. That concludes our comments on the result. Before we finish, I would like to take the opportunity to thank the whole team at RevolutionRace, our customers, shareholders, and partners. I look very much forward to continuing to build on RevolutionRace success together with all of you. With that, we are now happy to answer questions. Operator, do we have any questions? Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star and then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys, and you will hear a confirmation tone that you have joined the queue. If you wish to withdraw your question, you may press star and then two. Our first question is from Benjamin Wahlstedt of ABG. Please go ahead. Thank you very much. Good morning, guys. A couple of short questions from me. First off, I think we can quite clearly see a delay in the autumn sales or the autumn season. Would you be happy claiming that we will see a bounce back in these sales for Q4? I can start with that. We don't really guide for the second quarter. What we do see and have said in the report is that sales in September and also in October, that is after the quarter ended. was much more in line with our targets. As you know, the target is to reach at least SEK 2 billion in sales. Yep during the fiscal year 2023, 2024. Yep That feels very strong, and we are very pleased with those numbers, and we feel that we have a good momentum now entering the peak season with these two months behind us. Perfect. I believe that was a good reply. I don't think you'll answer this. Is it possible to give us a rough growth figure per month for Q3? Per month? No. Yeah We don't really disclose the isolated months. Yep I think you can go back to what we said in the last quarter or quarterly report, where we actually mentioned how July was trading. Yep September is actually performing more in line with what we expect in order to reach at least SEK 2 billion in 2023, 2024. That is what we have said. Yep calculate around that. Perfect. Thank you. We saw an accelerated decline in the Nordics versus last quarter. I was just wondering if you could give us a bit more flavor here. I know you've commented on a differing market allocation or marketing spend allocation, rather. Would you say that this is the main culprit, or are you seeing a more hesitant consumer overall in the Nordics compared to DACH, for example? It's a bit hard to say because, well, I came on board in August. What we have seen in September and in October is also that the sales numbers also in the Nordic region has bounced back to much better levels than we have had in the past. It's a bit difficult to say exactly why the patterns have been like that in the past, but what we do see in our product mix, we definitely see that the fall season started later this year compared to last year. We can always speculate, and we don't want to talk too much about the weather, but we do know that it was much warmer this year compared to last year. That could be one explanation why the fall season started later in the Nordics this year compared to last year. Yeah. Perfect. Following up on that, should we interpret your Nordics bouncing back, should we interpret that as having positive growth for any of the months in the quarter? We haven't guided for what one can expect on a region level for the upcoming quarters. What we do say is that we have seen much better numbers during September and October compared to the numbers for the full quarter that we just disclosed. Perfect. Another follow-up then. Is it possible to give a date or a rough date for when RevolutionRace autumn started? It's actually difficult to say because we're operating in 18 localized countries. On a high level, I think you can say that sales more took off end of August, beginning of September, something like that. It differs. It was, as you can understand, a little bit earlier in Finland compared to South Europe. Yeah. It differs for natural reasons. Perfect. Yeah, absolutely. Perfect. Those were all of my questions. Talk to you soon. Thank you. Thank you very much. The next question is from Julien Motte of Pascal Advisers. Please go ahead. Yeah. Hello, gentlemen. Just three questions for me, if I may. The first one is could you talk a little bit about the conversion you saw in September? Is it coming back to rather normal pattern, I guess? July and August was very weak in terms of traffic to conversion. Yes. If you could talk about that a little bit. Second question is on inventory. If you could say a bit, it decreased again, I guess, for the buildup, but is there a pricing impact? Is there also a category expansion impact on this? If you can give a bit more color on the increase compared especially to last quarter. The last one would be on the share of, let's say, new products. If you add shoes, bags, and all the small things you've done, I don't think the dog thing is a big thing, but how much did it represent in the last quarter compared to before? Yeah. Thank you. Yeah, I can start with the first question. I can repeat it just to make sure I got it right. That was a question about conversion rate. We definitely saw a much better, you can call it marketing efficiency during September. That continued into October as well. As a result of that efficiency, you can say that you get much higher conversion per marketing SEK spent. Good. The answer to that is definitely yes. Is it back to past levels or still not? I think it's a bit tricky for me to answer that. It also differs between the different markets. I think I'm pretty confident to say that it was much better compared to what we have seen in the past months and quarters. If it came back to exact levels in the past, it's a bit tricky for me to say how it was a couple of months ago. The second question was about the inventory buildup. As we said in the last quarterly announcement, we said that we have invested in order to have a fresh inventory now before the peak season. You can expect that inventory level from now and especially during the second half of this fiscal year to start to flatten out. You asked something about the pricing impact also on the Yeah inventory level. We haven't really seen any pricing impact. Also, I don't know, Jesper, if you want to say something about the potential currency impact. Yeah on that as well. Yeah. We've seen more of a, obviously, a USD impact than a pricing impact. The USD has developed strongly against most currencies and definitely against the SEK. There is a USD component in the most recent period, but still very manageable. On the third question, if I recall correctly, it was a question about the share of new products. Yeah. The new products. On a high-level basis, you can say that RevolutionRace product mix is very much based on what we call the running assortment. That stands for roughly, and it differs a little from a seasonality point of view. You can say in high level, 70%-80%. That grows, which means that new products also grow. Obviously the new products are taking some share of that, but the running assortment and the base categories are still very important for us. Okay. Very clear. Thank you. Thank you very much. Ladies and gentlemen, just a reminder, if you do wish to ask a question, you may press star and then one. The next question is from Niklas Ekman of Carnegie. Please go ahead. Thank you. Yes, sorry, I joined late here, so I apologize if you've already elaborated on this. We talked a bit about weather here, but what other factors here can you explain the big difference here between July, August and September, October? Are there any major strategic changes that you have done in this period that explain the acceleration towards the end of the period here? Yeah. We mentioned one other aspect, and that, I would say, is what we call marketing efficiency. We have definitely seen a pickup on that during September and October. That is one thing to maybe mention and highlight in that sense. Okay. Fair enough. Is that due to any strategic changes from you? You've achieved higher marketing efficiency, but how have you done that? Yeah, we have focused more our marketing investments on a very high-level basis. You can call it more converting traffic. It's a shift on a short-term basis. However, long term, it is important to always find a balance on how much you should invest in short-term traffic, and also in more long-term brand-building activities. We have also launched, as you may have seen, those type of initiatives such as YouTube series, and we do some TV commercials and stuff like that as well. Definitely, you can see a shift in how we allocate our marketing spending to more converting traffic during September and October. Very clear. Thank you. Sorry if I missed the first part here. Second question, just when you talk about September and margins are back to around the 25% guidance, can you just help clear, is there usually a large seasonal variation within the quarter? In the previous year, would July and August be weak months from a margin perspective and then September much stronger? Just to understand if this means that we can expect you, as a group, for a full quarter to show a more solid margin development in coming quarters, or whether September should maybe, in a normal quarter, be much stronger than 25%, if you understand my question. Yeah, I think I understand it. I'll try to answer it. You can say that as sales volumes are much higher in September compared to July and also August this year, you of course see scalability in the EBIT margin. That is, of course, related. Sales volumes are related to EBIT margin. Having said that's one component, of course, very important. The other component that I can mention here is, of course, the marketing efficiency component that we just discussed, where you get a better return on every invested krona in marketing. That, I would say, are two important components in order to get the higher margin in September compared to July and August. It is harder to get this kind of high marketing efficiency in July as the demand is not as high as it is in September for natural reasons. There is some sort of annual seasonality effect within the quarter as well, more based on market size or sales volume. Yeah. That makes sense. Thanks. Just following up here on the mix of new products, when you talked about the running assortment, it's like 78%. Some kind of the more recent launches here, I assume we're still talking about. We lost you for a couple of seconds. Maybe you can repeat the last two sentences so we get the whole. Yeah. Sorry, there's some static here on the line. Just on the new products like bags and shoes, can you quantify at all the share of sales here? Are we talking a low single-digit percentage point, I assume? If you could just clarify how significant those new launches have been. We don't disclose the new and smaller product categories for commercial and competitive reasons. What we do say is that the running assortment is at those levels I just mentioned. As you can imagine that the newly launched categories such as dogs, teens, bags, shoes, are fairly small if you relate it to the full sales volumes. However, you can say that it is like when we enter into new markets, you sort of dip your toe, you test it. You don't maybe invest too much in it when it comes to inventory. Compared to how much we bought, we saw a very strong sales development, both when it comes to our fleece for dogs and also the shoes in the spring, which were more or less sold out immediately. Which means you have to sort of replenish and do some follow-up orders. That takes time, takes a couple of weeks or months to fill up the inventory again. It's more of a go-to-market strategy that we take it a little bit slow when it comes to very new product categories. Yeah, that makes a lot of sense. Thank you so much. What is also important with these product categories, which we, of course, expect to increase over time, it also strengthen our brand, and makes it possible to enter into new sort of customer segments as well with these new product categories, such as teens, which is an important component in our long-term growth strategy. Makes sense. Thanks a lot. Thank you. Thank you very much. We have no further questions in the queue, I'd like to hand back to Mr. Fischbein for some closing remarks. Thank you, operator. We are seeing exciting days and look forward to the coming months. Sorry. Did we get any questions from the Yeah online? Okay, sorry. Operator, can I just repeat, we got two questions online before we finish off. The first question was if we are able to disclose how the situation is evolving in U.S. and in U.K., we haven't disclosed that. What we do say is that we are growing in the rest of the world region, that growth rate is, in the quarter, at 34%. The second question is if we are still confident in achieve the 2024 target sales for SEK 2 billion. The answer to that is, first, that it is actually a financial target for 2023/24 financial year. We are very confident about that. As we saw that sales numbers in September and in October were more in line with what we need to see in order to reach that, means that we are confident with our financial targets. With those two questions, we thank you all for participating today and for your interest in us. We look forward to speaking to you again over the coming weeks and months. May I also remind you that our Q2 report will be announced at the 31st of January. With that, thank you and bye.