Europris Asa

revenue growth, but slightly higher OPEX. My name is Henriette Tronsen, covering the consumer companies and also some tech companies in Arctic. And with me, I have the CEO of Auropris, Espen Eldau, and CFO Stina Byhre, which will take you through the presentations. then followed by a Q&A presentation at the end. So feel free to send your questions during the presentation. Thank you.

Thank you, Henriette, for the introduction. It's a pleasure to be here, and thank you to Arctic for hosting today's event and the hospitality you've shown us. That's great. As Henriette said, CFO Steve Nabire will join me on stage today, and she will present the financial details and the And we will answer questions at the end of the presentation. We will start with the questions in the room and then we will continue with questions from the web. And feel free to send in your questions as we speak. Well, as I said, the numbers are out there. We are satisfied with the revenues. We had a cost issue and I will come back to that a little bit later. But let's have a look at the highlights for the first quarter. Sales have had a good start to the new year and footfall to the stores increased. And that is, of course, the most important thing that we attract the customers. Total sales grew by 4.8% and the chain store sales grew by 6.3% with a like for like of 5%. Easter was early this year, and despite an early Easter, we actually saw record sales during the Easter season. And having that growth in the important quarterly season is, of course, a driver for Europis and demonstrates that we are a seasonal store for the Norwegian consumers, and that demonstrates our strength. We also have a concept that is relevant to the current financial climate, and we see that the trends we see now are the same as we reported last year. We continue to see high sales growth for consumables and the campaign products, and we also see high demand for our private label products. So the consumers are more cautious, and that is positive for the out-of-pitch concept. Looking at gross margin, that was 43.5%. That is almost on par with last year. And the operating expenses to sales was 29.5%, which is an increase of 2.1%. And as I said at the point of that, that is where we are not in line with the consensus for this quarter. The increase was caused by overall inflation effects and also higher electricity costs. Stina will provide some more detail on the OPEX development, and I will also come back to this when I talk about the outlook, as we see that parts of these effects will continue to impact the numbers for this year. On the financial side, we have strengthened the financial position and reduced net debt by almost 600 million. And finally, we have reached an agreement on the purchase price for the remaining 80% of the shares in ÖOB, And that is good news. So it's been an eventful start to the new year for Autopeace, with a lot of actions. I'll continue with the Earl Bear transaction. And of course, I'm really satisfied to announce that we have made good progress and that we have finally reached an agreement on the acquisition. After we exercised the option back in January, we've had a good dialogue with the sellers. and we reached an agreement on the final purchase price, which landed on 200.5 million, of which 13 million will be paid in cash, and the remaining will be paid in European shares, and those shares will be subject to a 12-month lock-up period. The closing is still subject to approval from the Foreign Direct Investment Agency in Sweden, and that is expected to be received within a few weeks. And we prepare for a closing of the transaction in May. It's not a big statement, but of course, this has been a very long process. And I'm really happy to see that we now can start the hard job. The work has begun. And together with the ÖOB team, we are working very close these days. And I'm really looking forward to continue that process and work on how we can improve the profitability and sales in ÖOB. And, of course, I know that many of you would like to see detailed plans and financial targets and timelines for EOB already now, but this is too early. We have to wait until we have received the final approval, and we also have to wait until we have communicated and detailed these plans together with the staff in EOB. IOPs has a very clear view on what needs to be done to lift sales and profits in EOB. And now we are working closely with the ÖLB team to detail these plans and make sure they get the right ownership of these plans. Because Avidopis will, of course, support the ÖLB organization, but it's important for us that they take ownership and they will actually carry out the implementation. We believe that we have a good plan on how profits should be increased. And we also see that the same culture, the same values is shared among the employees of ERB. It's been a really good start when we have started the collaboration, and I'm looking forward to continue this in the coming months. With that, I will leave the floor to Stina to talk more about the financial details.

Thank you, Espen. I will then talk about the first quarter financials. Group sales were 2 billion, up 4.8%. For the Auerpreis chain, the total growth was 6.3% and the like-for-like growth was 5%. The quarter had two fewer sales days, but this was more than outweighed by positive timing effects from an earlier Easter. And the Easter sales were strong, with all-time high sales in the weeks leading up to Easter. And as Espen said, the same development that we saw last year has continued into this year. We saw strong growth for campaign sales, and especially so for the products on the front page of the marketing leaflet. We also saw higher growth for consumables than for non-food, and we saw higher growth for our private labels than for branded goods. And these are all testaments to the relevance of the Avedupris concept in the prevailing market conditions. Where online sales are concerned, the first quarter is seasonally relatively small. In total, these sales were 153 million, down 8.4%. Lekerkassen had lower sales in both the Swedish and Danish market, which more than offset growth in the Norwegian market and growth for strikkemekka. The gross margin was 43.3%, down 0.2%. And we had higher unrealized currency gains on our hedging contracts this year than last year, meaning that the margin change was positively impacted by 0.7 percentage points. And the lower margin was explained by product mix with a higher share of consumables, a higher share of campaign sales, and also from higher input costs, especially following the weaker NOC. We are satisfied that the margin continues to lie above where it was before the pandemic. OPEX was 597 million, up 13%. This is, of course, a high increase. but it is important to see the development over time. Over the past years, we have had, if we exclude structural growth, we have had OPEX growth below inflation. And this growth last year was only 2.5%. We have gradually benefited from the central warehouse in Moss, and we have significantly benefited from our hedging strategy when it comes to electricity costs. Over the past three years, we have avoided more than 80 million of costs due to this compared to if we had had market prices. But this year, our prices are more in line with the market, meaning that those who are in the spot market will actually see lower costs while we will see higher costs. There are also some timing effects that will lead to a higher OPEX growth in the first half this year than in the second half. And for the full financial year, we expect the OPEX to grow by around 10%. As the OPEX growth was higher than the sales growth, the OPEX to sales ratio increased and ended at 29.5%, up 2.1 percentage points. EBITDA was 281 million, down 9.8%, and this development mainly reflected the higher OPEX. EBIT was 107 million, down 26.6%, and this also reflected higher lease depreciations following CPI adjustments on rent. The net profit was 47 million, down from 71 million last year. Sales growth was offset by the higher OPEX. And it should also be mentioned that our interest rate swaps had a positive impact of 7 million this year compared to a negative impact of 5 million last year. The first quarter followed its normal seasonal pattern with negative cash. Net change in cash was roughly on a par with last year, ended negatively at 490 million. The financial position is strengthened. The net debt was almost 3.5 billion, and excluding lease liabilities, it was 841 million compared to 1.4 billion last year. And cash and liquidity reserves were 1.7 billion at the end of the first quarter. And then I will hand it back to Espen. Thank you.