speaker
Moderator
Host

Hi and welcome to today's webcast with Bubbleroom, where VD Magnus Månsson and CFO Alexander Tossavainen will present the report for the first quarter of 2024. After the presentation we will hold a Q&A, so if you have any questions, send them in with the form to the right. And with that said, I leave the floor to you.

speaker
Magnus Månsson
CEO

Thank you very much. Hi and welcome to today's presentation of the first quarter of 2024. My name is Magnus Månsson and I have been VD for six months. And with me I have Alexander Tossavainen, who is CFO here at Bubbleroom. Dagens agenda består av följande. Vi kommer gå igenom lite highlights, Q1. Vi kommer gå igenom en business update, Q1, samt finansiell genomgång. Vi kommer beröra lite tankar inför 2024. Och i slutet så kommer vi öppna upp för frågor. Highlights. Trots en fortsatt tuff marknadssituation, faktiskt varit mycket aggressiva kampanjer på marknaden, så kände vi Att vi var stolta över att kunna växa med 1,4%. Och detta är trots att vi bytte vårt affärssystem den 15 januari. Som gick bra men hade dock en liten påverkan på säljet. Vi ökade vår egna varumärken till en andel av 71,6% av säljet. Vi var lite sämre mot föregående år på bruttomarginalen. och landade på 65% och denna försämring kan främst härledas till att vi sålde av gamla produkter i januari. Vi landade på ett justerat resultat på minus 5 miljoner. Vi har, som jag har nämnt innan, jobbat mycket hårt med vårt lager och frigöra kapital och även se till att vi har ett fräscht och intressant lager för våra konsumenter. Vi kan se det i vårt arbete att vi har kommit ner till en lagernivå på 77 miljoner mot 106 miljoner As I mentioned last quarter, we have launched many projects to improve profitability. I can gladly say that we are moving forward in all these areas. It requires a certain amount of organization and sustainability that we dare to question ourselves and actually how we work. Our strategic overview that we started in Q4 is beginning to be seen forward. Vi har själv satt ett nytt affärssystem som vårt projektteam har drivit exemplariskt. Att byta ett affärssystem är säkert som många vet som ett affärsmässigt hjärtbyte. Vi gjorde detta den 15 februari och har redan efter sex veckor gått in i förvaltningsläget. Jag tycker det är grymt. Jag vill verkligen lyfta upp alla inblandade i det här projektet. Framåt så fortsätter vi vår plan som bygger på fyra stora affärsinitiativ som jag nämnde i förra rapporten. It is our product journey, it is customer journey, it is learning and it is growth. Under these blocks we have three basic foundations that should always be with us in our decisions. It is sustainability, it is to be data-driven in our decision-making and it is to strive to be the best employer in the industry. If we go back to the four blocks, an example of the product journey is our oversight of documents, purchasing and sourcing. Vi har fått hem våra första produkter från närmarknaden som vi placerade i slutet på Q4, vilket ger oss en flexibilitet och en snabbhet mot innan. Vi har även tittat över antalet varianter i vårt sortiment och kommit ner radikalt. Om vi tittar på kundresan så är det att försöka förbättra oss på alla delar där vi möter vår konsument. Examples of these projects are that we have launched a new customer rating on the product level to be able to pick up data and facts. We have started to bring back the return handling to Brås. We have actually also brought home customer service to our own office. All this to get a faster and better contact with our consumers. To also look at new channels in our product journey, we have opened a physical outlet that we have now run during Q1. Vi har även en digital outlet som ligger live sedan några veckor. Detta tillsammans med hemtagningen av returhanteringen öppnar stora möjligheter för oss. När det gäller marknadsinitiativ så kommer vi öppna en fysisk pop-up store på Olén City i Stockholm. Det ska bli spännande att följa. Det kommer vi göra under maj. Vi har utökat våra pressaktiviteter och haft flera pressdagar med media och influencers både i Sverige och Norge under Q1. Under Q2, we will launch a customer club and will also start selling gift cards. Sustainability. We have started a collaboration agreement with Not So Ordinary, where we rent out our products. This is the first time we have tested such a solution and it has started to exceed expectations and will be incredibly fun to follow forward. We are also proud that our sustainability guidance has been public for a few weeks. With that I leave it to you Alexander, some financial information.

speaker
Alexander Tossavainen
CFO

Thank you for that. Then I will try to summarize the first quarter and we start to look at the results calculation. Just as Magnus just mentioned, we could in the light of a challenging market show a sales growth of 1.4% during the first quarter compared to 2023 and the sales rose to 99.5 million. Together with an increased sales, we also see a continued strong gross margin, even though it is somewhat lower than the previous year. The gross margin went up to 65% and corresponded to almost 65 million kronor. The gross margin has been able to remain strong, among other things due to a positive mix change, where we have continued to increase the proportion of our own brands. Because it is on our own brands that we have a much higher margin against the external products. The other external costs went up to 55 million SEK, adjusted for comparison. This is 0.7 million SEK or 1.3% higher compared to 2023. And it can be explained by the fact that the cost levels have generally gone up since last year, but also because the other external costs include both a fixed and a movable part, and therefore have increased a little now, as our sales have also increased. Personalkostnaderna sedan ökade med 3,6% till 14,2 miljoner. Det är främst förklarat av den årliga avtalsökningen. Sedan har vi justerat evigt DA som uppgick till minus 5 miljoner kronor under Q1. I detta är det borträknat de jämförelsesstörande posterna som under kvartalet avser kostnader för vårt nya affärssystem That is, it was put on hold in February. The deductions went up to 2.3 million SEK, which is almost higher than the previous year due to the new business system that has been updated and started to be written off. And with that, the adjusted turnover result ended up at minus 7.2 million SEK. Let's go to the balance sheet and look. As we commented earlier, the inventory is significantly lower than it was last year. It went up to about 77 million kronor. And it has decreased by almost 30 million kronor since Q1 last year. And this is as a result of active work to bring down the inventory to a more suitable level. Varelaget är i och med det knappt högre än vid årsskiftet då det uppgick till drygt 75 miljoner kronor. Och då har också rörelsekapitalet som en följd av det rört sig svagt uppåt sedan årsskiftet och uppgick till 15,3 miljoner vid kvartalets utgång. Kassan uppgick till 51 miljoner kontra 58 miljoner föregående år. And then we have an interest-bearing debt that covers the automated storage and it goes up to 25.1 million kronor, where 5.9 million of that is short-term. Finally, some comments about the cash flow during the quarter. And what is worth noting about that is that our cash flow återkommande brukar vara lägst under Q1 och Q3 och som högst under Q2 och Q4. Så med det sagt så uppgick kassaflödet från den löpande verksamheten under Q1 i år till minus 10,7 miljoner och det är kvartalets resultat som här är den största bidragande faktorn. I övrigt så är det ganska små förändringar på balansräkningen. Investments were small during the quarter and ended at 0.5 million kronor. This shows the end phase of investments in our new business system. And that it is a small amount here also shows that there is not much left of our larger investments. During the first quarter of 2023, the investments rose to 3.2 million, which mainly resulted in the expansion of the robot warehouse and the new business system. Under the first quarter, the amortization took place with 1.5 million SEK and the total cash flow for the quarter went up to minus 12.7 million SEK, which gave liquid funds up to 51.2 million SEK at the start of the quarter. And that was all about the financial side, so I'll pass the floor back to you, Magnus.

speaker
Magnus Månsson
CEO

Tack så mycket. Jag tänkte att jag skulle försöka sammanfatta lite. Vårt absoluta fokus sen jag tillträdde har varit att komma tillbaka till lönsamhet. Det gäller att fortsätta att kolla över vårt kostnadskostym, fortsätta att driva projekt som ger oss bättre effektivitet. Jag är väldigt stolt över organisationen som har genomfört en massa projekt de senaste sex månaderna och vi kommer inte stoppa på detta. Vi kommer fortsätta fokusera på sälj och tillväxt och jobba med vårt kassaflöde. Extremt viktigt. Förutom alla projekt så är jag glad över att de stora investeringarna, infrastruktur, backend, nu är klara. Vi har en modern logistiklösning, Outdoor Store. Vi har en ny e-handelsplattform och nu har vi även ett nytt affärssystem som gör att vi kan faktiskt börja lägga fokus fullständigt på tillväxt och lönsamhet. So with our strong market position and our great organization, we are now looking forward to quarter two. So thank you for this and we now open up for questions.

speaker
Moderator
Host

Thank you very much for the presentation and as you mentioned, we jump right into the questions here. Could you give a comment on your weaker margin in Q1 compared to the previous period last year?

speaker
Magnus Månsson
CEO

Jag nämnde nog detta även i rapporten. Vi var aggressiva i början på Q1 i januari och hade en stor rea där vi sålde av gamla produkter. Man kan ju se även att laget har gått ner med nästan 30 miljoner. Det påverkar ju dock en liten del i vår marginal.

speaker
Moderator
Host

Thank you. You also started a strategic overview in Q4, but it's a little hard to see the effects so far. When do you think you will see the effects of this?

speaker
Magnus Månsson
CEO

We are not guiding for this, but as you can see and hear, we have many initiatives going on. We work both on the cost side and forward-looking initiatives. So I expect progress forward, but I'm not guiding for it.

speaker
Moderator
Host

I understand. And with regard to the big initiatives you have taken so far, including the ERP system, which you will soon be done with, what does it look like in the future with the CAPEX-driven initiative, if you put it that way?

speaker
Magnus Månsson
CEO

As I mentioned in my summary, we are done with the big CAPEX-driven projects. The last big one was the business system that we went live with here on the 15th of February. On the other hand, we have smaller investments that are within our budget frame this year.

speaker
Moderator
Host

Yes, you've had quite a big rotation on leading positions in the company. How will that be?

speaker
Magnus Månsson
CEO

I don't think we've had such a big rotation on leading positions. The CEO, Wille, quit in the summer and had worked eight years at the company. The CFO, Esko, had worked five years at the company. I think it's a kind of succession that happens quite naturally in a company. So it's nothing that I have reacted to and now we have a new CEO who is on his way in, Andreas Malmström, and together with the group who have been with us for many years, I think it will be a good mix forward.

speaker
Moderator
Host

Thank you. What are your expectations on the market for the rest of the year? Do you see any indications that we are on our way to better times?

speaker
Magnus Månsson
CEO

Jättesvårt att säga. Alla snackar om att det ska öppna upp sig i H2. Det är makrosiffror som jag känner att jag inte kan kommentera. Vi känner att vi har en plan som vi har satt och det är tillbaka till lönsamhet. Back to black som vi säger. Och den kör vi på med. Och sen får vi då, har vi stolper in makromässigt eller stolper ut, ja vi får jobba ändå. Så då är det.

speaker
Moderator
Host

You mentioned earlier that you don't guide, but I'm going to ask the question anyway. Can you give us a rough estimate when we can expect to see profitability?

speaker
Magnus Månsson
CEO

No, unfortunately we don't guide on that.

speaker
Moderator
Host

I understand. You mentioned in the presentation that 70% of the assortment is made of your own products. Are you satisfied with that level or should it go up or down?

speaker
Magnus Månsson
CEO

Det här är en jättesvår fråga. Vi är ju uppe på 71,6% på egna varumärken. Det är egentligen sammansättningen av varumärken och produktersortiment som är den stora frågan. Vi har externa varumärken som tillför någonting i portföljen. Jag tror det är det som är det viktigaste. Att man har både externa starka varumärken och en egen produktion som ger en mix, en flexibilitet och ett a sort of dementia promise to a consumer that she likes to trade. So that in the future, absolutely that it can be changed, but right now it looks like it's a good distribution.

speaker
Moderator
Host

Thank you. If we go back to this strategic overview, how far would you say you have come in it?

speaker
Magnus Månsson
CEO

We started it in Q4 and with that said, we have been going for four months and it's a pretty short time, but what I Det som jag tycker är positivt är att organisationen är väldigt agila, flexibla i form av att adoptera in nya frågor, nya tankar, egentligen ifrågasätta vår affärsmodell, sortiment, sälj, trafikanskaffning. Så vi har ju, som jag försökte gå igenom i min presentation, väldigt många ongoing initiative, and I feel that it's a good progress, but I can't guide more than that.

speaker
Moderator
Host

I understand. Could you mention something about how the cost distribution looks between marketing, law and admin?

speaker
Magnus Månsson
CEO

No, I can't go into detail on that, but you can look at the P&L, what we present in the report.

speaker
Moderator
Host

I understand. The final question here, what is the goal with this pop-up store that you talked about in the presentation?

speaker
Magnus Månsson
CEO

Good question and an interesting question. We haven't had a physical presence for many, many years. We feel very good in the product segment, dresses, occasion, student, ball, etc. We would like to show our beautiful products from consumers. We have contacted Olens City and have a collaboration with Olens City in Stockholm, which has extremely large traffic. So our idea is to look at what is happening in the market and learn a lot from the consumer, the purchasing power. But we also believe that this has an effect on our brand. And if it goes well and it feels good, then we will continue with some of these in the future.

speaker
Moderator
Host

Thank you very much. That was the last question we had today.

speaker
Magnus Månsson
CEO

Thank you for that. And with that, I would like to wish everyone a pleasant valborg and thank you for listening.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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