New Bubbleroom Sweden AB (publ)

Hello and welcome to today's webcast with PubRoom, where the CEO 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, please send them in with the form to the right. And with that said, I leave the rest to you.

Thank you very much, and welcome to today's presentation of the first quarter of 2024. My name is Magnus Månsson, I am the CEO since six months ago, and with me I have Alexander Tossavainen, who is the CEO here at PubRoom. Today's agenda consists of the following. We will go through some highlights, Q1. We will go through a business update, Q1, as well as financial progress. We will touch on some thoughts in 2024. And in the end, we will open up for questions. Highlights. Despite a still tough market situation, and in fact a lot of aggressive campaigns on the market, we felt that we were proud to be able to grow by 1.4%. And this is despite the fact that we changed our business system on January 15, which went well, but had a small impact on sales. We increased our own brand to .6% of the sales. We were a little worse than last year on the stock market, and landed at 65%. This decline can be mainly due to the fact that we sold out old products in January. We landed on a adjusted result of minus 5 million. As I mentioned earlier, we have worked very hard with our sales and free capital. And we have also made sure that we have received fresh and interesting sales for our consumers. We can see this in our work in coming down to a sales level of 77 million against 106 million last year. As I mentioned in the previous quarter, we have started many projects to improve profitability. I can with great pleasure state that we are moving forward in all these areas. It takes a certain amount of organization and endurance to dare to question ourselves and actually how we work. Our strategic overview, which we started in Q4, is beginning to be seen. We have launched a new business system that our project team has run exemplary. To change a business system is probably, as many know, a business-based heart change. We did this on February 15th and have already gone into a state of disrepair after six weeks. I think it's great. I really want to raise all the members of this project. We will continue to develop a plan that will be based on four major business initiatives, as I mentioned in the previous report. It is our product journey, customer journey, profitability and growth. During these blocks, we have three fundamental principles that should always be with us in our decisions. Sustainability, being data-driven in our decision-making and striving to be the best employer in the industry. If we go back to the four blocks, an example of product journey is our overview of the assortment, purchase and sales. We have received our first products from the close-up market, which we placed at the end of Q4. This gives us flexibility and speed towards the end. We have also looked at the number of variants in our assortment and come down radically. If we look at the customer journey, it is to try to improve on all parts where we meet our customers. Examples of these projects are that we have actually launched a customer rating on product level to be able to pick up data and facts. We have started to pick up the return handling to the stock market. We have actually also brought home customer service to our own office. All this to get a faster and better contact with our consumers. In order to also look at new channels in our product journey, we have opened a physical outlet that we have now run during Q1. We also have a digital outlet that has been live for a few weeks. This together with the collection of return handling opens up great opportunities for us. When it comes to the market initiative, we will open a physical pop-up store at Lehn City in Stockholm. It will be exciting to follow. We will do that in May. We have increased our press activities and had several press days with media and influencers, both in Sweden and Norway during Q1. During Q2, we will launch a customer club and will also start selling gift cards. Sustainability. We have launched a collaboration agreement with Not So Ordinary where we rent out our products. This is the first time we have tested such a solution. It has started to exceed expectations and will be incredibly fun to follow. We are also proud that our sustainability guidance has been publicly released for a few weeks. With that, I leave it to you, Alexander. Some financial information. Thank

you. I will try to summarize Q1. We start by looking at the result calculation. Just as Magnus mentioned, we could show a sales growth of .4% during Q1 compared to 2023. The sales rose to 99.5 million. Together with an increased sales, we also see a strong stock market, although it is somewhat lower than the previous year. The stock market rose to 65% and almost corresponded to 65 million SEK. The stock market has been able to remain strong due to a positive mix change where we have continued to increase the share of our own products. We have a much higher margin for our own products compared to the external products. The other external costs, up to 55 million SEK, are adjusted for comparison with the current stock market. This is 0.7 million SEK or .3% higher compared to 2023. This can be explained by the overall cost levels since last year. The other external costs include a fixed and a moving share. Therefore, the sales have increased a bit. The personal costs have increased by .6% to 14.2 million SEK, mainly due to the annual increase in sales. The EVIT DA has been adjusted to minus 5 million SEK during Q1. In this, the cost of the new business system, which was launched in February, has been calculated. The sales have increased to 2.3 million SEK, which is just above the previous year due to the new business system that has been updated and started to be written off. This results in a adjusted moving share of minus 7.2 million SEK. Let's move on to the balance. As we have commented earlier, the stock market is significantly lower than last year. This is about 77 million SEK, which has been reduced by almost 30 million SEK since Q1. This is a result of an active effort to bring the stock market down to a more appropriate level. The stock market is just above the previous year, which has been reduced by about 75 million SEK. The moving share has also been slightly raised since the previous year, which has been reduced by 15.3 million SEK at the end of Q1. The cash has been reduced by 51 million SEK, which is against 58 million SEK last year. The tax is also reduced by 25.1 million SEK, which is against 59 million SEK. Finally, a few comments on the cash flow during the quarter. What is worth noting about the cash flow is that the return on the cash flow is usually the lowest during Q1 and Q3, and the highest during Q2 and Q4. As mentioned, the cash flow from the current activity during Q1 this year has increased to minus 10.7 million SEK. This is the quarter's result, which is the biggest contributing factor. In general, there are quite small changes in the balance. The investments during the quarter were small, and ended at 0.5 million SEK. This is the end phase of investments in our new business system. The fact that there is a small block here also shows that there is not a large part left of our larger investments. During Q1 2023, the investments increased to 3.2 million SEK, which mainly resulted in the expansion of the robot camp and the new business system. During Q1, the amortization has increased by 1.5 million SEK, and the total cash flow during Q1 increased to minus 12.7 million SEK, which gave liquid assets, ranging from 51.2 million SEK per quarter. That was all about the financial side. I leave the floor to you, Magnus.

Thank you very much. I would like to try to summarize a little. Our absolute focus has been to return to profitability. It is important to continue to look beyond our cost system and continue to run projects that give us better efficiency. I am very proud of the organization that has carried out a lot of projects in the last six months, and we will not stop at this. We will continue to focus on sales and growth and work with our cash flow, which is extremely important. In addition to all projects, I am happy that the major investments, infrastructure and backend are now ready. We have a modern logistics solution, we have a new e-commerce platform, and we also have a new business system that allows us to focus on growth and profitability. With our strong market position and our great organization, we are now looking forward to Q2. Thank you for this, and we will now open up for questions.

Thank you for your presentation. As you mentioned, we jump directly into the questions. Could you give a comment on the weaker margin in Q1 compared to the previous period last year?

Yes, I mentioned this in the report. We were aggressive in the beginning of Q1 in January and had a big error where we sold off old products. We can see that the stock has gone down by almost 30 million. However, this affects a small part of our margin.

Thank you. You also started a strategic overview in Q4, but it is a bit difficult to see the effects so far. When do you think you will see the effects of this?

We do not guide for this, but as you can see and hear, we have many initiatives in progress. We work both with the cost side and the forward-driven initiative. I expect progress forward, but I do not guide for it.

I understand. With the thoughts on the big initiatives you have taken here, including the ERP system, which you will soon be done with, how does it look forward with the CapEx-driven initiative?

As I mentioned in my summary, we are done with the big CapEx-driven projects. The last big one was the business system, which we went live with on February 15. However, we have smaller investments that lie within our budget.

You have had a big rotation on leading positions in the company. How will that be?

I do not think we have had such a big rotation on leading positions. VDN Ville closed in the summer and had worked for 8 years at the company. I think it is a succession that happens naturally in a company. It is nothing I have reacted to. Now we have a new CFO who is on his way in, Andreas Malmström, and together with the gang he has been with for many years, I think it will be a good mix forward.

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

It is very difficult to say. Everyone is talking about the opening of H2. I feel that I cannot comment on the macro numbers. We feel that we have a plan, and that is back to the country, back to black as we say. We are working on that. We have to work on the macro numbers.

You mentioned earlier that you do not guide, but I will ask the question. Can you give us some rough estimates when we can expect to see profitability?

No, unfortunately we are not guided on that.

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

This is a very difficult question. We are up .6% on our own products. It is really the combination of the products and the assortment that is the big question. We have external products that add something to the portfolio. I think that is the most important thing. That you have both external products and your own production, which is a mix of flexibility and assortment promises to a consumer that she likes to trade. So, forward, absolutely that it can change. But right now it looks like it is a good distribution.

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

We started it in Q4, and with that we have been going for four months. It is a fairly short time, but what I think is positive is that the organization is very agile, flexible in the form of adopting new questions, new thoughts. We have actually been asking our business model, assortment, sales, traffic acquisition. So we have, as I tried to go through in my presentation, very many ongoing initiatives. I feel that it is a good forward, but I can not guide more than that.

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

No, I can not go into detail on that, but you can look in the PNL, what we present in the

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

Good question, an interesting question. We have not had a physical presence for many years. We feel very good in the product segment, clothing, occasion, student, bar, etc. We would like to show our products to consumers. We have contacted Olens City, a collaboration with Olens City in Stockholm, which has an extremely large traffic. So our idea is to look at what is happening, learn a lot from the consumer, buy behavior. But we also believe that this has an effect on our brand. If it goes well, and it feels good, we will continue with this.

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

Thank you for that. With that, I would like to wish everyone a pleasant choice and thank you for listening.