New Bubbleroom Sweden AB (publ)

Hi and welcome to todays webcast with Babbro, the CEO of CIFO and Andreas Malmström. Andreas Malmström will present the report for the third quarter of 2024. After the presentation, we will have a Q&A, so if you have any questions, Babbro will send them to the right. With that said, I leave the floor to you.

Thank you for that. Hi and welcome to todays presentation of the third quarter of 2024. My name is Magnus Malmström and I am CEO and with me is Andreas Malmström, CEO of CIFO at Babbro. Todays agenda consists of the following points. We will as usual go through some highlights from Q3. We will do a business update and a financial review. In the end, we will try to summarize some thoughts on the three first quarters of this year and maybe look a little into 2024. And in the end, we will open up for questions. We are happy to present a quarter where we continue to take big steps in the right direction. In a tough market, we are happy to have an increase of 1 liter, but we are not satisfied with this growth. We have a good margin of .2% against the previous year's 60%. We chose the quarter because it was difficult to get growth, to prioritize margins and we also increased our own brand, which stands for 70% of our sales against the previous year, 67.2%. We have worked hard during the quarter and continued with the effectiveness of the cost control, which we started with in Q4 last year. We have improved both on the personnel side and in our pension costs. This sum gives us a adjusted EBITDA of minus 5 million against last year's minus 11.1 million. A strong message on the way to our black numbers. As I mentioned in previous reports, we have had a large project portfolio. I am happy to say that we have gone to the ham. These projects are linked to the following business initiatives that I have presented in previous reports. It is our customer journey, it is our product journey, it is to work with growth and of course to return to profitability as soon as possible. I want to give a big shout out to our organization that continues to deliver on this. An example of customer travel is that we have taken home customer service, which was allocated to a tree plot solution. This gives us direct contact with our consumer, we can get data, which we can also use in both the management of the company and in other areas such as return management. Another example is product reviews, where customers can rate, put and write comments on specific products. This was launched at the end of Q2 and has given us important data, a lot of data, for example on how the consumer perceives material on our products or size. We have also launched digital returns, which we can now see a positive effect on, both in the speed of management and knowledge. In connection with this, we took home the return management to Brås. Instead of shipping the returns to Tallinn for packaging, we save both the environment and we speed up the management. At the end of Q2, we went live with our customer club and I can say that we are already up to 500,000 members. A strong message. The customer club gives us data about our customers and it is an opportunity to spread in both the offer and communication. We have also recently increased the customer club with bonus points, which means that the consumer gets bonus points on ground purchase, which can then be used for next purchase. On the marketing side, we have increased press activities, we have had lunch and breakfast, we have shown collections. We have had several press days with media and influencers, both in Sweden and Norway. We have increased our investments in Denmark and Finland to build a brand identity. During the autumn, we have had a large brand campaign where we launched a party collection that has been well received. We can now say that our brand identity is constantly increasing. We continue to work hard to develop our sustainability work and I will take up two points to explain what we are doing. We have made a map of our external brands that are about 30% of our portfolio, with a focus on sustainability. This is actually a purpose to include external brands in our sustainability and climate work. Each brand has to answer questions, including social responsibility, quality assurance, climate work and future goals. We then analyze the answers and translate them into an internal ranking, to make clear which partners may need additional support or which are at the forefront. We have also contributed to a CSRD project. It is a pilot project together with a system supplier called Mission Twin. Mission Twin's mission is to help companies to protect their travel from net zero emissions. Since the start, we have used Mission Twin for our annual climate map. It is a fast initiative and a small tax collection that I have gone through now. There are three core elements that will always be with us in our decision making and how we work. The first is sustainability in all aspects. It is data driven decisions and that we as a company should strive to be the best employer in the industry. Over to you Andreas, go through some financial points.

Thank you Magnus. If we start with the turnover in the quarter, it seems to be .2% compared to the third quarter 2023. As Magnus mentioned earlier, we have focused on keeping the margin up and see that we have a gross margin of .2% compared to 60% last year. The gross result is growing with .4% to 58.1 million SEK in the quarter. We see that our cost focus during the year has given results. We see that our external costs go down by .7% and in relation to the turnover they drop from .5% to .6% in the quarter. We also see that our personnel costs go down by 4% and drop in relation to the turnover from .6% to 13%. Finally, we see that our result on adjusted EBITDA levels is improved with 6.1 million SEK from minus 11.1 million to minus 5 million SEK in the quarter. And for the third quarter 2024, we have no comparatively disturbing posts. So it is also minus 5 million SEK that is our EBITDA results. Our result on EBITDA levels is minus 7.5 million SEK per quarter, which is also a clear improvement compared to the previous year. If we look at the first nine months of the year, we see a turnover growth of .1% compared to the same period in 2023. At the same time, we see an improved EBITDA margin of .2% compared to .1% in the previous year. EBITDA results increase by .9% to 216 million SEK. And our external costs grow by 1% during the first nine months, but they drop in relation to the turnover from .9% to 54.8%. Our personnel costs increase by 2.8%, but they also drop in relation to the turnover from .7% to 12.6%. And on adjusted EBITDA levels, we improve the result with 7 million SEK and go from a result of minus 10.7 million to minus 3.7 million SEK. On adjusted EBITDA levels, we do a result of minus 11 million SEK, which is also an improvement of 6 million SEK compared to the previous year, minus 17 million SEK. If we go over to the balance calculation, we see that our team goes down by 1.7 million SEK compared to last September 2023 and ends up with 86.3 million SEK per last September. It is a level that is a little above what we want, which also affects the cash negative. We had, just as Magnus mentioned, a slightly higher sales growth during the quarter and thus sold out a slightly higher share of the deposit. And the cash went down by 14.9 million SEK compared to last September 2023 and ended up with 34.5 million SEK per last September. This is mainly due to the fact that we have had a negative EBITDA result in the last 12 months and that we continue to amortize at our AutoStore. We now have 22.1 million SEK left in the rental loan linked to our AutoStore, which we amortize closer to 6 million SEK per year. The solidity per last September rose to 48.3%. If we then look at the cash flow, we see a negative cash flow from the current activity at minus 42.5 million SEK and a total cash flow at minus 44 million SEK. Q3 is the quarter where we see the biggest negative impact on the cash flow, given that we build up our deposit before autumn and winter months. We see a build-up of the deposit during the quarter at 18.9 million SEK, and we have a short-term debt of 19.3 million SEK lower compared to last June this year. We have not made any investments during the quarter and we show a negative cash flow from financing at 1.5 million SEK, which is related to the amortization of our AutoStore. With that, I hand over to Magnus again for a few closing words. Thank you for

that. I will summarize a little. In this quarter, we have not launched as many new projects as we did during H1. We have focused on writing down and improving existing initiatives. Our focus is to return to loneliness. We need to continue to turn the stones and look at our way of working. I am pleased with many parts of the report, such as the marginals and that we are cost-effective. I see a positive impact in the company, but I would like to see a better sales growth. In general, we are improving the result with a total of 6 million SEK compared to last year. With that, I would like to thank you for listening. We look forward to quarter four. I would like to thank the customers and our organization. With that, we open up for some questions.

Thank you very much for the presentation. As you mentioned, we will go ahead with the questions. The turnover has increased marginally between the brutto marginals and the marginals. What are the biggest drivers behind the improvement in marginals, despite some challenging market conditions?

There are two parts. When we saw a little sales growth, it was to focus on marginals in the form of not being aggressive in the price campaign. We thought the market was very price aggressive. We have tried to maintain or correct our marginals by not being so aggressive. That is one part. The other part is that we increase our own brand with 3% so that the marginals are

strengthened. Thank you. Is the ambition to increase the product mix as much as the share of your own products is selling?

We have received this question before and we are at around 70%. It is not the percentage of private and foreign brands that is important. It is the mix with the consumer. Finding a sort of product that attracts our consumer is the most important thing. On the other hand, if we go to 72% in the proportion of one quarter or 67%, we are very happy with the distribution between foreign and our own brands.

Thank you. You mentioned that you have had a strong cost of production in the quarter. What specific measures have you taken to reduce the costs? How do you assess this for the coming quarter?

We have lower personnel costs by being fewer employees in the third quarter compared to last year. We have also reduced the costs of general cost awareness. We do not guide forward on how it will look, but we will always look at our cost and take action where it is needed.

Thank you. You mentioned that you do not guide, but you have continued to reach the goal of being as lucrative as possible. Can you give us some kind of detailed timeline on how we can open up and reach that goal?

We do not guide for that, but we work forward with lucidity. It is the most important part. But to do that, we have to look at all parts of the PNL. It is both the growth that we try to achieve and the margin we think is very high. And of course, the cost side is also there. We have said ourselves that we will be back to lucidity as soon as possible. Back to black as we say.

Thank you. You mentioned that you are positive about the effects of the customer club. You mentioned that there are 500,000 people who are with you right now. And digitalization, can you tell us more about the significant impact of the business and what long-term effects you expect to get from this?

If we start with the return management, we started with this project a year ago. We took home the returns from Tallinn to Borås in Q2. There are many advantages to having it in-house. We get an understanding of what kind of problems there are returns on. Another advantage is that we do not ship from Tallinn back to Borås. It is a fast, which means that we have halved the time in handling a plague that returns before the counter today. It is both knowledge, we already see new traces of getting the return. So it is another part of it. And the speed. It is return. If we take the customer club, there are many advantages. It is knowledge, data that we get from our customers. We can use it in the development of the sortiment. We can look at what they lack. We also spread communication. You get a direct contact in a different way with the consumer. Both of these two we have seen positive signals. If they have been live for a very short time. But we are positive about both of these projects.

Thank you. It has been a tough market for most of the OaFET-branch. How do you see the market that we have now? Do you think it will develop forward?

Yes, it is very difficult. We are ... how should I say? The market has been tough in the form of ... The market has been tough in the form of ... Even if we see a reduction in the rate and these things. Then it may not have really hit the consumer yet. Very few hundred extra in the form book. But somewhere like this, it is the same for everyone. We need to have a relevant sortiment. A relevant customer offering. And not look so much at macro effects. We can not affect it. We just have to work with our own business.

Thank you. A little pre-question there, as you mentioned. It is less money in the form book for consumers. Have you seen any other types of customer training? In the form of a customer base?

No. We continue to work with the sortiment. When I look at the sortiment, we are very good at parties. We are very good at clothes and at the skirt. And the sortiment continues to be very strong. We have a fairly high average order value. Which is fixed. It does not change how they consume. Our consumers in the form of lower prices. We are quite stable in those data points.

That was all the questions. We had so much thanks for coming here today. And thank you to everyone who has asked questions. We wish to continue to work on a scene. Thank you.