New Bubbleroom Sweden AB (publ)

Welcome to this presentation where Babbeldrum presents their Q4 report. We have Andreas with us. Here you go.

Thank you for that. Welcome to today's presentation of the fourth quarter 2004 and the whole year 2024. It should be until 2004. My name is Magnus Månsson and I have Andreas Månsson with me. Who is CFO at Babbeldrum. Today's agenda consists of following points. We will go through some highlights from the quarter. We will do a business update on Q4 and look at the whole year, as well as we will have a financial breakthrough. Then we will summarize some thoughts on Q4 and the year and look a little forward towards 2025. And at the end of the presentation, we will open up for questions. I am happy to present a quarter where we continue to take big steps in the right direction. Our ambition is to return to profitability more than half of the loss in Q4. We reduce the sales of the quarter by 6.8 percent, but land on the whole year on a plus of 0.4 percent. We can say that we continue to take good growth in Sweden and have a little tougher in the rest of the Nordic countries. We are constantly working to optimize our assortment on the Zalando platform in Europe. One effect of this is that we have reduced sales of products with a higher degree of profit. This affects sales but benefits profitability in the long run. This is an active decision. We are at a stable and good margin of 63.5 in the quarter and our share of our own brand of the total sales is 70 percent. According to us, a volatile and quite aggressive market during Q4, which was heavy in October, but became good over Black Week and Christmas, we prioritized marginality and profitability and a little in marketing. We have continued to work hard with efficiencies and cost control, and Andreas will go through this a little later, both on the personnel side and on our operational costs. This contribution gives us a adjusted EBITDA of minus 1.6 against last year's minus 3.2. A strong message on our way to a slump in numbers. We have now been in the area for a year and we are carrying out a major business trip. We look at processes, we look at how we work today, but also how we need to look forward and organize ourselves. As I explained a little earlier in our report, we have four blocks in our business plan that are linked to profitable growth. All projects during the year have been linked to this strategy. It is customer travel, it is product travel, it is sustainability, but it is above all to return to profitability as soon as possible. One example of customer travel is the following. We launched our customer club in 2024. We have already now, when we went out this year, 600,000 members. It is a unit. We have also launched a bonus system in our customer club during the quarter and treats such as member deals, pre-tour to Réa, etc. We have taken home our customer service to Brås. It has previously been outsourced and already now we can see that we are more cost-effective than we have been before. But the most important of all is the customer satisfaction that we focus incredibly much on. An example of this is that we have gone from 2.8 to 4.0 on Trustpilot in just three quarters. We launched product reviews where customers can rate, write comments on the specific products. We have already now after one quarter 70,000 reviews, but above all we have got a lot of useful data in the company that we can work with. During the quarter we expanded market activities and doubled the number of PR meetings and cooperation with ambassadors and influencers. We also had a successful brand campaign that we are happy with. We have launched digital sales during the year that went by and we can now see a positive effect on both the speed of handling and knowledge. In connection with this, we took home the return management to Brås and instead of shipping the return to Tallinn for packaging, we now save the environment and we speed up our handling. We saw a decrease in return rate in the quarter and we have brought it to all our initiatives that we have taken during the year and in Q4. We have evaluated the range during the quarter where we are down by 10 percent in individual between 10 and 15 Exactly but we talked about this prior to Q5 to reduce our total dür你的 area, lower aldB, through childっと er your category. And then after Q3 we haveやd Mer EFISORE王, which I like it. You do not forget that you are one in five action grandson. All hairwood A. The next group you do your job by doing. We are always looking forward to this. An example of this is that we have integrated AI both in customer service and in our product transitions during the quarter. Within the sustainability block, which is incredibly important to us, where we work continuously, we have launched a second-hand site together with the company Revive, where consumers can put up, sell and buy Barber Room products. We have been aiming to not fly home products throughout the year. I can proudly say that we have been flying zero during 2024, an important part of our sustainability approach. Nothing of this could have gone without our fantastic staff. We have been striving to become the best employer in the industry. I hope this can attract staff. With that, I would like to thank everyone for 2024. Now it's your turn, Andreas, to give us some financial information.

Thank you, Magnus. If we start with the turnover in the quarter, it rose to 113.3 million SEK, which is a reduction of .8% compared to the fourth quarter of 2023. We have, as Magnus mentioned, worked a lot during the quarter to optimize the profitability, and that has gone out over the sales and has affected negatively. The margin of turnover is just below the fourth quarter of 2023 and ends at 63.5%. Partly driven by the fact that we have a slightly lower share in our own products in Q4 2024 compared to 2023. Our other external costs go down by .1% and as a part of the turnover they go from .5% to 53.8%. And in our other external costs we have a mix of both fixed and mobile costs. Our staff costs go down by .3% and even there we are falling as a part of the turnover, and in this case from .2% to 11.2%. And the profitability on the adjusted EBITDA level was improved in the fourth quarter from minus 3.2 million SEK 2023 to minus 1.6 million SEK 2024. And for the fourth quarter 2024 we have no comparatively disturbing posts. The adjusted movement result was improved by 1.3 million SEK to minus 4.1 million SEK in the quarter. If we look at the whole year 2024, we see that despite a tough market throughout the year, we have a turnover growth of .4% and the total sales in the year ended at 439.6 million SEK. During the year we have focused a lot on strengthening the turnover margin, where we have a strong turnover margin from increasing the share of our own products. But we have also worked with a lower rate of sales and have contributed positively to a better turnover margin. We end the whole year with a turnover margin of .5% compared with .8% for 2023. As Magnus mentioned, we have worked very actively with our operational processes and through that we have reduced our remaining external costs by 3.5 million SEK, which corresponds to a reduction of .5% for the whole year. We go from .5% to .5% in relation to turnover. We also have a lower personnel cost for the whole year, which goes down by 1.1 million SEK compared with 2023 and falls in relation to turnover from .5% to 12.2%. All this work results in an improved, adjusted EBITDA result with 8.6 million SEK compared with 2023 and we end the whole year with minus 5.3 million SEK. The moving result on the adjusted EBIT level is improved with 7.3 million SEK to minus 15.1 million. If we look at the balance, we see that the stock has increased by 5.7 million SEK compared with December 2021, which is an effect of a decreasing turnover in the quarter and that we are a little earlier with deliveries of the stock for the coming season. This is a level that is a little above where we want to be and we will work and focus a lot on improving the stock situation during the first half of the year to return to a better level again. We have ended the cash flow at 60.3 million SEK, which is 3.6 million SEK lower compared with December 2021. We have under the quarter received a positive effect on the cash flow of more frequent payments from Zalando, where we have received payments on a weekly basis, which has reduced our customer feedings and improved our cash flow. This is something that only applies during Q4 and we will probably go back to monthly payments from Zalando, which we will see in our Q1 report later. We have 20.7 million SEK left in the rental loan related to our AutoStore and we end the year with a solidity of 47.2%. Finally, if we go over to the cash flow, we see a positive cash flow from the running business at 27.2 million SEK, where we compared with the last September, see positive effects both from a lower deposit and from lower short-term payments. We have not made any investments during the quarter and we continue to amortize our rental loan with 1.5 million SEK in the quarter. The total cash flow for the fourth quarter ended at 25.7 million SEK and the cash flow ended the year at 60.3 million SEK. With that, I leave it over to you, Magnus, again for a few closing words.

Thank you for that. I was going to summarize a little. Our focus, which we have talked about in our previous reports, is to return to the solution as soon as possible. It is to turn all the stones and focus on the process and our way of working ourselves. I am pleased with many parts of the report. I see a progress, I see an execution of the project, I see that we improve the results every quarter. We have liked to see a little better sales growth. But we are now scalable, we have a good infrastructure, we have systems and processes that are in place. Examples of this are the new business system and all systems are up and going. AutoStore is new and can deliver a good and smooth, cost-effective logistics. With that said, it is now time to start looking at new markets. Focus even more on growth, but of course with profitability. Thank you so much for listening and with that we open up for questions.

Thank you so much for this presentation. We have received some questions here at the company. I will start directly. The sales growth in the quarter, as you mentioned at the end, was negative. What did it depend on and what do you see in the future?

It was a volatile quarter. I mean that it was a tough October, but we entered November and made a good December. If you look at the whole quarter, Black Week and the sound sales were better than we had predicted. But still it was minus 6.8%. But we feel that when we do not have a consumer who is struggling with the combat, we do not feel that we want to burn cakes when it comes to marketing. So we took a decisive decision to invest less in combat marketing. But we have also optimized both the market and product, Salando, where we are on 11 markets today. Among other things, we have brought down unprofitable products with a higher trade rate, for example in Germany. This affects sales negatively, but it benefits profitability and that is what we have prioritized.

How does the sales look on your markets? Do you see the same trends in the whole of the Nordic region,

for example? We do not go into detail on our markets, but Sweden, which is our core market and home market, has been good. Norway is ok, but we have had a little tougher on the other markets.

The costs have dropped relatively much this quarter, the last quarter of the year. What can we expect in the future, when it comes to the costs?

We do not go into detail and guide on that in the future, but we see very positive effects during Q4. This comes from the fact that we have focused and worked very hard with it throughout the year, 2024. But we will of course work on improving and making the whole of the business more effective. We focus a lot on our internal costs and especially look at the relationship to the turnover. So, a large part of our cost base is still moving, but we do not go into detail and guide on what we expect in the future.

Thank you. You have stabilized your second share of your products, which is 70%. Is that where you plan to be?

I think I mentioned before that the most important thing for us is the mix. It is a good mix, like to prepare our consumers with a lucrative mix. We look at our assortment all the time. I mentioned in the report that we draw down on the number of variants and look at the lucidity of the salami at the product level. If you look at the share of our own brand, we see that our consumers like our own brand and our assortment. As I mentioned in the report, we have decided to start moving towards 75% of our own brand in the share. But it is not a stress, the most important thing is to find the right assortment and mix.

Thank you very much. We have some more questions as a conclusion. Why are your competitors more lucrative than you?

Good question. We started our transition journey about a year ago. When Babel Room went on the bus, the market climate was different. We had the goal of having a growth and a lucrative growth. A lot of things have happened on the road here. We have invested a lot in an infrastructure that we are now done with. We have invested in a business system and in all systems. We have invested in Autostorm. The last year we have focused on assortment, brutal marginal, becoming more efficient and getting back to lucidity. I do not want to comment on other colleagues in the industry, but on how we work ourselves. We have a clear and clear goal, and that is lucrative growth. We see in this report that we think we are taking big steps forward. Thank

you. The company has 60 million in the bank. How will this be used and will it be used?

We see that we will use those 60 million as capital in this transition journey that Magnus mentioned. Right now we have no other purpose with the bank we are working on.

I understand. We have one last question. On the website there is a delivery place and there is an ad there. It is empty today. Will Babbel Room expand internationally through its own web site in the near future?

I can not comment on the timeline, but I mentioned in the report that we are opening up now and looking at other markets via and owned. We have been selling for a few years on Zalando on 11 markets in Europe. As I mentioned in the report, we feel now mature to start looking at other markets outside of Norden with our own online trade.

That was the last question we have received today for your presentation. Thank you so much Babbel Room for choosing to present in this way. We look forward to meeting again. Thank you so much and thank you for all listeners.

Have a

good day.