Byggmax Group AB (publ)

Good morning. Thank you for attending today's Speak Next 4.3 interim report. My name is Sarah, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, but an opportunity for questions and answers at the end. If you'd like to ask a question, press star 1 on your telephone keypad. I'd like to pass the conference over to our host, Carl Sandler, CEO. Please go ahead.

Thank you. Thank you very much. And again, welcome to this conference call where we will present Big Mac's report for the third quarter of 2025. I'm Carl Sandlund, CEO, and with me is Helena Nathos, our CFO. And as usual, you'll find the presentation that we are referring to on our website, and we will try to guide you to the relevant page during this call. After a short business update from my side, Helena will walk you through the Q3 financials. And once the presentations are finished, we open up for your questions. But let's begin. And please go to page number two in the presentation. And as I hope you already have seen, we continue to improve our profitability in this quarter. Even though we've been operating in a weak market, we deliver on our focus areas, and we adapt to the market conditions. The third quarter is part of our high season, and we have strong focus on operations, and performance has been robust throughout this season. Our sales in the quarter is 0.8% lower than last year. We have some negative currency effects on sales, which means that Like-for-like sales is 0.2 lower than 2024 in the quarter. So it's very similar to last year. But I will come back to different categories. But overall, positive development in guarder-related categories, while estate and consumer steelmen, weak in performance when it comes to larger renovations. And we also have effects on our refined e-commerce offering with high margin and positive contribution to profitability, but negative impact on sales during the quarter, about 2% on total sales. We continue to maintain a high gross margin, and I have touched upon two of the reasons for this, demand mix and changes to e-commerce. But early payment and strong operation performance with no waste levels also contribute. And the high gross margin in combination with strong cost control mean better results. Our profitability improved for the sixth consecutive quarter, and the EBITDA margin in the quarter was up to 14%. In addition to improved results, we reduced both net debt and leverage, and our net debt is now below 200 million Swedish kroner at the end of the quarter. So overall, strong operations and improved product profitability in the quarter. Before we get into more detail, let's make the offline number three a short overview. Big Max was founded back in 1993, and today we have 212 stores across four Nordic markets. Our core is built on a strong selection of products for home renovation and maintenance, heavy building materials. primarily for consumers. And we offer everything from building materials and paint and tiles to flooring and more. And our in-store assortment is enhanced by online, providing both a wide range but also home delivery of heavy building materials and customized products. We are a true discount retailer, and offering the best prices requires, of course, maintaining the lowest possible cost. And our store design not only keeps operational costs low, but also ensures an efficient shopping experience, which we see that our customers highly appreciate. And in addition to the Big Macs brand, we have Ride Ties, Ties & Only, focusing on ties in the bathroom, and also Cosco Big Borrow, which offers products and buildings for home and gardens, such as conservatories or greenhouses. This continues to page number four, and there you see that our sales last 12 months was 6.1 billion Swedish kronor, and we delivered 248 million in EBITDA, and that's an EBITDA margin of 5.7%. Our business model is efficient, and we have high cash generation and cash conversion, and this is seen in strong cash flow, as you will hear more about later. And we have a good, strong mix of physical stores and e-com, and today about 80% of our total sales is through our online or digital channels. On page number five, we have some macro context, and the market remains weak. Consumer acceptance improved during last year and were more positive in the beginning of this year, but weakened during the spring. When comparing 2003 this year to the last year, the consumer confidence remains below last year in Sweden and Denmark, and it's stable at the low level in Finland. So in most of our markets, confidence among consumers is actually weaker or as weak as the same time last year. And I guess the general view is that consumers continue to be cautious, especially when it comes to larger investments and purchases. that we see an increased household saving. At the same time, it's good to see that house transactions continue to develop in the right direction, and the level is now similar to what we saw before the inflation shock. And together with disposable income and view of the future and so on, those are historical drivers for our type of business or innovation projects. As we used to say, it's always hard to predict the future. That's why we follow the market development very carefully, and we have short lead times, and we are used to quickly adapting our business to different level of demand, something that we have shown through the last quarter. The current market context is also reflected in our sales, if you turn to page number six, please. Cautious consumers and customers concerned about their personal finances tend to hold back on larger purchases and new in this quarter. Major elevation projects, such as home extensions, large indoor refurbishments, or roof replacements, have developed more weekly. This is natural. Customers are keeping a close eye on their wallets, and as a result, there are fewer big ticket items in the mix. At the same time, other parts of our assortment have performed well, particularly products related to gardening and outdoor living, and this includes everything from planting, garden maintenance, decking, fencing, and every painting. And we're also pleased to see growth in windows, garden buildings, and greenhouses, especially the new greenhouse range sold under our own private label. And this mix has effect on the gross margin. Demand has been more tilted than usual towards higher margins. Earlier this morning, actually, new data from Swedish Building Materials Index was released. And on the consumer side, that data showed that the market grew by 1% in 2003 compared to last year. So we are performing at least as good, especially considering that we have removed e-com sales corresponding to 2%. Current market conditions mean that operation control is, of course, extremely important. See page number 7. And during the high season, operational excellence is one of our most important priorities. And this year, perhaps more than before, we have stayed focused on the core. We have dedicated more time and energy to strengthen our existing business. And this has resulted in strong performance throughout the core area. When working with materials such as timber, operational discipline is key to minimize waste. It's essential to always maintain a good order. And our store teams have done an excellent job maintaining very high standards And in addition to satisfied customers, this has resulted in very low wage levels. And all this is made while maintaining strong cost control. As some of you might remember, we increased the staffing levels a bit earlier in Q2 to make sure to have full capacity from the start of the season. And during Q3, this has been adapted to the volumes, and despite inflation and wage growth, we managed to keep our cost at almost the same level as last year. And finally, we have put in a lot of effort into securing a smart buildup of the inventory with successful prioritization of products. We have secured strong product availability and well-stocked stores while maintaining the total inventory on a good level is actually slightly lower than last year. Please stick to the next page, and you will see more improvements to the customer offer or experience during the quarter. I'll start with the left-hand chart on this page, because that is closely connected to the right-hand chart on the previous slide. Because, of course, the flick side of lower inventory levels It could be that the product availability in stores go down. But we have worked very carefully with this. So for products with higher demand, we have raised stock levels while adapting, sometimes reducing inventory for products with lower turnover. And this has resulted in both improved service levels. We have even higher product availability in our stores than before, even though total inventory is slightly lower than last year. And in addition to better product availability, we continue to improve the customer experience in our stores, both through rearrangement to secure better customer flows and by enhancing our self-service checkouts and other services. This strengthens our ability, for example, to communicate with customers by displaying offers or reminding of the product that they might have forgotten when they are in the checkout. And in addition, those self-service check-ups that we have free up our staff from the cash registers and allowing them to be more present in this core and to assist and support customers during their visit to us. And this time more than 50% of the customers in Sweden use self-service when they check out from our stores. And then speaking of digital tools, we are also continuing to develop the digital support tools that we offer our customers on our website. For example, our AI-driven shopping shop. It helps customers with their project and adds the selected product to the shopping cart. And this service is still in the early stages, but we can already see that it contributes both to customer experience and satisfaction, but also to sales. On page nine, some words of income. Our ambition is always to offer the most attractive assortment to our customers, where our store assortment is complemented with a wide range online. And to secure relevant products for our customers, we add products where we see potential, but we also phase out selected non-core ones. Lately, we have refined the ECOG offering, where we have removed some categories to secure higher relevance, but also to improve profitability. In the short term, this has somewhat negative impact on sales, and as mentioned, a possible 2% in the order of total sales. But at the same time, it's contributed positively to margin and profitability. Before heading over to Helena, next slide. Looking at the bigger picture and the longer term, over the past two years, we have secured a strong financial position with no net debt and no leverage. In addition, we have a very strong operation control, and we have made improvements to our customer offering. And we continue our long-term ambition to be the leading low-cost home improvement retailer in our markets. We operate a very high-efficiency retail model, that delivers positive customer experience and the right quality to the best prices through scale and simplicity. We will develop our core with a strong customer focus to further enhance our offering, and our ambition is to increase sales and volume in our existing store portfolio, and we will continue to secure efficiency and leverage our operations. And with deeper customer insights, development of the commercial offering, and strong execution capabilities, we secure a foundation for profitably growth. So just to summarize, focus on what is most to our customers, expand through smart commercialization of our offering, and scale with ambition and discipline. But now, over to Helena and this quarter's financials.

Thank you, Carl. And the actions and priorities you just described are here reflected in our numbers. On slide 11, we show the rolling 12-month sales and margin development over the past three years. It's been a long period of weak and volatile demand, but our early actions have helped mitigate the impact and stabilize performance. During 2025, we are now seeing a gradual recovery in sales, even though macro and our consumers remain cautious. At the same time, profitability has strengthened for the six consecutive quarters, lifting the rolling sell month EBITDA margin to 5.7%. This demonstrates that our strategy of being efficient and focused on our core is paying off in this uncertain market. On slide 12, this quarter illustrates that our focus on core and simplification of our offer drives probability even when sales are stable. In the third quarter, sales are so important 8% lower than last year, reaching 1,965,000,000. And the two main factors explain this. First, a negative currency impact primarily from the Norwegian currency of around 0.8%. And second, a deliberate removal of parts of the e-consortment, which had a further 2% impact on sales. We ended this quarter with 212 stores, one new store in Sweden, and a net of zero change in the other Nordics. Sales in Sweden performing somewhat stronger than the rest of the Nordic in this quarter, but the real strength lies in our gross margin, which improved by 150 basis points. And the improvement comes from several drivers. A more product mix, especially as commented from garden and maintenance category. Targeted initiatives in e-commerce with streamlined , early payment discounts from suppliers, and low waste levels in our stores. Altogether, it's a broad-based margin improvement, not one single factor, but many disciplined actions reinforcing each other. If we move to slide 13, as Carl described, operational excellence is one of the cornerstones of our strategy. Over the past two years, we have adjusted our cost base to much lower volumes wide improvements, flexibility, and speed. Costs have been reduced in both schools and administration, creating lean processes and an organization that can scale up and down. In this quarter, total operating expenses increased by 0.8%. This confirms that our cost discipline remains solid even as we continue investing in the consumer experience and in digital tools that simplify operations. By simplifying how we work and keep close control, we built an organization that is both efficient and flexible going forward. And on slide 14, we can clearly see how our efforts translate into probability. Looking at the performance year-to-date, EBITDA has improved by 150 million versus the same period last year. This improvement reflects the scale of the . We built up across the business. The operation has become more aligned and the incremental sales contribute directly to profit. But also, in the relation related to lease agreements, we remain stable, while the lower investment levels have contributed to the decrease in total depreciation. contributes to higher profitability as the volume increases and also continuing to page 15. Finally, we have the rolling 12-month cash flow from operating activities amounting to 830 million, demonstrating the strong continued cash generation. It reflects the not only improved probability, but also efficient working captain management with stable inventory levels and disciplined investment decision . has been further reduced, and the leverage is now 0.4 times. It's down from 1.3 times last year. for balance sheet is by that stronger and it gives us both flexibility and resilience. And by that I hand back to Carl before we open up to questions.