Bokusgruppen AB (publ)

I will start with a short summary of the second quarter. It is exciting that the positive development continues with increased revenue and increased gross margin as well as stable results. The revenue increased by 2.4%, which is a strong message since we have still had some challenges in the quarter. There was a heat wave in May that triggered a very cold spring, which negatively affected the turnover, especially in our stores. In addition, we actively chose to reduce sales-driven activities for online channels in connection with a logistics shift in the month of April-May. But despite this, we have still managed to increase the turnover and the academic bookkeeping segment increased by 2.8%. And of that, the online sales of academic bookkeeping stood for an increase of 14%. We are also extra pleased that the number of active customers increased for both academic bookkeeping and Bokus. We also continue to increase the gross margin with 0.2 percent units and EBITDA is low on a stable level compared to previous years. If we take the second quarter in numbers instead, it shows a 2.4 percent increase in revenue, while the gross profit increases by 3 percent. EBITDA was, as I have already mentioned, stable in the quarter, But our financial target EBITDA margin is 6.4%. This is a significant improvement compared to the previous quarter when it was 3.9%. The target recently increased to 8% in the long term. So we are heading in that direction, but we still have a bit more to fight for here. Vi har också adderat ett nytt finansiellt mål, det gjorde vi när vi presenterade förra kvartalet, och det är avkastning på sysselsatt kapital, eller ROSE. Och även det här nyckeltalet har en positiv trend, från 16,5% för ett år sedan till 30,6% efter andra kvartalet i år. Och målsättningen här är att nå upp till 35% på lång sikt. If we look at the whole period from January to June, the revenue growth is strong, with an increase of 3.3%. This is mainly due to the academic record, which has increased by 4.6%. The gross marginals also have a very positive development, with an increase of 1% which gave an increase in the gross profit of 5.8%. In turn, this has led to an increase of SEK 6.7 million this year. This is a good performance for the first half of the year, we think. This quarter has also been eventful. We carried out another acquisition of franchise stores. In this quarter it was a company called Boko Company that for a long time has run six franchise stores in the Gothenburg area. We agreed on this acquisition in the second quarter, but the acquisition was carried out at the beginning of July, i.e. at the beginning of the third quarter. Franchise butiken i Umeå som vi då förvärvade i det första kvartalet, där genomförde vi övertagandet i början av det andra kvartalet. These acquisitions, together with the fact that we have also recently opened a store in Tyresö in the first quarter, means that the number of full-fledged stores increases by eight. This gives a real reinforcement to the Academy Bookhandel segment, which was previously our largest and most profitable segment. We also continue to focus on online channels and Bokus. We have in the quarter carried out a move to a new supplier for e-commerce logistics and that was a plan that we informed about during the last quarter. The move went smoothly and we are now in normal operation. We have managed to maintain a high service level to our customers without interruption. But the sales were still negatively affected by the fact that we were resistant to sales-driven measures for a couple of weeks to simplify this move. As part of our sustainability initiatives, we launched the re-use service Bookomloppet on Akademibokhandeln this quarter. This means that our customers can now send in books they have already read to one of our stores and get paid in gift cards. Böckerna säljs sedan vidare med hjälp av en samarbetspartner. Den här nya tjänsten ger våra kunder utrymme för nya läsupplevelser och ger också böcker ett längre liv. Det är positivt ur flera perspektiv. Vi har även lanserat ett initiativ för skrivfrämjande insatser under namnet Vässa Pennan. This picture shows a multi-year overview of the last five years' revenue and EBITDA during the second quarter. The revenue has increased step by step since 2020, which has had a strong negative impact on the pandemic. The result in the second quarter is always negative. We have big seasonal variations that Ola will tell you more about soon. Men det har legat på en relativt stabil nivå över åren om man justerar fridämförelsesstörande poster. Efter den här inledningen så lämnar jag över till vår CFO Ola som kommer gå igenom den finansiella delen av rapporten.

Tack Maria. Den här bilden visar på säsongsvariationen i vår affär som Maria precis var inne på. We can see how revenues and results vary during the different quarters of the year. Q2, which is framed, is our smallest quarter in terms of revenue and does not contain any major specific sales event. Further, we see that the third quarter is a stronger sales and results-based quarter, with the school start as an important sales event. To conclude with the fourth quarter, which is the strongest quarter of the year, with both Black Friday and Christmas trade, and stands for about 35% of the year's turnover. The second quarter, which is referenced, stands for about 19% of the year's turnover. If we look at the outfall for the quarter, we see that we have a net revenue that rises to 350.3 million kronor, which means an increase of 2.4 percent compared to 2023. We have a gross margin that rises to 42.8 percent, which is an increase of 0.2 percent units. Our EBITDA for the quarter fell to minus 23.4 million kronor, which is 0.1 million kronor higher than previous year. And the quarter's result goes up to minus 31.5 million kronor, which is a decrease of 0.1 million kronor compared to previous year. We can summarize this as a stable quarter. Moving on to the period from January to June, we have a net turnover of 814.7 million kronor, which means an increase of 3.3% compared to 2023. We have a gross margin rising to 41.2%, which is an increase of 1%. This increase is a result of a purposeful work to optimize our consumer satisfaction and negotiations with our suppliers. Moving on to our EBITDA for the period, which is minus 12.7 million kronor, which is an increase of 6.7 million kronor compared to previous years. The period's result goes up to minus 35.0 million kronor, which is 5.2 million kronor better than the previous year. We are pleased to note that the work to improve the gross margin, together with the good cost control, has resulted in this improvement. Finally, if we look at the EBITDA margin for the rolling 12, it is 6.4%. for this period. The focus group has a strong balance calculation, but displayed a weakened cash flow for the quarter. The cash flow for the second quarter was negative, which is normal for this quarter. We see in the graph to the left that we have a clear season variation also for the cash flow. The fourth quarter is the strongest, driven not least by the Christmas trade. When we come to the first quarter, a large part of the purchase is paid to the fourth quarter, which leads to a negative cash flow during the period. In the second quarter, a large part of the payment for goods sold during the book war occurs, which negatively affects the cash flow in the second quarter. The adjusted operating cash flow for the second quarter of 2024 went up to minus 53.9 million kronor, which is then to be compared with 29.5 million kronor against the quarter of 2023. The reason for this decrease of 24.8 million kronor is linked to increased turnover and higher investments in the quarter. The turnover capital is partly increasing due to new stores, an increased service level in e-commerce and price increases. And investments are increasing mainly linked to e-commerce systems and the acquisition of franchise stores. For the 12-month period, the adjusted operating cash flow will increase to plus 68.9 million kronor and it will be compared with plus 11.3 million kronor for 2023. And in the middle of the picture, we see that the cash flow for the 12-month period improved by 57.3 million kronor, which is mainly explained by an improved result. The adjusted operating cash flow means that we put back the deductions that are amortization of leasing debts according to IFRS 16. Primarily it is about our store rents. For the quarter, this goes up to 34.4 million kronor and for the rolling 12 to 136.8 million kronor. The net debt through adjusted EBITDA goes up by the deadline for Q2 2024 to 0.8 compared to 1.3 for 2023. This means that we earn 84.8 million kronor on our cheque rating credit on June 30, 2024 to compare 103.2 million kronor 2023. In total, we have a cheque credit frame that goes up to 200 million kronor. The solidity is still high even compared to industry colleagues and goes up to 41.4 percent compared to 42.2 percent in 2023. With this, I will hand it over to you again, Maria.

Thank you, Ola. Then I thought I would talk a little more about the development in our two segments. We have two business segments in the form of the academic bookshop, which covers both stores and online. and Bokus, which comprises Bokus e-commerce and the subscription service Bokus Play. Both segments were positively developed in the second quarter, and in the picture you can see the revenue development compared to previous years for the quarter and for the current 12. Akademibokhanden ökade med 2,8 % i kvartalet. Det är en tillbakagång från rullande tolvsiffran på 5,2 % och som jag nämnde inledningsvis The heat wave in May was not good for sales, especially in stores. But we are still at a good increase, even if it is a little lower in this quarter than the rolling 12 rate. Bokus also increased by 1.6% and that was an improvement compared to the rolling 12 trend of 0.9%. It is very happy that Bokus keeps up with the positive trend from last quarter. In the lower part of the picture, you can see how revenue and EBITDA are divided into the two segments in the second quarter. The academic bookhand is the larger segment, both when it comes to revenue and EBITDA, and also has a higher EBITDA margin on a rolling basis. And now we go into a little more detail per these two segments and start with the academic bookhand. As I have already mentioned, Akademibokhanden had a continuous strong development in this quarter. To the left of the graph you can see the turnover in the second quarter during the last five years. And since the pandemic's negative impact on stores in 2020, Akademibokhanden has steadily increased sales and as you can see in the graph to the right, also the number of active customers. The retail sales had a certain negative impact during the heat wave in May, as I mentioned, but still shows an increase for the quarter. The really strong development is what the online business stands for, with an increase of 14% in the quarter. This gave an online share of 7.3% compared to 6.6% in the second quarter of last year. Let's take a look at Bokus. We have already said that Bokus developed positively in the quarter. This was despite a decreased campaign activity during the logistics shift. And also that we have continued to counteract student and business sales. Unfortunately, this is a trend that has remained for a longer period of time and makes it necessary to compensate with even better sales development in other parts of the business. It is very positive that in the quarter we have turned a previous negative trend in the number of active customers. And you can see that in the right graph there. And it was a top year that was affected by pandemic restrictions, which is very good for all online trade. And since then we have lost some in the number of customers, but right now we have gone up again and increased by 3% in the quarter. This is also in line with the fact that we have a very positive development of our customer key number NPS, which measures the customer's willingness to recommend. You can see that on the right in the picture. Despite the fact that we had a bit of a problem with logistics when we moved during the quarter, we managed to do it in a way that did not affect our customers. We have seen a very positive development here. And that is actually in line with our recently increased target. We increased the target for NPS for Bokus here at the beginning of the year and have now already achieved that target. This is a significant improvement from last year's 57. And down to the right we can see that even digital books have developed positively with a revenue increase of 16.9% compared to last year. And the increase is driven by the continued successful recruitment of subscribers to our subscription service Bokus Play. And then I will round off by looking a little forward. We continue to have a full focus on the development of a new e-commerce platform. We have talked about this in previous quarters. The investment will mean a higher investment level this year compared to the previous year, which we also see in this quarter. But that gives us a prerequisite for future growth in our online channels. And we get this by getting both a simpler way to develop and improve our customer service faster, but also that we get more effective and better tools for our employees. Den här förbättringen förväntar vi se under nästa år. Vi tror också att vi kommer kunna få draghjälp av att det ekonomiska läget ser ut att ljusna något senare under året. We hope to give our customers more room in the plan book to trade with us. And hopefully already this fall, as we always offer large book sales and large sales periods, such as school start and then we will soon enter the important Christmas trade. Another positive thing I would like to mention is a growing trend among young people to read more books. Böcker och bokhandel har blivit populärt vilket både gått både för vår affär men också för samhällsutvecklingen i stort. Då avslutar jag där jag började med de viktigaste punkterna från det andra kvartalet. And as I said, it is exciting to see that the positive development continues with increased turnover and increased gross marginals, as well as stable results. The turnover increased by 2.4%, the academic bookseller segment increased by 2.8% growth, and of that was the online sales for a growth of 14%. In addition, the number of active customers increased for both Akademibokhandeln and Bokus. We are also continuing to increase the gross margin in this quarter with 0.2% and EBITA was on a stable level compared to previous years. With that, we are done with the presentation and will see if anyone has any questions that you want to ask. Now we will see. We have received some questions here from Urien, who is our analyst at Carnegie. The question is, extra costs for logistics flow. Ni har inte angett hur mycket, men kan försöka gaffla in om det är low single digit, high single digit eller double digit i miljoner kronor. Oj, den var svår. Jag kan istället prata lite grann om vad det handlar om delvis. then it affects our gross margin, and then there are running costs that have been a little higher in connection with the fact that we had the move. And then there are certain one-time costs to physically move from From Almros, where we were before, to Postnord, where we are now. I don't think we can agree on the absolute sum, but it is not a very high one-time cost, but it still affects the quarter. Do you agree? Do you want to add anything, Ola? No, I think it sounds like a good description, absolutely. More questions are coming in from Örjan. What financial effects do you assess from in-farmed franchise stores, Boko Company. So what happens when we now take over both six franchise stores from Boko Company and previously one franchise store in Umeå, is that under the franchise form we get a franchise fee. But when we now own the stores completely, we get the entire turnover and the entire result. And I can only say that it is positive for us. Partly it gives us an increased turnover, of course, but it also gives a better result than when we only have franchise fees. But we cannot specify the exact size for that.

Exactly. It is profitable stores that will give a positive contribution, quite simply.

Exactly. And the third question here from Nørjan. We are approaching the turnover target of 4% in the last 12 months. That is correct, it was 3.7% in the last 12 months. At the same time, it is easy to compare during 2023. What initiatives do you take to maintain growth even when the comparison becomes more challenging? Yes, we focus a lot on getting our revenue and growth up there. Partly it is the investments that we make within the online business with both a better logistics solution that gives customers a better customer experience, better delivery solutions. and better lead times, but also what I mentioned earlier with investments on our e-commerce platform is also something that will make us more competitive in e-commerce and that will lead to a higher revenue growth in our online channels. But also in stores, we are partly focusing on new stores, both organically and through acquisitions. And then we are working on reaching out to our customers even better, both through our membership club, Akademiparkhandens Vänner via online, but also with customer meetings and store environment in our stores. Would you like to add anything to that?

No, that's exactly what we're doing. We're working on many different fronts to continue to drive growth forward.

Another question. How weather-dependent are you in normal weather conditions? Is it sunny or rainy for the rest of the summer? I would say that we are not absolutely weather dependent, so that we look every day if the sun shines or if it rains, but just the spring, what I mentioned in Q2, just these when it has been very cold at first in the spring and then it hits and becomes high summer, that does not usually be good for us and it is partly that you may are less tempted to go out to the store and shop. But also what you shop for is more garden related, summer clothes and other things. Parasol. Parasol, that's right. Pants maybe too. And if you look at Q3 here during July, especially a bit into August when it is still summer, would it be really hot like we had summer 2018? then it's not good. If it gets so hot that you can't go shopping or can't do anything at all, then it's bad for us. It's also not good if the weather gets really bad, like it is right now in July. A classic Swedish summer, I would say, is good for us. The weather is really good. The weather is not the only thing that affects us. It also affects how well we perform in our customer meetings. But it can continue as it is right now. The last question, I think. It's fun that you increase young people in the customer club. How is the age distribution today? I don't know exactly what it looks like, but the largest age group we have is between 35 and 55. But I think it's 35 to 45 that is the largest. And then we have quite evenly distributed upwards and downwards in ages. But what has increased the most in recent times is the very youngest target groups. And then you should know that you have to be 16 years old to join, so we don't have anyone younger than 16. Instead, it's the parents who buy. Unfortunately, I don't have the exact figures in my head, but the average distribution is around 35-40, which is the peak. And then more increase in the younger ages than in the older ages. So healthy, I would say. Ja, roligt med lite frågor så här mitt i sommaren. Det finns fortfarande chans om det är någon mer som vill ställa någon fråga. Så har vi lite tid kvar. Vi hänger kvar ett litet tag här och ser om det dyker upp något annat. No, I actually think that it seems that the questions that have come have come, quite simply. So then we thank you for taking the time to listen to this presentation, even though it is in the middle of the semester. And I can remind you that the next report, which is for the third quarter of 2024, will be released on the 23rd of October. So then we hope that you are with us and are listening again. Thank you very much and have a nice summer!