Boozt AB (publ)

thank you and welcome all to our q4 webcast i think we have a busy day ahead of us so let's just turn to the um to the first slide um yeah we we entered the year with the top line growth of some 6.3 percent so at the low end of the guidance that we communicated back in February. We had, of course, hoped for more, but given the quite challenging market conditions, we believe that we have managed quite well in 2024. The adjusted EBIT margin increased to 5.7% from 5.2%. percent last year and this was mainly due to the exemption from norwegian customs which we obtained during the year so just to make it crystal clear the exception is of course also applicable going forward so the 5.7 margin is a a new base going forward Moving on to the fourth quarter, revenue increased by 4% and this growth was driven by Boostlet. Revenue from Boostlet increased by 36% in the quarter, supported by the price initiatives that we started in Q3. We came into the second half of the year with some elevated stock levels and which is why we used Boostlet to clear older stock so that Boost.com could focus on the current season only. Boost.com declined by 2% of the quarter, very much impacted by the low consumer confidence as well as the exceptional strong performance last year. Our department store KPIs continue to improve and looking at the full year, we now generate more than 40% of our sales from the product categories outside of fashion. All this is supported by our continuously high customer satisfaction. In the quarter, the net promoter score was 72 and our trust pilot score was 4.4. So remaining well above industry average. The adjusted EBIT margin for the quarter was 9.9% compared with 7.7% in Q4 last year, and the improvement was mainly driven by the exemption from Norwegian customs. However, adjusting for this, the margin still increased around 60 basis points in the quarter, reflecting among other things a slightly lower marketing cost ratio. In the quarter, we continued our share buyback program and in total we've bought back shares for 162 million SEK in 2024 equal to almost 2% of the share capital. Since the last AGM we've bought back shares for 60 million SEK. As decided at the last AGM in April 2024, the current buyback program is in total 200 million SEK. and we plan to buy the remaining 136 million SEK during the next couple of months. So we maintain our plan of buying back shares for 800 million SEK in total. Looking ahead, we expect to increase revenue with 4-9% or between 4-9% in 2025, while increasing the adjusted EBIT margin to between 5.8% and 6.5%. I will come back to our 2025 guidance later in the presentation. So if you could turn to the next slide. In 2024, we continued our journey to cement our position as the Nordic department store, which is the cornerstone of our strategy. This, as we have highlighted on previous occasions, brings numerous advantages, such as high average order value, lower return rates compared to operating as a fashion-only store, and greater customer loyalty. I believe that the advantages of pursuing the department store strategy became quite clear during 2024, as the soft demand in fashion, especially women's fashion, was compensated by growth in the other categories. So the categories truly act as a hedging mechanism in a volatile trading environment. For the full year 2024, Boost.com generated more than 40% of its revenue from categories outside of fashion, increasing from 39% in 2023 to 42% in 2024. The short-term goal is to increase category share to 50% and long-term category should be somewhere around 65% of the overall business. Home, beauty, sports, and kids are steadily evolving into strong categories on their own. And we believe that especially kids and sports are becoming market-leading verticals on their own. In beauty and home, there is still some way to go with regards to assortment and availability. Also, the share of customers shopping from multiple categories increased in 24, going from 51 to 52%. It's a modest increase, but we have to take into consideration that cohorts have been holding back on the purchases. This is probably due to continued lower consumer sentiment. The growth in the year was mainly driven by new customers who typically start out by buying from only one category. And this explains the modest increase. Older cohorts are still buying more categories. Please turn to the next slide, please. As just mentioned, we continue to see an increase in the number of customers shopping across multiple product categories on Boost.com. Shifting customers to buy from more categories remains one of the most strategically important goals of our department store model and is reflected in our financial performance. In 2024, as we illustrated on the slide, we saw an increase of between 1 and 7% on all groups of customers shopping from 2 to 6 categories on Boost.com. This amounts to a total of just above 50,000 customers. Looking at total active customers over the last 12 months, we are now above 2.7 million on Boost.com, corresponding to an increase of 2% versus last year. We would have liked to see our customer base increase faster, but growing the base has been challenging given the current market environment. Please turn to the next slide. I would like to provide some remarks on Boostlet.com. When we launched Boostlet back in the days, the thinking was that we needed a channel to clear old inventory and excess stock. Having just an extra tab or category on Boost.com did not make sense as clearing stock combined with free shipping and returns is quite a bad combination. Therefore we launched Boostlet where we offer amazing deals but with the strings attached that you have to pay for shipping and returns. In 2024 Boostlet delivered on this vision. Going into a new year, it's always difficult for us to predict exactly how much we can grow. We can estimate a growth in online penetration and we assume that we take market share, but as we are inventory taking, the potential growth is also driven by a risk appetite. The growth is, as a main rule, limited to the growth in our buying budget. We always aim for growth, at least at the top end of our growth guidance, well knowing that there's a risk if demand is softer than expected. The reason why we're willing to do that is because we have Boostlet. Boostlet which is able to clear potential overstock while still making a small profit. We can clear without compromising the Boost.com brand and at the same time reducing the risk of a major stock write-down. All this while building the Boostlet brand franchise. So it's quite beautiful actually. We came into the second half of 2024 with stock on the high side at the same time as consumers were still holding back. Therefore, we activated Boosted early in the autumn-winter season. If consumer sentiment stays muted, we will do the same for spring-summer this year. Our biggest priority is always to keep stock fresh. If we go to the next slide, and before handing over to Sandra, I would like to spend a couple of minutes talking about how we use technology in our operations. AI and machine learning are becoming a bigger part of how we work, helping us to be more efficient and to make smarter decisions across the business. We already see impact in many areas. Our tech teams use AI to write and refine code, customer service is rolling out chatbots to handle inquiries faster, and AI-generated product descriptions ensure consistent information in multiple languages across Boost and Boostlet. In marketing, automation helps us personalize customer interactions. In supply chain, AI is improving inventory planning and logistics. Even in back office operations like payment and fraud detection, artificial intelligence makes processes faster and more secure. These AI-driven improvements have made us more efficient, strengthened our competitive position and helped reduce costs, bringing us closer to our long-term 10% margin goal. Recently, as announced in January, these efficiencies also allowed us to streamline the organization, leading to a 10% workforce reduction of 20% of our white-collar employees. Looking ahead, AI will continue to be at the core of how we work, and we will keep investing in new technology to drive efficiency and create the best possible experience for our customers. So with this, I will hand it over to you, Sandra.

Thank you, Herman. If we turn to the next slide, you see that the revenue increased 4% in the quarter, which resulted in just above 6% growth for the full year. We had a small currency headwind during the year and growth in constant currencies in 2024 ended at 7%. Looking at Q4, the development was mixed throughout the quarter, with disappointing October, followed by a good performance over Black Week, where customers came back and were much more willing to spend. This likely had an impact in December, which turned out weaker than we expected. Weather likely had some impact throughout the quarter, with unseasonably warm weather probably affecting sales of winter clothing. Geographically, growth was mainly driven by a continued good development in Sweden, where revenue increased 9% for the quarter. Denmark continued to be muted, likely impacted by the consumer confidence, which remains at very low levels. Revenue in Denmark declined 2% in the quarter. So looking at the categories, the newer ones continued to show good progress while revenue from men's and women's fashion declined in the quarter. The kids category in general and the toys category especially performed very well in the quarter, as did the sports category. And even though women have been holding back on buying fashion for themselves, they shopped more in the home and beauty category. The gross margin was 37.5% in the quarter and unchanged compared to last year. This was driven by a mix of slightly higher gross margin on Boost.com, where we've been focusing on profitability, and a lower gross margin on Boostlet, which we're still using to clear inventory with temporarily higher discounts. The adjusted EBIT margin was 9.9%, up from 7.7%. The margin in the quarter was impacted by a repayment of customs in Norway following the positive ruling in November. After the verdict, we have asked for compensation from customs paid during the prolonged court case and we expect to receive a total compensation of around 100 million. Of this, 40 million is related to 24 and is included in the adjusted EBIT for the quarter. Excluding the repayment, the adjusted EBIT margin in Q4 was 8.6% and 0.9 percentage point up versus last year. This was mainly due to a lower marketing cost ratio, as well as the fact that we no longer pay customs in Norway as from mid-November. So if we turn to the next slide, please. Looking at our two platforms, revenue in the quarter on Boost.com declined 2% as the market remained very challenging. We continue to see an increase in active customers and more than 350,000 customers bought on Boost.com during the quarter. However, as consumers remain very hesitant to spend, we also see that they on average buy less frequently. Active customers in the last 12 months increased by 2%. The average order value also increased 2% and reached 1,011 SEK, and that was above 1,000 SEK for the first time. In the Nordics, revenue on Boost.com declined with 3%, with revenue from both Sweden and Denmark declining in the quarter. Growth outside of the Nordics was 4% and mainly driven by the Baltics. The adjusted EBIT margin for Boost.com increased almost 4 percentage points to 11.3%. This was, of course, to a large degree driven by the Norwegian customs as mentioned earlier, but also underlying we saw a good improvement. Excluding repayments, the margin was up 2.5 percentage points to 9.9%. This was driven by a higher gross margin as well as a slightly lower marketing cost ratio. So if we move on to BruceLet, revenue increased 36%, which was supported by the price initiative that we introduced in Q3. In the quarter, we continued this to clear out older products from prior seasons to keep our inventory fresh. This has been well received by customers, in particular in the Nordics, with Sweden increasing 63% and Denmark increasing 32%. Active customers during 2024 increased to more than 1 million, which corresponds to an increase of 26% versus 2023. The average order value was down 5% and of course impacted by the lower prices. The adjusted EBIT margin for the quarter was 4.6% compared to 9.2% last year. The decline was mainly due to the temporarily lower prices on the site as well as the limited access to campaign goods. So let's move to the next slide. Here we see the development of the cost ratios in the quarter. The fulfillment cost ratio stayed flat compared to last year at 9.5%. The transfer sales at the fulfillment center, now fully operational, clearly helped support efficiency. However, with the cost base set for higher volumes in the quarter, overall productivity dipped slightly. Looking ahead, we do expect a fairly good improvement on margins from these transfer sales. We believe it could translate into a net improvement on the EBIT margin around 20 basis points. The marketing cost ratio for the quarter was 9.8% and slightly down compared to last year. Competition for cost per click is still high, but we're benefiting from a strong base of loyal customers, many of whom are joining our membership program Club Boost. These loyal customers are coming directly to us more than before, while new customers are mainly brought in through performance media. Our adjusted admin and other cost ratio improved by 2 percentage points to 6.1%, mainly due to the legal ruling in Norway. Additionally, we have not paid customs in Norway since mid-November after securing a simplified VAT registration. For comparison, we paid 10 million in Q4 last year. Looking at the underlying development, excluding Norwegian customs, the ratio improved slightly, supported by largely unchanged salary expenses. Without adjustments, the admin and other cost ratio improved 5 percentage points. The unadjusted cost includes the full 100 million, which explains most of the improvements. The depreciation cost ratio for the quarter was 2.3% and slightly up compared with last year, where it was 2.1%. For the full year, the depreciation cost ratio was 3.3% versus 3.2% in 2023. So next slide. We ended the year with a net working capital of 752 million, corresponding to 9.1% of revenue. This is to be compared with 4.1% at the end of 2023. The increase was mainly due to a higher inventory position at the end of 24, and this was partly due to the sellout being lower than planned, but also that the opposite was the case in the fourth quarter last year. The initiative to activate Booslet during the second half of 24 was very efficient. As we go into 25, we don't have elevated levels of older stock, which enables us to focus on the upcoming season sales. However, considering the lower sales than expected in coming into 24, the overall inventory level is slightly elevated. We will manage this by continuing to use Boostlet in 25 and adjust buying budgets as needed. Cash flow from investing activities was 60 million in the quarter versus 28 million last year. The increase was mainly related to the investment in transfer sales at the fulfillment center. Free cash flow in the quarter was 625 million and down versus last year. This was mainly due to networking capital movements. For the full year, we ended at a positive cash flow of 12 million, which is more or less unchanged versus last year. Our net cash position was 795 million at the end of the quarter, down 245 million compared to last year. Our cash position continues to be impacted by our share buyback program. And in the last 12 months, we have repurchased own shares for 165 million. So this ends the financial overview. So back to you, Herman.

Thank you, Sandra, and please turn to the next slide. Coming out of a quite challenging year with still strong growth and best-in-class profitability reinforces our belief in our long-term vision of becoming the leading Nordic department store. Sorry. When lower consumer sentiment acts like a drag on consumer spending fashion, this is where the categories step in. And as mentioned earlier, Our newer categories, kids, sports, beauty and home, perform really well. We are successfully moving customers from buying from only one category to more categories, typically from women's fashion to other categories, but we would like the pace to be higher. Awareness of our categories is still too low, and we would like to accelerate the growth in awareness of the categories. Therefore, we will make an extraordinary investment in 2025 in promoting the categories and building the Boost brand beyond fashion, basically from being an online fashion destination to a multi-category online department store. We will reinvest a significant part of our savings into a marketing push supporting the newer categories. The return on investment is potentially high, as customers moving to more categories on average spend exponentially more. In 2024, customers buying from one category spent 1,000 SEK on average on Boost.com, while customers buying from all of our categories spent around 16,000 SEK. By investing in a challenging market where peers probably are holding back, we would position ourselves even stronger when market conditions eventually improve. So with this, let's move on to the next slide and our guidance. Our ambition for 2025 is unchanged versus prior years as we plan to continue to increase our share of the total market for fashion and lifestyle. This is likely to be supported by an increase in online penetration across our categories. However, in our guidance for the year, we have not factored in any significant improvements to the current challenging market environment. We are not expecting consumer sentiment to increase meaningfully. With this in mind, we expect to grow revenue with 49%. And should consumer confidence improve across the Nordics, we do see an upside to this. In terms of profitability, we expect to deliver a margin between 5.8 and 6.5%. Using the midpoint, this is an increase of around 0.5 percentage points compared to 2024. Profitability is expected to benefit from economies of scale as well as cost efficiencies across the group. This includes a tailwind of around 0.3 percentage points from net savings related to the recent production staff as well as around 0.2 percentage points from the transfer sales. And the lower end of the range is set to allow for flexibility to respond to adverse market conditions. Lastly, we expect CAPEX in the range of 170 to 200 million, of which around 75 million will be related to the capacity expansion program that we will gradually start to roll out in 2025. As earlier communicated, we plan to spend around 500 million SEK from 2025 to 2027 to increase our output capacity at the warehouse. And before we conclude our presentation, I just would like to hand over to Sandra to have a small comment.