Boozt AB (publ)

Thank you and good morning to all and welcome to the presentation of our Q1 results. Let's turn to the first slide. The operating environment remained challenging in the quarter with consumer confidence in the Nordics declining even further, most likely fueled by the increasingly uncertain geopolitical situation. In terms of top line, we increased revenue with 2% in the quarter or 3% in local currency. Growth was primarily driven by Boostlet.com, which saw a strong 18% increase. As we did during the second half of last year, we have used Boostlet.com to clear inventory in the quarter. Our price initiatives on Boostlet helped keeping our inventory fresh while contributing to building Boostlet's value brand franchise. Revenue from Boost.com declined slightly in the quarter by 1%, but remained flat in local currency. This, we believe, reflects both the current cautious consumer environment as well as the fact that we deliberately are less aggressive on pricing on Boost.com. While this impacts short-term sales, we do this to preserve Boost.com's more premium brand value, a strategy that is supported by Boostlet's ability to clear old inventory. Our customer base continued to expand in the quarter, reaching 3.8 million active customers across both platforms and growing 7%. Furthermore, 52% of Boost.com's customers now purchase from more than one product category, illustrating the continued success of our department store strategy. In the quarter, we maintained our higher levels of customer satisfaction. Our Trustpilot score was 4.2 and our Net Promoter score was 74, indicating continuous strong customer loyalty. In terms of profitability, our adjusted EBIT margin improved to 2.3% compared to 1.2% in the first quarter last year. The positive development was largely driven by the efficiency gains in fulfillment and distribution as well as the exemption from customs in Norway. Our cash position remains solid, even after buying back shares worth 134 million this past quarter, finalizing our 200 million SEK buyback program for the year. With the current program finalized, our board now intends to launch a new program, likely at a level comparable with the previous program. Finally, this quarter we took a significant step to strengthen our position for the future. In February, as previously announced, we streamlined our organization, reflecting the growing impact of technology and the wider adoption of AI-driven tools across our value chain. This included a 10% reduction in our total workforce, or about 20% of our white-collar staff. Turning to outlook, we have revised our guidance to reflect the increased market uncertainty and the unfavorable currency movements observed since our previous report. We now anticipate revenue growth in the range of 0 to 6%, adjusted from the prior expectations of 4 to 9%. Our EBIT margin is now projected to be between 4.5 and 5.5%, compared to the initial guidance of 5.8 to 6.5%. I will elaborate on the updated guidance in more detail later in the presentation. So now let's turn to the next slide. Despite the difficult environment, we successfully attracted a significant number of new buying customers to our platforms in the quarter. Our active customer base on Boost.com grew by 2% at the same time as Boostlet saw a strong 22% increase in the quarter. This means that a total of around 270,000 new customers shopped in the two shops during the quarter. While our focus remains on increasing the category awareness, expanding our active customer base is a continued priority. In a market with muted consumer sentiment, attracting nearly 300,000 new customers I believe is a testament to our underlying strength. The increase was broad-based across both platforms and regions. Active customers in our main region, the Nordics, grew by around 6%, primarily driven by growth in Boostlet, supported by the current price initiatives, as well as price-sensitive consumers, which is benefiting our outlet, Boostlet.com. Active customers in the Baltics continued to increase significantly and we were up around 28% on Boost.com and 84% on Boostlet compared with last year. This continues to be from low levels, but with a continued high average order value on par with the group, we see decent profitability as well as strong growth opportunities in the Baltics. Finally, active customers increased by around 10% in the rest of Europe, driven by positive development in both Boost and Boostlet. But also, please bear in mind that for this metric, we are looking at the last 12 months. Let's go to the next slide. In the quarter, we continue to see an increase in the number of customers shopping across multiple product categories on Boost.com. Driving multi-category purchases remains a key strategic goal of our department store model with a direct impact on our financial performance. In the current macro environment where consumers are cautious and holding back on renewing their wardrobe, the ability to offer other categories helps us absorb the negative effects of the lower fashion demand. Over the past 12 months, as shown on the slide, we observed an increase of between 2% and 8% across all customer groups shopping from two to six categories on Boost.com. This means that 52% of our Boost.com customers now purchase from more than one category. While this is a modest increase from 51% last year, it's important to consider that this metric is consistently influenced by the fact that new customers typically begin by shopping within a single category. And with around 170,000 new customers joining Boost.com this quarter, the result is quite encouraging. Despite our focus on Encouraging multi-categories purchases, growing our overall customer base remains a key objective, as we have a strong track record of both retaining customers and successfully introducing them to new categories. 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. If you turn to the next slide, turning to multi-category buyers and boosts, which we have not shown before, we also see a gradual increase. 42% of Boostlet customers shopped from more than one category in the last 12 months compared to 41% the previous year. This was supported by around 80,000 new customers making multi-category purchases in Q1. Like it is with Boost.com, this year-over-year comparison is influenced by the substantial number of new customers acquired by Boostlet over the last 12 months. We are gradually expanding Boostlet's product assortment beyond its traditional focus on fashion, and it is quite encouraging for us to see customers buying into the new categories. This diversification also mitigates the potential stock risk within kids, sports, beauty and home, as Boostlet now provides a clearing channel for all categories. So with this, I will hand it over to you, Sandra.

Thank you, Herman. So please turn to the next slide. Revenue increased 2% in the quarter, as Herman mentioned, or 3% in local currency, with growth being relatively stable throughout the quarter. Once again, growth was mainly driven by a continued good development in Sweden, as well as Norway, where we saw revenue growth around 10% for the quarter. Our performance in Denmark continued to be soft, impacted by the continuous decline in consumer confidence. Revenue in Denmark declined 3% in the quarter. Looking outside of the Nordics, revenue was down slightly by 1%. While the Baltics are still performing well for us, Germany and the Netherlands saw a decline. This is mainly because we're holding back on marketing here as we remain focused on being profitable on every order in these countries. Additionally, Q1 last year was a very strong quarter for Germany and the Netherlands. Looking at categories, the non-fashion categories continue to show good progress, while revenue from men's and women's fashion declined in the quarter. However, while women are holding back on fashion, they're increasing their spend particularly in the kids category, which together with the home category, were the best performing categories in the quarter. The gross margin was 38% in the quarter and down 0.9 percentage points compared to last year. This was mainly driven by a lower gross margin on Boostlet, where we are clearing inventory at higher discounts. Additionally, the gross margin was impacted by timing effects related to other revenue. However, these timing effects will revert in the second quarter. The adjusted EBIT margin was 2.3%, up from 1.2%. This was driven by good progress in fulfillment cost, as well as the administrative costs, which I will come back to in a minute. So let's change to the next slide. So if we look at the two platforms, Boost.com saw a slight revenue decline of 1% for the quarter, which translates to flat growth in local currency. The performance was significantly affected by the overall market sentiment. In terms of shoppers, we continue to see an increase in active customers. Around 170,000 new 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. Number of active customers in the last 12 months increased by 2%. The average order value declined 1% to 957 kronor, which was to a large degree driven by currency. In the Nordics, revenue on Boost.com was flat. However, Norway outperformed with more than 10% growth. Sweden also did relatively well, growing 2% in the quarter. This is supported by a strengthening market fueled by lower market rates and tax cuts. Revenue from Denmark was, however, down 5% in the quarter. Consumer confidence in Denmark continues to decline, which has a significant impact on the fashion demand in the country. Sales outside of the Nordics declined 6%. As mentioned earlier, this was impacted by lower sales, mainly in Germany and the Netherlands. The adjusted EBIT margin for Boost.com increased 2 percentage points to 3%. The margin improvement was mainly driven by increased efficiency and fulfillment and distribution, supported by the transfer sales introduced in 24. Furthermore, margins were positively impacted by Boost no longer being subject to customs payments in Norway, as well as a slightly higher product margin due to the lower markdowns on Boost.com. But if we look at Boostlet, we see a revenue increase of 18%, which was supported by the price initiative that we introduced last year. In the quarter, we successfully continued to clear out older products from prior seasons to keep our inventory fresh. This has been well received by customers, in particular in Sweden, where sales increased almost 40%. Active customers during the last 12 months were just over a million, which corresponds to an increase of 22% versus the same period last year. The average order value was slightly up compared to last year at 982 kroner, despite the lower prices offered on Boostlet. This was due to a slight increase in number of items per order. The adjusted EBIT margin for the quarter was a negative 0.2% compared to a positive 2.6% last year. The decline was mainly due to the temporarily lower prices on the site. If we move to the next page, here we see the development of the cost ratios in the quarter. And if we start with the fulfillment cost, we saw good improvement in this quarter down to 10.8% from 11.6% last year. So now part of this is thanks to better deals that we negotiated with our distribution partners, but importantly, we're also starting to see the real benefit of the transfer cells that we installed at the fulfillment center last year. They are now fully up and running in Engelholm and they're making a significant difference in how efficiently and how quickly we can process orders. On the marketing cost, our costs stayed relatively the same at 10.1% compared to 10% last year. We're still seeing the benefit of having more returning customers and a growing number of club booth members, which naturally reduces how much we need to spend on marketing. However, as planned, we increased our spending on offline marketing this quarter. This is a deliberate effort to increase awareness in the Nordics for our non-fashion categories, which include sport, kids, beauty and home. Looking at our adjusted admin and other costs, the ratio decreased by 1.1 percentage points to 10.7%. The main reason for the improvement is that we're no longer paying customs in Norway. The non-adjusted ratio improved a bit less to 12.7% from 13.3% last year, And that is due to the severance costs of 27 million related to the reorganization, which was booked in this quarter. The depreciation cost ratio for the quarter was 4.1% and unchanged compared to last year. So my final slide here is the cash development. And we ended the quarter with a working capital of 1.4%. million kronor corresponding to 16.9% of revenue. This is to be compared to 12.7% at the end of Q1 last year. The increase was due to a higher inventory position due to a lower sell-through than expected coming into the autumn-winter season. While this has an impact on inventory, we still believe our inventory is in good shape and up-to-date, supported by our ability to clear older stock through Boost.com. CapEx was down to 42 million in the quarter versus 97 million last year. Last year, we were starting to invest in the transfer sales that we mentioned earlier, which explains most of the decline. Free cash flow in the quarter was a negative 619 million compared to a negative 685 million last year. This improved cash flow was mainly due to the lower CapEx. It is worth noting that the cash flow in Q1 is typically low, largely due to the relatively high inventory at the end of the quarter in preparation for the spring-summer season. Our net cash position was 8 million at the end of the quarter, down 228 million compared to last year. Our cash position continues to be impacted by our share buyback program. In the last 12 months, we have repurchased own shares for 134 million. Finally, I'd like to mention that we have now, as expected, received a cash payment of approximately 100 million from the Norwegian tax authorities regarding the wrongfully paid customs in Norway, providing a further boost to our cash position. This will, however, impact the cash flow statement in the second quarter. This ends the financial overview, and back to you, Herman.

Thank you, Sandra. And before we move to the guidance, I would like to take a moment to address our position in the current market environment. As previously mentioned, the operating conditions have remained quite challenging throughout the quarter. After a couple of years of muted consumer sentiment following the COVID pandemic, we had expected consumers to start being more optimistic. And what we have seen is actually the opposite. Consumer confidence has declined across the Nordics, driven by increasing geopolitical uncertainty. Basically, a growing uncertainty about where the world is heading. As a result, we have observed more cautious consumer spending, particularly in the fashion sector. That said, we are constantly managing the business to navigate these challenges effectively, ensuring that we stay well prepared for what lies ahead. As part of this, we streamlined the organization during the quarter with a key focus on leveraging AI and technology to enhance efficiency. This process included a 10% reduction in the workforce, and we expect these efforts to deliver a net improvement of around 0.3 percentage points to our adjusted EBIT margin in 2025. With these actions alongside the steps we've already taken, we are reinforcing our foundation and further strengthening the resilience of our organization. For one, we maintain tight control over our costs and our cash position remains solid. Secondly, the growing diversification of our product portfolio is helping reduce our reliance on the more volatile fashion sector. And third, our efficient and adaptable supply chain ensures that we're well equipped to handle the ongoing market challenges. So while we acknowledge the challenging environment, we are confident in the steps that we've taken and the strength of our business. We believe that we are well prepared to navigate these rough waters and we are positioned to capitalize on improvements when market conditions become more favorable. So now let's move to the next page and our guidance. As mentioned earlier, we've updated our financial outlook to reflect the increased market uncertainty we've seen since our Q4 report. Specifically, we now anticipate net revenue growth to be in the range of 0 to 6% compared to our previous expectations of 4 to 9%. And our adjusted EBIT margin is now expected to land between 4.5 and 5.5% compared with the 5.8 to 6.5% we have stated before. The revision of our guidance is primarily driven by two key factors. First and most important, our initial outlook assumed a continued challenging but also stable market. However, the Nordic retail environment has become increasingly uncertain mainly driven by the geopolitical unrest we're currently seeing. This volatility is evident in our performance so far in April, which has been extremely volatile following the increased trade tensions. While we hope for stabilization, we anticipate that any substantial improvement is unlikely before the second half of the year. Adding to this, the Swedish kronor has strengthened since February when we gave the guidance. Assuming exchange rates remain at current levels for the remainder of 2025, this strengthening is expected to negatively impact our net revenue by approximately 3 percentage points. In addition, given that the majority of our costs are denominated in Swedish kronors, we are also projecting a negative impact on our adjusted EBIT margin of around 1 percentage point, assuming no change in this currency range. Finally, regarding our capital expenditure, the CAPEX forecast for 2025 is now expected to be in the range of 150 to 170 million SEK, a decrease from our previous range of 170 to 200 million SEK. As we announced last year, our plans to invest approximately 500 million SEK in capacity expansion between 2025 and 2027 remains in place. Of this total, approximately 65 million SEK is now planned for investment in 2025, which is a reduction from the previously communicated figure of around 75 million SEK. The remaining difference is primarily due to slightly lower expected CAPEX related to IT development. This concludes our presentation, so operator will please open up for questions.