Boozt AB (publ)

Welcome to the Boost Q2 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Herman Haraldson and CFO Sandra Gad. Please go ahead.

Thank you and good morning all and welcome to our Q2 2025 call. Let's turn to the first slide. I think it's fair to say that the first half of the year has been challenging to quite difficult market. Despite this, our revenue for the first six months was slightly positive in local currency. While this is below our long-term ambitions, we are satisfied with the performance given the strong consumer headwinds, particularly in Denmark. Looking at Q2, it was flat in local currency, but with a 3% currency headwind, our reported revenue decline by 3% to 1.8 billion sec. This is broadly in line with what we anticipated when we updated our guides in April with the variation that May was significantly worse than we expected and June was stronger than anticipated. In the quarter, Boosled continued its strong performance with revenue growing by 14% or 17% in local currency. The strong growth is a direct result of our inventory clearance strategy. As we have said earlier, our inventory going into the spring-summer season was too high, so we have used Boosled to manage our stock levels, effectively mitigating inventory risk and keeping our offering fresh. As was intended when we launched Boostlet, this channel now is providing its value as a crucial part of our business model. In contrast, Boost.com saw a revenue decline of 6% or 3% in local currency, While this was impacted by a muted demand for fashion, sales were also affected by our strategy to limit promotional activity on Boost.com to protect our brand value. We believe this is the right decision to preserve the long-term health of the Boost.com brand, even though it affects us short-term in a difficult market. Our profitability or adjusted EBIT margin for the quarter was 3.4%, down 1.5 percentage points from last year. The decline was primarily driven by two factors, a lower gross margin due to the clearance sales and a higher marketing cost ratio. was the result of a planned higher spent marketing, mainly focusing on the non-fashion categories. However, with consumers holding back on spending, we did not get the expected returns on those investments in the short term. Partially offsetting the declining margin, we saw a continuous solid trend in our operational costs with significant improvements in both fulfillment and admin. These ratios improved by close to 2.5 percentage points combined compared with last year. A highlight for the quarter was our strong free cash flow, which more than doubled to 186 million SEC up from 90 million last year. The improvement was the result of our disciplined inventory management as well as the repayment of the wrongfully paid customs in Norway related to 2022 to 2024. The strong cash position allows our commitment to shareholders as we repurchased 94 million SEK worth of shares in the quarter. In total, we have now already repurchased shares for 109 million of the 200 million program initiated in April. We are on track to return 800 shareholders from the Danish listing proceeds. To meet this commitment, the board has initiated the process to increase the current share buyback program from 200 million to 300 million SEK. Finally, our financial guidance for 2020 remains unchanged. We expect net revenue growth of 0 to 6% and an adjusted average margin of 4.5 to 5.5%. With the addition that we now also guide for a free cash flow of at least 500 million SEK. in 2025. Provide more detail on the outlook at the end of the presentation. Now turn please to the next slide. We normally do not provide a detailed breakdown of the monthly performance, but given the big swings we have seen in trading, we believe it is important to highlight how sales have developed on a month-by-month basis during the quarter. As you can see from the slide, after a relatively stable Q1, sales started to decline in April and reached a low point during May. The weak performance should be seen in the light of a challenging trading environment, where very low consumer confidence as well as a cold May in the region impacted consumer demand. With consumers' confidence started to see some optimism, trading in June improved significantly, with revenue increasing with double digits for the month. This was driven by all categories women's fashion. This positive trend at the end of the quarter gives us confidence as we move into the second half of the year. Next slide, please. We are strategically fueling our business for future growth by three key areas. Hiring, AI, and inspiration and curation. First, let's talk about our people. We have made new high-profile recruitments in our buying and merchandise teams to significantly strengthen our organization. The move of our headquarters to Copenhagen has been instrumental in attracting very experienced and talented buyers and merchandisers. They bring strong fashion backgrounds and valuable industry relationships that will complement our data-driven approach in a powerful way. Second, we are making a pre-AI across all parts of our value chain. We are leveraging AI to generate content for banners, campaign images, and also product descriptions, which allows us to scale our creative output. We're also building AI assistance to support our technical engineering, financial tasks, as well as customer service teams, making our operations more efficient. Crucially, we can now deliver highly personalized recommendations to our customers. Based on the order and behavioral data, we can do it more efficiently and with greater precision. Finally is inspiration and curation. All these initiatives, particularly those driven by AI, are designed to increase customer loyalty through tailored content. By offering product descriptions through better curation and styling tips, we are confident that we can make the shopping experience more engaging and inspirational for our customers. To further support the business, we are also enhancing our engagement and focusing more on social media. These strategic initiatives are all focused on making us more agile agile and responsibly equipped to succeed in a rapidly changing market. We are confident that these actions are the right steps to build a strong foundation for future growth. Please turn to the next slide. Going back to the performance in the quarter, we continue to see an improvement in the share of our customers who buy from more than one category on Boost.com. As most of you know, moving customers to buy from more categories is a key priority for us. Customers buying from more than one category are more loyal and they buy exponentially more than customers buying from just one. In the last 12 months, 53% of customers bought from more than one category, which is an increase from 51% in the same period last year. As mentioned in the beginning, we have invested in offline media to increase the awareness of the non-fashion categories. It has had some effects, but it has not been as effective as we had hoped for. With this, I will hand over to Sandra for a more detailed run-through of the numbers for the second quarter. Please, Sandra.

Thank you. So let's start with a look at our revenue for the quarter. Revenue declined 3% and it was flat currency. The decline was driven by Denmark, which was down 8% or 4% in local currency, while Sweden continues to perform above par, delivering 4% growth in the quarter. Looking outside of the Nordics, revenue was down by 3%. 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 single order in these countries. The gross margin was 39.1% in the quarter and down 2.7 percentage points compared to last year. This was mainly the gross margin on Boostlet, where we are clearing inventory at higher discounts. Additionally, the gross margin was impacted by currency, resulting in a headwind of close to 1 percentage point. The adjusted EBIT margin was 3.5%, down from 4.9%. This was largely the progress margin as well as the increased marketing spend in the quarter. These negative impacts were partially offset by a continued solid progression in fulfillment costs as well as administrative costs, which I will come back to in a minute. Turning to our two platforms, Boost.com saw a revenue decline of 6% for the quarter, which translates to a 3% decline in local currency. While the difficult market conditions had an impact, it's also important to note that our strategy of maintaining a more premium pricing on Boost.com, which we do to protect our brand equity, is likely impacting short-term sales in the current environment. Despite this, we onboarded close to 200,000 new customers on Boost.com. However, as consumers remain hesitant to spend across the Nordics, we also see that they're buying on average less frequently. The number of active customers in the last 12 months was flat compared to last year, while the average order value increased 2% to 934 kronor. In the Nordics, Boost.com revenue was down 6% or 3% in local currency, and this was driven by a 10% decline in Denmark, which translates to a negative 5% in local currency, while Sweden was down 3% in the quarter. Consumer confidence in the Nordics continued to decline in the quarter, though we have seen a slight improvement towards the end, and especially in Sweden, which was also reflected in the strong performance in June. Sales outside of the Nordics declined 8%. As mentioned earlier, this was impacted by lower sales, mainly in Germany and the Netherlands. The adjusted EBIT margin for Boost.com declined 0.8 percentage points to 3.8%. The decline was mainly driven by a lower gross margin impacted by currency as well as a higher marketing spend. This was partially offset by the increased efficiency in fulfillment and distribution supported by the transfer sales that we introduced in 2024. Additionally, margins were positively impacted by Boost no longer being subject to customs payments in Norway, as well as the staff reduction. If we move on to Boostlet, revenue increased 14% supported by the ongoing clearance sales introduced last year. in the quarter, we successfully continued to clear out all the products from prior seasons to keep our inventory fresh. This has been well received by customers, particularly in Sweden, where sales increased 30%. Active customers during the last 12 months increased 19% to more than a million, while the average order value increased 2% to 933 kronor. This was achieved despite the lower prices offered on Boothlet and was due to an increase in number of items per basket. The adjusted EBIT margin for the quarter was 1.9%, down from 5.9% last year, and the decline was mainly due to the current clearance sales on the site. So if we move to the cost ratios, starting with fulfillment, we're very pleased to see the continued good development in our fulfillment cost ratio, which was down to 10.5% for the quarter compared to 11.4% last year. This is a direct result of the operational efficiencies that we've been working on. The transfer sales we installed last year are now fully up to speed and combined with better distribution deals, they are generating meaningful savings for our business. Our marketing cost ratio increased to 11.5% from 10.8% last year, and there are two main reasons for this. First, we continued, as Herman mentioned, with a planned offline marketing spend to build awareness for our non-fashion category. The second reason is that we did not see the expected return on these investments due to the challenging environment, and particularly with women holding back on spending, also somewhat impacting other categories. we do not plan to spend the same level on offline marketing in the second half. If with admin and other costs, the ratio continues to improve and decrease by 1.5 percentage points to 9.7%. This improvement was driven by two significant factors. First, our administrative costs benefited from no longer having to pay customs in Norway. The other major driver was the positive effects of the restructuring that we completed in February, which reduced our permanent positions by approximately 10%. We're very pleased with the increased efficiency that this has delivered. This is now projected to have a positive impact on our adjusted EBIT margin of up to zero point points in 2025, an increase from our earlier projection of around 0.3%. Our depreciation cost ratio increased to 4.1% from 3.6%. And this was also due to two factors, the new depreciation cost associated with the lease of a new bulk store home and the installation of the transfer sales at the fulfillment center last year. These are strategic investments and we expect to grow into these costs as our business expands. Finally, it is worth noting that costs related to share-based payments resulted in a positive adjustment this quarter. This was due to lower share price and lower projected performance than initially anticipated. Consequently, the non-adjusted EBIT margin for the quarter increased to 5.8% from 4.2% last year. The next slide, please. Cash development. So we ended the quarter with networking capital of 1.3 billion kronor, corresponding to 15.5% of revenue. And this is to be compared to 12.2% last year. The increase was mainly related to decline in accounts payables, which was primarily due to reduced inbound deliveries during the second quarter. Inbound deliveries are anticipated to pick up during Q3 ahead of the autumn-winter season. Inventories, they are on par with last year, but significantly down compared to the last couple of quarters, supported by the ongoing clearance sales and boosted. CapEx was slightly down compared with last year in the quarter versus 48 million last year. The decline was mainly related to intangible investments. Investments in tangible assets was at 12 million and among other things relates to investments at the fulfillment center for a new semi-automatic system for garments on hangers which will include end productivity even further. Free cash flow in the quarter was 186 million compared to 90 million last year. The improved cash flow was mainly due to the effective inventory clearance during the quarter, as well as more cautious buying behavior given the difficult trading conditions. Furthermore, cash flow was positively impacted by the repayment of customs duties, which were incorrectly paid in Norway in 2022 to 2024. These two factors were partially offset by decline in our accounts payable. Our net cash position was 75... at the end of the quarter, down from 297 million last year. And our cash position continues to be impacted by our share buyback program. In the last 12 months, we repurchased own shares for 292 million. So this ends the financial overview. So back to you, Herman.

Thank you, Sandra. Yeah, our performance since changing our guides in April has been broadly improved. in line with our expectations. We were clear then that we did not foresee trading improvement until the second half of the year. Although June saw a significant improvement, this was preceded by a weaker than expected May. Looking forward, with sales now returning to growth, we remain confident in our current guidance for the full year. So the guidance remains unchanged with 0-6% revenue growth and an adjusted EBIT margin of 4.5 to 5.5%. This indicates that we need to achieve between 0 and 11% growth in the second half of the year. While this is a broad range, it also illustrates the continued uncertainties we are facing. Additionally, of course, it's worth noting that the for the second half of the year than what we faced in the first half of the year. Currency remains a headwind. However, with a slightly weaker SEC, the top line headwind is now down to 2% from 3% in April. The margin headwind is slightly lower as well, up to around 1 percentage point. Our capital expenditure guidance also remains the same with 150 to 170 million to be spent in 2025. One thing to mention though is that we are slightly postponing our capacity expansion plans. This is partly due to significant improvements in operation efficiency and better than expected utilization of our existing capacity, but of course also a result of the lower than expected growth we've seen since communicating the plan in April last year. This means that you should not expect us to spend around 500 million from 2025 to 2027, but rather that these investments will be deferred by one to two years. Finally, as mentioned initially, we are now being a bit more firm on our cash flow. Driven mostly by the positive development in our inventory position and supported by the clearance on Boostlet, we now expect to generate a free cash flow of at least 500 million SEC in 2025. This compares to around showing a significant improvement. So, yeah, this concludes the presentation and I would like to hand over to the operator for questions, please.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Nicholas from Ekman. Please go ahead.

Thank you. Can I start with a question here on current trading? And I know you don't usually comment on this, but given the huge variations we've seen here in April, May, and then June, it's just difficult to see which of these were a one-off. Can you say anything about the start of Q3, whether we should look at June or if we maybe should look at the entire Q2 as an indication? That's my first question.

Yeah, good morning, Niklas. It's a good question. As you said, normally we don't provide current trading and also, you know, July and August are kind of a leftover from the spring-summer sales. But I can tell you that we're back to growth, even though it's a modest growth, but we're back to growth. And of course, it's supporting the guidance for the second half.

Very good. Thank you. And the guidance here, as you said, it's also a pretty wide range. And if I just look at sales in H1, it does seem that at least the upper end of that guidance is more optimistic and it seems to be pointing more towards the lower end of your guidance. And then a little bit the same on margins if you just for import duties. Is that Do you share that view or is it the easy comps that make you more optimistic about the possibility of reaching the mid to high end?

I think it's a combination of easy comps, better stock alignment, and probably a more optimism that we see going forward. As for the revenue side, on the cost side, we're actually very, very well in control of the costs. So I think the midpoint is a good bet, but definitely not the lower point of the guidance on EBITDA.

Very clear. And just to clarify as well, because last year's earnings were, of course, impacted by these import duties, the Norwegian import duties. Can you confirm that your underlying margin in Q2 was in the range of 5.6%? And also, I think that in Q3, your margin should have been around one percentage point higher, around 4.3%. Am I getting the math right on that?

So you're referring to the last year's margin, right?

We don't really get your question. Can you elaborate?

I'm looking at the underlying margin if you adjust for Norwegian import duties, which you did pay in Q1 to Q3 and then they were kind of repaid in Q4. So the underlying margin was that 5.6% in Q2 and around 4.3% in Q3.

Well, we have a tailwind. If we look at this quarter, we have a tailwind from the customs of 0.7 percentage points. And full year, it's around 0.5-ish, something like that.

And for Q3, the margin would have been around one percentage point higher, excluding these import duties. Is that correct?

That sounds a bit much, but I don't remember the number from last year right now.

Maybe we can come back on that.

We can come back on that. That's no problem.

Okay, final question to you, Sander. How much longer are you staying? And also, I'd like to take the opportunity to thank you for your contribution over all these years.

Thank you. That's very nice of you. Well, actually, I'm going to have a few days off here, but today is my last day at the office.

I'm sorry, I was breaking up here a little bit. Oh, sorry. Thank you so much. Thank you so much for taking my questions.

The next question comes from Benjamin Walstedt from ABGSC. Please go ahead.

Good morning. First of all, I was wondering about your guidance, as you point out in the presentation as well. Since the Q1 report, FX rates have sort of been moving your way again, and I was wondering how and if this was taken into account when deciding on the guidance commentary in this report, or the Or if it was taken into account when deciding on whether or not to change the guidance in this report?

Well, we think that's too early to say, obviously. But we think that when we provided the guidance, that room covers it. But obviously, if it continues down, then we will be more specific in Q3. But for now, we keep it as it is.

Perfect. I was also wondering about the ongoing perhaps inventory clearances. In the beginning of the year, you noted that you expected an H1 inventory clearance through Boostlet. We've seen signs in reported figures, and I was wondering if you could give us any additional flavor on the quality of the current inventory, and what are your thoughts about the need for further clearances into Q3, please?

uh as you see our inventory now is in line with with last year so we actually have been managed to grow uh inventory position is is actually quite good We still are a bit spring-summer on Boostlet and we will continue to do that. But of course the focus now is to have the right inventory on Boost.com. And as we said, especially in the women's category, has been muted, less stresses, and that has been corrected for the fall. So I think that we have already now, and within deliveries that are coming into the warehouse, we have a quite good inventory position. At least now, we no longer have too much inventory.

No longer have too much inventory. Sounds promising. Final question from me. You have changed your commentary around expected admin ratio savings from the headcount reduction to now be 50 basis points as opposed to 30 basis points previously. Could you talk a bit more about this decision, please?

Yeah, we can just see the effect of our savings. And when you do restructurings, you, of course, you know, some of it is redundancies, some is where you need to kind of replace people with some kind of other types of people who are level centers. But we've seen that it's less than expected. So the effects of our rightsizing have been higher than expected, which is quite encouraging because our operation costs are very much in control. And we believe we are kind of quite a very fit company. Perfect.

That's all I had for now.

The next question comes from Daniel Schmidt from Dansky. Please go ahead.

Yes, good morning, guys. A couple of questions from me, and I think you answered most of them already, but I think you, Sandra, pointed to the fact that you will be less pronounced Going forward when it comes to offline marketing and non-fashion categories for the second half of this year, is that going to be neutralized by increased marketing when it comes to fashion related items or how should we view that statement?

marketing cost ratio was too high in the quarter. So then business still with 10% and below for kind of a long term and the marketing cost ratio of 11.5% was too high and it was due to our marketing campaign. And part of it, of course, you know, It ran in May, where consumers were holding back, and basically our concept was not good enough. So we are back on the drawing board, and of course our plan is still to increase the awareness of the categories, because we believe it is very strong. And I think the best proof of the categories is how the contributors that are basket size It's actually got slightly up in an environment where item price and fashion is going down, clearing and boosting. So actually, you know, so this only encourages us to focus more on the category. We're forgetting the women's because it's still the women that are driving the purchases in other categories. And if women come into the site to shop for themselves, they typically add to the basket of other categories. So a long answer, Daniel, to a question. Sorry. Yeah.

Yeah, I think I heard you breaking up a little bit actually during the call. So maybe I missed some of it. But did you say that you aim to get to rather a 10% ratio for the full year on marketing? Is that what you said?

Not for the full year, but kind of normally we aim for 10% and 11.5% is too high. So obviously now it should be considerably lower than it was in the core in the first half.

Okay, then I hear you correctly. And then you did update the savings ratio, the savings amount when it comes to the staff cuts and you upped it. What do you see in fulfillment which was quite sort of a significant improvement in Q2? Is there any sort of Is there anything to say about that for the second half? Is that surprising you on the upside or is that more in line with what you've been guiding for?

Fulfillment is really delivering as we had hoped for. Our investments in automation and consolidation have really, really paid off. As you know, we've been focusing on improvement and fulfillment basically since 2019 and I think it's paying off. we are moving in the right direction i the aim is still to to get improvements in fulfillment cost ratio also in distribution but i think that kind of i'm not guiding for for for the second half improvement but i think that we're in a really good track and and uh very much in control of our supply chain but of course when growth is is weaker it's easier to kind of uh calibrate. So that's why I kind of use this kind of a slight growth pause to make sure that everything works in the warehouse, which it does.

Okay. My interpretation is that you're happy, but it's a bit too early to say that this is going to have a significantly higher impact than what you already have guided for. But so far, so good at least.

So far, so good, yes.

Yeah. All right. I think just also maybe just coming back to the inventory clearance and you said you didn't have any more excess inventory but you also said that you are still maybe it sounded like you were a bit aggressive in July and beginning of August but to get to a position where you don't need to be more aggressive anymore as you get into the second half of

august or back to school or whatever is that the right interpretation yeah we came into the into the year with too high uh prior season inventory and that has been cleared so so which is good obviously sales in q2 were less than than expected so so for the spring summer inventories they might they will be slightly elevated and we will continue to to clear that on on boosted but other than that so there's no noise from old inventory so we can focus on the autumn winter 25 which is a very good thing for a retailer that that you don't have a mountain of inventory behind you so and that's why it's quite it's actually quite encouraged to see that our inventory now is on par with last year the same period last year so so we are quite um We are quite happy with the inventory position, which is also why we can guide a cash conversion that is as high as it is.

Okay. Good. Thank you. That's all for me and Sandra again. Wish you good luck in your new position. That's going to work out great, I think. And thanks for all the collaborations that we've had and talk to you in the coming quarter, Herman.

Thank you, Daniel.

The next question comes from Johan Fred from SEB. Please go ahead.

Yeah, good morning, guys. Johan Fred here from SEB. Thank you for taking my questions. I just have a few follow-ups on the previous quarter. Firstly, on Niklas's question on current trading, you mentioned that April and May were soft, but trading improved in June with growth returning across most categories except women's fashion. Do you mind elaborating just a little bit on what drove the recovery in June? Was this weather driven and was the improvement widespread throughout all regions? Any color there would be much appreciated.

Thank you. Of course, weather contributed a lot to the recovery in June, because May was quite cold. Also, we saw that consumer confidence across the region seems to be going up. uh so so even though women were still were buying less than than we would have expected they also were kind of increasing the buy so it was a combination of of consumer confidence and and whether we believe Of course, going into the third quarter, we don't see a double digit growth again, but we're still seeing a modest growth, but it's still a growth, which is why we are confident that we can deliver on the guidance for the second half.

Thank you. And any difference between the different regions or geographies?

Denmark is still kind of holding back, being probably more depressed than other Nordic countries. Sweden is actually doing quite well, and we're happy with that. And Finland is also slightly lacking so it's kind of it's going in waves but we can see that in general consumer confidence seems to be picking up which gives us confidence that we might be getting out of this low consumer confidence slump if we've been in for a while got it very clear thank you and the second one if I may on marketing spend you state that

Marketing to sales ratio in H2 will be considerably lower than in H1. Any chance that you could quantify the decrease in H2, i.e., how big of a step down can we expect?

uh it will be low i don't want to quantify kind of how much which will be lower and of course you know the the the category offline marketing has been put on hold and and the increase compared to last year of 0.7 percentage points was only due to our offline marketing that we did for the categories etc so so It will be lower, but of course, we are still building the brand. And if we see opportunities and we still are seeing a good probability, We might still do some marketing, but we will just spend what is needed to deliver on what we are expecting for the second half. So I don't want to kind of quantify that it will be an X or Y amount, but it will be lower than in the first half.

I hear you. I hear you. Thank you so much for taking the time and answering my questions.

Oh, thank you. You're welcome.

The next question comes from Eric Sandstedt from Kepler Shoebrew. Please go ahead.

Hi, thanks. A few questions on the market environment to start off with here. In terms of competition, have you seen any changes from the ultra-fast fashion players during the quarter?

uh i think it's as intense it has been as it has over the last year or two we've seen some numbers lately from denmark saying that some of these ultra fast fashion players are losing ground mainly chinese but we're not seeing a more intense the competition of uh of course if if the decline especially in women's dresses is because they are buying a cheaper and more kind of uh instagram or tick tock friendly addresses but but we we don't really see a more intense competition i believe that it's it's it's to a high degree kind of driven by consumers holding back which also kind of which which is supported by the numbers of you know the credit card use from the banks that are showing that that spent on clothing and shoes in the Nordics has been down in the same quarter.

Okay, thanks. Great. And also in terms of inventory levels on the market overall, so to speak, in the Nordics, do you sense that inventory levels are starting to normalize also for other retailers or is it still sort of excess inventory out there that has to be cleared? also putting pressure on you.

Yeah, a lot of inventory has been cleared during the first half. My impression is that retailers have probably been going more cautiously into the second half, so I'm not anticipating that There will be a gross margin pressure due to inventory in the second half. I think that we're not expecting a worse consumer environment and of course all hoping for that it will improve and maybe the talks in Alaska might change something. for the better. But we're not assuming it will be worse. And if anything, there are signs that consumers are becoming more optimistic for a good reason, actually.

Yeah, thanks. And then in terms of your buying costs, do you get any benefit at all from the fact that the US dollar has been weak versus the Nordic currencies? sort of versus the same period last year. I guess you don't buy a lot directly into US dollar terms, but indirectly, do you see any deflationary trends there in terms of sourcing costs?

We don't buy anything directly, anything from the US. And so we are a third-party retailer, so we buy from the brands. And typically now, for instance, we have been buying for the spring-summer 26th season. We don't benefit directly from the dollars. So we're not seeing kind of any advantage. Of course, you know, If this will continue, of course, that might give an advantage as the brands might be more inclined to give you better prices or something like that. But we don't see the immediate effects. I think we're much more affected by increases in freight costs, et cetera, because that's kind of a direct cost and effect is quite a lot. But we have not seen any... real changes based on the fluctuations in the US dollars. And also the other way, you know, if they would come and say, you know, the dollar is up, we say, yeah, but that's your problem, right? So that's why, you know, I think it's a more long-term thing. If it's a structural thing, then, of course, the dynamics will change.

Yeah. Thanks for clarifying. And then just finally, I know this is a difficult one, but relating to the share-based payments, as you mentioned, it was actually a positive one off for a change here. I mean, could you say anything about how to think about this line?

Yeah, I think the share-based payment, of course, shows that the program works. If we don't deliver on growth and long-term profitability, the share-based payment basically goes away. So this is just a reflection of a payout. And then there are social costs associated with the payments. And when the share price goes down, then, of course, the costs are lower. But this big amount just reflects... that the likelihood of us targets set out in 22 and 23 and 24, they are kind of, it's just much lower. So I think actually it's a proof that it actually works, the share-based payment program. So we only get share-based payment if we deliver targets.

Great. Thanks a lot.

The next question comes from Benjamin Wahlstedt from ABGSC. Please go ahead.

Hello again. Quick follow-up on Johan's question. The line was breaking up a little bit. Did you say the reason for the higher marketing ratio year-on-year was fully due to the now post-offline marketing, please? Sorry, I did not break up again. Did I?

Perfect. Thank you very much.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

for participating in our q2 call for this um yeah for this quarter thank you for good questions and also this is central uh last day and i will also would like to thank sandra and thank you guys for being a very good inspiring partner to to sandra and myself during the last many years thank you very much and i guess i'll see you in the in the coming weeks thank you