Boozt AB (publ)

Good morning and welcome to our presentation of our Q1 2026 report. Let's just go to the agenda slide. We will have the usual agenda for the presentation and I will present the highlights of the quarter and the strategic update before handing over to Michael for the financials. Next slide, please. We have said that 2026 would be a year of growth acceleration, and the first quarter tells us that we are back on track for that. We delivered 4% constant currency growth, and while January and February were soft, momentum changed in March, which saw a significant increase. This correlated with the launch of our spring-summer assortment, where we went into the season with around 35% more styles than last year, and an assortment that we believe is the most relevant and inspiring we have offered for some time. And we can see that our customers are responding, so that's very positive. On profitability, the underlying margin continues to improve. Our adjusted AVID margin increased slightly versus last year, despite significant FX headwinds. Looking ahead, we are in a strong position to push harder in the second half. Our inventory is clean and healthy, and we have already committed to a significant ramp up for the autumn-winter season to fully capture the growth momentum that we are building. We will do this from our new base as the headquarters transition to Copenhagen was completed in February. This was done without disruption and gives us the foundation to build our culture and the best team in our industry. Today, we are also initiating a new 200 million SEC buyback program. The cash generation remains solid, and we will continue to distribute excess cash in a disciplined way. And finally, on the outlook, we confirm our revenue guidance of 3% to 8% constant currency growth. But given the solid start of the year, the higher end of the revenue range is now considered being more likely. The adjusted EBIT margin guidance is raised 30 basis points to 5.6% to 6.8% to reflect the favorable currency moves. And Michael, he will take you through the details later. So now please turn to the next slide. We believe that the improvement we saw in March is due to the strategic adjustments we made to Boost.com going into 2026. We have elevated the brand, we are providing more inspiration and we are using AI to improve the whole customer experience. And most importantly, we have right-sized and improved our inventory in many ways. Following a year where we had to focus on cleaning our inventory, which had become too deep and without enough freshness and newness, we are now gradually building a more inspirational and a more aspirational assortment. In the first quarter, we added more than 100 new brands to Boost.com, including well-known names like Birkenstock and Hunter in fashion and Peugeot in home. We've also widened our buying within our current brand portfolio, making slightly more fashion bets. With more than 135,000 styles launched as part of the spring-summer campaign, we brought 35% more options than in SS25 to the shop, and our customers responded well by buying 40% more style variations than last year. For the second half and the autumn-winter season, the buy plan is even more ambitious. We are adding more brands and more breadth across categories, including the return of Max Mara and Gap to the site and new additions like Paul Smith. In total, we are on track to add more than 200 new brands during 2026 across our different categories. The point is simple. Our customers are responding to a better and broader assortment. This gives us confidence in the acceleration that we are planning for the second half. Next slide, please. Looking at the women's category, we are also seeing a better trend here. After a number of quarters with a decline in customers engaging with the category, we are starting to see a stable improvement. Active customers buying women's fashion on Boost.com grew 3% in Q1, but the underlying development was even more encouraging. January and February were difficult. Cold weather and limited inventory held us back. But as it got a bit warmer in the region and as we saw the first signs of spring, women reacted very well to the SS26 loans, supporting our acceleration in March. We expect this momentum to continue as we broaden our assortment even further in the second half of the year. It goes without saying that this also has a spillover effect onto the rest of the business. When women engage with fashion, they often also move into beauty, kids, sports, and home. So you might say that a healthy women's category drives the entire platform. Next slide, please. As we scale that volume, it is essential that we do so efficiently and keep the cost base lean. AI has become a key part of how we do that, allowing us to handle increasing volumes without a proportionally increasing costs. A clear example is in customer service, where AI now handles 40% of all inquiries. By automating the routine cases, we have been able to reduce our staffing requirement, allowing us to operate with a more focused team while maintaining a high service level. In the supply chain, we have removed 20% of the manual workload by automating product categorization among other things, which also ensures better data consistency. And in the warehouse, we have effectively added 5 to 10% in capacity within our existing footprint through the use of AI. So it's all about using technology to make our current infrastructure work harder and more efficiently. These are just a few examples, but they give a good idea of how broadly we work with AI to increase efficiency across the entire value chain. So next slide, please. On the customer side, we are using AI to remove friction and make the shopping experience more relevant. This is already live and already contributing. All products now have AI-generated descriptions and tags. And for the Spring-Summer collection, we are also using AI-generated model pictures. We are also seeing a direct commercial impact from AI-supported styling suggestions. When customers see outfits mixed and matched by AI, they add more to the basket, increasing the average order value. As we've said before, AI is going to get us to a shopping experience that is very close to the experience you get when you get engaged with an outstanding shopping assistant in a physical store. The only thing that is missing is the ability to feel and touch the products. Our virtual shopping assistant is also off to a good start. While adoption rate is still in the very early stages, the conversion rate for customers who engage with the assistant is 130% higher than those who don't engage. So even though the sample size is still quite small, results are quite encouraging. On product discovery, our recommendation click-through rate has improved from 1.5% to 5%, a meaningful step in making it easier for customers to find what they are looking for. By delivering more relevant suggestions and testing a number of AI tools, we ensure that finding the right product remains as intuitive and easy as possible for the consumer. But to wrap it up, AI is making us a more efficient business and better retail at the same time. That is not always easy to achieve, and this is why we keep investing in it. The next slide, please. We work continuously to build out our non-fashion categories, adding both strong brands and more breadth to that part of the assortment. These categories performed well in the quarter, which is also evident from the increase in customers buying from more categories. If we look at the chart, the trend is solid. Every group from two to six categories is growing in high single digits, up between 7% and 9%. This is a positive step up from what we saw last year and it shows that our focus on cross-selling between departments is paying off. This is fundamental for us. We know that when a customer buys more than just fashion, when they add items from home or kids, they stay with us for longer and they return fewer items. The strategy is working and it gives us a very strong foundation for the rest of the year. With that, I will hand it over to Michael for the financial review.

Yes, thank you, Herman, and good morning, everyone. I will start out by presenting our financials for the quarter, followed by comments on our updated outlook for the year. I'll start on slide number 11. As Herman said, we grew 4% in constant currency and this was despite of lower inventory. We thereby maintained our growth momentum from Q4 and we improved our general return profile. There are a few notables in the growth patterns that I believe are worth highlighting. First of all, our strategy with increased focus on our main premium side is firmly executed and showing results as expected. Boost is growing 6% in constant currency and boost-led is declining. Secondly, the Nordics grew quite nicely with good stable growth in Denmark and Sweden and we saw Norway grew 13% where we continue to see that we have very strong potential for further growth and where we believe that we are underrepresented. Finland did not grow and here consumer behavior appears quite weak generally. As mentioned a couple of times, March was considerably stronger than January and February and I just want to mention that this is both because currency growth was stronger but also because we now see less currency headwind. This is something that will benefit us for the rest of the year and something that will show in the reported numbers already from April. Please go to the next slide for comments on our profitability. I think it's critical to understand that the quality of earnings are actually much stronger than they appear in the headline figures. The underlying gross margin is actually up, but impacted by FX 70 basis points and also timing of other revenue as well as some Cox adjustment. And this is timing. As the effects disappear, the reported gross margin will go up, and we saw that in March. So we had a positive reported gross margin in March, and that is a trend that we see continuing into April now, and we also expect for the rest of the year. So the EBIT margin was slightly up. This was driven by less marketing spend. We have reduced offline and improved efficiency. This particularly related in this quarter to boost lead due to reduced focus and reduced need for clearance at our outlet site. The marketing spend was completely in line with plan and expectations as when we started the quarter, so nothing out of the ordinary. Next slide, please. In Q1, the return on our capital improved as our inventory is moving faster and performing better. As you can see on the chart to the right, our quarterly inventory turnover improved to 0.4. This, we believe, reflects both a broader, fresher and more relevant stock profile. When you have a stock profile like that, that's a very solid foundation for us to increase stock and take bets. So we actually strive to increase stock as soon as possible, but we also very firm and very strict on the quality that we require. And there is not much high quality stock available at this point for the spring summer trading. As such, the larger inventory ramp up will be seen in the second half of the year where the increased buying budget is committed. Now, please move to slide 14 and our cash development for the year. The free cash flow was negative and in line with expectations. It's driven by the normal working capital seasonality where we have significant payments of VAT, provisions, etc. And this was combined with an increase in inventory where we're building up for the spring-summer trading. On the bridge on the slide, you can see that the change from the same quarter last year, which is quite a representative quarter, The main difference is really related to exit tax payment in Sweden, capex increase due to the relocation of headquarters, and then a bit of a larger increase of inventory than what we had last quarter. I want to mention also that our last 12 months free cash flow is 754 million SEK, so far above 100% cash conversion. Please move to slide 15. So we ended the quarter with a cash position of 239 million SEK and we also acquired shares for 97 million SEK in Q1. And as such, we continue to have a very strong balance sheet and we have financial room to maneuver as we take on commercial opportunities in the market. Today, we have also found liquidity and space to initiate a new share buyback program of 200 million SEK that we are returning to our shareholders and we will continue to be disciplined in our return of excess cash. This completes my financial review and I'll now turn to our outlook on slide number 17. I'll start out with some comments on the currency because this obviously had a relatively large impact due to the macro volatility which had an impact on our main currencies and particularly the NOC as appreciated against the SEC as supported by increasing oil prices. This has changed the expected FX impact on our financials for the year and as such we are increasing our EBIT margin guidance. In the first quarter of 2026 we still have the significant headwinds both on revenue and EBIT margin but if we assume that the current exchange rates hold then that effect is diminishing quite materially for the rest of the year. That will be visible in our reported gross margin and our reported EBIT margin already from March. The full year impact is now expected to be around one percentage point negative on revenue growth and a small negative impact on EBIT margin and this is based on Riksbankens fixing rates as of yesterday. By the end of Q1 2026, we have also hedged more than half of our NOC exposure. We found that the current levels are attractive compared to last year, although when we hedged, it did come with some implied costs because the forward rate is lower than the spot rate due to the interest rate difference between Norwegian Krona and the Swedish Krona. The hedging also means that our sensitivity on our EBIT margin and our profit is lower now, which makes our updated EBIT margin guidance relatively robust. Please go to slide 18 for the outlook of the underlying business. So as mentioned, the spring season has started well for us and the business is progressing in line with plan. As we've said from the beginning of the year, we are targeting a growth acceleration during 2026 and we have an inventory buying plan and commercial initiatives lined up to deliver exactly that. With the current momentum, we therefore consider the higher end of the guidance range more likely, and on top of this, we also have almost one percentage point less negative impact from currency than what we expected in February. The EBIT margin guidance is upgraded by 30 basis points, which corresponds to almost 30 million SEC in absolute EBIT. So with this, I'll now hand the word back to Herman for some final remarks.

Thank you, Michael. It has been a strong start to the spring-summer season, but we are far from claiming victory. The macro and consumer environment is uncertain, and our most important quarter of the year is still a long way off. But for now, Boost is in a stronger position than we have been for a long time. Consumers are responding, our inventory is excellent, and commercial initiatives are yielding results. So now it is up to us to work hard to build further momentum as we move into the summer months. So this concludes our prepared part of the presentation, and we will now open up for questions. So operator, please.