Boozt AB (publ)

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 HERROLDSEN AND CFO MICHAEL BURGBY. PLEASE GO AHEAD.

THANK YOU AND GOOD MORNING TO ALL AND WELCOME TO OUR Q2 2026 WEBCAST. SO LET'S JUST TURN TO THE FIRST SLIDE, THE AGENDA. SO FOR TODAY'S PRESENTATION, WE'LL FOLLOW OUR USUAL AGENDA. I'll take you through the highlights and the strategic developments, and then Michael will walk you through the numbers in detail. So please move on to the next slide. When we started in 2026, our ambition was clear. We wanted to get back to double digital growth. We were quite confident that the initiatives we had put in place in 2025 were the right ones to position us strongly in the market and that they would bring us our growth momentum back. So this is why I'm very pleased that the results came through even faster than we expected. We grew 13% in the second quarter and we almost doubled our EBIT margin to 6.5%. And this was a broad-based performance with every major category and every market contributing. Behind the quarter, there were three main drivers. The first is our new assortment strategy, which is broader and more inspirational than before. We offered 55% more styles on Boost.com than in the same quarter last year and sold almost as many different styles also during the quarter. That was very positive. The second is AI. Our new AI initiatives have clearly improved the customer experience, and we're happy to see that our customers are responding accordingly. And the third thing is a real step change in our commercial organization. We've built a powerhouse of local country specialists, all sitting together at our new headquarters in Copenhagen, and this is something that we just couldn't have done before we moved the headquarters from Hylland, Sweden, to Copenhagen. Alongside this very encouraging performance, we also decided during the quarter to sharpen our focus to make sure that we capture the full potential of our core business. So this is why we closed our B2B gift shop initiative and narrowed our focus. So as we say, we don't need to do everything, we just need to be very good at doing the right things. We are now ramping up inventory as planned and will go into the autumn and winter season with more stock than last year and considerably better stock. And this is the key to keeping our momentum. On the back of the current performance, we've also decided to expand our share buyback program to 300 million Swedish kronor, up from the 200 million we announced after Q1. And finally, with Q3 tracking as expected, the guidance upgrade we announced on 29th of June is firmly confirmed. We don't take the second half for granted, but we're entering it from a position of real strength. So now please turn to slide number five. The women are back. Our clearance acceleration is coming from women's fashion. After several quarters of decline, the category is now growing strongly again. The numbers of customers shopping women's fashion at Boots.com was up 20% in the quarter, and this wasn't just a one-month spike. The trend was stable and solid all the way through the quarter. And this matters a great deal because women who shop with us, they don't stay in one category. They browse and buy across all of them, home, beauty, kids and sport, and even in menswear. And that is exactly what lifts basket value and loyalty across the platform and ultimately what creates long-term sustainable growth. So let's turn to the next slide. One of the key drivers behind this acceleration is our revised assortment strategy. We've deliberately become more inspirational and less promotional, adding new brands, more breadth and greater variety to our offering on boost.com. That also included more premium products which helped to elevate the shop and ultimately the brand. We added around 55% more styles to our spring-summer offering and it really paid off through the second quarter. We got more clicks from our performance marketing channels and we converted them better. So more choice for the customer combined with reaching the right audience worked just as we had hoped. Our focus now is firmly on the second half, and our plan for the autumn-winter is at least as ambitious as what we've just done for spring-summer. We'll again increase the number of styles versus last year, and we'll bring in strong brands such as GAP, Max Mara and Paul Smith, along with other strong brands that support the categories. So with that, we're quite confident that we can carry our momentum into the most important time of the year. So please move on to the next slide. We've been able to grow revenue significantly in the first half despite running on low inventory. And that says a lot about the quality of our stock and how well our assortment has performed. Now, we tend to be quite careful about carrying too much stock. Some would say that we're almost allergic to it, but we recognize that going into the spring-summer season, we probably went a little too low. So we're pleased that after those lower levels during the first half, our inventory is now above last year's, so the buildup is well on track. And as we speak, autumn-winter products are arriving and going live in good volumes, and that leaves us feeling very confident about the season ahead. So let's move on, looking at AI and the customer journey. We covered our main initiatives on the last quarter's call, so I won't go into all that detail again. But I think there are kind of two things worth highlighting this quarter. The first is imagery. Since we launched AI model images in April, we produced around 10,000 of them, adding roughly 300 new variants a day from just 16 reusable models and with no casting cost at all. Video is next, along with categories like shoes, bags and accessories. The second is our Shopping Assistant, which now has been live across all markets since June. It's still very early days, only around 3% of our customers use our AI Assistant so far, but those who do, They convert at roughly 2.5 times our normal rate and they spend about 8% more per order. We've only just started and the next step is to make the underlying search even smarter and even more personal. So it is opportunities like these that let us significantly improve the customer experience, our service levels and the overall appeal of our sites. And all at relatively low costs. Let's move on to the next slide. Here is a nice illustration, a colorful one, if you like, of AI at work. For the World Cup, we wanted to capture the moment, so we used AI to style outfits and create campaign imagery in each team's colors. entirely from stock we already had, with no new photoshoots required. It was relevant, it was fast, and it was very local, except perhaps for Norway, who became global darlings during the tournament and could be used everywhere. It was quite spontaneous, and it's a small example, but it shows how quickly we can move on marketing content, basically how we can be relevant at light speed and at low cost. So please move to the next slide. Our department store model keeps compounding. 54% of our customers now buy from more than one category. Over the last 12 months, every single customer group buying across more than one category grew double digits versus last year. And our most engaged customers, the ones buying across all six categories, were up by 15%. This is exactly the pattern that we're chasing. The more of a platform a customer touches and the more of her categories she buys into, the more valuable she becomes and the longer she stays with us. Put simply, it creates both value and stickiness. So with that, I will now hand over to Michael for the financial review.

Thank you, Herman, and good morning, everyone. Please go to slide number 12. So we accelerated growth significantly in Q2, and when looking at all metrics, internal and external, the conclusion is that it was very broad-based across categories, countries, customers, etc. So we see strong growth in our new customers, but for the first time in years, we also have good growth in sales to our current existing customers. The initiatives that we have executed are playing out as planned. Our positioning and the focus on boost has led to strong double-digit growth, as you can see on the slide. And this is really our main site and premium site where we see then slower growth in BoostLED. That implies a higher quality of earnings, better margins, and it's also a positive for our long-term brand relationship. We saw double-digit growth in all months of the quarter, and the change into growth trajectory really happened from March. And as such, we believe that our performance has been driven through market share gains rather than being market driven. During the summer, we did, however, see a small signs of general improvement in consumer spending in our core markets, we believe. Next slide. So the repositioning and ambition to grow the profitability in a healthy way is really now showing up in the numbers as we have probably advertised a couple of times. But of course, margin reached 40.1%, a full percentage point ahead of last year. This is driven by real product margin. Boost.com is doing less discounting as it leans further into being the premium destination, and the mix has shifted, so it's relatively more sales that comes from Boost versus Boostlet. Other revenue grew 6% in a quarter, and we expect that to accelerate quite materially in the second half, which will provide further support for the gross margin for the second half. Please go to slide number 14, and profits. The profit development is generally showing improvement in the quality of earnings, increasing and healthy gross margin with leverage on the operational cost base. This is how we want to drive probability improvements as we move along. In particular, for this quarter, we see improvement in the marketing cost ratio based on less offline spending, but also less marketing spend for Boostlet. Admin and other cost ratio is up fully as expected and planned, and as a result of our relocation to our new headquarter in Copenhagen, but also investments in our commercial team and resources. Adjustments for the quarter amounted to 39 million SEK. 28 million relates to share-based payments, which is a non-cash component, as you know, and correlates with performance and the share price. The remaining 11 million SEK related to initiatives taken to focus on the core business, which Herman has already mentioned, and it mainly relates to the closing of the B2B shop initiative, leading to some FTE terminations, write-down of fixed assets, and elimination of a vendor software agreement. This was truly extraordinary, and we expect no further adjustments for the rest of the year, except for the usual share-based payments. Please go to slide number 15. So we delivered 13% higher revenue with lower inventory levels throughout the first half year. And as such, it should not be a surprise that the performance of our inventory is much better than the performance in the same quarter last year. You can see that on the chart to the right. We have fewer products, but a stronger return on the capital we have employed. Currently we now have inventory levels that is higher than last year and we know that more products create more sales but typically with a diminishing return on capital so this is how we will continue to have a strong growth in the second half. Please move to slide number 16 and our cash development for the year. So we have generated strong cash over the last 12 months of more than 600 million SEK and for Q2 alone we were just above cash break even. It's a bit more than 100 million less than last year, despite stronger profit, and there are two reasons for that, as you can see on the bars on the chart. One, we pay exit tax related to our headquarter move, and two, we are increasing our inventory position compared to the same period last year. Both factors are fully in line with plan and expectations. Please go to the next slide on how we deploy this cash, because on slide 17, we have outlined that today the board has initiated a mandate to increase the current share buyback program by another 100 million SEK. With this expansion, we expect to repurchase shares for an amount of 400 million, around 400 million this year, and that brings us to around 850 million SEK for the last two years, i.e. close to 10% of the share capital. We continue to have a very strong balance sheet, and we want to maintain that as we move forward, while still being disciplined in returning the excess cash that we generate back to shareholders. It is important to understand the dynamics of our cash generation because in periods with very high growth, we will tie capital in inventory and areas to support the growth, whereas over the cycle, boosts will fundamentally be highly cash-generated. And that means that over the cycle, we will also be able to distribute significant cash back to shareholders. This concludes my presentation for the Q2 results and I'll now go to my final slide regarding the 2026 outlook. So during the year we have upgraded now our financial outlook two times already and based on the accelerating growth momentum. Since our last upgrade on 29 of June we have seen performance in limelight expectations and as such we are today confirming our outlook. Our expectations for CAPEX have been adjusted to an interval towards the high end of our previous expectations, and this is mainly related to higher one-off investments in assets and installations at our Copenhagen headquarter. So with this, I'm now handing back to Herman for final remarks.