Boozt AB (publ)

Thank you and good morning to all. Welcome to our Q3 2026 presentation. So let's turn to the first slide, please. So we will follow our usual agenda. I'll take you through the highlights and the strategic update, and then Michael will go through the numbers in detail. So let's turn to the next slide, please. In Q3, we won market share across all categories, and the strength of our Nordic department store strategy continues to build and gain momentum. Revenue grew 60% in constant currency, and at the same time, our adjusted EBIT margin improved 5.5% up from 4% last year. Once again, the growth was broad-based. Every category and every major market grew by double digits. Women's fashion, our largest category, accelerated further from Q2, and that actually matters a great deal because when women come back to Boost, they bring the rest of the department store with them. So we're taking markets here in the Nordics and there were three main drivers behind the quarter. The first is the assortment or autumn winter collection. It's the widest we've ever had and our customers responded to it from day one. The second is commercial execution. We're spending our marketing money in a smarter way, and I'll come back to that in a moment. The third thing is the customer journey. With AI-supported search and our shopping assistant, it's now easier for our customers to find what they're looking for. That means that we go into Black Friday and the holiday season with the strongest inventory position we've ever had. More stock than last year and considerably better stock. On the back of a strong Q3, we upgraded our outlook at the end of September. Last week, we added that we now expect the adjusted EBIT margin to land in the high end of the range. And today, after a strong October, we're adding that we also expect revenue growth to land in the high end. And Michael, he will take you through the details later. So now please turn to the next slide. In Q2, we saw a step change in the number of women shopping at Boost. And in Q3, that continued. On Boost.com, the number of active customers shopping women's fashion grew 70% compared to last year. If you look at the chart, you can see how far we've come. A year ago, this number was still going down. The main reason is the assortment. We launched the broadest autumn-winter collection we've ever had, with around 55% more style variations than last year. And it was well received from the very first week. And as we've said before, women who shop with us rarely stop at fashion. They also buy for their home and for their kids, and they buy beauty and sport. And that's exactly what we saw in the quarter. The growth in women's fashion lifted all the other categories, and they also grew by double digits. Today, close to 200,000 more customers on Boost.com shopped across categories than a year ago. That is what drives loyalty, and that is what makes the department store model work. Please move to the next slide. I'd like to say a few words about marketing, because the way we work with it has changed a lot over the past year, and we believe it's been an important driver of our momentum. First of all, we've changed where the money goes. Today, the budget follows new sales. So we spent it on winning new customers and getting our existing customers to shop in more categories, not on customers who would have bought from us anyway. At the same time, we've moved money away from last click ads and into campaigns that build awareness and trust in the Boost brand. We've also changed how we make our marketing. With AI-made images and local planning tools, we can now tailor every campaign to its market. Our content engine is around 10 times bigger than before, with more than 600 local videos and category posts every month. And content made by creators has doubled our return on investment. And we can see it in the numbers. Around 20% more customers shopped on Boost.com in the third quarter than a year ago. And over the last 12 months, our marketing ratio came down to 9.2% from 10.1%. So we're reaching more customers and we're doing it more efficiently. And we want to take this even further. And that is the thinking behind the realignment of our commercial operations, which we announced last week. We've removed a management layer, so our commercial teams are now closer to the decisions. This means shorter decision paths, clearer ownership and a faster response to what our customer wants. The new setup has been in place since 1st of November. Our plans for Black Friday and the holiday season are locked and responsibilities have already been handed over. So we don't expect this to affect the peak season and Michael will come back to the financial effect later. Let's turn to the next slide, please. With more customers and more orders, our fulfillment center in Engelholm has to keep up. And it does. In the third quarter, we shipped 1.9 million orders, up 60% on last year. Ahead of the peak season, we've put two new initiatives in place, and they make us both faster and more efficient. The first is our new return handling center. Returns are now checked and repacked and back on sale faster. For our customers, that means they get the refund sooner and they're ready to shop again. And also, the new Returns Center is built to handle the wave of returns that always follows Black Friday. The second is beauty. Products like hairspray and perfume are classified as flammable. But from Q4, they are picked by machine in the same flow as all our other orders. Both are part of the warehouse investments we told you about at the start of the year, and both will support our efficiency going forward. And we are already preparing for the next step in 2027. We'll invest in a fourth order store system in Ingelholm. It will be up and running no later than Q3 2027 in time for that year's peak season. It gives us room to keep growing and it will make our fulfillment even more efficient. So let's move on to the next slide. As planned, we have built up our inventory for the peak season. At the end of the quarter, inventory was 3.8 billion SEK, 21% higher than last year. In the first half, we probably ran a bit too lean, so we are pleased to be where we are now. The strong inflow supported our autumn-winter trading, and it gives us a very good starting point for Black Friday and Christmas. We know that some of you see higher inventory as a risk. For now, we see this actually as an opportunity. The quality is high, the assortment is fresh, and we have boosted it as a natural hedge if we need it. We also have the financial flexibility to keep a strong and relevant inventory position into early 2027. Please move to the next slide. Finally, our department store model keeps getting stronger. Over the last 12 months, The number of customers on Boost.com shopping for more than one category grew 13%. That is close to 200,000 more multi-category customers than a year ago. And the customers buying from all six categories of most loyal customers grew the fastest by 20%. In Q1, these groups grew in high single digits. Now, they are all growing by double digits. This is exactly the pattern that we want to see. The more categories a customer shops in, the longer she stays with us and the more valuable she becomes. So with that, I will now hand over to Michael and the financial review.

Yes, thank you, Herman, and good morning, everyone. I will start out with the finances for the quarter and then go through our outlook for the year by the end. But please start on slide number 11. In Q3, we grew 16% in custom currency and 17% in reported terms. This is a clear acceleration compared to the 13% that we delivered in Q2. But the growth patterns from Q2 continued, characterized by being very broad-based both across countries and categories. All categories grew by double digits, including Sweden also as a country with 13% and Denmark with 15%. Norway grew around 20% in custom currency. The growth is driven by volume coming both from acquiring new customers, but also we see an increasing orders from our old cohorts. We reached the milestone of 3 million active customers in the last 12 months at Boost.com and orders grew by 18% in the quarter. As expected, the AOV development improved in Q3 versus Q2 and it was flat in the quarter. Other revenue grew 21% in line with our plan and expectations. The main driver was the Boost Media Partnership, where the brands increased their activity around the autumn-winter launch. This is important for ambitions both short-term and long-term to drive the gross margin. Overall, we had a strong start to the autumn-winter season and looking at all the metrics, we are convinced that the growth comes from market share gains driven by our sustainable growth initiatives implemented during the year. Please go to slide number 12. The gross margin was 40.0% in the quarter, up as much as 2.6 percentage points compared to last year. Half a percentage point comes from currency, but the rest is really underlying improvement driven by the same factors that we talked about several quarters. Better buying terms, less markdown activity and a sharper distinction between and identity between our two shops. And it's worth to note that the product margin improved both on Boost and on Boostlet. Next slide, please. The adjusted EBIT margin improved 150 basis points to 5.5%. Adjusted EBIT grew almost 60% to 107 million SEK. The driver is clearly the gross margin and the operating leverage on our cost base was lower than what we usually deliver. These are deliberate decisions because we have invested in growth initiatives which comes out as both higher fulfillment cost and also higher marketing cost. The adjusted fulfillment cost ratio increased by 0.4 percentage points, driven by inbound volumes. In September alone, we received record inbound volumes for a single month, preparing our platform for the peak season. But the underlying efficiency at the warehouse continues to improve, and long-term we continue to see potential to drive the fulfillment ratio down. The adjusted marketing cost ratio was also up by 0.4 percentage points. These are mainly related to offline brand building for long-term expansion, while the online marketing costs grew broadly in line with revenue. Over the last 12 months, the marketing cost ratio is still down from 10.1% to 9.2%. The adjusted admin and other cost way to increase by 0.8 percentage points. This is mainly related to the cost of our relocation to Copenhagen, which we have talked about before, but it also reflects IT investment in our customer journey and customer experience, such as our new search function, better personalization, etc. Finally, the admin cost ratio also includes 0.3 percentage points from hedging losses mainly related to the appreciation of NOC against the Swedish Krona. The depreciation ratio improved by 0.5 percentage points. In total, currency had a net positive effect of around 0.5 percentage points on the adjusted EBIT margin. and adjustments for the quarter relates entirely to share-based payments impacted by improved performance and higher share price. As you know, this is a non-cash cost which follows the share price and our performance. Slide 14, please. As Herman mentioned, we have built inventory ahead of the peak season. Inventory increased by 21% compared with last year. The quality of the inventory is very good and relevant. Stock from two seasons ago is around 30% lower than the same time last year. And a large part of the increase is currencies in products and categories we are deliberately building. This includes in categories like our beauty products. Accounts payable increased in the same period, reflecting timing of the inbound deliveries, but also the work we've done to optimize working capital. And as a result, net working capital was only 4% higher than last year, and as a share of last year's revenue, it actually came down slightly. Please go to the next slide. Boost continues to be highly cash-generative, but the free cash flow in Q3 was slightly positive in the quarter compared with 202 million SEK last year. This is purely because we have been building inventory ahead of the peak season, whereas we focused on clearance last year. On top of this, we paid the exit tax related to the move of our headquarter. We continue to have a strong balance sheet with basically no debt by the end of Q3 and we continue also our share buyback program where in the first nine months we have bought back shares for 318 million SEK. As a side note, we will going forward run the program under the EU safe harbor rules for share buybacks. That concludes the financial review and now let's turn to the outlook on slide number 17. This year we have upgraded our outlook three times. Most recently on the 28th of September with our Q3 trading update. Today we see that based on a strong October we now expect that both the revenue growth guidance and the EBIT margin guidance will end in the high end of the ranges. We've also announced the commercial reorganization and this will entail a one-off cost of around 40 million SEK in Q4. This will be reported as an adjustment. On a full year basis, the change will, all is equal, add around 0.3 percentage points to the EBIT margin starting already from November this year. Finally, a word on next year. The fourth auto store system that Herman talked about will be paid in full in 2027. So next year's capex will include just below 200 million SEK for that system. However, we have gained a scale and profitability level where even in years with large investments like this, our cash conversion and cash flow will remain strong. And as such, our capacity for cash distribution to shareholders will continue again next year. With that, I'll hand back the word to Herman for some final remarks.

Thank you, Michael. A year ago, we said that 2025 was a year to prepare for our next growth phase. Today, we have delivered two quarters in a row with double digital growth and a significantly higher margin. And it's the right kind of growth. We sell more on a premium side. We discount less. We win more customers across more categories. And we spend our marketing money more effectively. So we go into Black Friday and the holiday season with our strongest inventory ever. A more agile organization and a team that is fully focused on the peak. We do not take Q4 granted. It's the most important quarter of the year. and a lot still depends on how well we execute. But we are well prepared and we have the momentum with us. Finally, I'm very much looking forward to our Capital Markets Day on March 9 next year. We will host it at Crystal, our new headquarters in Copenhagen. We'll take you through where we want to take boost in the coming years and share our updated financial ambitions. And also, it will be a great opportunity to show you our new home. More information will follow, and we hope to see many of you there. So that concludes our presentation. So operator, will you please open up for questions?