Björn Borg AB (publ)

And welcome to our Q2 presentation. On Fridays, we do one thing that is unique for us. We force everyone working for us to train. In a couple of slides, you will see an incredible quarter unfold in front of you. And one part of creating those results is our ability to create a culture, gathering a lot of different people with different backgrounds, And have them believing in one long-term dream. And that is to inspire you that you can be a bit more. That you can reach whatever goal you have. And that the key enabler to help you do that is training. Working out a bit more. So every Friday we decided that we close all the offices all around the world, which is currently, you know, not that many countries, but we will add more country as we grow older. 11 and 12, we work out together because we know that that's going to benefit the business. By doing that, we will earn more money and we will sell more. But first things first, Q2 was all about footwear integration. So we stood there after Q1, our licensed partner in the Netherlands had just went bankrupt. That landed in our lap. We were quickly together with some of the major shareholders, some of the board members, and of course our executive management team, we decided, This is going to be the greatest opportunity that we have ever had for this brand. Let's take it over. Let's integrate. Knowing, of course, that the footwear category is huge, offering massive potential for further growth, but also enabling us to even quicker transform the brand from that beautiful, old, colorful underwear brand into a sports fashion brand. The decision was easy to make. Making it happen, however, was not as easy. And it would never, ever have unfolded as good as it did without the team. So, of course, headed up by our global ops director, Daniel Grohman, who simply turned out to be a wizard in driving this project into what can be described as nothing as a massive success. It took a while to sort all things out. Yes, it meant some short-term discounts that you will see in our margins. But of course, year-to-date footwear growth of 35%, Q2 footwear growth of 199% is just a very clear message to everyone that when it comes to handling challenges and things that was not planned, when it comes to integrate things into this great team that we're having, we are master in turning that into something even better. So as you can hear, looking at Q2, I'm just extremely proud over what we have accomplished. And it doesn't really only stop with footwear. If we just run through all of our categories, as you will see in a few slides, everything is really working for us right now. And yes, of course, stuff can be better. Looking at the gross margin, well, we've taken a hit partly due to currencies working against us, a bit due to increased container and freight costs, but a lot it has to do with one-off discounts that we simply had to do given that we took over an order book of footwear very, very late. And of course, we wanted the retailers to continue to get those products, helping them with additional discounts. They could sell that out within the season. That will change, of course, as we go forward. We believe that if you do footwear right, it could actually be a gross margin driver. Most likely, it will take a bit of time. Looking at the bottom line, it's fairly strong. Q2, it's ahead of last year. We know from the past that Q2 is roughly a very challenging quarter for us in terms of making high profit numbers. But during the last couple of years, we've showed that we can also make profit in Q2, which is dominated by D2C business and not so much distribution and wholesale business. If you look at some of the highlights, just reminding all of you, okay, so where is this guy going? Where is this brand heading? And of course, one of the success factors is perhaps not that I've been with the company now 10 years, but it's that we have a very, very consistent long-term view in terms of what we want to create. We don't change direction. We simply keep on digging, even when things are working against us. So our mission, of course, is to build a sports fashion brand, inspiring people out there that training is... Too important just to give to those who wants to win Olympic gold medals. Training is for every one of us and a key facilitator to bring something more out of you, to become a better mother or father or a better friend, or just living longer, or perhaps laugh a bit more. You can win a gold medal as well. That's okay with us, but that's not the main purpose of what we want to do. Our long-term financial goal is to grow, of course, and to continue to be profitable. Our business strategy has been to really dig where we stand, but working with key categories and now also football being included to drive growth in all of our geography markets. And with that said, also slowly then built a much stronger international presence where our key focus is Germany on one hand and US on another. So running through a few of the numbers then. So first of course, our brand. So as I've said many, many times before, we have two things that makes us truly unique. And one is that Jens, our CFO is deciding to work for us and not somewhere else. And the other one is our brand. Those are our assets. And of course the key is to make the most out of those two. And looking at our brand is constantly developing in the right direction. Sometimes a bit slower than anticipated or that I would wish for. But every quarter we're taking small, small steps and becoming stronger. And some of the highlights from Q2 is that our unaided awareness is increasing dramatically in all the markets. Meaning that if we would ask just a random consumer on the street, hey, make a list of sports brand. We want them, of course, to say Bjorn Borg immediately. But there's a couple of other brands that they usually say first. But Bjorn Borg is more frequently popping up on that list. Whilst on that list and asking, hey, do you know about Bjorn Borg? Would you like to buy stuff from them? There were really, really high already. And if you can only pick three brands from that list, in Sweden, we're number three. Looking at that, the percent intent. So when you ask consumers, can you consider buying from us? We can see that we're increasing on apparel and we're maintaining and actually also increasing on underwear. And as you might have remembered, one of the challenges or potentially the risk back in 2015 and 2016 with transforming the brand into a sports brand was that, well, what happens with the underwear category? Will you lose out on that? And what we said then, very confident, but not really knowing, of course, the future was that we believe that building a strong brand Building a sports fashion brand will actually drive underwear growth. And that turned out to be the truth. But also we can see that by building a strong performance brand, a strong apparel brand, a strong sports fashion brand, actually people view our underwear collection and us as an underwear brand even stronger. Very, very important. Looking at our growth, of course, it's a record quarter. We're up 30% versus last quarter. We never sold more in a quarter. I don't think we ever grew as much in a quarter either. And of course, there's a number of things that are simply working our way. And all of the countries, of course, consequently, is doing really, really well. And of course, the good thing is that Sweden and Netherlands, our biggest markets, are really, really flying, which is showcasing that our ability to roll out new categories is really getting a strong foothold. Germany, Finland, Belgium, Denmark is also showing strong growth numbers. The distributors in the quarter are somewhat getting a bit back on track. But again, that's not our main focus. We believe in interacting directly to our consumers, either through partners like Stadium and XXL or through our own channels, driving our own business and being in control over how we would want to build the brand. That is key for us. Looking at the different channels, of course, we're growing all over the place. So wholesale is plus 50%, you know, own e-commerce plus 9%, so a bit slower. But if you look closely, of course, profitability is a lot higher in Q2 versus last year. Own retail is growing a lot. Comp growth is 4%. Distributors is growing, but on a very low number. And here, you know, we've talked about our idea of moving the brand online. And that started already in 2018, 2019. And of course, a bigger and bigger share of our business is coming online. However, of course, I think it's worth mentioning again, you need to have a strong balance here. We know that consumers still want to go out and visit physical stores, you know, touch and feel the stuff. see what you can only experience in real life together of course now driving a strong foothold online and of course the key for us is to balance the two we want to grow both And of course, looking at the categories, as you can imagine, you know, this has been one of the best quarters in terms of category growth. I think that, of course, footwear is one thing to celebrate. But as you recall, we've been talking about apparel over and over and over again. You know, a few years ago, I said that our targets would grow year on year 35% and many was laughing. Now, you know, we're up 43% in the quarter. Year to date, we're plus 35% when it comes to sports apparel. And of course, that's the key category so far in terms of transforming the brand into a bigger arena. And of course, adding footwear will only fuel that up. And of course, as already mentioned, footwear is up 199%. But again, here, we're not really comparing Apple versus Apple. We took over volumes from markets we didn't have last year. But still, of course, if you take that out, we still see a strong footwear growth in all of our markets. And of course, with that said, looking at bottom line, things could always be better. And I'm sure that Jens will tell you all about that, even though, of course, there's a lot of victories also when you look at that. So, Jens, why don't you show me the money? Will do. Thank you.

Thank you, Henrik. And what a fantastic morning. I woke up this morning thinking, I cannot wait to show the world these numbers and this report. It's simply fantastic. And we're so proud. So looking at the bottom line, the gross margin is, I'd say, quite good, considering that we just integrated footwear, as you heard from Henrik just a few minutes ago. It took a little hit this quarter, but we're expecting that to come back as we just heard. So fantastic. The bottom line or the EBIT margin or EBIT number is very high, very strong compared to previous years. And following obviously the net income as well, showing good numbers for being a second quarter. As you know, our second quarter is dominated by D2C and HEMS not so strong as other quarters. But comparing to Q2 previously, we're showing a very strong growth. If we look at the balance sheet, we are a very, very solid company. The equity is strong. It's at 46%. So showing that we can balance also the cash or the liquidity situation when integrating a category such as footwear. Looking at the net debt, yes, it's increasing a little bit compared to the two previous years. However, if we go back in history, we see that we are on a very, very good level when it comes to our debt situation. The working capital is super important for us and a KPI that we follow very, very closely. And we have an internal target of being around 20% of a rolling gross sales, 12 months. And that's exactly where we end up when we close Q2. And looking back, we are going slightly downwards. The trend is going down, even though we now are increasing a number of pieces in our warehouse. So the working capital is looking good. We're in control of our cash situation and the balance sheet is super, super strong. So why should you believe in Björn Borg, let's say? Well, first of all, you should believe in what Henrik just said. You should believe in the culture. If you want to see what we're all about, well, join us any Friday. Just give me a call, send me an email, and you can come train with us on Fridays at 11. Then you will see what this company is all about. That's number one, I would say. However, we also have a few items listed on the screen in front of you. So we have a proven track record of profitable growth since back 10 years ago. The strategy that we sent out also 10 years ago is showing that we will grow and we will do it in a profitable way. The value creation, so we can look at the stock market and comparing to other peers in the market, we are outperforming basically all of them. If you're interested in high dividends, well, yes, that's also Bionboy. We have shown going back in history that the dividend payments that we've delivered over the years is quite high. As I just mentioned before, the balance sheet is strong. We have the equity ratio and the net debt ratios are very, very good. We are way below our targets that we've set out towards the banks, for instance. The management team has been around for a long time and have a good, good track record and has also become some of my very, very close friends. So that's showing that this is a super company with a very, very strong culture that I already talked about before. Well, we've done all the investments. Back in 2019, we launched what we call the system excellence project, basically replacing everything. We had several warehouses, we had several ERP systems, cash systems, BI systems, and I don't know how many systems we had. But then we launched a huge project and consolidating those into one of each, basically. So there's really no large investments for us coming our way. I mean, we've taken all that work done already. So we offer a good continuation, I would say. So with that, I wish you all a very, very good Friday. Henrik.

Brilliant, brilliant. So let's wrap it up then. And thanks for, you know, listening guys and calling in. So, and I guess we shouldn't, you know, overplay Q2. We know that we've been around for a while. So of course, some cores are really, really strong. Others are a bit weaker. You know, this is all about, you know, having a long-term perspective. And of course, you know, making sure that every quarter is taking us a bit slower to our end goal. Some quarters you might take two or three steps closer to that. Some other cores you might take a step back. But it's really having that long-term approach that, you know, value creation takes time. Looking at the quarter, of course, there's many, many highlights. So, the brand is continuing to get stronger and stronger. You know, looking at our channels, you know, wholesale is really, you know, driving a fantastic growth. But also, of course, we see e-com and comp growth in our retail stores. So, of course, the retail stores are working really, really well as well. All of that indicate that the brand is really, really working as we have a strong traction with the end consumers, really picking stuff up from us. rumors and of course i can feel that myself that you know the situation around you as a consumer is not as good as it was you know three four five years ago perhaps and we have less money to spend and and we read about that but we can't really see that impacting us currently and of course we are a small brand so even if the entire market is declining we could still grow And last, of course, you know, we have an exceptionally strong momentum in sports apparel. That's been one of our key focuses, of course, you know, since we launched, you know, the Northern Star and our business plan and the idea or dream, if you will, to turn in this underwear brand into a sports fashion brand. And of course, the key sign, if you will, traffic light that will indicate for you looking at us, whether we do that successfully is definitely then sports apparel growth. But with that said, you know, a strong quarter, there's a lot of stuff that could have been done a lot better. We need to work even more on our gross margin. It's declining for clear reasons, and many of that is one-off effects. But of course, we need to work even harder on that. We need to make sure, of course, that we invest everything very carefully so we can continue to drive, you know, profitable growth and not growth at any price. And of course, that journey will never continue. But at the end of the day, it comes down to simply really understanding what makes us unique. And again, to repeat myself, we need to continue to build a strong brand. We need to continue to develop everyone choosing to work for Bjorn Borg, so they become their best version of themselves. And the combination of the two, that will unleash a massive amount of potential. And of course, then No ceiling is too high or no goal is too big if we accomplish to continue doing that. So with that said, you know, thank you for listening in, for joining us and for believing in us. As Jan said, you know, join us on a sports hour. Many of our biggest shareholders is actually joining. I think one is coming next Friday. So we're looking forward to that. But I'm sure Hjalmar has a few questions before we hang up here. Hjalmar, is that correct?