Clas Ohlson AB (publ)

Welcome to the Class Olson Q1 2025-2026 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 hash 5 on their telephone keypad. Now I will hand the conference over to CEO Christopher Tonstrom and CFO Pernilla Walfriedsen. Please go ahead.

Good morning and welcome to the Claes Olsson Q1 report presentation. My name is Christoph Trondström. I'm the CEO and I'm here with Pernilla Walfridsson, CFO. So we'll go through a business update. Pernilla will take us through the financial development and then I'll cover the events after the reporting period and then the strategy update and summary before we move into Q&A. So overall, looking at the first quarter, we've had a strong start to the new year. And we have shown again that we can deliver both growth and profitability. Looking at some of the highlights, the first quarter sales came in at 10% organic growth. And the operating profit came in at 278 million, which is up 37% versus last year. And this results in an operating margin of 9.9%. Also cash flow was strong coming in at 468 versus 413 last year. So the financial position is still strong with the net EBITDA of 0.3. And we're under the quarter with the net cash position. EPS came in at 3.27, also that up versus 2.3 last year. And today we also reported the August numbers, and we saw a solid start also to the second quarter with 7% organic growth in August. Moving into the business update and starting with our strategic position, we continue to execute on the strategy that we laid out back in 2022. And we're doing everything to solidify our competitive advantages related to our assortment, the Claes Olsson brand, and the customer meeting. And we are doing a lot of work to differentiate ourselves by focusing on our multiple niches. And we are doing a lot of work to develop a scalable and also efficient operating model that's cost competitive. We measure ourselves versus the discounters and low price players in the market. And we want to generate a strong free cash flow that we can then reinvest into our ABC. So looking at the financial targets, we are over delivering on the targets, both when it comes to sales and margin in the quarter. And the financial position remains very solid. Now looking at some of the highlights from the first quarter, we laid out three growth drivers for the year ahead. The first one is related back to our assortment, making it relevant 12 months a year. And here we've had a continued high pace in terms of renewal. And we saw over the summer that we have seen strong performance both across the base business, seasonal products, but also news. And we have also done a lot of work to become more flexible when it comes to purchasing. And we saw that we were able to meet the peak demand of seasonal products back in July when the weather turned very warm. Second, on the profitable and growing online business, we see that the B2C channels show very positive development. Reported sales on Ecom was plus 10%, but if we look in isolation on the Klaus Olsson part of the business, Ecom was actually up 28% in the quarter. And the online-only assortment, which we have also worked on over the last few years, is driving significant growth. And we now have more than 4,500 products that are web only. Last but not least, on the growth drivers, we continue the work to building a more robust store network. In the quarter, we saw strong like-for-like development and also customer satisfaction remained very high during the summer months. And we are now preparing for even further rebuilds of more stores and also more store openings happening now in the second quarter. So the ambition to launch 10 new or add 10 net new stores this year remains as we move forward. When it comes to the enablers in terms of efficient customer communication, we keep working with a big focus on digital marketing, which is flexible and scalable. And it is supporting both online but also in-store growth. When it comes to the competitive cost base, here we continue to work across the organization to be competitive across all parts of Klas Olsson. And also not adding any structural costs, even though we're growing significantly. looking at the sustainability agenda and highlight here is that we see strong growth on spare parts both on the spares business but also within the class also on class also business and here the ambition is very much to deliver a more and more sustainable business model where consumers buy products they really need use for a long time but also are able to repair and looking at the customer relevance and satisfaction this is very much a few numbers that highlights the abc so we are very much in the sweet spot that we want to be in product reviews remain very strong we get lots of reviews from our customers and the quality that the customers play back is that we have a very high quality assortment when it comes to affordability we continue to be competitive also versus the low price players in the market And on the net promoter score, we are still within very high levels across all the channels where we meet the customers with an MPS at 57 for the quarter. So looking ahead, we are continuing the effort to strengthen Klass Olsson across the five prioritized niches. and we do look at ourselves as a multi-niche players and we can see across the quarter that we have been growing all prioritized niches and the work continues to further solidify ourselves across each of those five areas so without i will hand over to panilla to take us through the financial development thanks christopher and good morning everyone

Let's run through the numbers more in detail. But first, I would like to remind you of the changes in our reporting that comes into effect from this quarter. We have moved from the function of expense method to the nature of expense method. The main reason for the change is that this way of reporting profit and loss is how we already work internally, and that's how management reviews the operations. This means simpler way of working. and more efficient processes and we also believe it gives more transparent information on significant expense categories. This change has no impact on net sales and operating result and no impact on our financial targets. What you will see later on in the presentation is that it impacts on gross margin. Looking at the performance during the quarter, we can conclude that sales were strong, with total sales up 7%, of which 10% relate to organic growth and minus 3% relates to currency effects. Like-for-like sales was up 7%, and online sales were, as Christoffer mentioned, strong during the quarter, totaling 542 million SEK. Looking at the whole markets, we had strong organic growth figures across the board, but obviously with extreme strong figures in Norway. As previously communicated, sales in market outside Sweden, Norway and Finland, which is dominated by sparse business-to-business sales, were down by 35% due to changing market dynamics following the weakening of the US dollar. When it comes to macro trends, we are less concerned about transportation costs at the moment as they have remained at a reasonable level, even if there has been an increase in spot prices during the summer. The US dollar remains at a lower level than in the last couple of years, which of course is positive for us as it is a big purchasing currency. Impact from NOC continues to be negative and immediate due to a large share of sales in Norway. As I mentioned, our gross margin looks a bit different than we are used to due to a change in reporting method. All historical figures are of course available in previous reports. No matter reporting method, gross margin improved significantly from last year. The main factor behind the increase was lower purchasing costs. Currency effects were slightly positive. That's positive effect from lower purchasing currencies and hedging compensated for the negative impact from selling currency NOC. But all in all, gross margin increased by 1.4 percentage points to 45.7%. The income statement shows a record-strong Q1. Operating profit amounted to 278 million SEK compared to 203 million SEK last year. Also note that we did not have any items affecting comparability in the quarter. DPS for the quarter was 3.27 SEK, an increase from 2.3 in last year's Q1. If we look at the inventory, the total inventory level is down compared to Q1 last year and at a very good level, despite more stores compared to previous year. We are still very pleased with the availability of products and we think the stock in trade is fresh and well balanced. Cash flow for the quarter was strong. Cash flow from operating activities totalled 378 million SEK, an improvement from 346 million SEK last year. Free cash flow amounted to 306 million SEK compared to 247 million SEK last year. Since we are highlighting the free cash flow, I would also like to mention that we define free cash flow as cash flow after investing activities, including amortization of lease liabilities. Net depth EBITDA excluding IFRS 16 was minus one times. So in other words, I maintained net cash position. And with that, I will hand back the presentation to you, Kristoffer.