Clas Ohlson AB (publ)

Good morning everyone and welcome to the Klaus Olsson Q4 and year end report presentation. My name is Kristoffer Tonstrand and I'm the president and CEO and I'm here together with Pernilla Walfridsson, our CFO. So looking at the agenda for today, we will review a business update, go through the financial development from the quarter and the year, then cover the events after the reporting period, summarize and then move into Q&A. So highlighting the fourth quarter and the year, we can conclude that we are closing the year from a position of strength. Q4 is a strong finish to a strong year. We have seen very solid organic growth above our targets. We have reported record sales and record earnings, as well as strong cash generation and our balance sheet remains strong, which is also reflected in the proposed increased dividend that we will come back to. And we've also started the new year strongly with 9% organic growth in May. We will also come back to that. So moving into the business updates and looking at the strategy execution following Q4. The business continues to develop in line with our strategy. We see progress across all the strategic pillars and also growth across all the prioritized niches, as well as continued online growth and also a store network that continues to strengthen. We also see that club class and customer engagement is improving and during the quarter we also kicked off the building that relates to the logistics investment and it's progressing according to plan so far. Then looking at how we're performing versus our critical from a customer point of view when it comes back to our assortment, our brand and our customer meeting. We during the quarter have received 90,000 product reviews. It's a smaller quarter, so it's also slightly fewer reviews, but we can also see that the feedback from customers remain very strong. We also deliver on the affordability scoring that we're following every quarter. And also MPS remains strong and still industry leading. So all in all, we're progressing well from a customer point of view. Then turning to our consumer missions, growth continues to be broad-based. All our missions contribute to the overall growth. And I think one of the strengths in our business model is that we're not dependent on one category. We are broad-based and we do have many legs to stand on. And I think we've also been able to demonstrate relevance across many different customer needs during this quarter. So with that short introduction, I will then hand over to Pernilla for the financial development.

Thanks, Kristoffer. Good morning, everyone. Let's take a closer look at the financials of the fourth quarter and the full year 2025-2026. To begin with, net sales were up 11% in the quarter, up with 9% related organic sales increase, 2% related recently acquired subsidiaries, and new currency effect in the quarter. 7% of the increase relates to like-for-like growth, and 1% relates to expansion of the store network. Online sales grew by 25% in total, including the acquired phone life and a third of online businesses. For the full year, total sales amounted to 12.5 billion SEK, and organic sales increased by 9%. During the year, we increased the store network by eight stores. Looking at the home markets, we saw great performance throughout the quarter as well as for the financial year. Organic growth in Sweden was 8% in the quarter, 11% in Norway, and 9% in Finland. The macro environment is, as you know, very volatile. Currencies is, as always, a factor. And in the quarter, the NOC has picked up substantially versus the SEC, whereas the US dollar remained on somewhat lower levels. I would also like to mention that for the coming quarter, we anticipate negative hedging effects from the NOC if the significant uplift versus the SEC remains. Spot prices for shipping remain at reasonable levels, but with a sharp increase in oil prices, we anticipate higher freight costs going forward, as well as higher input costs in manufacturing, but still of course also impacted by the US dollar development. The gross margin increased by 2.2 percentage points in the quarter, up to 50.1%. Key explanation to the strong gross margin were favorable purchasing currencies, improved purchasing prices, lower freight costs, and positive mix effect from sales in the spares group, meaning lower business-to-business sales and higher gross margin in the recently acquired companies. Over to the income statement, we see good operating profit of 180 million SEK and a 6.9% operating margin. The increase in personal expenses relates to higher volumes in our logistic chain, weight increases, new stores and acquired businesses. Other external expenses also increased in the quarter, mainly due to increased investments in marketing and due to the addition of the acquired businesses. The EPS for the quarter was 2.18 sec and 18.40 sec for the full year. The inventory is marginally up compared with the same period last year. This level should be seen in the light of us also adding stores, adding assortment and adding acquired businesses since last year. On the other hand, we have also seen lower purchasing prices and currencies, so all in all a balanced and efficient inventory. Cash flow for the year improved versus cash flow from operating activities totaling 2.1 billion SEK, an improvement from 1.8 billion SEK last year, mainly thanks to improved profits. Free cash flow for the period amounted to 1.3 billion SEK. Net debt, EBITDA, excluding IFRS 16, was minus 1.1. So we maintained a strong net cash position. Turning to investments, I think we have been disciplined in how we have invest for the future and managed to come in at 313 million SEK for the year, which is above our initial forecast of 250 million SEK, but below forecast if we exclude the acquisitions of phone life and a share dealer online. For the year 26-27, we intend to continue investing in our store network, both in new stores and in refurbishment, and we will continue to update our IT landscape. As previously communicated, the vast majority of our automation investment at our distribution center will be accounted for in 26-27. In total, we intend to invest approximately 600 million SEK in 26-27. And with that, I'm handing back the presentation to you, Christoffer.

Thank you very much, Pernilla. And then we will move into the events after the reporting period, starting with the May sales development that we also reported this morning. And overall, we've had a very strong start to the new financial year with an organic growth of in total 9% for the total company. And we see again broad-based growth, with Sweden growing 11%, Norway 5%, and Finland encouragingly 11% organic growth. Other markets grew 22%. So all in all, the momentum continues as we kick off the new financial year. And again, it's also, as I said, broad-based across countries, but we can also confirm that it's broad-based across the five consumer missions. Then turning to the proposed dividend that the board is proposing today. Here, the proposed dividend is amounting to 9.25 kronas per share, up from seven last year, and it's to be distributed as two separate payments of 4.625. The board also proposes an extra dividend of 4.75 kronas per share to be also distributed into separate payments of 2.375. And this is a reflection of the strong earnings growth and the strong EPS development. And our dividend policy moving forward remains unchanged. And the extra dividend reflects the strong balance sheet and the position that we are in from a business model point of view. So moving into the summary and looking at the way forward. We do have a very large market opportunity. We have a strong position. We have a strong brand position. We have high customer satisfaction. We have a strong omnichannel platform. And we also have a strong financial profile. So we see continued opportunities for profitable growth, also supported by our business model that we believe has become significantly stronger now over the last few years. So this morning we also updated and announced updated financial targets. And these targets are valid for the next three years. So starting us of the new year on 1st of May. And here the targets are balancing three important areas. First, an organic sales growth of 5% per year. An operating margin of around 12% per year. And a return on capital employed of around 30% per year. Apart from the financial targets, the dividend policy, as I previously mentioned, remains unchanged. The dividends are to comprise at least 50% of earnings per share after tax with consideration to the financial position. So I believe these targets reflect the company we have become. It's a balance between growth, profitability, but also we did the introduction of return on capital employed, capital efficiency. I believe these targets are supported by the strength of the core business and they're really designed to ensure that we support disciplined and profitable growth over time. So not only for one year, but really over the next three years. And I believe that the targets are supported by the strength of the business model. So with that, I also want to highlight that this afternoon, so starting at 1 a.m. CT, we will have our Capital Markets Day. Here we will have an opportunity to go deeper, opportunity to explain more about the growth drivers moving forward, but also an opportunity to talk a bit more about the updated targets. So I hope to see many of you this afternoon. And with that, we will move into Q&A.