Pierce Group AB (publ)

Good morning, everyone, and welcome to Peers Group's presentation of our Q4 result for 2025. I'm Göran Dahlin, CEO of Peers Group, and with me is Fredrik Kjellbjerg, our CFO. Thank you for joining us today. Today, we begin with a brief recap of who we are and where we stand in the European market, followed by a summary of our financial performance in a quarter. Then we will provide updates on our ongoing transformation and strategic growth drivers for the coming quarters. We'll close with a Q&A session at the end. So Peers is Europe's number one online destination for motorcycle gear and equipment, and we sell everything you need when you ride a motorcycle, except the motorcycle. The company was founded in 2008 in Stockholm. We are a pan-European e-commerce company. And we have more than 15 years experience of operating across Europe. We generate around 1.8 billion SEC in sales with a 5% EBTA margin. And we have approximately 290 employees in Sweden, Poland, and Spain. We serve more than 1 million customers and we've built a strong digital presence with 1.8 million followers on social media. Our assortment includes over 200,000 products and we operate local e-commerce sites in 20 countries. All logistics are handled through our central warehouse in Poland, enabling scale and efficiency. And since 2021, we're listed on Nasdaq Stockholm. We operate in three verticals through 24MX, XLMoto and Sledstore. Monocross represent around 60% of sales in a market of approximately 10 billion SEK. of the total market. Motorcycle accounts for roughly 35% of sales in a significantly larger 90 billion SEK online and offline market. So our share is still below 1% of the total market, highlighting substantial growth potential. Snowmobile represents around 5% of our sales in the 2 billion SEK market, where we hold around 5% And we offer a broad product assortment across gear, protection, parts and accessories. Around 60% of sales comes from gear and protection, where fashion and innovation are key drivers. While 40% comes from parts and accessories, where function as well as wear and tear are key drivers. Our mix is approximately 35% private brands and 65% external brands. And we have one of the highest private brand shares among European competitors. This strengthens both margin and our differentiation. We operate on a per-European scale with around 60% of sales in Central and Southern Europe and about 35% in the Nordics. And we have offices in Stockholm and Barcelona and offices and central warehouse in Stech in Poland. E-commerce penetration varies across Europe and it remains high in the Nordics and parts of Western Europe, creates room for continued online shift. Within our categories, penetration is higher in off-road and lower in on-road. Overall, the niche is well suited for e-commerce, where we can offer superior selection and availability compared to physical stores. The rider base continues to grow and electrification will further broaden the customer and improve accessibility in urban environments. We think this will attract younger riders in new customer segments. Our supply chain and logistics setup is best in class and a key competitive advantage for us. We operate more than 37,000 square meters of warehouse space and manage over 60,000 SKUs in stock, ensuring strong availability across our assortment. We handle more than 20,000 orders per day with pick and pack within 24 hours, supporting high service levels and customer satisfaction. The setup is agile, combining crosstalk and own operations, and supported by our own long-distance holders, giving us control, flexibility, and cost efficiency across Europe. Our competitive landscape is fragmented and consists of five main segments. First, leading pure online specialists such as 24MX and ExxonMoto. Second, general marketplaces like Amazon and eBay. Third, large European omnichannel retailers with roughly balanced online and physical sales. And fourth, traditional brick and mortar players, often local stores, many of which have added basic online presence during COVID. And finally, some of our leading brands, even though they primarily sell via distributors and retailers, some of them also operate their own web shops. We are the largest pure e-commerce player in our market. We're the Nordic champion and clear leader in off-road across Europe. We are also the only truly pan-European specialist with local sites, languages and payment options, customer service and delivery partners across our markets. In addition, we're the only player with a pan-European long-haul logistics setup. Most of our Other players are local champions focused on their home markets, often primarily on-road and generally with a relatively low share of private brand. Several are financially owned, which could facilitate future consolidation. Overall, the market structure creates a clear opportunity to build a significantly larger pan-European category leader with a scale to stock a wider assortment, offer superior availability and lead times. strengthen private brands and improve purchasing power with key suppliers and unlock meaningful back-office synergies. To summarize our investment case, our focus is to enhance the customer experience, expand geographically and into new adjacent categories and drive profitability with a mid-term EBIT target of 5-8%. We combine strong pan-European footprint, one of the highest private brand shares in the industry, a scalable and efficient logistic platform, and a state-of-the-art IT stack, which creates clear competitive advantage and operational leverage. We are the undisputed leader in the European online market for motorcycle gear accessories and parts. And we are operating a large and still under-penetrated 100 billion SEK market. The market remains fragmented, ripe for consolidation. And we are uniquely positioned to lead that process. And now we will walk through our Q4 financial performance. So in Q4, adjusted EBIT improved significantly from 1 million SEK last year to 30 million SEK We continue to grow in the quarter with the revenue up 3% year on year or 7% in local currency. This was done despite tougher comparables, geopolitical uncertainty and continued subdued economic conditions in several major European markets. Against this backdrop, we believe that we gain market share both in the quarter and for the full year. Gross margin improved slightly to 43.5% up 0.3 percentage points, mainly driven by lower in-frame costs and obsolescence effects. Variable costs decreased slightly relative to revenue as we continue to improve efficiency in our performance marketing. Overhead costs declined to 75 million SEC and were down relative to sales despite 7 million SEC in transformation. According to accounting standards, these investments cannot be capitalized, but needs to be taken as OPEX. At the same time, we're still carrying depreciation from legacy on-prem systems. This temporary negative cost gearing will fade as the transformation completes. And after all the systems have been launched, first half of 2026, we expect roughly 30 to 40 million second habit improvement on an annualized basis. We ended the quarter with 235 million SEC in cash, which is a solid cash position. Looking forward at some of our KPIs, they reflect a stable and healthy development. Private brand share over the last five months was 36% compared to 39% a year ago. The decline is mainly mixed driven as external brands have grown very strongly. In absolute term, private brand sales remain solid. We launched a large number of new products in 2025, and while the ramp has taken longer than expected, we continue to invest strategically in private label. And our ambition is to accelerate growth there, but we remain realistic about the time required to build up successful new products and categories. At the same time, we're unlocking significant growth with our external brand portfolio by improving availability and assortment depth. Customer satisfaction remains a clear string. Trustpilot scores are stable at a high level of 4.4 out of five across Europe, which is a good score comparing with many of our direct European competitors. Continuing on some of our KPIs, our active customer base continues to grow with last 12 months active customers increasing steadily compared to last year, reflecting improved acquisition and retention. At the same time, we see a gradual increase in both average order value and order volumes. This development is driven by better product availability and underlying demand rather than increased promotional intensity. Overall, this confirms a healthy combination of customer growth, higher engagement and improving purchasing behavior. I hereby hand over to Fredrik Kjellgren, our CFO. Thank you.

If we zoom in on the gross margin, we can see that our gross margin improved slightly compared to last year, landing at 43.5%, an improvement by 30 basis points versus Q4 2024. The year-over-year improvement was driven by a combination of reversal of provisions for obsolescence and lower inbound freight cost. In turn, the improved obsolescence was driven by active sales measure and sales mix. Looking ahead, we expect the market to remain price sensitive. So our focus is on maximizing gross profit in absolute monetary terms. That said, we need to be price competitive, but not the cheapest in the market. from Asia continue to be volatile, though we observed a slight decline since late 2024. Now let's double click and give some context on the adjusted EBIT this quarter. The Q4 adjusted EBIT increased But in order to fully capture the underlying trend, it's also good to be aware of other unusual items impacting the adjusted EBIT. Two items not classified as items affecting comparability impacted the EBIT in the quarter. About one million SEK from trademark amortization and around seven million SEK in transformation costs. The amortization of trademarks stems from our early decision to consolidate smaller own brands into pro works. And these charges will continue until the second quarter of this year. Transformation costs are on an annual basis. So overhead costs decreased by one million SEK year over year to 75 million. And this is despite the seven million in transformation expenses that we incurred during the quarter. Since Q3 2023, we have right sized the company by reducing our white collar workforce efficiency gains from streamlining processes and empowering teams, reducing bureaucracy and empowering teams to make faster decisions. Now over to networking capital. Our networking capital has increased since the exceptionally low levels that we saw back in Q2 2024. This is mainly the results of our of growth. Our focus remains on continuously improving our purchasing methodology to drive higher efficiency, keeping the stock fresh and healthy by acting early on slow-moving items, while maintaining the right levels of inventory to support customer satisfaction and sales momentum. And with that, back to you, Jaron.

Thank you, Fredrik. So let's look at our outlook and growth drivers. So looking ahead, we will continue with what we call enhance, which is carried by our peers 2.0 program, which is a transformation that where we strengthen our fundamentals by improving customer experience, streamlining operations and increase scalability. We target completion of this program by the first half it will structurally improve. At the same time, we're entering a new phase, which is the expansion phase. We will roll out 12 localized markets and continue to grow in mountain bike and scooter motor categories. So this will broaden our addressable market, create cross-selling opportunities and add new revenue streams over time. This will take time to scale. We are aware of that, but it will be an important contributor to long-term growth. And finally, the European motorcycle e-commerce market remains fragmented and is ripe for consolidation. As the largest and only pan-European listed player with a scalable platform already in place, we are uniquely positioned to participate and potentially lead in the next phase of this industry consolidation. And with that, I would like to say thank you for your attention and we'll open up for questions.