Pierce Group AB (publ)

Welcome to Pierce Group Q2 Report 2026 presentation. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to the speaker, CEO Joran Dahlin and CFO Fredrik Kjellgren. Please go ahead.

Good morning, everyone, and welcome to Pierce Group's presentation over our results for the second quarter of 2026. I'm Jan-Anne Dahlin, CEO of Pierce Group, and I'm joined today by Fredrik Kjellgren, our CFO, and thank you for joining us. So today we will 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 the quarter. Then we will provide updates on our ongoing transformation and strategic initiatives before we look ahead to our outlook and growth drivers for the coming quarters. We'll close with a Q&A session at the end. Pierce Group, we are Europe's number one online destination for motorcycle gear and equipment. We were founded in 2008 and we are the leading European e-commerce platform for motorcycle and snowmobile gear, parts and accessories. We operate the online stores 24MX, Excelmoto and Sledstore. 60% of our turnover is done with off-road riders, 35% with on-road riders, and 5% is with snowmobile riders. We today operate locally adapted websites in 29 European countries. We have the broadest and most differentiated product assortment in the market, including one of the highest shares of private brands. We offer more than 200,000 articles to more than 1 million customers across Europe. We turn over 1.8 billion SEK and show 3.3% EBIT last 12 months. We have approximately 295 employees, we're of 157 white collars, spread over Stockholm, Stockholm, Poland and Barcelona. And we're listed on Nasdaq since 2021. As I said, we have the broadest and most differentiated product assortment in the market, including one of the highest shares of private brands, and we offer more than 200,000 articles. We started in Sweden, but we're now the only true pan-European company in the industry, with over 70% of our turnover being done outside the Nordics. E-commerce penetration varies across Europe and remains higher in the Nordics and part of Western Europe, regions, creating room for continued online shifts. Within our category, e-commerce penetration is higher in off-road and lower in on-road, where the market is larger but still more under-penetrated online. Overall, the niche is well suited for e-commerce, where we can offer a superior selection and availability compared to physical stores. The rider base continues to grow, and electrification, we believe, will further broaden the customer base. Our logistics setup is quite unique for the industry. Our warehouse is located in northwest Poland and is 37,000 square meters. We stock there more than 60,000 articles and we have a deep buffer capacity. This means that we can serve our customers with thousands of orders per day that we pick and pack within 24 hours. We also have a very efficient setup with Pierce dedicated long distance haulers that both delivers to national injection points for last mileage, as well as pick up, refill and cross stock orders from our suppliers. The competitive landscape is fragmented and consists of five main segments. I will not go through the segments now, but I would say that we are one of the largest retailers in our industry and we have We are the only pan-European specialist with our local sites, with local language, local payment options, local customer service, and local delivery partners across our markets. Most other players are strong local champions focused on their home markets, often primarily on-road, and generally with a relatively low private brand share. Several are financially owned, which could facilitate future consolidations. 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 delivery times, strengthen private brands, improve purchasing power with key suppliers, and unlock meaningful back-off facilities. So, turning to the second quarter results. In Q2, we continue to improve profitability despite the temporary operational challenges related to the introduction of our new warehouse management system. The Q2 adjusted EBIT came in at 34 million compared to 32 million last year. This corresponds to an adjusted EBIT margin of 6.4%, up from 6.2%. This was achieved while still absorbing approximately 6 million SEC of transformation costs during the quarter. Looking at the last 12 months, adjusted EBITDA has now reached 61 million, corresponding to a margin of 3.3%. So we continue to move step by step in the right direction towards our medium to long-term target of an adjusted EBIT margin of 5 to 8%. On the top line, we continue to grow despite the operational impact of the warehouse management transition. Q2 sales increased by 3% year-over-year to an all-time high of 537 million in local currencies. Growth was 2%. At the same time, the VMS implementation temporarily affected both sales and cost, all in a quite significant way. Ahead of the launch, lower campaign activity was forced because we needed to give the warehouse room to train the operators. And during the transition, fulfillment was paused. And post the transition, we had a lower warehouse productivity during the ramp-up period, and that created a significant backlog, both in outbound but also in inbound. Moving into margins, profit after variable cost came in at 2 million SEK lower than last year with a significant negative impact of height of extra freight cost related to our VMS transition. At the same time, improved performance marketing efficiency helped offset part of this impact. So our focus remains to maximize profit after variable cost in absolute terms as our business model is extremely scalable. Overhead costs amounted to 75% Q2 included approximately 6 million of transformation costs, primarily related to external consultants and temporary parallel systems during the transition to our new technology platform. We expect these transition costs to gradually decline over the coming quarters as we stabilize the WMS and continue the rollout of the new e-commerce platform. As previously communicated, we continue to expect Pierce 2.0 to deliver further annual EBIT improvement of approximately 20 to 30 million as the transformation cost disappears. Part of this has already been realized through lower depreciation and amortization. Finally, we have a very strong financial position with 319 million in cash. And in addition, we have 150 million credit facility with no cash amounts drawn at the end of the quarter. Inventory amounted to 505 million, down slightly from 522 million last year. And we believe inventory levels are well aligned with demand. Overall, this strong financial position gives us significant strategic flexibility. Moving into some of our the private brand shares. Over the last 12 months, the private brand share was 35% unchanged from previous quarter compared to 37% a year ago. The decline over the years mainly mixed-driven, reflecting a very strong growth in external brands, as well as somewhat weaker development than targeted in the private brands. In absolute terms, private brand sales was still strong at 638 million over the last 12 months. And we continue to invest strategically in private label while increasingly focusing our efforts on the brands and categories where we see the strongest potential. Our ambition absolutely remains to accelerate growth, but we are really stick about the time required to build successful new products and categories. At the same time, we continue to unlock significant growth within our external brands portfolio by improving availability and assortment depth. This remains an important growth factor for us. Customer satisfaction. This remains a clear strength. We have quite high Trustpilot scores compared to our peers in the industry. Although we have during the VMS transition seen impact on our net promoter score, but we believe that we're Continuing on some of our KPIs. We have an increased customer base. It's steadily growing. This is very satisfying to see. And we have a stable AOV year over year. And with that, I hand over to our CFO, Fredrik Jager. Thank you, Jan.

If we zoom in a little bit on the gross margin, we can see that the gross profit . . . . . . Looking at the shipping cost. In-freight amounted to 21 million in the quarter, corresponding to 4% of revenues, which was unchanged compared with the same quarter last year, so pretty stable. That said, shipping rates from Asia continue to be very volatile. Overall, our focus remains the same, to grow gross profit in absolute terms by balancing price and competitiveness, marketing efficiency and margin discipline. Next slide, please. Now, to give some context to the adjusted EBIT for the quarter, Q2 adjusted EBIT was 34 million compared to 32 million last year. As in previous quarters, there are also some costs within the adjusted EBIT that are related to transformation, but not classified as items affecting comparability. During Q2, these amounted to approximately The inflation costs mainly relate to external consultants and overlapping license fees as we operate systems in parallel during the transition of our new tech platform. Excluding these two effects, just EBIT would have been approximately 41 million for the quarter. The 1 million SEC of accelerated trademark amortization in Q2 will be the final remaining impact from the consolidation of our private brand portfolio. Looking ahead, the transformation cost will continue for some time as we stabilize the new VMS and progress with the rollout of the new eco-platform. However, we expect these costs to gradually decline over the coming quarters. As Jaron mentioned earlier, Part of the benefits from PIERS 2.0 have already been realized mainly through lower depreciations and amortizations. We continue to expect a further annual EBIT improvement of approximately 20 to 30 million SEK as transformation costs come down and the remaining systems are fully implemented.

Next slide, please.

Going over to the Overhead costs remain broadly stable in absolute terms at 75 million SEK compared to 74 million SEK last year. As a share of revenue, however, overhead costs improved slightly from 14.1% last year. And this is despite the cost of transformation of about 6 million that we absorbed in the quarter. These costs mainly relate to the external consultants and parallel license fees connected to the rollout of the tech stack, but there are also some costs related to more operational consultants supporting the VMS rollout. today. At the same time, the rolling 12 revenue has increased by 17% and the sales per FTE, white collar FTE, has thus increased by approximately 90% since the launch of Pierce 2.0. This clearly demonstrates the scalability of our business model Next slide, please. Heading over to the net working capital, we've seen a significant improvement compared to last year. The improvement is mainly the While working on the working capital, we are keeping a close eye on the inventory. And I'm happy to say that the inventory remains well balanced. Going forward, we still see opportunities to strengthen part of the assortment and further improve availability. The focus is therefore to continuously improving our purchasing methodology and inventory quality, keeping the stock fresh, acting early on slow moving products and maintaining the right inventory in the right areas. This should allow us to continue supporting growth while maintaining disciplined working capital management. And with that,

looking forward. So, summarizing a little bit on Peirce 2.0. Since Peirce was started literally in a garage in 2008, it was a successful and fast-growing company. Following the COVID period, however, the business entered a more challenging phase. The demand was declining, there was a pressure on margins, and the losses accumulated. I joined Peirce in Q2 2023. Shortly thereafter, in Q3 2023, we launched Peirce 2.0 with clear priorities to return to profitability and get back to sustainable growth while making the company more stable and scalable. We initiated a major organizational reset in to reduce the white-collar headcount and then continue to reduce over the years. At the same time, we took a hard look at our technology platform and we concluded that the existing tech stack was not fit for purpose. It was underperforming, unstable and lacked the scalability required for us to expand into new markets and verticals. As a result, we made the tough decision This was a difficult decision. We knew it would be both costly and time-consuming, but also necessary.

We simply had no alternative.

Alongside this, we evaluated our private label portfolio and concluded that sales were spread across too many brands, making it difficult to invest in brands in an efficient way. and lack of Pierce assortment and brand identity. We therefore simplified the portfolio from 73 brands, focusing on Raven in gear, expanding it into the large and highly competitive on-road segment, and ProWorks in parts and accessories, while keeping Coors as a tactical brand. We migrated several thousands of products and replaced several thousands of products also. and we partnered with leading designers to strengthen the overall brand and product offering. This transition has been quite hard, to be frank, and this is a reason why the growth rate of the private label has been somewhat lower than we had hoped for. But we are absolutely convinced it has been the right decision and long term this is the right thing to do with fewer

in those brands and build real brands.

Then we spent several quarters cleaning up inventory through targeted sales activities for slow-moving goods and more restricted buying. We also made a very large one-time write-down of 40 million SEK of obsolete inventory. And growth was initially held back as we cleared out slow-moving inventory, but began to recover once we rebuilt the assortment Since Q3 2024, sales have grown by 17% despite the challenging market and we have clearly gained market share. lower than the very high year-over-year growth rate, with an average of 16% reported in the fourth quarters of Q4 to Q3 2025. This growth, combined with a 39% reduction in the white-collar headcount, as Fredrik said, has resulted in a 90% increase in sales by white-collar employees, something that we are very proud of. This has demonstrated the efficiency gains of Pierce's 2.0 program in a very Looking at the results, we reported an EBIT of minus 69 million SEK in 2023 and since then we have turned the business around and have been profitable in all quarters except for a setback in Q1 2025. Adjusted EBIT improved first to 25 million SEK in 2024, 45 million SEK in 2025 and the last 12 months basis we have reached now 61 million SEK. At the same time, the underlying business has strengthened. The customer base has grown, customer satisfaction and retention has improved, and also employee net promoter score has increased. And as we approach the end of this transformation, we are now gradually moving into the next phase, which we call expansion. With a stronger and more scalable platform, we are in a position to expand into new markets and categories and to explore consolidation opportunities in a fragmented market. So what's left now in PIERS 2.0, the remaining activities is primarily the rollout of the e-comm platform, apart from stabilizing our WMS, which will take the beginning of Q3 to do. And we are slightly later than we anticipated. We had hoped to be able to close everything during Q2. We were not able to do that. So in Q4 last year, we launched a beta version of our new ECOM stack in four pilot markets where we had no localized sites before. After a period of improvements, we launched the remaining markets to be localized, primarily in Eastern Europe. And we therefore now operate local sites in 29 European countries. We also migrated Spain and Belgium as pilot markets for the markets where we have had local sites for many years, which we in Pierce call established markets. We will now follow up by migrating the rest of the smaller established markets during August and September. But as we have experienced quite a significant reduction in sales post-launch, and this is expected that this happens normally when you change and make big changes to your sites primarily due to the search engines that need to relearn the new structure of your sites and this takes some months to recover and we have seen this in all the markets that we have launched but as we do that and we are very keen on protecting the very strong sales period of the Black Friday sales period we will the larger established markets until December and January. The transformation costs are connected both to the WMS and the new ECOM stack. And as we stabilize the WMS and roll out the ECOM stack, the transformation costs will gradually be reduced over the coming quarters. So looking ahead, we are now finalizing the 2.0 transformation. And with a scalable platform, we're entering a new expansion phase. Apart from defending and growing in our established markets, the roll out of 13 localized markets and continued growth in mountain bike and scooter motor categories, this will broaden our It will take time to scale, but it will be an important contributor to our long-term growth. And I must say that the start of the new markets and the new verticals has been very promising, even if it's a short timeframe. And finally, the European motorcycle e-commerce market remains fragmented and ripe for consolidation. As the largest and only to lead the next phase of industry consolidation. So this ends our presentation for today. And with that, I hand over for Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Adrian Elmland from Nordia. Please go ahead.

Hi, Aran and Fredrik. Good morning to you. I think I have three main questions. I'll take them one by one. So firstly, you're kind of guiding here for continued negative effects from the warehouse management system during Q3, right? I think you said that you expected to be solved end of the quarter. Could you perhaps give us some more details on sort of why you expect this and sort of what is more to be done during the quarter, if you will?

Hi Adrian, good morning to you. Good question. So thank you for that. There are two different things. One is the productivity and functionality of the WMS and the operators. So it takes time to ramp up the system. Bitlog that we had before, we've had for 10 years, more than 10 years. And we've been adapting that, improving that. And when you launch something completely new like this, it takes some months before you're back to normal productivity. But then it's also, as we mentioned in the call now, that we have had a quite strong, we've had a big backlog in outbound and inbound, and that takes time to work down. And even if the outbound is almost gone now, we still have a backlog in inbound, which affects availability and hence

Okay, far enough. Second question here regards to the new localized websites, the scooter and bike categories as well. Could you that these are sort of the main growth drivers in, let's say, the coming 12 months, or are they still too small? And if not, then what is kind of the main growth driver for the upcoming expansion phase that you mentioned during the presentation?

So, number one is, of course, to defend and grow the current business that we have in the established markets. We hope that the market will recover a little bit and that we start seeing good signs primarily in some of the markets in Europe, but far from all. We also have the inflation, of course, that will naturally be driving underlying growth. And also we see that the rider base continues to expand, which is promising. But when it comes to... So the established markets will for sure be... And the online penetration will continue to increase. So the established markets will be an important contributor to growth. If we fail to grow in the established markets, it will be difficult to show very strong growth. But I must say that new markets and verticals have shown very promising results to start, so we have good hopes that that will be an important contributor to the growth.

Okay, last question from my part. Could you give us some guidance or at least thoughts on the private label products here? Could we see growth maybe this year or is it more to be done?

We target to get back to on private label during next year and from Q1, Q2 next year. It will take some time. And the primary thing here is that we have two things. We have been a little bit too, hindsight, we've been a little bit too aggressive taking out products. And we also experience quite large challenges Thank you very much. The next question comes from Christian Small from Pareto Securities. Please go ahead.

Good morning, Göran and Fredrik, and thank you for taking my questions. So a couple of ones from me here. Firstly, on the VMS drag here, would it be possible to maybe quantify the impact of this? I mean, considering that I guess you have quite good visibility in the backlog here, since you referred to two days earlier, would it be possible to quantify this backlog here?

The impact in Q2, I think the primary impact was on the top line and what we have quantified in the report is that we have backlogged about revenue recognition. So we didn't manage to ship all the products that were ordered in Q2. So that is what we come up with in terms of the quantification of the impact. But in addition to that, We did have some impact on availability in Q2 and also some extra costs. And the extra cost was partly included in the transformation cost that we absorbed in Q2, but also part of it in the productivity in the warehouse. So that is part of the variable cost that you find in Q2.

Yeah, that's clear, but you don't have any sort of estimate on how would you think that how much these two deals would have made you in terms of revenue recognition here?

No, no, that's it. So my advice is basically just sort of going with the run rates for the cut-off effect between the quarters. Yeah, that's clear.

And then on your guidance in terms of the ICOM rollout here, just to clarify that, the guidance here. So we should rather expect this to be fully rolled out in Q1 2017, I guess.

Yes, that's correct.

Yeah, understood. And then... You referred to a couple of large markets with the rolling out of the comms in preparation for the high season. Which markets are you referring to here specifically? Are these markets that are waiting, maybe one quarter with? We're not there yet.

that we have.

Okay.

Thank you.

And then finally on follow-up on the mountain bike and scooter vertical here, could you give some indication on like either how much this vertical is growing year-over-year or maybe in terms of like absolutes, how much is here?

It's very early. So it's, you know, in Q2, the new markets and the new verticals were quite young, so to speak, babies. But we are, it looks very promising, but we're not giving specific quantifications of it. Yeah, then I think it's a little bit too early to do that. I mean, it's so young still, but as we said, we're very satisfied with the beginning.

Yeah, that's clear. And I think you've previously talked about that you are looking to hire new people to make this vertical grow more. I mean, how is that progressing with expanding both personnel in that vertical and so on?

Sorry Christian, I could not catch you. Could you repeat the question?

So within the mountain bike hall, I think you've guided for previously that you're looking to hire new employees in this vertical to do more. How is that looking right now?

It's not necessary for us to hire any new personnel for this. We have the people we need. And this is one of the, how should I say, beauties with our business model or operating model, And then we have 20% of the purchaser and 20% of the product data manager. And for the rest of the marketing team, et cetera, we're talking percentages of their working time. So we are, and it's the same when we add the markets, it is very little extra efforts required from us, especially since we are utilizing AI translations completely. So with the new tech stack that we have, We hope to be able to launch even more markets going forward, but right now we're on 29.

Okay, perfect. That was all from me. Thank you, guys. Thanks, Krista. Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thank you. So Fredrik and I would like to say thank you for listening, and we wish you a great Friday.