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.