Pricer AB (publ)

Good afternoon and welcome to the Pricer second quarter 2025 earnings call presentation here at DNB Carnegie. I'm joined today by CEO Magnus Larsson and CFO Magnus Wetzel. Welcome, gentlemen. Thank you very much, Hjalmar. I figured we start right away, so I hand over the word.

Oh, sorry. Thank you. So hello, everyone. Thank you for having us today. We are here to present the second quarter 2025 with me, as mentioned by Hjalmar, we have Claes. I'd like to start with, just for those of you that might not know us that well, Pricerin Brief, founded in 1991. We are a leader within retail tech. Our vision is to be the preferred partner for in-store communication and digitalization, highlighting really the collaboration and partnership with our customers, where we believe that we are doing things quite different compared to competition. We are, from a deployment point of view, we have sold more than 28,000 stores and we have some 350 million labels that we've sold and delivered, which makes us a clear number two on the market. Going into the second quarter, let me start by first stating what I guess is the obvious. I'm not at all happy with this quarter, with the net sales that fell below expectation and where we also have a poor profitability. But of course, there are things that are also positive in the report that I will lift and highlight. I would also like to start with looking at the market. When we are looking at the future and we're looking at how will the market grow, there is nothing that has changed from what we predicted earlier, that the market will continue to grow. And over time, the growth will be around 15% annually, at least until 2030. This is what we see. We see no reason to actually change that view as well. We see that there is a real need among the retailers to actually do digitalization of the stores. From the hesitation that we've seen in terms of investments now during the first half, it's not a hesitation saying that we'll not do anything. It's pushing things into the future, waiting a little bit to see that things are actually getting more clear on the market. So you could say that the geopolitical situation have really affected us both in Q1 and also now in Q2, as I alluded to. That's a clear risk when I did the Q1 presentation. One thing that has actually developed in a maybe not unexpected way, but we can see that looking at the US market specifically, Here we have had a number of large RFQs or requests for proposals and procurement processes that has actually been paused totally. So it's not been won by anyone, but there's been several where they said that we just have to wait until next year. So it's not lack of interest, but it's the uncertainty so high reflecting the tariffs that they just simply decide to move the decision into the future. On the Nordic market, we can see that there has been low activity versus previous years. This was expected. We are now going direct. We have a new company in place in Norway. We have recruited a team of salespeople and delivery people. that are all in place as of August 1st. We have really positive discussions with all our previous customers, the one that we sold with our distributor before, and they've all confirmed that, yes, we're going to continue with Pricer, and we expect all the contracts to be closed now in August. So very positive development. Of course, here we see the possibility to actually increase sales and profitability with a new setup. I would finally like to highlight the order intake. We did actually have a better order intake than last quarter, or the quarter in Q2 in 2024. Slightly above, but if we actually take out the FX effects, it's actually growth of 7.7%. But more importantly, I would like to highlight the European market where we can see that the order intake now in Q2 is 20% better than the European market were last year in the second quarter and also 9% above the order intake in Q1 this year. So we see a positive momentum on the European market. Having said that, Claes, do you want to say something?

Yes. As Magnus said, we are, of course, very disappointed of the low sales and the low gross margin. The low gross margin is, of course, highly affected by the low sales as our fixed COGS has a bigger impact, of course, of the sales because of that. On the cost side, our operating cost includes our reconstruction cost in the quarter for about 8 million. And if you take out that, the cost is slightly lower in Q2 compared to Q1. Then if you look at the cash flow from our operations, that is quite good despite the new EBIT result. We have a better handling of our working capital. They have taken down of inventory during the period. Net debt now is at the same level as it was in the beginning of the year or at the end of last year, which is quite good compared to the cost and the losses we had during the first half of the year. If we then look at the sales and gross margin development, we can see that the order intake is up compared to Q1 with about 10%. The backlog now when we go into the second half is 660 million, which is significantly higher than a year ago. And as I said, both gross margin and the gross profit has been affected by the low sales and the bigger impact from our fixed cost. We have all our production cost in US dollars, and we have very little effect of that now in the first half, mainly because a lot of the inventory that has been sold during the period was inventory booked at a much higher dollar level when we get into this year. But this will have a positive effect during the rest of the year when we see an effect from our lower production cost. And then this slide shows that you can see our operating result over 12 months, ruling 12 months. We are now at the same level ruling 12 months as we was after Q2 last year. Now we have 106 and last year at this time we have 102. And then of course the margins are affected. Thank you, Klaus.