Pricer AB (publ)

Good afternoon and welcome to Pricers third quarter 2025 earnings presentation here at DNB Carnegie. My name is Hjalmar and I work as an analyst and we are joined here today by CEO Magnus Larsson and CFO Claes Wetzel. Welcome gentlemen. Thank you very much. And we have a lot to speak about. So let's get started right away. The floor is yours.

Excellent. So thanks, everyone, for joining. We're going to present now our third quarter for 2025. It's myself and Claes, as mentioned by Hjalmar. And as always, let me just start with Pricer in a brief for those of you who don't know us since before. So our vision is to be the preferred partner for in-store communication and digitalization. We work within retail tech. We're a leader within retail tech. And we have been around for nearly 30 years or actually more than 30 years. And we have to date 28,000 stores sold across the world. Looking at market development and the Q3 highlights, of course, the first thing I want to lift is that we managed now in Q3 to have the best net sales so far in this year for a quarter, 598 million. It's better than both Q1 and Q2. We had a very great increase in our recurring revenue. Why is that? So it's partly due to all the SaaS services we sell through Pricer Plaza, but we've also changed our business model and our pricing model for all software services, also older installs to a subscription model only. So even if you, for whatever reason, are not able to actually connect your store to Price at Plaza, you will still need to renew the software for your installed base or your installed server. And the new pricing model is recurring. So basically, as of now, we are in principle only recurring when it comes to software sales. And this is why you can see the almost 50% increase in recurring revenue in this quarter compared to last quarter. You will also see that it's a quite high increase versus Q2. It's almost 20% increase versus Q2. This is one of the drivers behind the margin improvement. We're on 23%, not for the quarter. And it's, of course, partly part of the recurring revenue, but it's also product mix. And I think Klaus will speak a little bit more about it in detail. One of the highlights for me personally is, of course, that with our EBIT result, managed to it's a positive result and it's actually not only for q3 but with the result of q3 we take the entire result for the full year into positivity so i'm super happy for that Something I'm a little bit less happy with is, of course, the order intake, which was bleak now in the quarter. We could see that there are many different reasons, but the key reason is the fact that there is still a lot of market uncertainty affecting the retailer's decision to invest. We have quite a few customers where we know there is a project they want to deploy, they want to get started with, but it's being pushed into the future. So we haven't lost them, and we do expect that the orders will actually come at a later stage. But it's clear, it's not only ourselves, we see it also for our competitors, that this unwillingness to invest is affecting the market growth at the moment. Then on the Nordic side, as you probably know if you followed us, we have been moving from a partnership sales model on the Nordic and Baltic market into a direct sales market approach. Since August, we have a full team in place. We can actually see that we're now getting traction on the order side. You don't really see it in the Q3 report, but I expect that it will be visible as of Q4 and forward on. And one first example of this new direct mode sales is that we got a direct frame agreement this week with Norris Gruppen, who is one of the leaders on the Nordic market, but also then in Norway, obviously, for those of you that are Nordic, that we announced a couple of days ago. So it's a frame agreement we expect to serve all the stores over the coming couple of years. One thing I would like also to speak about is that we have another customer. It's one of the largest Nordic customers that we have. They now had their first store on Price of Plaza and they have an ambition to actually do all their stores as soon as possible. So there will be a couple of hundreds by Christmas and then some more by beginning of next year. So it's a very clear trend also in the Nordic market for Plaza and connecting your stores. Looking at the organization, and for those of you that will look more on the OPEC side of our business, we have invested over the last couple of months and quarters in our organization, in the commercial organization, very much on the marketing side, on the sales side, on the product management side, all the parts of the organization that will actually help us build the value proposition of today, but also the value proposition of tomorrow. And that will more in larger extent also engage with our customers directly. This has generated a lot of positive traction. Once again, not visible this quarter, but hopefully visible in the quarters to come. And as mentioned, the fourth quarter has started well from an order intake point of view. What are we actually solving? We've been looking at different industry trends and the macro trends. And today I'd like to focus on two of them. When our customers come to us, often it is to help them with improving the operational efficiency in the store. But it's also increasingly more on the in-store experience. How can they make the shoppers buy more? How can they actually get additional revenues from CPGs, the brands? So I've got two examples. If you think about the operational cost pressure, I would like to take our customer SOK in Finland and the partnership that we have forged with them since 2023. It was a pretty long sales process, but we got a contract during autumn 2023, which we announced to the market. They started with 15 stores in 2023. And by today, we have deployed more than 6 million labels across 450 stores. So this is way above the initial discussions we had with them. And we will continue to deploy additional stores. They have some, I think around 1,000 stores in total. Why did they select us? Well, the key reason was to get the operational efficiency in place. But it was also to improve the work environment for the staff, and especially looking at replenishment and picking online orders. So they wanted to make sure there would be less time spent, but it would also be easy for the staff. And they can see now that when they did the pilot, they said, well, there was basically only one choice. You're the only one with a solution that works for us as we need. But it was also now we can see afterwards when they started to do employee engagement service that they have an increase in positive answers on the work environment. They can also see that it's faster to actually get an employee fully productive in the store. And I'm really happy for the cooperation, and it's Jarkko Mäkkinen, the head of development at SOK, says that Pricer has proven to be the partner that they wanted, acting as an extension of our own team. And of course, we feel the same way. It's a very inspirational customer to work with. So this is very much on the store operational side. And if you're more interested in this case, I think you will have it now, or it will come very soon, a video actually from SOK where they speak about why they selected us. The next thing would be then addressing the in-store experience. Price Revenue is a product that we conceptually launched in New York in January at the NRF event. We are now come to the place where we are starting pilots. So yesterday we actually had our first Pricer Avenue aisle live. It's in a store north of Stockholm. It is very much a store where we will let our engineers just verify that everything is working as it should. But if you want to see it, you know, you should go northwest of Stockholm and see if you can locate the store. It's really nice. And what you also see on the picture here is what we call the floating canvas. This is something unique to Pricer. It's a patented way of doing and actually we're the only one with the current look and feel of the general ESL on the market where you can do it. We, unlike everyone else and unlike our old models, we have not made our thin so frames are so thin on the ESL that you can easily then build a picture over two ESLs or of three or five, actually any number of ESLs you want, you can build the merchandise in the promotion area. So we're going to do, in addition to what we just installed in Sweden, we will do pilots, more of a commercial nature, in Finland, in France, and in the UK now during October and November. So there will be more updates on this, but we can see there is a huge interest in price revenue. And I think it's also fueled by the fact that there's no one else on the market that is actually doing it this way. So having done now the shameless marketing of Avenue, I hand over to you, Claes.

Yes, Q3 is the best quarter for this year. You see, we have a strong gross margin and gross profit, and we see effect in our production costs now from the weaker US dollars. We have had a negative currency effect compared to last year with about 10 million, which affected our EBIT, of course. But still, we have a return on sales of 6.5% for this third quarter. If we then look at the cash flow, the operating cash flow for the first nine months is... positive and 16 million cash flow has been affected by the high accounts receivables and it has actually increased by 120 million in the third quarter so this is just a it's a timing effect and that will be of course a positive effect from this now in the coming quarter And if you look at the order intake, it's of course weak as Magnus said, but the backlog now when we go into the fourth quarter is higher than last year. On the sales side, it is the best this year and it's 598 million. Gross profit is also the best for the year with 139. And even then, the total result is, of course, the best for this year.