Rugvista Group AB (publ)

Good morning everyone and welcome to our Q2 2026 earnings call. My name is Ebba Ljungrur and I'm CEO of Valvista and I also have Joakim Tuvner with me who is our CFO. Before we kick this off, I would like to as per usual point out that the images in this presentation, they come from one of our fall campaigns. So this is a sneak peek that you're getting. The campaign is called Urban Reflections. and it has primarily handmade rugs in it. It's very beautiful. I think this one that you see in the image now is one of my favorites. It's a wool and viscose rug that I hope will be a top seller for us going forward. The structure is as we usually do it. So we start with a bit of a business update and then Joakim will go more into the numbers. And then of course we finish with a Q&A. So if we pop over to the business update. Very proud of this quarter, I have to say, double-digit organic growth and a lot tougher comparables than before. Net revenue was 174 million compared to 150.5 last year. That is a 15.6% growth and organic, it was almost the same, 15.8. And if we move over to the orders, they were 77,000 compared to 74,000 really last year. And if you look here, you can see that that represents 4.1% year-over-year growth. But we are facing quite tough comparables. If we look at the year before, it was 26.3% growth. And so we're happy with this, but I think it's worth pointing out that we are up against tougher comparables going forward as well when it comes to order growth. Moving over to new customers, almost 56,000 compared to 52,000 last year. So that's 11.2% up, which means that new customers in this quarter represented almost 75%. That's quite high. But as we have said before, this fluctuates over time. I would say it tends to be around 30%. So this is 30% reoccurring customers. So this is a little bit higher than the average quarter. And then AOV, average order value, we came in at 3,115 compared to 2,833 last year. So that's a substantial jump actually on almost 10%. And if we look at the development over time, you see that it's been flat for a while and now we are seeing it going up here. I think We have talked about this many times and it does come from several different sources and it's really not a silver bullet here, which I've said many times before. But the start really is all the changes that we've done on site that we started with well over a year ago. We show larger rugs, which means we sell more large rugs, which drives AOV up. Handmade has performed very well in the quarter. We have lower discounts. As you might remember, we did a big sellout last year ahead of the move. So that also affects AOV. And then, as we said as well in the Q1 reports, we have made some price adjustments to mitigate increases we see from the suppliers during the spring. And while those haven't really come through in the cokes, we know that they are coming in the fall. But all in all, if we look at the quarter, the growth came then from almost two thirds from AOV and around one third from the order growth. Moving further down the P&L then, we have a very strong gross margin this quarter, 67.1. It was 62.5 last year, but I think it's worth remembering that in Q1, it was 64.9. We have this in spite of the increased freight costs that we have seen, but we are helped by both discount mix and price increases. And I think there's also a bit of an exchange rate factor in this as well. Marketing spend. That landed on a more normalized level this quarter than in Q1, 29% flat. Again, this continues to fluctuate, and it's not something that we really look too much on a quarter by quarter level, but rather rolling. But of course, as I've said before, we aim to slowly, slowly, slowly, slowly, slowly drive this down over time. And in general, both Q2 and Q3 are lower than Q4 and Q1. So this just supports that. Sessions then on site that increased by 6%. It's much more like for like comparables these days. If you look at last year, it was up 49%. But then you remember that we had a big shift in how we spend our marketing money and what channels we invest in. So now it's much more similar to what we did a year ago. We actually think sessions might go down a bit over time because the AI traffic, at least early indications, is that it tends to be lower, but then with slightly better conversion. We're not quite there yet, so we need to see how things pan out, but that's how we see it going forward. And then EBIT was 20.5 million, which is a large increase from last year when it was 7.1. That represents a margin of 11.8 versus almost 5 last year. Many contributing factors here, starting with that we had better sales, which drives the economies of scale. Of course, the mentioned gross margin. And then we also had a few one-offs from the move last year. Then if we move over to looking a bit at the markets, the customer and also commercial development, the market development as per usual also remains very mixed across different geographies. So we continue to be flexible in how we move money from channels and also countries. I think one example is Germany, for instance, that grew almost 26% this quarter compared to, I think it was 10.5% in Q1. So they do fluctuate a lot. And then, of course, we continue to have a challenging world situation. Fuel charges is an example. First, they went up a lot, then they went down a lot. Now we see some tendencies to going up again. So we really try to mitigate this by being as flexible as we can. And looking at consumer sentiment, it's actually continued quite low. We had almost a very low measurement for Germany, for instance, in the middle of the quarter. And all of the countries that we follow are low in the quarter. So we do see that every time we see tendencies that things go up, It tends to drop again, unfortunately. On a slightly happier note, we have a stable and high trust pilot score that we're very proud of. 4.6 in the quarter. As you know, we are actively working with this. I would like it to be a little bit higher. So that's something we are working on. Again, something that is not a quick fix and it's many different factors that contributes to this. But since we are a small brand in a lot of different markets, we know that this is an important indication that our customers both like what we do and like our products and they like our delivery, but also that it's a good or almost a necessary thing for people to be able to trust us and make sure that we are a company that delivers on its promises. And then if we just look quickly at the assortment for the quarter, actually all lines within the assortment performed well. So machine-made, handmade and unique all grew. We had several new designs also that we have launched during the spring that took off in a very nice way. So that for us, of course, that means that they live on for many years and we add colors and we add sizes to the products. And last but not least, I think it's worth mentioning that AI, of course, continues to be a very, very big topic for us. We continue to progress in this area and just as an example, well over 90% of our development these days is done either completely by AI agents or with the majority of it being done with that help. And we are also continuously really working very hard on improving the structure around both product data and all our content, etc. So both customers and the AI-driven services both understand and really find what they need on the site. With that, I hand over to you Joakim for the financial deep dive.

Thanks Eva. Just one note before I jump in on the numbers. I think many investors or analysts may use an AI tool like ChatGPT or Claude, et cetera, just to run these reports. And there are things that are highlighted as errors when you do that, very convincingly so with calculations, et cetera. And these things are not errors and can be explained. So if you run across that and are still in doubt, you are of course more than welcome to contact me. So, like Eva mentioned, we were up against a comparable of 22% organic growth of net revenue last year, and now we had a double-digit growth with 15.8%, excluding a minor currency impact of 0.2%. So, in DACH, we grew by 30.7%, whereas Germany grew by 25.7%, despite that decrease in consumer sentiment that Eva just showed. Nordics grew 15.4, Sweden grew 9, and the rest of the world grew by 10.5%. And then we had France to continue to grow very well with 21.9%. So again, quite varying performance within the markets. So on to the expense percentages as a share of net revenue. Just a comment here, we have added in the rolling 12 numbers. We think that adds a value to look at this over time. As you know, we have some seasons. For instance, in Q4, we had 35% of sales last year. We actually had 41% of our EBIT last year. So have a look at those numbers more than over interpreting each individual quarter. So two product expenses then. These were down by 3.8 percentage points. This was mainly due to the price increases and the lower discount levels, but also somewhat to the weaker US dollar versus the Euro. You know that we in quarter two last year had a lot of sellout of products just before the move that we were going to do in June. And that of course impacted last year's margin. Moving on to the other part of the gross margin here, shipping and other selling expenses, and this decrease also due to the same reason as the product cost, and this is despite that we had some increased fuel surcharges that impacted negatively, mainly in April and May. So this then sums up to a 4.6 percentage points better gross margin. And here we think moving forward, fuel surcharges is anybody's guess where those will end. But as we mentioned in the last earnings call, we did increase the prices in April. and this was because of a known product price increases that we will get that we think will kick in in a little bit in quarter three and then in quarter four. So other external expenses so in last year we had the moving cost for the first three quarters and we had a 4.2 million moving cost which is equivalent to 2.8 percentage points in last year. And that explains the decrease. Personnel expenses is quite stable, just a bit up in fixed amounts, but then due to the increased revenue, it's down by 1.8 percentage points. Moving into other operating expenses and here we have the effect from the valuation of the assets and liabilities that we carry in foreign currency. This goes up and down. Now it was an income in last year of one percentage point that became a cost this year. We do not hedge this and we try to work naturally with it, meaning that we try not to keep too high balances in foreign currency that we haven't planned to purchase something with. So depreciation and amortization is now stable. You can say this is then an effect from a higher net revenue again. in quarter two we have the fixed amount of our depreciation and amortization is what we expect more or less having going forward. So this then sums up to an EBIT margin that is 7.1 percentage points higher than last year arriving at 11.8 and the main factors contributing to that is of course the increase in net revenue and also the increase in gross margin. Plus then the fact that we had a 4.2 non-recurring costs in last year. Moving on to the balance sheet.

And that's the move costs.