Rugvista Group AB (publ)

Welcome to the RugVista Q3, 2026 conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Ebba Jungerud and CFO Gustaf Arlid. Please go ahead.

Thank you, good morning everyone and welcome to Rugvistas Q3 earnings call for 2026. My name is Ebba Ljungerud and I am CEO of the company and I have with me our new CFO, Gustav Arlid. Welcome, very nice to have you here. Thank you. And before we kick this off, I would, as per usual, like to tell you a little bit about the photos in this presentation. They come from one of our fall collections called Woven Stories. That one has both machine-made and handmade and also some unique rugs in it. And it's really soft and nice fall colors, I think. Very nice rugs, so please enjoy the photos. As per usual, I will start with a bit of a business update and then Gustav will go into more detail around the financial development and then of course we'll end with a Q&A. So jumping right into the business update. I think we have to say we're very happy with this quarter. Tough comparables from last year, but still really good growth. We had double digit organic growth. And this is our best Q3 ever and a very strong quarter overall. Net revenue increased from 167 million to around 195 million. So that's an increase of 16.8%, sorry. with an organic growth of 16.3%. Moving over to the order count. We landed on almost 84,000 compared to 80.6 last year. And if we look here quarter by quarter, you see that it was a 3.7% increase from Q3 2025. Not that much, but also the comps from the year before were quite tough with 19.4% growth in that year. Rolling 12, you can also see that it is stabilizing a bit. It is important for us to see order growth over time, but it's not as steep as it's been previously. but still growing. And then new customers, 63.9 thousand compared to 57 thousand last year. That's an increase of just above 12 percent. This means that around 76 percent of the orders came from new customers. Once again, quite high. It was also quite high in Q2. But of course, we are happy to get new customers on board. It's just important that we keep our CRM wheels rolling, so we get them to come back as well. And then AOV, average order value, was on 3,274 SEK, which is the highest since Q2 in 2023. And you who have been listening for a long time, you know that this is something we've worked on continuously for many years now. And the growth here was almost 11%. And if we look quarter over quarter, it's 5%. I think it's fair to say that the growth going into fall is normal. We have seen every year that customers switch to more expensive rugs. They're bigger, they're slightly more expensive in terms of what the quality is, etc. But it's still, of course, a nice jump for us. And if you also add on, the growth also actually comes from that. There is a shift from... We increase more in handmade than in machine-made than we do in the spring, Outdoor is such a big category for us and outdoor is almost only, or well, it is only machine made rugs. So the top line growth then in the quarter comes from both more orders and higher AOV, where AOV has the biggest impact. And it is very important for us that we balance the two and that we grow in both. Moving forward. The gross margin for the quarter was very strong. It increased to 68.1%. This is a record high level for us and it follows on another record quarter in Q2 2026. There are lots of small contributing factors here. We have reworked all the agreements with all of our suppliers across the board. We have a much more granular pricing strategy in general today. A couple of years ago, we had more of a general markup, whereas now we put a price on every rug individually. And then, of course, we also had the price increase in early Q2 2026, where there's a bit of a timing benefit. where it hasn't really come through in the course yet. It did come through a little bit in the end of the quarter, but yeah. And then marketing cost or marketing spend on 28.8% versus 29.9% last year. We continue to invest a lot and this is of course still a big chunk of money every quarter, but this quarter we really saw a great efficiency in the investments. We're growing a lot in influencers and ambassadors and how we're working. We're also working a lot or we're starting to work more with PR. So we are moving a tiny bit from purely performance marketing, driving marketing to more brand building marketing over time. This is a shift that we want to make, but we don't want to make it too quickly. We really want to make sure that we balance it over time. And this percentage is very important to look at over time rather than quarter by quarter, even though Q2 and Q3 tend to be lower than Q4 and Q1. It's just really, it's a long-term trend rather than quarter by quarter. The sessions on site, they increased by 21% compared to 38% last year. This is a little bit higher than maybe we would have thought, because we have much more like-for-like comparisons now. The AI crawlers are growing, so that definitely helps with the sessions. We're also seeing organic growth growing, which we think is a testament of that the brand is just better known. And then just in general, better efficiency in the marketing investment. And then we end up on the EBIT, which ended up on almost 35 million, something we're very happy with, compared to 12 million last year. So this is our best Q3 ever. The margin is 17.8% compared to 7.2 last percent. And last year, I mean. And I think it's just really, it's not one thing. It's many small things and just really good cost control throughout the P&L. And Gustav will go through this a little bit more, but there is also some moving costs in last year, which affected it. Then if we just move over to markets and the customer and the commercial development, we saw a little bit of improved customer confidence in Q3. It's very uneven across markets still and of course the world turmoil continues. So if you see here, you see three of our bigger markets, Sweden, Germany and France. So it's a little bit more of an encouraging picture than in Q2. But yeah, still very uncertain. Sweden showed some recovery during the quarter and Germany improved towards the end of the quarter. And France was relatively stable. So I just think it's also important to know that improving confidence, it doesn't always just completely match our sales in a given country. For example, Sweden in the quarter grew only 3.7, whereas Germany grew 21.6. So you can't just translate it. And for us, it's just, again, a sign that we need to focus on the stuff that we can influence. So the assortment that we make sure we have the really nice rugs, the buying experience to improve that over time. And of course also the effective marketing. And we really, we will continue to shift our investments and be quite opportunistic and look at where do we get the best return on investment and continue to invest there. And that then brings me on to customer journeys. This is a very big priority for us. It's been for a while, but it just continues to be a very strong priority. During the quarter, we introduced individually sorted listing pages that are looking quite encouraging. So we help customers to find the products that are relevant to them much quicker. A couple of tools to visualize the rugs in your room and what the size looks like, etc. And also quite a lot of improvements in the checkout. Another thing we work with continuously is to improve the images and product descriptions. Both the color and size and material is super important that both the product photos and that the room images really represent this accurately because otherwise it's not going to be a good experience when you get the rug to your house. This is both for conversion rates and it's for returns and it's also for our Trustpilot score. which ended up on 4.5 for the quarter, a little bit down from last year when it was 4.6. So it's still high, but this is not the right direction we're aiming for. And that of course then leads us to just having to work much more with the customer journeys. We are getting a lot more reviews these days, and that tends to take the score down a little bit in general, but of course this is just really very important for us that we continue to work with this. And here you can see the, the rolling quarter and then here it's a 12 month average then so it's 4.6 for the rolling still and we just need to address all the experiences behind these reviews. Color and size super important and that's why we work so much with both the images and the descriptions to give them an accurate understanding. Room visualization, I think is also very important for rugs, but any furniture really to just be able to see what it's going to look like. Returning rugs is super inconvenient. So even though it's free, we know that it's better if you don't have to return it, then you get it right the first time. And of course, last mile is also a part of this where we work with all our partners to improve that experience for the customer. Very ongoing work, so it's not a quick fix here either, but it's for sure something we will continue to work with. And then, last but not least, on this slide a little bit about our assortment. We've had a lot of launches during this fall, Woven Stories with the photos and then Cozy Homes and Urban Reflections, where Cozy Homes is more of our big sellers and Urban Reflections are very modern and very colorful rugs. So it's nice to be able to show different sides of our assortment in this way. And then, of course, alongside of the new designs, we also work a lot just with expanding our current assortment with the favorites and just add colors and add sizes where we think it makes sense. And this, of course, then allows us to build on the products the customers already like. So we utilize what we know. And with that, I hand it over to Gustav.

Thank you, Ebba. So let's dive into the financials for the quarter, starting off with our net revenue. As mentioned, we grew by 16.8% in the quarter. We had some small FX support, so the organic growth was 16.3% in local currency. Jumping to the regions, growth continues to vary between markets, but what we could see in Q3 was that all our regions grew by double digits. Nordics was actually the strongest performer with almost 25% growth, followed by DACH growing by 23%. As you mentioned, Germany grew almost 22%, so the momentum really continued in Germany. Rest of the world, which is mainly the remaining European markets grew by some 11% and France was delivering a 7% growth in the quarter. Product costs improved by 2.3 percentage points in the quarter. But you mentioned two factors already, the price increase that we did earlier in Q2, as well as the more granular pricing strategy that we now have on SKU level. And to that, I wanted to add also that throughout Q3, we saw a really disciplined discount level throughout the quarter, also strengthening the gross margin. Also, freight costs in relation to revenue developed positively, decreasing from 13.8% to 11.5% in the quarter. Again, price increase and discounts level of course helps. And further, we have seen some increases in the fuel surcharges comparing to previous quarters. However, we've been able to, with an optimized freight and carrier mix, actually balance some of those, which also strengthened the margin. So, all in all, the above-mentioned drivers led to a record high gross margin of 68.1% in the quarter. The strong commercial execution was further supported by the fact that the COX increases that we have mentioned just came to the end of the quarter and not fully as we're still facing in the higher cost inventory into the P&L. So that also supported the almost five percentage point improvement year on year. Continuing into the cost base, starting with other external expenses, which is including marketing costs. It decreased with 2.6 percentage points in the quarter versus 25. First, a remark on the comparable. 25 was the last quarter where we had some moving related non-recurring costs. That is equivalent to roughly 1.1 percentage point of the decrease year on year. And the remaining improvement is driven by, as you mentioned, a more efficient marketing spend in the quarter. Personal expenses also decreased 1.2 percentage points versus last year. And cost discipline, as you also mentioned, is of course a key lever in improving our EBIT margin over time. And we've seen that throughout the quarter. And this is also when we then see a good example of operating leverage as we scale with volume. Other operating expenses, which is the revaluation of our balance sheet items that we carry in foreign currency. During Q3, this was a cost of roughly 600 ksec, some 500 ksec less than the quarter in 2025. And as you can see in the graph, this is something that shifts and fluctuates quite a bit over the quarters. We don't do any hedging, but we work actively with our natural hedge that we have in the business. So it will continue to fluctuate. We do what we can to limit the impact. Next up we have depreciation and amortization. Also here we have a decrease of 1.8 percentage points in the quarter. Two factors mainly driving this. Last year in Q3 we had some overlapping rent costs for our old premises and our new warehouse facilities. We are now at the level that we expect to be going forward. And this overlapping double cost was equivalent to one percentage point decrease year on year. And again, then this is also a metric where we see the benefits from the top line growth as we get some operating leverage also with the fixed costs. Summarizing to a solid profitability improvement versus last year, an EBIT margin of 17.8%. at almost 11 percentage point improvement year on year. We improved our gross margin by a strong commercial execution and we managed to leverage the cost base as Topline continued to grow very good. And final remark on the EBIT, last year we also had some non-recurring costs as mentioned for the move as well as some overlapping rental costs which also supported the year-on-year improvement. Continuing into our balance sheet and inventory more specifically, as we enter our peak period of the year, we have increased inventory value slightly, and this is mainly to ensure the availability of our top sellers for the peak sales period. Even though we have increased, we still believe that the shape of the inventory is good and that we're well suited for the peak period. And on the right hand side of the slide, you can see that despite the increase, we are still well within our target range of inventory in relation to latest 12 months of sales. So overall, a good inventory position going into the peak season. And then to conclude our cash flow, starting with the cash flow from operating activities to the top left, it improved slightly versus last year, amounting to almost 41 million SEK. starting from a higher EBITDA, but then largely being absorbed by a higher increase in our working capital year to date. Cash flow from our investing activities are now back to a more normalized level versus last year, when we had quite, for us at least, significant investments into the warehouse. And this summarizes to a strong cash position when we exit the quarter of 167 million SEK when we enter into the peak season. And with that, I will leave it back to you, Ebba, to conclude.