RVRC Holding AB (publ)

Welcome to the Revolution Race Q420 and 2526 presentation. 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 CEO Paul Fishbein and CFO Jesper Ahm. Please go ahead.

Thank you operator and good morning everyone and welcome to this conference call where we will address the report for the fourth quarter and also the full financial year 2025 and 2026. Our financial year starts 1st of July and ends 30th of June so Q4 covers the period from April 1st to June 30th. My name is Paul Fishbein and I am the CEO of Revolution Race. And joining me today for this conference call, I have the company CFO Jesper Alm. Before we begin and talk about the fourth quarter, I would like to, of course, mention also the important event that took place shortly after the end of the financial year. In early July, we announced the acquisition of I Can I Will. And I'm very pleased that we, through the acquisition of I Can I Will, are taking an important next step with this first acquisition. It is an important next step of the development of RVRC Holding as a group and actually marks the beginning of an exciting new chapter for us as a group. And I will return to the acquisition and the rationale behind it later in this presentation. But first, for those of you who are new to the Revolution Race story, Let me start with an overview of the Revolution Race brand and our business model. Revolution Race is an international outdoor brand offering outdoor products, mainly clothing, but also shoes, bags, and other outdoor products. Everything started with pants, and that category is still the largest product category. We operate with a D2C business model, meaning that we skip the middlemen and sell our products directly to our customers. We do this mainly via our own website and with our D2C business model. We can secure a competitive offering and at the same time maintain industry leading margins. As a digital player, our brand is very much built together with our community on social media. And today we have 2.5 million followers and almost 850,000 reviews on our site. Revolution Race was founded in 2013 and launched in 2014. And we have been listed on Nasdaq Stockholm since 2021. Moving on to this picture, I think illustrates our international presence. We have customers in around 40 countries and 19 localized webshops. However, we focus our efforts in 10 countries in Europe and also operate three physical stores in Sweden. We design all our products in-house and work together with more than 25 suppliers for the production in Asia. Now let's take a look at the performance and our net sales development. We conclude the full financial year of 2025-26 with continued growth and very solid profitability. Net sales for the full year amounted to a little bit more than 2 billion Swedish krona, resulting in sales growth of 8% in local currencies compared to last year. When we look at market data, we see that the market is weak. So despite uncertain market conditions, We increased sales and continue to gain market share in several key markets. Net sales in the fourth quarter amounted to 414 million Swedish krona corresponding to growth of 3% in local currencies compared to the same quarter last year. and we clearly aim for higher growth number but given the uncertain market environment we continue to grow and strengthen our position in several important markets and in fact it is clear that in some important markets our sales is actually performing very well. So let's have a look at our net sales development by region, because looking at the financial year as a whole, sales increased in all regions. DAX grew by 10% in local currencies, the Nordics grew by 9%, and the rest of the world region grew by 1%. But if we exclude North America, sales in the rest of the world region would have increased 6% in local currencies. While then total sales across all markets would have increased by 9%. Sales in the United States, they were high in the previous financial year and fairly high and have since then been negatively affected by the changing market conditions. In the fourth quarter, sales in the Nordics increased by 7% in local currencies and also in Swedish krona. What is interesting is that Sweden, we saw the highest growth there in Sweden with 12%. And I think this is a good example of strong performance in a mature market. particularly as we have seen reports such as Sport Index reported a 4% decline in sales of outdoor clothing during the same period. So this clearly indicates that we continue to gain market share. In DACH sales increased by 3% in local currencies and it was Austria and Switzerland that continued to perform well with double-digit growth in both markets. But we must also mention Germany where we note a weak consumer sentiment. And despite the challenging market, we continue to grow and market share and believe that we are strengthening our position in our largest market, even if we aim for more. And in the rest of the world region, sales decreased by 3% in local currencies in the quarter, but excluding North America, sales in the region instead would have increased by 2% and total sales for the company, 4%. if we look closer on For quarter, we continue to demonstrate our ability also to combine the growth with high profitability. EBIT amounted to 66 million Swedish krona, corresponds to an EBIT margin of 15.9%, and the gross margin improved to 72.2. During the quarter, we worked on some IT projects, for example, a new product information management system. And during the quarter, we also opened a store in Haparanda in North Sweden on the borders of Finland. And we can say that that is developing very well. We end the quarter and remain a strong financial position with inventory of 520 million SEK and the net cash position of 313 million. And also on top of that, an available credit facility of 600 million SEK at the end of this quarter. And if we summarize the full financial year, adjusted EBIT amounted to 425 million Swedish krona. That corresponds to an adjusted EBIT margin of 21%. And that confirms our continued industry-leading profitability. And of course, this is very strong and something we are also very proud of. During the year, we strengthened our operating platform. We completed the relocation of our Nordic Warehouse operations to a modern automated logistics center. And we also continued to develop our physical retail presence selectively, opening a brand store in Stockholm and also the store in the fourth quarter in Haparanda. And as I mentioned, the Haparanda store has performed very well. very well and as I also mentioned we worked on some IT projects during the year especially in the fourth quarter so our result is strong and our financial position remains strong therefore we can conclude the financial year 2025 and 2026 and the board of directors proposes a dividend of 1.5 Swedish krona per share and this proposal is in line with our dividend policy and we are happy to be able to continue to grow the dividend again. So even if this report should focus on the Q4 numbers, I want to talk a little bit about the acquisition of I Can, I Will that we actually announced in July. And I am very pleased that we, through the acquisition of I Can, I Will, are taking an important next step in the development of RVRC Holding as a group. We have always had a disciplined approach to capital allocation and we will continue to have that. We will continue to have strong focus on organically developed revolutionaries but have for some time considered adding M&A as a capital efficient complement to our growth strategy. And if we look at the transaction, RVRC Holding is acquiring 90.1% of ICANA Will. The initial purchase price corresponds to a valuation of 700 million Swedish krona in enterprise value for 100% of the company. There is potential additional consideration of up to 175 million Swedish krona. payable in two tranches and they are based on performance during 2026 and 2027. This initial purchase implies an EV-EBIT multiple of 9.5 based on the LTM data as per June 26 and if we assume full payment of the additional considerations the total purchase price will correspond to an EV-EBIT multiple of 7.8 times. And the acquisition is financed through a combination of existing cash, available credit facilities, and the transfer of our treasury shares. Now let's take a closer look at the I Can I Will company. And I Can I Will is a Swedish sportswear brand founded in 2012, headquartered in Stockholm in Sweden. The products are primarily sold through a digital DTC first model like Revolution Race and has, like Revolution Race, also built its brand together with its community, having now 620,000 social media followers and more than 230,000 product reviews with a rating of 4.5 out of 5. On the numbers, LTM sales per end of June was at 470 million Swedish krona. Growth is strong. Q4 sales are expected to reach 124 million representing a growth of approximately 30%, which was also roughly the growth in Q3. Margins have also improved with this growth. Adjusted EBIT reached 73 million for the full year, 25-26. That's up from 52 million the year before. And that's an EBIT margin for the full year of approximately 15.6%. And that's a step up from past numbers. And in Q4, the EBIT margin was at 16.3%, which is also higher than the same period last year. Looking at the geographic mix, the Nordics account for over 80% of the sales, with Germany and the rest of Europe representing the remaining. However, those markets are growing faster. What is interesting to note is the potential in Germany and Dach as Germany grew over 50% in the calendar Q1 26. By channel iCanIWill is at around 87% DTC and 13% wholesale and by gender 82% of sales are to female customers and 14% to male customers. As part of our M&A strategy, we have developed an M&A framework and we can clearly see that Icana Meal meets all our M&A criteria. Icana Meal is clearly a digital first D2C company with a strong community. Growth-wise, it meets our target and we see that the company grew around 30% in the last two quarters respectively. Profitability is good and size-wise, Aikana Wheel is right in the middle of our size range. The product category within YUM and training apparel with functional materials is a natural adjacency for our assortment and Valuation wise at acquisition the EBIT multiple as I mentioned is 9.5 times but falls to 7.8 times assuming the full additional purchase price is paid. Operationally it shares very similar characteristics to Revolution Race. It's e-commerce, it's asset light, and it's cash generative. And this is something that we truly understand. And lastly, we know many of the people at Aikana Wheel and understand that the cultural fit is there. Our integration philosophy is a decentralized philosophy with a focus on best practice sharing rather than full operational integration. This picture illustrates that the companies and brands will operate separately but have the same owner in an RVRC holding. We believe this approach preserves entrepreneurial drive and the brand's identities and offering and local market knowledge, both within Revolution Race and I Can, I Will. And it also causes less disruption to management, employees, customers and partners. The structure is also an attractive proposition for the ICANA Will management who seek continuity and we of course see a strong signal of commitment that management want to stay and continue to build ICANA Will but also become an important shareholder to RVRC and thus believe in our joint future. So with that I would like to hand over to our CFO Jesper Alm who will take us through the financial year for the fourth quarter and for the full year. So Jesper please go ahead.

Thank you Paul and good morning everyone. I will briefly cover the financial performance during the fourth quarter and the full financial year 2025-2026. Gross profit amounted to 299 million SEK for the quarter compared to 281 a year ago. And this equals a gross margin of 72.2% compared to 69.4 last year. The increase in gross margin is mainly attributable to currency effects on goods for resale. So in essence, this is the weaker USD for purchasing, only partly offset by a weaker euro. And both currencies versus the reporting currency being SEC. Gross profits for the full year increased to 1.4 billion SEK compared to 1.3 billion last year. And this equals a gross margin of 70.5 compared to 69.8% last year. Personal expenses are higher compared to the same quarter last year and the number of full-time equivalents was 147 compared to 132 last year. The increase includes staff in our retail operations and now that is three stores in total. Other external expenses were 191 million compared to 183 a year ago. As a share of net sales of 42%, the number was higher than last year, and this is partly due to investments in IT and marketing. EBIT for the quarter amounted to 66 million SEK compared to 63 million a year ago and this translates to an EBIT margin of 15.9% compared to the 15.4 a year ago. Adjusted EBIT for the financial year amounted to 425 million compared to the 383 a year ago and the current The adjusted EBIT margin then is 21% compared to just below 20% last year. Our financial position is strong. We had a solid net cash position of 328 million at quarter end or a net cash position of 313 million when adjusting for lease liabilities of 15 million SEK. The credit facility of 600 million SEK remains available and undrawn as of June 30th. Cash flow from operating activities came in at 31 million in Q4 compared to 85 million for the same period last year. The lower cash flow compared to the corresponding quarter last year is mainly attributable to ongoing inventory build-up and changes in operating receivables. The credit facility of SEK 600 million was undrawn at the end of the quarter, but following year-end, the revolving credit facility was increased by SEK 300 million to a new total of SEK 900 million. And further, following the acquisition of ICANN iWILL at the beginning of July, we entered into a net debt position. The inventory amounts to 520 million of which 336 million was goods in warehouse being sellable compared to 439 million a year ago. So inventory has increased by 111 million compared to Q3 and that is driven by an increase in goods in transit. Networking capital decreased to 172 million compared to 262 million a year ago. Changes in networking capital is mainly attributable to increase in accounts payable. We aim to distribute 40 to 60 percent of net profits annually in accordance with the dividend policy. And as a result of the company's continued growth and strong financial position, the board proposes a dividend of 1.5 SEC per share. This represents a dividend growth of 11% compared to the SEC 135 per share paid out last year. The proposed dividend amounts to approximately 161 million in total representing a payout ratio of around 48%. and I note that we over the five years since the IPO and the first dividend in 21 have more than doubled the dividend per share. In addition to the dividends paid out or now proposed during the quarter we continued repurchasing shares in line with the AGM mandate and the total amount repurchased was 68 million SEK during the quarter. And at the end of the financial year, we held 2.8 million treasury shares, of which 2.6 approximately were used as consideration shares in the acquisition of ICANN iWILL. So treasury shares remaining after the acquisition is approximately 200,000. And with that, it's over and out for me, Paul.

Thank you, Jesper. So to sum things up, through the acquisition of Aikana Wheel, we are taking an important next step in the development of RVRC Holding. Together, the group now has a base with net sales of approximately 2.5 billion Swedish kronor and an adjusted EBIT of close to 500 million Swedish kronor. ICANA will continue to operate as an independent brand with its existing management and its own identity. At the same time, our experience of geographical expansion provides good opportunities to support ICANAWheel's continued growth. particularly in the DACH region. And Aikana Wheel will be consolidated from the acquisition early in July. Also turning to inventory, our saleable inventory was lower than at the corresponding point last year, but while the value of goods in transit was higher. Now inbound deliveries have increased since the end of the quarter. And we believe that our inventory is now better positioned ahead of the important autumn and winter season. Finally, also a quick word on current trading compared to last year. It should be noted that the strong sales growth of 15% reported for the first quarter last year was partly supported by outlet sales and also favorable weather in Germany. We see market conditions, particularly in Germany. They were weak in Q4. It looks like it will continue to be challenging for some time. But despite this, we note that RVRC Holding in July continued to deliver performance sales growth in local currencies. And that concludes our comments on the results. Before we finish, I would like to thank everyone who contributed during the quarter and throughout the full financial year. That includes our employees, customers, partners, shareholders. And I would also like to take the opportunity to warmly welcome the I Can, I Will team to RVRC Holding. Together, we are now entering an exciting new chapter. And with that, We are now happy to answer questions, so therefore I ask the operator, do we have any questions?

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Benjamin Wahlstedt from ABGSC. Please go ahead.

Good morning. I have a few questions. So first of all, I was wondering if you could share your view on the German market growth in the quarter, please. I understand this is a difficult task.

Sorry, I could not hear you properly. Can you repeat the question, please?

I will. So I was wondering if you could share your view on the German market growth in the quarter, please.

Yeah we have seen, first of all we have seen industry colleagues that I'm sure you have seen also that have reported their quarterly results and also disclosed the performance in Germany and from what we can see it looks like the market and what we can read from those reports is that the market seems to be challenging and weak and and we can see that we are outperforming them and thus increasing our market shares. We also have access to other kind of data, for example, from partners like Google, where we see that our traffic and the sort of share of brand search for our brand compared to the total market, that it looks like the market is also weak based on that number and that we increase market shares when it comes to searches for our brand. And then, of course, we also read what other people are reading when it comes to different kind of macro reports. And note that Germany, the consumer sentiment in Germany still seems to be challenging.

All right. And if you could distill that I mean, is it possible to give a number for market growth? Just your best guess is probably better than... Best guess is negative. All right. I was wondering as well if you could give us a bit more color on the gross margin bridge. What share of the improvement is FX driven, for example?

The majority of the improvement is FX-driven, and then we obviously always have the components of market mix and product mix, but both the purchasing currency, EURUSD, relative the primary sales currency, EUR, developed positively in the quarter, and as we've stated before, we have a delay in the effect of the purchasing price. And also we comment on outlet sales where we've seen lower outlet sales, which means that is kind of a market mix where we have slightly improved gross margins as well.

Yes, thank you. I was wondering as well if you could elaborate on the temporarily higher IT costs in the quarter. Any comment on the magnitude specifically is helpful, both for Q4 and Q1, although I suspect you will be reluctant to comment on Q1.

Yeah, so to start with, these are temporary. It's a project. The project has been focused on Q4. The costs are below 5 million. They will continue into Q1 on a smaller scale for completion. So the cost in Q1 will be lower than what we saw in Q4.

And I can add to that that we have chosen to implement, for example, a product information system to implement that now so that we are ready and don't have to do a big big deployments when we are right in the middle of our peak season. So even if it has a bigger impact on a smaller quarter such as Q1 and Q4, we believe it was the right thing to do it now so that we are ready and don't have to deploy big projects during a peak season.

Perfect. And finally from me then, I was wondering about the personnel cost increase. I understand that adding in-store staff drives personnel costs in absolute terms. However, the annualized cost per employee is up some 10% as well, and I would imagine retail staff has a dilutive mix effect on the cost per head. So any additional color on personnel costs would be helpful. Thank you.

Yes, you mentioned we have added headcounts due to the opening of stores. That is clear. And there is, you could say, a temporary effect also on staff when it comes to some IT-related projects. And we don't expect... And then, of course, there is a salary review that always takes place in May. that has been in line with the sort of market. But we don't expect staff costs to go up from here. It should be now on a stable level.

All right. Is it possible for you to share where these increased IT costs landed or the split between external lockbacks and personnel costs? Just roughly.

Both the project or external costs and then we've and also some extent consultants related to that that is external costs and staff cost is we've seen a ramp up of IT staff over a longer time period but the projects are mainly external.

All right perfect I'll get back into the queue.

Thank you.

The next question comes from Emanuel Jansen from Danske Bank. Please go ahead.

Good morning, Paul and Jesper. I hope you can hear me. I was wondering if we could continue maybe on the sales trend during the quarter. Is it possible to maybe give us some more flavor on the sales trend month by month during the quarter? And I remember the last quarter you mentioned there was a quite of a slowdown in March, specifically in the German market?

Yeah, just on a very high level. May was the strongest month. June was the weakest month.

And did you experience any negative local sales growth in Germany?

Yeah, Germany followed. I mean, Germany has such a big impact on our total number. So May was also the strongest month in Germany and a weaker month in Germany in June compared to last year.

Fair enough, and could you potentially also talk a bit about the other markets, because I assume that the Switzerland and Australia is growing quite well, and also maybe give us some flavor on the UK market, and yeah.

Yeah, as you mentioned, Austria and Switzerland are growing well, double digit and in some cases over 20%. And the Nordic region, especially Sweden, which is a mature market, also continues to show good development and then we have the rest of the world region where it's heavily impacted or that region is impacted by the development in the US where we have deliberately slowed down or basically almost turned off the operations since a year ago and that has a big impact on that region. I think it's It leads to a difference of six, seven percentage points in growth in that region. So US obviously impacts the rest of the world region a lot. So meaning that the rest of that region is growing. And within that region, we have three focus markets that we focus on and that's UK, Netherlands and Poland. And those are developing in line with I would say expectations however one should also note that we on a total level we always try to sort of balance growth with profitability for us profitability is important and As you can see, we are delivering a 21% EBIT margin for the full year. And when a very important and highly profitable market, such as Germany, slows down, that has some sort of indirect impact on how much we can invest in marketing in the rest of the world region, such as UK. But UK is growing.

Yes, it is now live since a couple of weeks ago. So we are slowly, slowly increasing our efforts into the US again.

But it is live. Now we are importing all our products based on Cox value, meaning that we are now back to offering our products on a more competitive level than we could do last year. So yeah, a couple of weeks ago, so now from July, it is live.

In the near term, is it likely, given the comparable base and also the new setup, that it's more reasonable to expect some growth again?

Well, we don't want to guide, but I think it is clear that comps in U.S. are more or less from July this year, quite easy, since we more or less stopped operations in U.S. a year ago. So hopefully we will see impact from that. We know that that we had good interest from US customers before market conditions change. And we have seen also a continued growth in popularity based on followers on, for example, our social media platforms. So, COMPs are easy. We have the new infrastructure in place and we are now slowly increasing our efforts in the US. Can you still hear me, Mon-El?

The next question comes from Victor Hansen from DNB Carnegie. Please go ahead.

Yes, good morning. Hi, Paul and Jesper. A couple of questions from my side. Firstly, you mentioned a higher marketing spend in this report. Was this related to any specific region? Because, for instance, Germany, where you saw low growth, 1% organically, would you say that you overinvested in performance marketing in Germany with a negative effect on ROAS?

There are always two main levers to achieve growth. One is price and campaigns and the other is marketing. And we have a fairly high gross margin, which then also comes with a slightly higher market spend. Have we overinvested? I don't believe that. We, on a daily basis, try to calibrate and have as efficient market spend as possible. But in total, market spend is slightly higher than it was in the comparison quarter.

Our higher gross margin sort of facilitates that we can increase market spend slightly, but it's within the range of our sort of ROAS targets, even if it's a bit higher than last year.

Okay, understood. Next question on I Can, I Will. So the weak consumer sentiment in Germany that you mentioned here today. Could this affect ICANiWin's go-to-market strategy in the DAC region? So perhaps you'll be less aggressive on marketing spend initially due to this weak consumer.

Not really. I think I can. I mean, Germany is such a big market and the sports market is in fact, I don't know, five times, five, ten times bigger than the auto market. And even if the consumer sentiment is a bit slow or weak for the moment, I mean, it is still in line with last year and or slightly down, meaning that there is a lot of opportunities for a new player like I kind of will to actually enter the market. So I could be actually the opposite that this actually sort of leads to opportunities if other players are sort of facing challenges that and especially players who are very geared towards wholesale. I think that that can actually lead to bigger opportunities since ICANiWheel is sort of entering Germany with a very low base, more or less starting from scratch. So being like a disruptor into the market. So it doesn't necessarily mean that it should be negative by ICANiWheel since they are so small for the moment.

Okay, makes sense. I was curious here as a follow-up if you could be a bit more tangible on sales initiatives for I Can I Will in the DAC region in terms of your strategy there as you're starting from close to zero as you mentioned here. Yeah, any easy wins?

I should be a bit careful not to disclose all the magic to our competitors for competitive reasons, but it is clear that we have Since our launch, Revolution Race launched 10 years ago, we have collected experience and we are fairly good at CRM, for example, in Germany. That is something that Revolution Race can share with, I can, I will, for sure. So there are a number of areas where I think our experience and knowledge can be shared with. I can, I will, but should be careful going too deep into that for competitive reasons.

Okay, interesting. I guess we'll have to wait until you report. Yeah, going forward. Perfect. Next question. So we had quite a warm summer here in Europe. Any idea how large of a negative effect this has had on you this quarter Q4?

Yeah, we've looked at... We normally, well we don't speak about weather and temperature so often but it is clear that it has historically had effect on our performance during our Q1 and especially the shift of season where we go from summer to autumn and when we switch from bathing suits or light t-shirts to shell sets, for example. We have noted that in July it has been very warm in Europe. In many parts of Germany, where we look at, for example, the Düsseldorf area, which is our biggest area, we have seen that it is a little bit more than 10% warmer this year. in July and it has continued to be warm also in August compared to last year. If we look at Sweden in fact we've seen the opposite and we will look at temperature statistics in July it looks like in many parts of Sweden it was actually colder this year and we continue to see a good momentum in Sweden so weather especially this time of year has impact fall will come. We are very certain of that. It's a question of when it will come and very warm weather is not favorable for us. And so that is something to bear in mind when you look at comps now that it was very favorable a year ago compared to this year.

Excellent. I have a final question. So how much of your strong Swedish sales growth came from your stores?

Good question. I think I'll have to come back to that. I'm not that fast in math looking at the ESPR here.

They contribute, obviously, but bearing in mind that the main business of the e-comm is the main driver of growth.

Yeah, we see good growth on e-comm for sure. And what is very... promising to see is that during the quarter we actually opened a new store also in Haparanda. And that has been, it has been very promising since that start. That's not the full quarter in Haparanda. That is also maybe something to bear in mind. And last year, one of the stores, they were actually opened during the quarter already. So a full year impact is only the brand store in Kungsgatan, even if the Haparanda store obviously have impact, but not full quarter. And the outlet in Bakkeby was actually opened in April last year. So that is a full comparison.

Thank you very much. That's all for me.

The next question comes from Andreas Lundberg from SEB. Please go ahead.

Yeah, thank you and good morning. I would like to focus on the acquisition actually. Have you weighed any other options or why is this good for RVRC's shareholders with other allocation options? That's my first question.

We have to go back and sort of first look at where we are. We are a very profitable company with good or high cash conversion and a very strong financial position. Our mission is to create shareholder value and we have done that through dividend and also buyback and we have thought of other components to drive value for some time. M&A is a an obvious alternative to that and we actually set an M&A strategy some time ago and when we did that we also decided on a couple of M&A criteria that needs to be fulfilled in order to move forward. We've always been very disciplined with our capital allocation, and there is quite a lot of criteria that we have set, and those include that it should be a category that is close to what we sell adjacent. It should be high growth potential, good profitability. It should be a company that in size is not too small, but not too big so that we can manage it. Valuation is of course important, but what is also important is the operational model. It needs to be, it should be a company where the most priority of the operations is a D2C business and because that is an operational model that we understand and then culture is important and then we know the people, I've known the people at I Can I Will for many years and when we were we were told that that company is in sort of play or for sale we we started to engage in concrete discussions but we believe that this could be a very efficient way of overtime generate value because what is also important is what we can bring to the table and and how we can help ICANiWheel and we discussed that recently. But I think that also goes two ways. They have a lot of knowledge and competence that we can also maybe capitalize on because they have good people. So there are many things that I think really favors moving forward with the acquisition of ICANiWheel.

Cool. You talked about the decentralization thinking and they will basically be left alone more or less, but are there any potential synergies or things that you can share on the cost side?

Yes, I mean, we are not looking at bigger integration projects. We want to keep the entrepreneurial drive. We want to keep the brand identities. I think it's important to reduce heavy integration projects that could disrupt operations. But having said that, there are synergies or call it low hanging fruit that we want to realize directly. One example is, for example, negotiate with joint higher volumes within areas such as the logistics. It can be payment costs and those kind of sort of easy easy wins. It may take some time because some of the contracts that the companies are in may sort of expire in a year or so. But scale is important. Volumes are important and has impact on what kind of sort of prices and deals that you can make on a long term basis. So there are definitely synergies without moving into heavy integration projects such as joint IT platforms or joint logistics platforms because those will take time but they are also risky and we don't want to risk operational disruptions.

All right and how does the air supply chain or backbone look like today?

So they produce most of the products in Asia. It's been shipped to the warehouse in Sweden. In fact, that warehouse is based in Borås. It's a It's operated by a third-party partner using an out-of-store solution, so it's highly automated, very similar to what we have, an out-of-store solution. However, our warehouse is based in Stockholm and they are based in Borås, and from there they can ship to all the countries in Europe.

And did you say that B2B for them is 13%? Yes, that's correct.

1.3. 13%.

Was that more important in the early days of this company or how...

Yes, that is how the company was actually started in the beginning. It was more or less a full wholesale based company. And there was a switch when the new CEO came on board 2018-19, sort of changing this into a more of a D2C company. And now we're accounting for 87% of the business. But yeah. Cool.

And how does the cash conversion look like? Are there any investment needs, working capital needs that you would like to mention?

They have a very similar profile to Revolution Rates. Very asset-light, no big investments, no infrastructure. It's third parties and it's external production. So the cash conversion profile is very similar to Revolution Rates.

Thank you very much. That's all for me.

Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you operator. Before we wrap up let's see if there are any questions online and I don't know if we had a technical disruption with one of the guests here but I guess we'll have to take him offline if you have more questions.

We have received questions from Germany and these have been answered in the Q&A and the presentation. It's on IT, weather and AOV. So that has been covered. So we then have no further questions from

Okay, thank you. So with that last comment, thank you all for joining us today and for your interest in our journey. And I may also remind you that the report for our first quarter, we have also announced that today, a new date that that will be announced on November 19th. So with that, thank you and goodbye.