Thank you and welcome to the Q3 reporting for Matas Group. It's really been a quarter with what we call some mixed results, a record sales in in in third quarter in Matas and some challenges in in our Kicks markets, which which I'll take you through in in some more details.

Let me just take you we we grew the third quarter 1.8% year-on-year from a currency-neutral perspective, which is equivalent to 3.1% as we have reported in in our Q3 report. That also equates to a 16.7% EBITDA margin, adjusted for FX 17.2%, which is slightly below last year, but but still in a quarter where we were managing slightly challenging sales, but managed that with with some good and strong cost control.

Overall, a a a quarter coming out supporting the the updated guidance we gave early in in January looking at 3% to 4% growth for the year, 14% to 14.5% EBITDA margin, and CapEx within within our our guidance between 3% to 4% of revenues. I also think it's it's been a quarter where we've seen, and I'll come back to some more details on that, where our two big investments, both the Matas and Kicks logistics centers, really have shown the impact on on our P&L.

Going into the two different groups, looking at Matas, 5.5% growth that includes our subsidiaries, which also had a a a strong Q3, but Matas standalone 4.8% growth. A gross margin slightly below last year, which is also reflecting some of the dynamics in the quarter for Matas, which we'll come back to in a little while.

Kicks, where we've been challenged this quarter, minus 3.8%, 3.2% excluding Skincity, and I know we talked about Skincity and that will soon be out of the comparables. On the gross margin in Kicks, you'll see an improvement compared to last year if we adjust for for the FX headwind so which we've had in the quarter and which we had throughout the year.

That leads into to the group numbers as I as I reported previously. Moving into into our strategy, really, I think one key key thing to take away is the strategy we set out, Win the Nordics for the Matas Group, remains intact.

It's still our strategy, and it's still our focus as we move forward. It is still focusing on the three different areas: more for you, closer to you, and stronger for you.

We are keeping the momentum in these in these areas. With the with the results we saw coming out of Q3, we have now decided to accelerate our plans, and some of the details behind that acceleration I'll come back to in a little while.

In terms of more for you, we are we're focusing on continuing providing more choices, more brands to our consumers. We see especially strong performance within haircare, sport, and wellness, and we'll continue continue our assortment expansion as as we move forward.

In terms of our in-house brand, just want to highlight one one thing is really the growth of our in-house brand for this quarter, 10.9%. If we look especially on Sweden, where we launched Nilens Jord in September, we relaunched BeautyAct, we're looking at more than 30% growth in the quarter, which is a very strong indication of of the value of our in-house brands.

It's also showing that providing different assortment with different prices, not within the high-end, actually recognize with the with the consumers we have across Norway, Sweden, and Finland. Our online business continued to grow, 10% in in Matas, struggling a little bit in in Kicks with 2.5% growth, but I'll come back to some more details on that.

We continue to open more stores and providing, a better network for for our our consumers. Last but not least, and that is also coming through in in the Q3 numbers, is really around our two automated facilities and and our track on on our synergies, and as we announced earlier in the year, looking at the synergies for next year, which we're investing in right now, they are on track and and will be materializing as we move forward.

Just quickly on on our new brands and and and the assortment, we continued with the launch of new brands, and and specifically when we look at at the different markets, you can see also in in Kicks, launching the the Body Shop, providing more choices also in the mass beauty area. We launched 11 brands in Kicks, 22 new brands in in Matas in in the quarter.

Our membership club continues to provide very strong momentum for our business. As as as we mentioned last time we were together, we just launched the e-commerce platform across the Nordics, we now are operating on the same platform for all markets, which has also allowed, and and it's not part of this presentation, but just as the last piece, also part of our acceleration, we we now launched our Kicks app.

It was just launched two days ago, now providing our consumers in Norway, Sweden, and Finland with the opportunity to to do their purchases on the app as well. That's just a a an acceleration of the plans that we already put forward in in our Win the Nordics.

Then on stores, as we just said, four new stores in Kicks: two in Norway, one in Finland, and one in Sweden, really providing a a a broader footprint also from our stores' perspective. Our two logistics centers, this is really something we are very proud of.

We launched Kicks two years ago, Matas almost a year ago or actually in April this year. We've now had the first year with two automatic automated centers providing faster deliveries at a lower cost, and you'll also see that reflected in in the financial numbers.

We're very proud of getting through, the second high season for Kicks and the first high season for for Matas and our new facility, really providing a very strong performance. That is also reflected, the the the time from a Black Week, which normally had a tail of of deliveries, we actually completed that very fast, and it also made sure that our our customers got their their purchases very fast.

Very strong performance from our two logistics centers. Now coming back to to the acceleration, and and to provide a little context on that, if we look at our two two banners, if you look at Matas, you'll see we have a split in terms of our product portfolio of of roughly 1/3 in high-end, we have 1/3 in mass beauty, and 1/3 in health and well-being.

A a good split to provide choices for our consumers on all different elements. When we look at Kicks, we are a more high-end business.

We've known that from the beginning, and that's part of the strategy to broaden our offering to the consumers in Norway, Sweden, and Finland. Currently, we are still 76% and 24% mass beauty, predominantly a high-end business.

When we then have been through a a quarter of a downtrading from high-end, you can see basically last year we grew the business around 10% in high-end. This year, high-end is declining.

That has an impact on both Matas and on Kicks. As Kicks is predominantly in the high-end, of course, the impact has been more severe, and that's that's the outcome basically our performance in in Q3.

What we are doing right now, and that's really going into to what we also mentioned earlier, is the acceleration plan, specifically focusing on Kicks, but also has, of course, some impact as as we share best knowledge and we share learnings across, it also will have an impact on on Matas. What we're looking at is basically marketing efficiency.

This is a lot to do with our campaigns, how we go to market, the the good offers we provide to our our consumers. It's about pricing, making sure that we have the right pricing in the market.

That doesn't mean that we need to go out and price fight. I think the the discipline we had in Q3 focusing on delivering the right pricing to the market, delivering the right, gift presents, Christmas packages, etc., etc.

to consumers is the right strategy. We did not go into a price war, and this does not mean a price war either.

We're looking at assortment, and of course, that will will will help us to balance the split in Kicks from a 75/24 into into a more balanced assortment and pricing. Last but not least, we're also looking at our in-store productivity, basically sharing best practices from Matas to Kicks, from Kicks to Matas in terms of how do we get more impact in our stores, how do we provide a even better service to to our customers.

We have very strong scores from our customers when they when they do business with us, when they shop online, when they shop in our stores, and the way that we advise and give them, the guidance in their choices. Very strong consumer acceptance of of what we're doing.

We just want to do even more, and that's what we're looking at. We do all that, and I think Q3 also showed that, we're doing all this, but still keeping a very clear look at our cost base and keeping a very strong cost discipline in our group.

That was more overall. Let's let's move in to to the more hardcore numbers, and when we look at at the performance for this for this quarter, as I as already mentioned, we have 4.8% growth in Matas, Kicks a negative of 3.2% excluding Skincity, and then we have others growing 12.4%.

Very strong growth also coming from our subsidiaries. When we look at the channels, stores is is flat.

The growth we're getting is is coming from e-com. This is also a reflection of of the challenges that we just talked about in terms of our business in in the Kicks markets.

Wholesale growing very nicely, which is a reflection of our Web Sundhed business. Overall, as just mentioned, 1.8% growth for the group in in the quarter, 3.1% reported.

Going into the gross margin, and here you will also see a a a little mixed outcome from the quarter. If we start with Matas, a gross margin going down.

This has is basically linked into to a couple of things. One thing is the the product mix.

As you saw, high-end was also impacted in in Matas, and and different margins on the different categories where high-end is is declining. In addition to that, a more centralized purchases around the Black Week, even higher purchases.

When we then have a very fast delivery, that means that every all orders, all revenues related to the Black Week in November is is included in November, whereas last year we still had a a tail of deliveries coming into December and also impacting December. A little bit of timing, but predominantly linked into to the more concentrated purchases within within the in the Black Week and in the month of November.

When we look at Sweden, we have adjusted for FX, and I think that's the comparable number, we have an improvement of the gross margin. That is linked into the fact that a lot of the activities that we ran in Sweden and the campaigns were impacted by the pricing level that some of our competitors had in the market, meaning that our campaigns did not have the amount of sales as we would normally see.

We instead had a a a good performance in terms of our ordinary sales. We had a Christmas where we were delivered a lot of Christmas packages, gift packages, and had more normal sales in December, which basically ended up having a mix in in for for the quarter with with more normal sales and less impact from from from the campaigns, which drives the which drives the gross margin above last year.

I just want to to emphasize that we we had a a very strong discipline in the way we went to market in terms of our campaigns, in terms of the way they were executed, and and we did not we decided not to go into to into the very, very low pricing as we saw in the market. When we look at our costs, and this is really where we look at a a business where we decline costs half a percent compared to last year, despite that we have reported sales growth of 3.1%.

What the key key element there is really strong focusing on the way that we manage the business on an ongoing basis. We have this year we had the the two new facilities operating, we had MLC, KLC fully automated in in operation throughout the quarter.

As I just mentioned, a a very strong execution in those two facilities. In terms of our salary, overall we we're managing that with in our stores to make sure that we have the right level of personnel in place to make sure we provide the very strong service, very good service for our consumers, but also taking into account the movements we see on revenues.

We manage to keep our our cost in line with revenues and actually, as you can see, declining, which shows the impact of having lower salary costs. Does that mean we didn't invest in the market?

No, we invested, and we invested more marketing costs versus previously, also supporting the the customer traffic and to to protect basically our competitiveness, especially in a quarter where where things went a little bit hard on on pricing. We we kept we kept the the focus, we kept the discipline, and I think, that is reflected in in in our cost base and the way that we we managed the results for the quarter.

Net net, we we ended up in a quarter where we delivered 16.7% EBITDA compared to to slightly down compared to last year, adjusting for the for the currency headwind. Core online growth: 5%, not to the levels we've seen in previous quarters, but taking into the account also what happened in in our Kicks markets.

A mix on gross margin as I just went through, and then a I think a cost base which we managed throughout the quarter very successfully. Moving in from the P&L into our balance sheet, and and I think we talked about this quarter last quarter as well, is our inventories.

When we look at the right side, you'll compare the inventories to last year, and we started this year being in in a higher place. We're still in a higher place, but if you look in the quarter, we actually decreased the inventories with almost 300 million in the quarter.

Part of our plans on on focusing on our inventories, getting the inventories down, is progressing as planned, although comparing to last year, we we're still still above. We also have significantly higher sales, of course, when we look at the full year.

Looking at our our cash flow and also looking at our, working capital, you'll see in in this quarter compared to last year slightly higher working capital, which is, of course, linked into our inventories and and and payables. As we lower our inventories, we're not buying that much, and thereby we we get less payables, and that is basically what is reflected in this quarter.

We're spending less on CapEx, as last year we had the two MLC or we had Matas MLC the last payments, which basically generates a a free cash flow around 400 million for the quarter. Then we invested in the special items as announced earlier in the year, which is all linked to the synergies that will be released next year.

That brings me to to the gearing for for our for our group, which at end of Q3 is 2.9, of course, impacted by by the movements in our working capital and also impacted by the fact that, going into a quarter like this and not hitting full expectations on on our top line, that will trickle down also in in our working capital and so forth. Long-term remains unchanged between 2 to 3.

We're currently in the high end, and and of course, we'll be focusing in the on this as we move forward, both from a gearing level, but also from a working capital perspective. That brings me to to the last piece.

We we announced in the beginning of January our guidance for this year: 3% to 4% and an EBITDA margin of 14% to 14.5%. We are we're sticking to that.

We we feel comfortable in delivering inside that guidance as as as we have now announced the Q3 numbers. With that, I would hand over to the operator for for any questions.

Hi, Per. Good morning, and thank you for taking my question.

First one is on the Kicks deceleration and your accelerated plans to broaden the Kicks offer. As you alluded to, fairly significant deceleration in the quarter in Kicks, and reading through peer reports to be fair, this seems to be a general market issue and also seems to be impacted by a more aggressive pricing strategy from one of your peers in particular.

Now you talk to the efforts to accelerate the mass market offering in Kicks. Can you just help me understand what are you exactly doing different from what you have been doing all the way since summer '24 when you launched the Win the Nordics strategy first time?

Because to my knowledge, this focus on mass market has been part of the strategy all the way along. That'll be my first question.

Hi, Sebastian. I think the different approach that we're taking right now in terms of what we just announced in terms of acceleration, one of the elements is the assortment.

I think the learnings that we're getting out of Q3 is really that to be even more relevant to our consumers across the Kicks markets, we need to be able to provide a wider assortment. We already have that plan, and I think the acceleration is even more focus on the speed and how we can accelerate that introduction of new brands and different price levels within each of the categories.

That's basically what we're looking at. As you also saw in another point of the acceleration was around in-store.

How do we make sure that we from a store perspective will also be able to provide a even wider assortment to our consumers. When we say acceleration, it's exactly taking the plans that we already have and then trying to push them even faster forward as we move into first quarter, but also moving into the next financial year.

Okay. That makes sense.

Following up on that, part of the efforts as you alluded to is around the pricing. You said previously or earlier on the call here that your pricing was right in the quarter, that it was the right strategy to remain disciplined despite the fact that some of your peers are appearing very aggressive and despite the fact that it appears from the growth levels here in the quarter that you're losing market shares.

Was the pricing, or is the current pricing right in Kicks? Or is it also fair to assume that your pricing efforts are going to change and so is your gross margin performance in the Kicks banner going forward?

I think I would put it this way, Sebastian, that a lot of things moved around in Q3. I think we were looking at all the activities in the market, also looking at our own plans, looking at everything we've done in Q3.

We had a pricing in the market, and I think a lot of subsequent announcement have proven that that has been going too far in terms of providing too aggressive pricing. We did not follow.

That was a deliberate choice. On the other hand, as you saw in Q3 from a Kicks perspective is really our share of normal sales, which have a good indication on the consumers is actually still connected to Kicks and is still have a preference for Kicks is that we had a higher normal sales than what we usually see.

I think that is what we would like to accelerate, that connection we have with the consumers as we move forward into the next quarter and into the next financial year. That how do we then provide even more choices to our consumers under different categories and within both high-end and mass beauty.

To your point, does that mean lower prices? I think it means the right prices, the right products, and then we'll manage the margins and our cost base according to that.

Okay. Super clear.

Then another question, I'll jump back in the queue, just on the balance sheet here. On slide 19, you allude to increased near-term focus on deleveraging despite you being within the mid-term range of 2 to 3 times EBITDA.

I'm just wondering what number are we steering for here, and where does this leave the prospect of further near-term buybacks?

I think from an overall gearing perspective, we've set out the guideline between 2 and 3, and during the year, we've been slightly above the 3 for a short period. I think our focus will continue to be at staying within that guideline.

Having said that, we are completed with all the big investments in our logistics centers, and when you look at our cash flow also for the coming year, from the coming periods, that will eventually mean an improvement of our gearing as we continuously grow the business. In terms of share buyback and impact, that's something that will come out once we've closed the year and we've had that discussion with our board.

Not much more to say on the buyback for present.

Very clear. Thank you so much, Per.

Thank you.

Hi, it's Yiwei from SEB. Thank you for taking my question.

I have two follow-up question here. Also on Kicks, Per, I can understand your answers regarding sort of your strategy want to grow the product assortments and want to go down to the mass beauty segments and more relevant in Sweden.

I also understand that the market and also the mass beauty segment the competition is very intense. What makes you confident that you can drive a profitable growth in this segment?

Is it also fair to assume that going forward the balance between sort of the price discipline and also the profitability would be changing towards more growth focused than the margin? Now I'll do the next question later.

I think a lot of good questions in the same. Let me try and give you my perspective on it.

I think when we look at our strategy, Win the Nordics, it's still the same strategy we have. Part of that strategy was to provide more choices in terms of brands, products in different categories on different levels, both within high-end and mass.

That's the journey we are still on. What we're doing right now is we're accelerating that.

Then you can say from a Q3 where we see a lot of our loyal customers actually continuing to stay with our business in Kicks, in Matas, and the huge loyalty club we have of more than 6 million members, by providing more choices to our membership club within the different categories and within high-end and mass, we have a strong belief that that's the right way forward. We also believe that being able to provide the choices, being able to provide the big network of stores, and being able to provide the service and guidance to all our customers, as well as having our online business, and that omnichannel, we have a strong belief that is what's going to be the winning formula as we move in to next year as well.

Then I also just want to say, we had a Q3 in so many ways was so different than what we've seen before. I think it's very important that we stay on the path, we stay on our strategy, and we stay focused on the plans that we have.

Right now, we're trying to accelerate those to get even more impact in a faster speed, and that will be the focus as we move forward. Does this change the discipline in terms of margin versus growth?

We're a growth business. We'll continue to be looking at how do we grow the business, how do we take share in the market, and that will not change.

We will also have a strong discipline in terms of how we manage our financials, how we manage our costs, but I see those two things go very well hand-in-hand.

Okay. Great.

Very clear. Then next question also follow-up question on the pricing behaviors with your competitor in Sweden.

Do you see this is a new norm in the market, or you think this would be a temporary issue?

It's not for me to make a conclusion on our competitors, I think. I would be surprised if this is a new normal.

I think this was a quarter that for whatever reason ended up as it did. I don't think we'll see the same impact as we move forward.

Okay. If I may ask one more question here, very quick question.

In slide 11, you showed these segment growth, and can you split and break down to Matas and Kicks and what was the growth for the mass beauty segment?

I think you will find all the details in the Q3 report where we have split by the different segments both for Matas and Kicks. What you're seeing is on the Matas side, mass beauty and health and well-being is growing.

You also see growth in Kicks on the mass. I just want maybe draw the attention to what I talked about earlier on our in-house brands, Nilens Jord and BeautyAct, as we just launched those and relaunched BeautyAct, but launched Nilens Jord in September.

Getting out of a quarter where a lot of challenges in the market, but still being able to grow our in-house brands with above 30%, I think it just shows the perception from our customers on brands, on different pricing, strong brands, strong products basically. I think that's just an indication of the opportunities we have in the market.

Great. Thank you.

I jump back to the queue.

Hi, Per. It's Sebastian again.

I have a question regarding the FX margin adjustment that you allude to here, and you've done it for a while now. I'm just wondering how should we think of this FX sensitivity going forward, and the fact that you continue to allude to an adjusted margin performance?

Is it that we are going to expect you to offset this FX headwind in the Kicks business going forward? Or is it more you forecasting and expecting a reversal of the current FX movements?

That would be my question.

Yep. I think in terms of FX, I think what we are reflecting in our report is really the underlying, or we're trying to demonstrate to you what's the underlying movements, because Kicks in this quarter is on an underlying basis, like-for-like, if there was no movement in the currencies, we would have been gaining on our gross margin.

I think that's a very important message for everybody looking at our numbers. That's just the importance of why we actually show the numbers.

From an FX perspective, we're looking in options and evaluating how do we progress into the next financial year in terms of managing the FX and getting out of the impact we had this year. I think this year has been a very different year.

It's been a year where we have very strong improvement on the Swedish krona, and on the contrary on the Norwegian, and that is basically what is impacting us. If that moves forward, I think our task as managing the business is to find ways on how to mitigate that and make sure it get as least possible impact on our performance as we move forward.

That will be the focus we have also moving into the next financial year.

Okay. No, that's clear and completely fair to shed light on the underlying performance.

Then my last question, I promise, just on the implied guidance for Q4, it appears at least on my calculation that you guide for roughly a percentage point margin uplift compared to Q4 last year. Could you just remind us why is it we should expect margins to go up year-over-year when you had several quarters with the opposite?

I think there's a couple of things to that, Sebastian. It's a little bit also with the timing between quarters.

It's on the funding mechanics with our suppliers, and it has also to do with what's in the base last year and what are we looking into this year. Then you can say an important thing is also when we look at last year's number in Q4, we did not have an automate facility as we have right now in MLC, and there's other moving parts.

I think when we did the updated guidance, 14% to 14.5%, that's still where we believe we'll close the year.

That's fair. No sort of clear signs of improving in market dynamics or, yeah, more benign pricing environment or anything like that supporting this?

I think it's too early to say. We just one month into the quarter and still trying to analyze all the movements that we saw in last quarter, of course, moving forward into the last couple of months of this quarter.

Completely fair. No, good luck, Per.

Thank you so much for taking my questions.

Yes, thank you. I think my question was on the last one that Sebastian had about what what you've seen in in this quarter.

I think Apotea was out saying that they see continued tough competition into this year, but I don't know if you will comment, it doesn't seem so. When you talk about that you going forward will have right prices and we've seen that competition at least in this quarter, and also commenting that the Christmas quarter next year, next financial year, is not expected to see major differences.

When you say right prices, I must assume that you also want to be more competitive. Or are you sitting on the bench hoping that people getting more rational?

I think, Paul, when we look at the business, of course, we always evaluate what's the right pricing in the market on all our products. We look at our campaigns and the effectiveness of our campaigns, a little bit the marketing effectiveness as I referring to.

All these things combined with providing the right assortment, and which basically also means products on different pricing levels in the market, I think we believe that we will be able to have the right plans, the right activities, and the right pricing in the market as we move forward. Then, of course, we will follow what the competition does as we move forward as well to make sure that we stay competitive in the market.

Having said that, still what we are very much focused on is our omnichannel setup. We have more than 500 stores where we meet our customers every day.

We provide the right service, the right guidance, and from the feedback we get, they really enjoy doing business with us. We'll continue to expand that and improve that.

As I also mentioned, launching the app in the Kicks market will definitely also provide an even closer link to our customers.

Okay. When we talk about you pushing more on the mass market exposure in Sweden, what about the well-being?

Are you also taking that into the Kicks stores?

We are also looking at expanding inside with well-being. I think we mentioned that earlier, and that's part of our plans.

What we're looking at now, and that's also part of the acceleration, is timing and when we will be able to put that into the market in our Kicks business. Yes, wellness is also part of our plans.

Okay. Thanks, Per.

Thank you for listening in. It's been a quarter with mixed results: a strong Matas, another record quarter, a Kicks where we're facing challenges.

I'm very confident in the plans that we're now putting in place to accelerate our Win the Nordics, and I'll be looking forward to coming back reporting once we get to the Q4 results. Thank you.