Thank you.

Thank you, Hjalmar. Hello, everyone.

I'm really happy to be here. With me, I have Claes, as Hjalmar says.

We will speak about the Q3 presentation, but we will also speak a little bit about what's going to happen into the future. If I start with Pricer in brief, many of you on the call know us quite well.

Compared to last quarter, we can see that the number of stores connected to Plaza and the associated ESLs has been growing. Our vision is to be the preferred partner for in-store communication and digitalization, and there will be a few stories about this one.

It's not only our wish to be a preferred partner, but actually we get the feedback that we are the preferred partner. If I start with the highlights of the quarter, we have a financial performance that's reaching historical levels.

We have a continuous gross margin improvement, it's actually been improving now three quarters in a row. Gross profit has also increased three quarters in a row.

We have an adjusted EBIT margin that almost doubled versus the equivalent last year in Q3 at 12.9%, it's been, I have to say, a very strong performance, we are really happy. Why is this?

Claes will speak a little bit about it, but it's on the, of course, the COGS that we have, the customer mix and the market mix, but also a continuous work to actually improve our cost baseline both on the COGS side, but also on the opex side. Recurring revenue reached 7.5% almost, as a percentage of net sales.

It's been driven by very strong growth in Pricer Plaza, our SaaS service, it's up 39% compared to last year, and it's actually also up 20% compared to the last quarter, Q2. This is the result of our continuous work to sell new Plaza setups to our new customers, but also migrating existing one from on-prem to Plaza, and of course, this is adding a lot of growth to the profitability as well.

If I look at the order intake, we had a large growth of 27% versus last quarter. It's been driven a lot by a strong North America where we have seen that on the European market, on some specific economies, it's been more dampened.

We've seen a lot of price pressure reflecting the amount of a little bit less opportunities, but it feels like it's also turning. We have had two events.

One was Groceryshop in the US, and the other one was NRF Europe. There's been a lot of interest for Avenue, not only from leading retailers, but also from brands, especially on the US market.

We had a lot of pre-booked meetings with fast-moving consumer goods companies actually asking us for meeting, which is the first, and we do believe that it's the A/B testing that we did earlier this year that might be the result for this increased interest. We also saw a lot of trends in the IoT space, but I will speak a little bit more about that later.

We have a brand new customer win, Orange. Orange is a leading telecom operator, not only in France, but in many markets.

We got a contract now to deploy all their 561 stores across the estate in France. It's a full package, it's the ESLs, it's the implementation services, and every single store will be connected to Plaza.

This is actually something the first 100 stores will be done already now in Q4. This is of course extremely nice to get such a large order from a number-of-store point of view in France, which has been one of our key markets for such a long time.

As always, it was a very competitive situation, but as you can see in the quote here from Fabrice, also saying that Pricer emerged as the ideal partner. I think that was a big chunk of the deal actually, the way we approached the opportunity.

Continuing on order intake, very strong order intake, especially on the North American market. Accelerated delivery of Sobeys, and as you might recall or might know, we take the order intake for Sobeys in per quarter when it happens.

Good growth on the US announced contracts in US, the [DeCA?] contract and some others.

Also we have had a lot of positive customer engagements on the US market, both with existing customers looking at how to modernize the networks or the store networks, but also with new potential opportunities. In Q2, we reported good traction in Scandinavian market and Pacific market.

That is actually continuing into Q3, good growth in Norway, Sweden, but also Australia and New Zealand, it's been really nice to see. The Pacifics were a little bit low last year, it's nice to see that it's really coming back strongly this year.

On the European market, we saw lower order volumes in France driven by Carrefour, and this is something we alluded to and actually communicated in our previous report. Still, we do get orders from Carrefour, we do have an ongoing, consistent relationship with them, and will continue to be a key supplier into the future as well.

Then we've seen generally a weak demand or weaker demand in Eastern Europe, even though we can see really positive signs in Hungary specifically. What are the trends that we see?

What are the key insights that I can share? You might have seen this slide before if you followed our presentations.

Today I'm going to focus on sustainability as a competitive advantage and tech transformation. I want to talk about one of our customer in the UK called Company Shop.

What they are is they are a surplus supermarket, which means that they get surplus groceries from the tier one retailers in the UK. Their target group is very specific.

It's people that have a salary level or disposable income that's below a certain level. Those are the only one that is actually allowed to shop.

Why do they need our ESLs? They get the surplus, they get it in the morning.

They start with a specific price, and then continuously over the day, they lower the price until they've actually sold everything. You're helping people with less disposable income, but it's of course also fantastic for the sustainability perspective.

As you can see here, there's been last year 11.5 million meals saved in food and drinks, and of course, you've had the productivity improvement for the staff, or for the company. It's actually addressing two areas at the same time.

In the UK, this is something they now start to notice and it's been a lot of write-ups in the magazine on this one. We've been shortlisted also now for the best innovation within sustainable retail innovations.

Let's see in November. I have a positive feeling.

Knock on wood. Moving into technology.

IoT, we can see a real growth in demand for IoT solutions with in-store and in-store IoT. It's mimicking what you get online, but a little bit more than that.

Looking at what kind of data can you collect in the store and how can you actually use that data to improve the store experience, how can you use that data to actually increase also the profit. We get a lot of requests.

There's a lot of discussions. It's very much driven by AI as well.

We could see that I spoke about it earlier on the convenience stores that they were not really interested in ESLs at large scale before, but now driven by AI, they start to now look, how can we now deploy all these IoT devices? To really make this attractive, we also see clear trends that it has to be standardized.

You don't want to have one set of applications and communication for the thermometers, another for cameras, a third one for ESLs. We can see it will be more and more standardized.

We believe that this is a market that we have to be in. We see there's a lot of opportunities in this market.

Our approach will be that we will combine our existing ESL portfolio with all the benefits we bring to the market and above all, our customers, but we will next year gradually add complementary connectivity, new protocols to actually connect, supporting standard ways of communicating, but we will also look at adding a whole lot of different IoT devices. From a value point of view, well, we will develop our own IoT devices that we will actually sell, but we will also partner with company that can offer IoT devices that we do not want to have on our own.

Might not be that we're going to resell them. It might be actually that we just enabled them to connect, and we take it as a Software as a Service from our point of view.

We see a lot of new in-store use cases for retailers that this will actually lead to. In essence, more connected devices, that will be more Plaza revenue and there will be more add-on revenue.

We do believe that this will be a big thing and we clearly see all the trends, we see the interest, and we see the need to come with something. We are preparing, as you can imagine, for this.

Plaza is set up now or we're doing that development, and we're looking at the device side. There will be more information later, but I wanted to also now communicate that this is something that we are adding, something that you will see in our portfolio, and that will be launched.

Claes, back to the real data.

Yes. As you can see, very strong gross margin improvement.

This is mainly driven by the customer mix, as Magnus said, but also much more effective supply chain now, and even the Plaza development, and also freight. Freight have had an impact.

We have taken much more by boat this year compared to last year when we were flying more, and that has an impact. If you look on the sales, the sales is down compared to last year, even if it's the best quarter of net sales this year.

The main reason why it's down is actually that we have no large new customers with low margin in this quarter. What's also important to note here is that we have decided to close our German factory.

This have affected our depreciation this quarter by 7.7 million SEK, and it will affect the coming five months with 7.7 million as well. After that, the depreciation will of course significantly go down as the factory in Germany is closed.

The reason we do this is of course that the margins that we get from our supplier in Asia are better. Then very strong EBIT, as you can see, 65 million this quarter and a net profit of close to 44 million.

Then if you look at the cash flow here, as you can see, it's very similar to last year. The reason why the cash flow is pretty weak now in Q3 is that our inventory is peaking now in Q2 and Q3.

As you can see last year, we had a very strong cash flow in the fourth quarter. You could expect something similar will happen even this year.

Cash flow as a whole looks very good. Then if you look at the net sales, as I said, sales development is the best this year, even this is the disappointing that it's going down.

If you look at the gross profit, it's the best quarter for more than three years, actually, regardless that the sales has gone down.

All right. Before the Q&A, let me summarize.

In this quarter, we have really strong financial performance on historically high levels, high gross margin, high adjusted EBIT, high adjusted EBIT margin. The strong growth of the recurring revenue and the number of connected Plaza stores, 40% almost versus last year, 20% versus last quarter, and we have added another 500 additional stores.

We believe that we will continue at least this pace for the coming couple of years, we actually do believe that we will add quite a few stores. We also see that the uncertainty of the macroeconomic situation that I talked about before, we still see that it's continued to impact customers, but also it appears that the market sentiment is changing.

We have now actually had three quarters in a row where, compared to the previous year's quarter, we have had an increase of the order intake. Order intake this year is much stronger than last year, sort of indicating that we see this shift.

There is price pressure on one hand. On the other hand, we also see that, yes, people are starting to invest, and especially North America, we've been able to take much more than before.

That's pretty much what we were planning to present now, I guess over to you, Hjalmar.

I think on the sourcing cost, with the supply setup we have now and under the new supply management, we are working a lot with getting the costs down and we have had really good traction in that. As Claes mentioned, we have changed from doing a lot of transportation by air to by boat, which is of course affecting the costs positively.

It's also been on the market mix. We can see that and customer mix.

We are able to charge higher prices on the North American market than, for example, in Europe. We see the contribution also of additional recurring revenues, every single store we add will be good profitability increase for us, which is why we're actually pushing also much for the connected stores in addition to actually making the installed base really an asset for future upsells.

On the level, what would sustainable level, Claes, any comments?

No, I think with the customer mix we have now, you could say this is the base. That can change.

If you take new, large order on other price levels, then of course that will have an impact.

currency's effect has been very limited. It's 1%, 1.2% maybe on the top line.

It's not more.

It's actually both. In essence, every new stores, if you take the 561 that we just won with Orange, all on Plaza, all the Sobeys stores all on Plaza.

Pretty much all new customers go for Plaza day one. We are in discussions with almost all of our large established chains on moving, migrating from on-prem to Plaza, so that happens as well.

I think generally there is an understanding that this is the future. A few years ago, we could discuss about why do you want to move into SaaS.

Now I think all retailers basically see the benefit. Then making it for an established one, you need to do it in a controlled way to make sure they have a generic way of managing the network of stores.

No, I think that the growth that we see now in the quarter with adding some 500 stores, that's probably sustainable growth pattern in term of number of stores for the coming couple of years, most likely. Of course, then it depends a little bit on what services they buy and what is the size of the store, what the revenue would be, but I'm happy to add any store regardless of size.

Yeah, I think Q3 is in in line with with our expectation. First half was was better than than than expected.

We have a large number of stores with Carrefour. We are an important supplier and will continue to be an important supplier for a long time.

We we do expect to do more work with them.

we can see that goes in phases. We know when we deployed someone that roughly when is it time to upgrade.

Very often there will be some kind of procurement round, and of course, from a retailer point of view, they also always want to see can we get a better price. Of course we want to keep the price level, they want to get it down, but we also have been working with the cost, we have the possibility to do something.

Typically we would make adjustments to the price. There will be competition, but we always, and this is true for not only for ourselves, but also competitors normally, that if we won a store or a chain of a chain, it's very likely that we will stay.

It, of course, happens that it doesn't play out that way, but we're in a good position, and of course we try to utilize that as much as possible as well.

It's depending on the market and the competitor, I would say, but we can see that sort of the price floor has decreased as of last year, and then it seemed that it will stay. We also see that of course, competitors is trying to find ways of increasing the price.

Yeah.

That's what we said. It's on the cost side.

There was the freight cost and the development of Plaza. As you see, development of Plaza this quarter was very good.

There's also slowness. We negotiate new pricing, then it will be manufactured, and now we have some lead times for the manufacturing, and then it will go by boat.

We can see that the price that's been negotiated some time ago, it will take three or four or five or six months until we can see it in effect in the result.

That type of forecast we haven't done, and we will not do.

As far as I know, this is the first one. I'm actually quite convinced it's the first one, because they probably tried it, but this is the first real deployment.

I think it could open for new opportunities. We certainly have other opportunities that we're working on that are similar to Orange.

Of course, we sold it to Orange in France, and of course, as a sales guy, I hope to be able to address the other markets. They have quite a few stores in Europe.

We've seen more in Europe. In North America, of course, last year, we could see there was a clear slowness.

Towards the end of last year, we could see that the sentiment was changing from our point of view, and we see quite a lot of opportunities on and in North American market. Of course, we have also demonstrated growth and both net sales and order intake.

In Europe, it's more market-specific. We see markets where we have good growth and expect to have more growth.

In Scandinavia as an example, we are growing. We've been growing now compared to last year, the direct sales approach is working really well, whereas in other markets, we've seen it's been slower.

We're very certain that there will be a market demand. Then, of course, always when you launch a new product, it's very hard to really assess how successful it will be.

Of course, there is a belief, and we see the need. Then, of course, we need to make sure that we develop what the market wants, but we have a pretty good idea.

There's been a fair amount of Sobeys stores, but then it's across really all markets.

I would say it's probably still more new customers. We have a number of projects that we see that they will migrate, but then I think we will see that more in the numbers, then it will be probably bigger deploys in a specific quarter.

Thank you very much, Hjalmar. Thank you very much for joining us.

It's been a pleasure to be here and present this quarterly result, and well, we'll speak again.