Good morning, everyone, and welcome to Apotea's first quarter report this year. We will present today from our office in Stockholm, and as usual, we will start with the presentation and then move on to a Q&A with spoken questions.

Today's presenters will be Pär Svärdson, our CEO and co-founder; Johan Mårild, our CFO; and myself, Sarah Ahnström, COO. Let's begin.

Oh, thank you. We have had a good quarter with good profitability and a stable growth.

Johan, so...

Yes, we had revenues of 1 billion 937 million and a growth of 10.5% in the quarter, and an operating margin in line with last year. The operating margin was 5.2%.

As I said, we have had improved profitability and a stable growth, and our projects, I think they are heading in the right direction.

Since this fall, we have put a lot of focus into our growth initiatives, as we have said before, and some of these have now been launched. We're very happy about that.

Most recently, we soft-launched our site in Norway, apotea.no, which means that we are now selling our health and beauty products on the Norwegian market under the Apotea brand on the site. We are delivering the customer orders from our fulfillment center in Varberg, and this is, of course, a step to strengthening our position in Norway, as well as increase the utilization of the new fulfillment center.

We have also continued during the quarter to scale up the production in Varberg. We have sent out as much as 27,000 orders in one day, and we have done that by increasing the number of shifts, as we are now working both evenings and weekend shifts as well, and approximately 1/3, or slightly above 1/3 of all customer orders are now going from Varberg.

When we soft-launched of Norway, we also launched our new platform, and that was a big step as well.

Yes, and with the growth in the quarter of 10.5%, we now have rolling 12 months revenues approaching 7 billion and 400 million, and we have a rolling adjusted EBIT margin, which is flat compared to Q4 2024, and was 4.2%. Let's take a closer look on the revenues.

To the left, you see our net revenue development, and as mentioned, we had growth in the quarter of 10.5%, and the growth was fairly evenly distributed across our product areas: roughly 10% growth in RX, as well as in non-RX, and we experience a continued solid demand for pharmaceutical products online. To the right, you see our gross margin.

We had a slight increase in the gross margin in Q1 compared to Q1 2025, and the increase was the result of successfully executed campaigns, as well as improved purchasing. Our ambition is to have a fairly stable gross margin and, with attractive prices, attract more and more people to buy pharmacy products online.

Yes, we had a strong operating profit in the quarter. We had an operating profit of 101 million, and the operating profit increased despite increased depreciations related to the new fulfillment center in Varberg.

The increasing operating profit was driven by increased net revenues, as well as slight higher gross margin, as mentioned, and continued good cost control. Let's talk more about the costs then.

To the right, you see a breakdown of our operating costs. As you can see, the depreciations in percentage of revenues increased in Q1, as expected, and the increase was related to the new fulfillment center in Varberg that was opened up last year, and depreciation started in Q4 last year.

If we then look on personnel costs and other operating costs and take those combined, these are fairly flat compared to a year ago, and we maintain a good cost control. As we've mentioned before and worth mentioning again, the mix between personnel costs and other operating costs is also impacted by the usage of external staffing in our fulfillment centers.

We did not have any items affecting comparability in Q1. Yes, we had a strong operating cash flow in Q1, and that was fairly stable compared to a year ago.

We had limited investments in Q1. The investments in Q1 2025 were related to the new fulfillment center in Varberg, the platform investments are completed, and we expect this year to have significantly lower CapEx level compared to a year ago.

If we take a closer look on the net working capital, to the right, you can see that the inventory increased compared to a year ago, and the increase in inventory also impacted the inventory turnover rate somewhat, which is slightly lower, and the increase in inventory was primarily the result of increased inventory in Varberg. We have slightly lower return on capital employed in Q1 compared to a year ago; however, it's a strong return, and the decrease in return on capital employed is the result of the new assets related to the new fulfillment center in Varberg.

Then finally, in terms of numbers, let's look on the net debt and the net cash position. End of March, we had a net cash position of 105 million Swedish, and the increase in cash compared to a year ago was the result of a strong underlying operating cash flow, as well as then in Q1 2026, limited investments.

Our focus ahead is to continue to build the pharmacy of tomorrow, to improve the customer journey and improve our efficiency. I think we have hundreds of projects to improve the customer journey, to make it a little bit easier for the customer, retail is all about the customer, and if we can improve the customer satisfaction, and then we will both be more profitable, we will grow faster and so on, so that's our super main focus.

Yes, and we will continue to have a very strong focus on growth going forward. As we mentioned in the beginning, we have done a soft launch of the apotea.no site, but that also means that we will continue to work on that site and continue to improve the customer offering in Norway.

We will also continue to evaluate and launch several growth-related initiatives going forward still. I think one of the examples of kind of optimizing the operations also in terms of sales-oriented initiatives that we have done is that we have also expanded our offering of refrigerated deliveries on pharmaceuticals in Sweden.

These types of initiatives, we see a great potential in, I would say. We will, of course, also continue to scale up the production in Varberg.

The automation has a capacity of 50,000 orders each day, and as I mentioned in the beginning, we have reached 27 as of now. We will continue to optimize the operations, making sure that the system is stable even in higher volumes, and also work with related processes, such as purchasing, inventory levels, and freight options from the Varberg facility.

I think we have not reached the maximum level yet.

As all of you already know, it's a lot of uncertainty out there in the world. We haven't been affected yet.

We haven't seen any signs of that. We have a big focus on it every day, because it can affect us in the future, but we hopefully not.

Like logistics, where container is in the world, and plastic bottles, and so on. We haven't seen it, and we are in a very stable industry, but we have a focus on it.

Thank you.

That was the end of the presentation as well. Now we move on to the Q&A with spoken questions.

Yes, good morning, guys. Johan Fred here from SEB.

A few questions on my side. Starting off with the revenue growth, could you give us a sense of the split between volume growth and sort of price/mix effect in the quarter?

I think we have a fairly stable AOV in the period. Yeah.

I think we have some price effects, but it's more like very expensive medicine. It's not like higher prices on the same product, but we sell more and more of very expensive medicines.

As mix then was an important factor in RX sales growth, while sort of volume drove OTC growth, is that correct?

It's a little bit 50/50, isn't it?

I don't have the exact split, but yes, in terms of RX, we had a positive impact from increased orders or increased share from very expensive medicines, whereas the volume was main driver in other segments.

Cool, got it. On the gross margin, came in at I believe 28.3%, which is I believe the highest gross margin I think you ever reported.

How much of this was driven by sort of one-off campaign timing in the quarter, and how much was structural improvements in procurement?

If you compare with Q4, we have done a lot of improvements in how we buy things to warehouses, and so on. Our goal is to have a stable gross margin, and it goes a little bit up and a little bit down, but quite stable.

Particularly in Q1, we have had successful campaigns. You should buy the products from the right source, at the right time, in the right amount to the right warehouse, and do campaigns together with a supplier, and have a successful campaigns, and so on.

We have done a quite good job with that, and we can absolutely try to do it next quarter as well, but it goes a little bit up and go down.

More sort of I wouldn't want to call it a one-off effect, but specifically relating to Q1, essentially the opposite of what happened in Q4, is that correct?

Something like that. Yeah.

Yeah. In the light of this, how should we think about the revenue contribution from services?

It grew 30% in Q1, I believe. Is that relating to the campaigns you're alluding to, or is there anything that could indicate that this is a higher structural base going forward?

We try to improve or raise that as well, but it's absolutely related to campaigns.

Got it. Makes sense.

A final one then, if I may, on CapEx, which was minuscule here in Q1. You've previously guided for around 50 to 70 million, I believe, annually going forward.

Does this still hold, and if so, what types of investments should we expect in 2026 to get to that number?

We evaluate all possible investments we can do, and if we see that it's a profitable investment, we will do it. This 50 to 70, it's more like some kind of target, but we haven't found that much investment yet because now we are improving the investment we already have done, I think we have to come back over time and calibrate that.

I think if you look into the Morgongåva case, we have kind of done it step by step, we have improved the efficiency by smaller investments that has happened several times each year. I think in the Varberg case, we have kind of still to optimize the operations and so on.

We have bought a few bins to Varberg

so we can [have

more?] stock.

I see your point, but it was just the 50 to 70 million. Given that you essentially had no CapEx in Q1, that's quite a steep step-up in coming quarters then.

As I interpret it from your answers, you have no sort of planned CapEx investments in Varberg, rather continue to optimize existing infrastructure.

Not yet,

but

it might come.

Not you know.

Cool. Yeah.

Fair enough. Thank you so much for taking my questions.

Good morning, guys. I will, sorry to say, go back to one of Johan's questions about the gross margin.

I got the impression last conference call that while the campaign intensity was one issue you faced in Q4, the gross margin pressure you experienced was also an effect of purchasing to Varberg. I believe you, Johan, said that you were sort of still in the process of calibrating the purchases for the new logistic center, for example.

In Q1, it appears Varberg purchasing is basically not an issue at all. Was this a quicker turnaround than you expected, or how should we think about this?

We have absolutely done much better purchasing in first quarter compared to fourth. I don't think it's probably too early to say that all problems is gone and to be sure about that, because if you have just one quarter, it's a little bit too early.

We have absolutely improved our purchasing process, and we will continue to improve it over time.

Perfect. Thank you.

You also write in the CEO letter about planning more investments to ramp up growth. Could you elaborate on the kind of investments you are referring to here?

Or is this the apotea.no website, for example?

Sarah mentioned that we have built a new e-commerce platform. It's not investment on the balance sheet, but it's working hours for the AI team and for the tech team.

To improve the assortment, maybe do more marketing, it can be a lot of different areas. Maybe not a big costs, but costs related to that.

We want to focus on growth, and want to spend both money and time on building more growth, because I think it's very valuable for both Apotea and for our shareholders.

Perfect. Thank you.

That's clear. Sort of following on that then, you mentioned marketing and marketing investments as an example of such investments.

While you don't share marketing ratios explicitly, could you give us a hint or an indication of whether or not your marketing ratio is sort of up or down compared to the time of the IPO, for example?

I think it's

quite stable, and our goal is to find profitable marketing and do that marketing. For example, Google, it's not profitable to buy search terms that is not profitable, but we want to buy as much as we can that is profitable, and so...

That's something that we continuously evaluate the marketing spend. If we see that there is room to increase the marketing in external channels that's with a good return on investment, that's something we do obviously.

I think as we've shared before, the main driver for Apotea's growth has always been having the best offering to the consumer and ensuring that, with our attractive prices and speedy deliveries and free deliveries and attractive and large assortment, that drives new and new customers, but also keeping the customers returning more frequently. That's the main of our focus, ensuring that the deliveries and assortments are the right, et cetera.

A happy customer is a good customer.

Yeah. I think that's a good way to kind of drive growth.

That's a long-term, a sustainable way of driving growth rather than having short-term adjustments in marketing, a big calibration in marketing or prices, for example.

Thank you, that's very clear as well. Final one for me then.

In essence, why do you not raise your short-term financial targets for the margin? You showed in Q1 that you can deliver above 5% margins with the new set-up running far from sort of max or optimum capacity, I guess.

One could assume that with further growth, you would scale more on the now higher D&A from Varberg, for example, for a rather positive margin trajectory from here, assuming continued growth. You're above the 3% to 5% interval.

Why keep it intact?

We mentioned just before the uncertainty in the world. We want to grow faster and want to spend money on that.

I think we need a few more quarters, fourth quarter was not that good, we need more time before we can say, "Okay, this is the new stable level where we can be," because we don't want to overpromise, so that's why we try to keep it that way.

We are in the middle of this short-to-mid-term corridor of being in within 3% to 5%. We have a adjusted EBIT margin rolling 12 months of 4.2%, we are in the middle of that corridor.

Even though Q4 was—and I think we're we're fairly open that it was a that Q4 was a disappointment and and and low profitability, below our expectations, Q4 tend to be, with the seasonal variation, higher share of campaign sales, a softer profit-wise quarter compared to the other three quarters during the year.

Perfect. Thank you, that's all I had for now.

Thank you.

Good morning, Pär, Johan, and Sarah. A couple of questions from my side.

I was curious on your impressions of the competitive environment during Q1, because we've had some peers commenting on this recently, and it seems that the market remains tough, relatively low growth still. What's your view on the competitive environment here?

I think the competitive environment is quite stable as well. We have had a very competitive market for several years, and that's how we like it.

Okay. Perfect.

Nothing... No,

not really. ...no changes in

Q1. Okay.

My next question is on your beauty segment. Beauty products are up a lot, do you have any comments on how growth was within this segment and how important you would say beauty is for you going forward to reach your sales targets?

It's an important segment, and it is a broad segment as well, right? It contains a lot of different type of products.

It's going well, good growth in that area, it's one of the focus areas that we have. I think, in order to have a higher growth rate, we need to work on all categories.

We also have seasonal effects. Now we are heading towards the summer, and then you have sun protection sells a lot.

In the autumn, you have different products, all categories is very important for us, and we want to grow all of them, and we try to maximize the growth on all of them. We try to handle them individually and try to do as good as we can with everyone.

I think in terms of

the

beauty segment in specific, we have done quite large steps in terms of the assortment, and so on. We're very proud to welcome a lot of good brands to our site, and that's something we have been very proud of, I would say.

We're happy to...

Sarah is buying much more now than before.

I think we're very happy to see that the assortment is widening within those types of categories, and especially in the more premium segment, I would say.

Perfect. Then on Varberg here, I was hoping that you could perhaps provide an estimate of the savings effects as you have lower fulfillment costs in Varberg compared to Morgongåva, and now you said you moved 1/3 of your total orders.

Yes, I think it's still early days, and I think we've mentioned this before. Yes, we see a significant improved efficiency in Varberg; however, it's early days in terms of ramping up and understanding the kind of, what should I say, more steady-state type of some production costs in Varberg.

At the same time, we've also are shifting and the production between our sites and between different shifts, it's at this point hard to say a fixed number. Yes, we see efficiencies in Varberg, and we will come back to that, absolutely.

Perfect. Then a final question from my side.

The consumer sentiment, it's tough now with another war going on. How did April start?

We will need to come back to Q2 in the summer when we report the Q2 results. I think, yeah.

Probably a good idea.

Fair enough.

Thank you.

Thank you very much.

Perfect. Thank you, everyone.

That was the last question. Thank you for listening in to the presentation of our quarterly report, and we wish you a pleasant day.

Thank you very much.