Together with me I have Saara Mäkelä, our CFO, and Hanna Kukkonen, our CMSO. We'll take you through the last quarter and and and of course at the same time the first half of the year.

I will I will start with just a short recap of of what what we are. We're a European household company with strong brands: strategic brands SmartStore, GastroMax, and Orthex; three production facilities where we produce almost 90% of our of everything we sell; and then in addition to that, we have a strong present presence throughout Europe, which we are aiming to make our home market.

That in in very short about who we are. We make functional products, long-lasting, for enj- for an enjoyable and organized home.

It's key here that the products are usable, they all serve a purpose, and in that purpose, the storage category is our biggest range or biggest category under the brand SmartStore. It's about 70% of our sales.

In the kitchen category, where we also have kitchen storage products, we have baking utensils and whatnot to make the life of the home chef easier. Then we have the last category, which is home and garden, 11% of sales.

I think the main idea here is to to provide products to enjoy in your home that last long. That's part of our sustainability story.

We do products that you can enjoy many years and don't have to throw away, and the design is nice as well so you don't get bored of them. We launching a lot of new products, and we are quite happy to to win some awards as well for the nice design of the products.

Then if we jump into the to the results and the and the second quarter, and I would say it's it's been an interesting ride. We had we had at at the beginning a situation where raw material prices had increased sharply.

We had a situation where I would say demand in the Nordics started to rise, and I think the whole quarter was somehow somehow, in terms of activity, around making sure that we are very sharp and very quick on reacting on the unprecedent- precedented rise in raw material prices. That that tells quite a lot of the story.

We showed we've shown resilience. We've been probably the first or at least among the first to react with price increases.

In the Nordics, where our brand and our market position is strong, and and we have a very close cooperation with many partners, I think the understanding was there from the beginning that this was something that we had to do. In the Nordics, growth continued very nicely.

Whereas in Europe, where we are pushing for growth, where we are still a challenger in many places, and where campaigns are not necessarily agreed many months in advance, most of the discussions were around price increases, and we had to put some of the initiatives on hold and and just get through so we could operate under under okay conditions and and also ensure that we get the raw material that we need. We were very decisive, and I have here to say that I'm I'm extremely happy about the efforts that our commercial team and made during this period because it's not easy to to be extremely quick.

We learned from the last time the raw material went up that you have to react you have to react fast. I think also good here is is the cooperation with raw material suppliers and the the good work that our our team teams has made to ensure that raw material has been available throughout the the period.

Some some nice sales growth in in the Nordic helped us, and that that also helped to improve the margins a bit. We've been of course under these kinds of of very special situation, you have to have a good cost control, and you have to know exactly what what you're doing.

I'm I'm fairly happy with the outcome in general with a strong sales growth in the Nordics and then showing good resilience in in adapting to extreme increases in raw material prices. If we look at at the sales situation, net sales grew by 5.2%, and this came mainly from the Nordics where we have as good as a growth as 12% growth.

As I said earlier, we've been mostly concentrated on increasing prices in in rest of Europe, and campaigns and and rollouts of of activities had to wait before we had this in place. This translated into a decline of 10.5% in rest of Europe.

I have to say, our our strategy remains the same to grow Europe, and I think now that the the focus on price increases is is far behind, we can we can continue to build our momentum on on growing distribution with major retailers in Europe. On the EBITA level, we managed to land at 1.4 million EBITA, which is roughly 300,000 down from last year.

There you can see the res- resilience regardless of of the very high jump in raw material prices. That that's a 6.3% margin.

In terms of cash flows, strong cash flow at at 1.8 million euros. If we go into the details here by geography, as said, Nordic Nordic up if we first look at the quarter.

Considerable growth in the Nordics in the second quarter, which also takes takes then the the first half of the year into into nice growth in the Nordics. Then we had a decline in rest of Europe of of around 500,000 euros.

Still, on a half-year level, we are ahead of last year, but of course we want to accelerate that, and and hopefully we can now concentrate more on growth than than on increasing prices. In that sense, a a situation which which now is good to build on further.

In terms of of product categories, the storage category, our biggest category, grew nicely, and and that's the main driver also when we think about increased distribution in in Europe. The storage category together with the with the kitchen storage products and and so on are are those with good traction.

Then the other categories, not much to mention. We have we have for the first half-year I think quite a flat situation on kitchen and and on on home and garden, we have a small small increase, half-year level.

Sorry, small small decrease on the half-year level. In that sense, we are we are progressing, we would like to progress faster.

When it comes to strategy, not a major change. Our ambition is to be category leader in Europe and the benchmark in in quality and practicality with sustainable solutions, and especially in the storage category.

To to do this, we have to build consumer preference, we have to succeed with the big accounts in Europe, we have to accelerate online growth, and we have to work further on our capabilities as a category captain in in the Nordics. In addition to this, staying current, launching new products is is part of the strategy, and also of course, since we are operating our own factories, it's quite key that we we do it in an efficient way and and keep keep keep the production park modern.

This is this is the the strategy in a in a very short nutshell. I will now hand over to to Hanna Kukkonen.

Thanks, Alexander, and here's a few examples of implementing our strategy. As the stores are a very important place for us to build our consumer preference and our brands.

There's a lot of things being going on during last quarter, and here's a few examples. These pictures are from France, and here in the left, you see a shelf takeover from competitors, and now it's nicely branded with our products and SmartStore and with very inspiring pictures and shopping environment.

Then in the middle, a picture of a campaign for our latest novelty, SmartStore Vision, for storing shoes. Then an example of the SmartStore truck campaign that are going on all around Nordics and Europe.

Then in the second page, some pictures from Germany, Sweden, and Estonia. Left and right, you see a display that we call a pallet house, and this is a second placement place or campaign or permanent place that we offer for our customers in shops, and it's also a very good place to communicate and build our brand and sell the products.

Then in the middle, a nice campaign example from Sweden for our latest SmartStore Flip food containers. Then going and moving on to the innovations, we launch innovations or novelties two times a year, in February and September, in Q2 there were no launches of innovations, but we continued to sell in to our customers the latest novelties from or the recent novelties from last fall and this spring.

With promising and good results, and then we are also preparing for our September launches. Then moving on to sustainability, the most or the nicest thing was winning or getting the Red Dot winner award for our SmartStore Collect range.

Earlier this year, we were awarded with the German Design Award, and then in April we got an even more prestigious award, which is the Red Dot winner, and this will for sure help the success of this new launch. That was very quick from me, and then moving on to financials and Saara.

Thanks, Hanna. Our net sales during the quarter two increased by 5.2% year-on-year, and the growth was driven by the Nordics where sales grew impressively by 12%.

Sales growth in Nordics was supported by favorable foreign exchange rates, and price increases had a positive effect especially in Nordics. In constant currency, the total sales growth was 4.3%, one a bit less than 1% less than with the currency effect.

Outside the Nordics, the necessary price increasing process unfortunately slowed down the sales growth, and as the focus was for price negotiation rather than growth discussion with the customers. Sales declined by 12.9% outside the Nordics during the quarter.

We of course expect that this is a temporary effect and expect growth to resume. As expected, the raw material prices had effect on our profitability, and adjusted EBITA declined by €300,000, but we have learned from the previous peak in raw material prices and we started the price increases immediately when we saw the effects, and the decline was only €300,000 during the quarter.

The full effect from the price increases as well as the raw material increases will be visible during the coming quarters. We also had €600,000 of items affecting comparability, which resulted EBITA including items affecting comparability to decline to €800,000.

Unfortunately, I'm not able to provide further details on these projects here, but these costs were related to strategic projects supporting our long-term objectives. These items affecting comparability be a part of the admin cost, and excluding the one-off items, fixed costs were well under control.

Then the familiar curve regarding the raw material prices. There was a huge peak during the quarter.

The highest peak was reached in May, and since May, the prices have slightly eased and stabilized on a very high level still, and it's still uncertain when the markets will return to normal. Demand weakened during the price peak and remained weak and cautious, and customers continued to limit their purchasing activity, and that eased the supply challenges we were having in the end of the first quarter of the year.

The ongoing tensions in the Middle East continue to create uncertainty and may impact energy, logistics, and raw material supply chains during the coming times. Reduced availability of imports and ongoing logistics constraints in Europe remain as a key risk for us to monitor.

Then we have the investments. Investments were €600,000 during the quarter, that's €200,000 higher than last year during quarter two.

Most of the investments were related to product novelty projects, and cumulatively investments are €1.1 million, higher than last year, and that's due to the timing of the investments. Then our net debt.

It declined by €4.3 million and was at the end of the quarter €15.8 million, and our leverage stayed on a very healthy level at 1.1. Then the long-term financial targets, they are unchanged.

Currently we are on target in the Nordics and very close to targets on total level at 4% growth cumulatively. We were close to 20% growth after the first quarter in the area outside Nordics, but the price increasing negotiations affected the growth initiatives, and year-to-date growth declined to plus 1.8% growth outside the Nordics.

As Alexander and I already mentioned, we expect that to be temporary. Profitability is currently affected by the exceptionally high raw material prices, and we still have work to do to get to the 18% level, but as raw material cost pressure ease and sales growth resumes, we believe that the target remains achievable also through organic growth.

Leverage was 1.1, very healthy level, and dividend payout is in line with our targets. AGM decided a dividend of 23 cents per share, and 12 cents out of that was paid in April and then the second payment of 11 cents will be made in October.

Then I'll hand it over to Alexander to summarize the quarter.

Thank you, Saara. Just a short summary.

I think now it's quite evident that full focus continues on growing our European sales, of course not forgetting the Nordics either, but according to strategy, and full force full speed ahead. Then regarding the conditions, still unpredictable what happens in the Middle East and the effects of that, but we need to stay awake all the time and react when and if needed.

Then perhaps a small light in consumer behavior. We can see some good retailer reports showing that shoppers are, especially in the Nordics, finally returning to the stores and maybe buying a little bit more, perhaps there's a small awakening in that, we are hopeful.

That I would say summarizes the presentation, and now we're very happy to take on any questions there might be. Hanna, if you can help in facilitating that a bit.

Yes. Let's dive into the questions, and let's start with the many questions about the price increases first.

What magnitude of price increases have you implemented in Nordics and rest of Europe, are you able to tell?

I can shed some light on that. Of course, with the new hikes or the very high spike in raw material prices, the operating conditions became impossible, we had to react and we had to react fast, and we did it very decisively.

Our aim is to be long-term when it comes to pricing, our estimation was that we should be able to do the correct size of price increase to defend the full-year results. Without going into percentages, but it was an overall situation that I think everyone at a business had to face in one way or the other.

Therefore, the understanding was there. Where it was a bit tricky in the beginning was I think we were among the first ones out in Europe, it took a while before retailers actually realized that the situation is critical and this is something that needs to be done fast.

Yes, exactly. Then you mentioned that the price increase negotiations were affecting the sales growth in Europe, how long will high raw material prices disturb growth initiative in the rest of Europe?

What do you think?

That's a tough question, but I'm happy to say that the main part of the negotiations, if not all of them, are behind us, there's full focus on looking ahead. Then again, if you look at the price of our products in general, they are not huge investments for a shopper.

If, for example, the price of a storage box increases by 50 cents and you buy a storage box quite seldomly, I don't think that per se should affect the consumer too much in the long run.

Exactly. Yeah.

Then another difficult question is that given that price increases implemented will gradually offset increased costs, when do you expect to be fully able to compensate for the raw material headwind, during this year or next year?

With everything being constant, it's an easy question, but now that the world is changing fast and you don't know how many ships pass through Hormuz and so on, it's a tricky question. Our ambition is to follow it closely and towards the end of the year, hopefully we can have the full effect absorbed.

Yeah.

Regarding, by the way, still of this challenges with the rest of Europe growth, when you paused rest of Europe growth initiative during the pricing negotiations, did you lose any shelf spaces or listings, or was it purely deferred new business?

To me, it's purely deferred new business, and we were not alone. I think everybody in our industry using this raw material had to do something, and that of course makes the buyer cautious.

You need to put the pieces in place and then you push the button again, to speak, in terms of growth. Then another thing which probably affected Europe somehow is, we don't know to what extent yet, is the extreme heat waves we've seen in Europe.

That can have an effect on shopper behavior as well, maybe not running to all the stores during +40.

Exactly. Then regarding the price increases and Nordics, how are you able to say how much of the growth in the Nordics was driven by price increases and how much was driven by volume?

I can do that in a general way and say that there's quite a lot of volume growth in this one, and the effect of the price increases came gradually over the quarter, in that sense, it's healthy growth.

Yes, exactly. I think that was maybe all about price increases.

Then there were a few questions about the items affecting comparability that as Saara told earlier, where we cannot say any more details than what Saara already told us, I'll actually skip those questions and move on to the next ones. There was one about the selling and marketing expenses.

Selling and marketing expenses, which were roughly flat in H1, are they expected to increase in H2, particularly given the plan to reaccelerate growth initiatives in the rest of Europe now that pricing discussions are largely resolved?

Do you want me, Hanna, to answer or should you answer? Go ahead.

Who's

answering?

I can also comment that so last year we had some specific projects during the beginning of year, the phasing is a bit different. We are not expecting to make big savings during end of the year, and definitely we will be investing to the growth, especially in the international markets in Europe.

Yes, exactly. Yes, then one question about the sales growth in the Nordics, did the Nordics benefit from delivery timings during Q2 as the pace of growth picked up so drastically compared to Q4 and Q1?

I would say that the growth in the Nordics is of course there are many things that affected. We had nice new products, we had good campaigns over summer, and we had a let's say a quick resolution on price increases, which then could give us the opportunity to focus full out on growth.

In that sense, I would say no specific delivery-related strangeness in the numbers.

Yes. Good.

I think that was the questions this time. Thanks for the excellent questions in from the audience.

If you don't have anything else, we'll see in November next time.

Thank you very much, and have a nice start of the autumn, even though we hope for a bit of summer still.

Thank you.