Thank you very much, and welcome to our results presentation for the fourth quarter of 2025, and of course also looking at 2025 as a whole. My name is Helena Karlinder-Östlundh.

I am the CEO of Nelly Group, and I will be hosting today's call together with our CFO here at Nelly Group, Niklas Lingblom. First, as usual, let me start off by briefly giving you an overview of today's presentation.

We will once again start with a short introduction to the Nelly business in the form of a video. I will then provide some comments on the fourth quarter of 2025 and also, as I mentioned, briefly commenting on the full year 2025.

I will then hand over to Niklas, who will provide us with a financial summary, and as usual, we will conclude today's call by answering some of your questions. Now just reminding you that you are able to send us questions throughout the presentation, but of course we appreciate if you send them as early as possible so that we can make sure that we can answer as many of your questions as possible.

Without further ado, let's start today's presentation with a short video introducing the Nelly business. We will start by looking at some of the key factors shaping the fourth quarter of 2025.

To summarize the quarter, we achieved both growth and also improved profitability in the fourth quarter of 2025. It is important to note that we did so in a quite a challenging market.

In the fourth quarter, net revenue grew by 16.4%, which can be compared to growth of 5.5% in the same quarter last year, and this resulted in net revenue of 370.5 million in this past quarter. We generated an operating profit for the quarter of 47.8 million Swedish crowns, compared to 36.2 million million crowns in the same quarter last year.

This corresponded to an operating margin of 12.9%, which can be compared to an operating margin of 11.4% in the same quarter last year. This is a stable result for the quarter, but, as I said, in a challenging market, which we will come back to shortly.

Now, we also saw a similar pattern for the full year of 2025. For the full year, net revenue grew by 15.5% as compared to 3.2% the year before.

We generated operating profit of 166.4 million crowns, and that can be compared to an operating profit of 93.1 million crowns the year prior. This corresponded to an operating margin of 13.2% as compared to 8.5% in the year before.

As I said, coming back to the fourth quarter, we face a challenging market on several fronts. Firstly, we did encounter a highly price-sensitive customer in the fourth quarter.

We saw that our customer was both drawn to more value-priced items and also that actually the basket on average consisted of fewer items. Both of those factors taken together of course indicate a very price-sensitive customer considering their purchases very carefully.

In a market that was so characterized by this price sensitivity, we also saw intense discounting as a response across the whole fashion segment, really. Of course, November is generally a highly discount-driven month, but we saw this actually across the whole quarter, that there was intense discounting across the whole segment, which of course impacts the environment that we operate in as well.

Now on top of this, we also had an unusually warm start to the winter, and this did impact demand for a number of seasonal categories, and these categories anyway have a short selling window, even during let's call it a typical winter. In this past quarter with the warm winter, we did see that demand for categories such as jackets and boots was more challenging.

This of course continued throughout the whole quarter. Since one of our core principles throughout our sort of transformation journey has been to ensure a high sell-through of every season before we go into a new season, this did require higher marketing intensity and also higher discount levels to mitigate.

Both the heightened price sensitivity in the market and the warm start to the winter required us to increase our marketing intensity and use a higher discount level than the year before to both drive traffic and also still achieve a high sell-through of the autumn and winter season. We will come back to these points a little bit later in the presentation as well.

All in all, a quite a tough market to operate in. Now looking at one of the core KPIs that we follow very closely is our active customer base.

Here, it is very positive that for the fifth consecutive quarter, we did see growth in the active customer base in the Nordics. Now, this growth was primarily driven by higher conversion in Q4.

We did see relatively stable traffic year on year in the fourth quarter, but it's also worth noting that we required a higher marketing spend to achieve this traffic. Again, a quite a hesitant customer out there.

With this higher conversion in Q4, we continued to recruit more new customers than the same quarter the year before, and we also saw that the number of returning customers increased once again. A positive development once again in our active customer base.

Worth noting, though, again, that while we converted more customers, they were more hesitant in their spending behavior, which did result in a lower average order value. We have seen this negative trend in the average order value for some time now, and this continued in the fourth quarter.

As I said, a customer that was driven by more value-oriented product choices and also depended more than the year before on higher discounts to convert, and this of course puts pressure on the basket size with fewer items per order and lower average item prices, resulting in a lower average order value. Now going forward, our focus continues to be on making sure that we further strengthen the assortment across all of our categories, as we see this as absolutely key to being able to build the basket size going forward with more products and more importantly also, more categories per purchase.

Critical to continue our work on improving and strengthening our assortment across categories to counteract the trend we've seen in the average order value for some time now. Moving on to the gross margin.

Again, in the fourth quarter, we did see a slight improvement in our gross margin. We achieved a gross margin for the quarter of 54.0%, which can be compared to 53.3% in the same quarter the year before.

However, again, this slight improvement in the gross margin was hard-won. Of course, as we will see in a minute, we did achieve a higher own-brand share once again in the fourth quarter, and this positively impacted our gross margin.

This effect was partly negated by the discounting that resulted from the cautious customer behavior and the warm winter start, where we prioritized clearing stock at the end of the quarter, and which of course negatively impacted the gross margin here at the end of the year. The gross margin was also impacted by a number of currency effects, which Niklas will come back to a little bit later in the presentation.

As I mentioned, our own-brand share grew once again in the quarter and landed on 62.1%, which can be compared to an own-brand share of 47.2% in the same quarter last year. This increase in our own-brand share was primarily driven by a few key categories.

Jeans, sneakers, and knitwear all developed positively during the quarter and accounted for much of this increase in our own-brand share. As I mentioned, positive impact on gross margin, but we did have to employ a higher discount, which was required to sell through the autumn and winter assortment.

It is worth noting that this was an effective measure. We did sell through much of the autumn/winter assortment, which perhaps in hindsight had we known that the winter would come on this side of Christmas and the new year, we would have perhaps done slightly differently.

As I said, sell-through of the previous season has been one of our core principles that we have held tightly onto throughout this whole transformation. Once again, throughout the Black Week period and also the end-of-season sale, we prioritized sell-through of our autumn and winter assortment over achieving a sort of a higher gross margin.

An important point to note here also is that while we are, of course, very proud of our Nelly assortment and pleased that the customer is choosing the Nelly brand, our business model and our unique selling point is the mix between our own Nelly brand and our portfolio of external brands that we know our customer also values and wants. Going forward, we will continue to build our external brand portfolio.

We have strengthened it during this quarter with a couple of new brands. This will also impact our own-brand share going forward, not because of course the Nelly brand should weaken, but because we want to strengthen our external brand portfolio, which will impact the balance of our own-brand share and our share of external brands as well.

Lastly, to highlight one KPI that has been very important for us throughout this whole transformation journey is our return rate. Here, we saw a historically low return rate in the fourth quarter.

The return rate for the quarter landed on 22.8%, which can be compared to 27.9% in the same quarter last year. We have talked about the return rate frequently during our previous quarterly presentations, and really highlighted that it requires a constant focus in our business to maintain a healthy return rate.

I think it's fair to say that for Q4, this was a very low level, and it's important to remember that this will fluctuate across seasons and quarters because the return rate is in large part driven by the category mix, which of course looks different across seasons and quarters as well. In Q4 in particular, the return rate was positively impacted by some categories that tend to have a healthy return rate taking up a relatively large share of the sales.

As I mentioned before, both jeans and sneakers developed well during the quarter, and these are two categories that for us have seen a healthy return rate sort of emerge over the past couple of years. If we turn to the future looking forward, I think it's important to emphasize that we will stay the course and follow much the same strategy as we have been to date, but again, highlighting that this will need to be delivered in a tougher setting.

Both because of our own comparative figures, of course, but also because of the prevailing market climate which I've talked about during the presentation, where we see that the competition for our particular target audience attention and wallet is absolutely fierce. This will require both disciplined execution from us going forward, but also continued rapid adaptability to adapt to the market conditions as we see them, and we don't foresee these market conditions changing in the near term.

Definitely a tougher environment to operate in. As I said, we will stay the course.

We will continue to refine our assortment and make sure that we offer a highly curated assortment to our customer. We will focus on further building our external brand portfolio, complementing our already strong Nelly brand with the best external brands.

We will also continue to focus on building the overall Nelly brand, not just the products, but the overall Nelly brand as well, that of course, as I said, we will be under pressure in a tough market, but I think it's important to stay the course as we know that these are the elements that have sort of enabled our performance to date and will be key going forward as well. To summarize the fourth quarter of 2025 before I hand over to Niklas, we did achieve both growth and improved profitability in the quarter, but we did so in a challenging market.

We achieved growth in our active customer base, but with pressure on both basket size and gross margin. We achieved a historically low return rate in the fourth quarter, which positively impacted our results, but as I mentioned, important to note that this will fluctuate across seasons and quarters.

We continue to stay the course with our strategy that we continue to believe in going forward as well. With that summary of the fourth quarter, I will hand over to Niklas, who will provide us with a more detailed financial summary.

Thank you, Helena. Now let's have a look at the financial details of the fourth quarter.

Net revenue in the quarter amounted to 370.5 million, compared to 318.4 million last year, showing a strong growth of 16.4% in the fourth quarter. Growth was mainly driven by increased online sales before returns and an improved return rate.

Increased physical store sales also contributed positively. The return rate, as Helena mentioned, improved to 22.8% from 27.9% in the comparative quarter.

Currency effects affected the growth rate negatively, mainly due to the depreciation of the Norwegian krone, but also by a weak Danish krone and euro. Net revenue in local currencies grew by 19.5%.

Looking at the average order value in the Nordics, it decreased by 9.6% to 656 Swedish crowns, driven by both lower average item value and lower average ordered items. Total number of orders in the Nordics increased by 9.3%, to a large extent, mitigating the lower average order value in the quarter.

As a final comment on net revenue, we are happy to now have presented seven consecutive quarters with net revenue growth, and looking at the full financial year 2025, concluding a net revenue growth of 15.5%. For the fourth quarter, we conclude an operating profit of 47.8 million, up from 36.2 million last year, showcasing an increase in operating profit of 32%.

Operating margin increased to 12.9%, compared to 11.4% last year. The improved operating margin were mainly driven by the higher gross profit.

In addition, improved cost ratio for warehouse and distribution contributed positively. Looking at LTM figures, we maintain a positive momentum and conclude the full financial year with an operating profit of 166.4 million and an operating margin of 13.2%.

This compared to last year's 93.1 million and 8.5%, respectively. Taking a closer look at the income statement, we once again conclude that net revenue in the quarter amounted to 370.5 million, compared to 318.4 million last year.

Gross profit amounted to 200 million, compared to 169.7 million. Gross margin amounted to 54%, improved from 53.3% last year.

This improvement was mainly driven by higher share of own-brand sales, both online and through our physical stores. At the same time, higher campaign activity and increased price competition in the market had an adverse effect on gross margin.

In addition, currency effects, mainly from a weak Norwegian krone, had negative effects on gross margin, not fully mitigated by the depreciated euro and US dollar positively affecting us through part of our purchases. Looking at warehousing and distribution costs, these amounted to 42.3 million, compared to 40.5 million.

Costs as a share of net revenue improved to 11.4% from 12.7%, driven by operational improvements, optimized distribution, and the improved return rate also. Marketing costs amounted to 37.3 million, compared to 31.0 million last year, with costs mainly related to paid advertising.

Marketing costs relative to net revenue amounted to 10.1%, compared to 9.7% last year. In this quarter, we saw brand-building activities contributing to the somewhat higher ratio in the fourth quarter.

Admin and other operating expenses increased to 72.6 million, compared to 61.9 million, with a cost ratio relative to net revenue that was in line with last year. As mentioned, we were very happy to open up our new flagship store in Copenhagen, which affected admin and other operating expenses in the fourth quarter with an increased cost base, and in addition, the fourth quarter saw also increased personnel and consultant expenses.

As noted, operating profit increased to 47.8 million with an operating margin of 12.9%. To finish off the financial summary, let me take you through some additional KPIs.

Operating cash flow in the fourth quarter amounted to 50.8 million, compared to 71.8 million last year. Increased settlement of tax deferrals in the fourth quarter affected operating cash flow negatively, and by the end of the fourth quarter, remaining tax deferrals amounted to 42.9 million, compared to 95.3 million same quarter last year.

In the fourth quarter, we also adjusted our valuation of deferred tax assets related to tax loss carryforwards, increasing total deferred tax assets to 85.5 million. This also had a positive effect on profit after tax and EPS in the fourth quarter, which is worth to mention.

Inventory amounted to 188.2 million, compared to 172.6 million, and inventory levels as a share of net revenue LTM decreased to 14.9%, compared to 15.8%. Cash flow from investing activities amounted to -13.9 million, compared to -2.5 million last year, primarily attributable to the newly opened flagship store in Copenhagen, as well as continued IT investments.

Cash flow from financing activities amounted to -9.7 million, compared to -32.8 million, mainly related to the payment of lease liabilities, and compared to last year, mainly explained by last year's payment of an extraordinary dividend. Lastly, cash and cash equivalents amounted to 253.8 million, compared to 196.9 million last year.

Our equity ratio improved to 41.1%, up from 26.4% last year. Ending the quarter and full year 2025 with a solid balance sheet.

With that, I hand over to Helena for some closing remarks.

Thank you very much, Niklas. This concludes today's presentation, and I believe we have received a number of questions.

Before we go to questions, I would just like to obviously take a moment to thank all of our customers who have chosen Nelly once again throughout the fourth quarter, but most importantly throughout the whole of 2025. Of course, a huge thank you to the entire Nelly team.

I'm amazed and continue to be amazed by how committed everyone is to creating the best experience for our customers every day. Thank you to the whole Nelly team.

With that, Johan, we will move on to questions.

Thank you, Helena, Niklas, and thank you all for joining our fourth quarter presentation this morning. We have received a lot of questions today, let's kick off with the first one, which is from Daniel.

That actually is two in one regarding Germany, and both of them are for you, Helena. In connection with the most recent quarterly report, it was mentioned that Germany would be a focus market in 2026.

How has Germany developed during the most recent quarter, and how do the return rates look there?

Yes, the Nordics absolutely continue to be our core focus, but we have started to incorporate Germany more in the markets that we actively sort of drive. In Germany, we have continued to see a positive development also in the return rates.

This is one of our core principles that we will not grow anywhere if we can't do so profitably, and of course, the return rate has a huge impact on this. We have seen a a positive development in the return rate in Germany over the last sort of year as year and a half as well, which has enabled us to yeah, to focus a little bit more on Germany.

I think it's important to really understand that we will do so in a in a controlled and and sort of step-by-step manner. We are watching Germany very closely.

We are conducting some different sort of trials with influencer marketing, a little bit more paid marketing to see how it responds. Positive development, but very very controlled, I would say.

Thank you, Helena. Let's continue on the market in Germany.

This one is from August. Germany has been mentioned as a strategic expansion market.

Could you provide an update on how the establishment is progressing, what level of market penetration you have achieved to date, and what growth rate you expect in Germany during 2026 compared to the Nordic markets?

We obviously don't disclose that level of detail per markets. We definitely have seen that the customer in Germany has responded well to our assortment, and in particular, we see that they do like the Nelly brand.

Of course, the Nelly brand is what we can uniquely offer in the German market, with many of our external brands, of course, also being well established in the German market already. We see a very positive response in particular to our Nelly brand.

As I said, we have a number of sort of core principles that we operate according to in order to grow profitably, and we watch those very very closely in Germany. Far we see a positive development, but time will tell exactly how much we will focus on Germany and what share of the business it will make up.

Great. Thanks, Helena.

Let's dive into some numbers then. This one is from Kean.

Congratulations on a very strong year. However, I do want to better understand the volume dynamics in Q4.

Order growth decelerated sharply from 20% in Q3 to 9% in Q4, while traffic went flat. This occurred despite a 20% increase in marketing spend.

Could you walk us through what changed between Q3, Q4, and whether those dynamics have persisted into early 2026, or if you're seeing a different pattern now?

As I mentioned earlier in the presentation, I think we can really summarize the fourth quarter by saying that we achieved a stable result, but we had to work quite hard for it. I think that includes both how much marketing spend we had to employ to drive the traffic, and also what discount levels we had to employ to convert the customer.

This is reflected in the numbers. I still think we achieved a good result for the quarter, but it was really quite tough and challenging with a hesitant and cautious customer, and so that explains I think the dynamic between these different KPIs, that we had to operate according to the conditions of the market, which we did.

Yes, there was a part of the question about 2026. Of course, we cannot talk about 2026 just yet.

As I said during the presentation, we continue to see a tough market out there and quite a high level of discounting across the fashion segment. Thank you.

This one is from Jonathan, and it's regarding rest of the world, and rest of the world stands for 7% of the revenues in Q4. Could you shed some light on your plans in this area for 2026?

Yeah. As we have also mentioned during previous presentations, it is really mainly Germany that we focus on outside the Nordics.

I think it's really important not to try and figure out too many new markets at the same time. I know that can sometimes be a tendency in e-commerce to think that you just open up your sales to a market and the rest will handle itself, and we know that that is definitely not the case, and we know that Germany is a very tricky market, where many before us have underestimated the challenge.

I think, when we talk about rest of world, it is primarily Germany that we focus on. Now we do sell to the other markets in Europe, but that's not something that we are actively driving at the moment.

Great. Now we've received quite a few questions from Johan, and they are quite long, I'll try to read them quite fast.

How should investors think about the growth trajectory into 2026 as comparables become more demanding? Can you indicate whether growth is likely to be a high single digit, low double digit, or closer to previous mid-teens levels?

With return rates and own-brand mix tailwinds largely behind you, what are the key incremental growth drivers for next year, and should we expect greater reliance on new customer acquisition and international expansion, or are there still meaningful opportunities within the existing Nordic base?

We don't guide around particular growth expectations or profitability expectations for that matter forward. I think, as I said a little bit earlier in the presentation, our strategy doesn't change, and the way we think about the growth opportunities forward doesn't change.

It's a tougher market, for sure, but we still believe that we have growth potential in several of our categories. Some categories are already performing very well, but we do have many many categories that make up our assortment, and we see several categories where we ourselves feel that there is potential to improve our assortment further.

We definitely also I think have further potential in our Nordic markets. We have learned since opening the physical store in Copenhagen as well that it's actually giving us really valuable insights about the Danish customer, and also as we talked about in Germany, there is potential.

I think again that the growth levers don't change, we just have to be even more disciplined and even more adaptable in sort of mitigating all these various factors in the market as we pursue these growth opportunities going forward.

Thank you, Helena. Now over to you, Niklas.

Q2 and Q3 deliver strong EBIT margins of 15.3%, but Q4 declined to 12.9% despite solid sales growth, driven by higher admin costs and gross margin pressure from increased discounting. As you enter a new investment phase with Germany expansion, more physical stores, and brand building, what is a realistic, sustainable EBIT margin for 2026 and beyond?

Should investors view Q4's 12 to 13% as the new baseline, or was this primarily a temporary effect from promotional intensity?

Thank you for the question, Johan. We might comment that continued investment will be needed, both CapEx and OpEx.

These are factors that need to be considered. Q4 saw some increased pressure on gross margin from price competitions mentioned, and some flexibility going forward will be needed to be able to keep a curated and competitive assortment.

As well as to keep an adaptability in our marketing strategy. We also expect some scaling effects through larger volumes, and as always, profitable growth will be our main focus still going forward.

Thank you, Niklas. Unfortunately, we are running out of time, there will be two more questions for today.

This one is regarding Black Friday from Eric. He is wondering if the Black Friday discounts impacted margins this quarter.

We saw a slightly more typical Black Friday or Black Week, Black Month pattern last year, where the beginning of November was a little bit slower and then really picked up in intensity around Black Week itself. I would say, though, that the weather actually did have a greater impact on our gross margin than the discounting in November, because if you remember, the whole of the fourth quarter was pretty warm, and that tends to impact the already short window we have for seasonal products.

Of course, Black Week always impacts to some extent, but I wouldn't say that that was the biggest factor.

Great. The last question then for today, this one is also from Eric.

Congratulations on the Gothenburg store. How does your strategy look when it comes to stores, and how many do you intend to open?

Yes, good question. We are very happy that we have signed this location in Gothenburg.

It's really a AAA location once again, and it's of course also extra special because it is a little bit like coming home. As we have said in previous presentations, we very selectively pick locations where we believe that opening physical stores will help us both build our brand and help customers discover or rediscover our assortment, and also for us to continue to deepen our relationship and learn about our customers.

We don't have a set number of stores that we are planning to open, but we take it one by one. We now have stores in Stockholm and in Copenhagen, which we're really happy about, and adding Gothenburg.

Beyond that, every location will be decided on its own merits. Again, time will tell.

Amazing. Thank you both Helena and Niklas, and thank you all for sending in so great questions.

Thank you very much.

Thank you.