Alligo AB (publ) (ALLIGOB) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the presentation of Alligo's Interim Report Q1 2023. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Clein Ullenvik. Please go ahead.

Okay, everybody. Welcome to Alligo Q1 report. Today's highlight, we think we'd love to talk about Alligo. Today's presenters will be myself and Irene Bellander, our CFO. We normally have one theme for our presentation, as you know. We've had logistics, assortment, sustainability, acquisition. And today, we will touch up on our customer strategy -- the way will look from a customer perspective. We said last time -- if we move to Alligo, in short, we said last time that -- we had 4 slides of Alligo, that was to introduce you all to this new creation Alligo. We said last time that we should have fewer slides. But this time, we are down to 3 slides, not many, fewer slides, but I think quite a few. And we are a leading player in a leading player in workwear, personal protection, tools and supplies in the Nordic region, SEK 9.2 billion turnover, a little shy of 2,400 employees and a little over 200 stores and with our proud concept brands, Tools, Univern, Swedol and Grolls. If we look at the original Alligo, we've got several different questions. As I said, Alligo is a fairly new creation and in different meetings in different forums we get questions, what is the background of all this? And we have all our concept brands. And of course, Alligo is structured with many different components. So just in a time line to pinpoint a few years, so actually it takes back to 1832, Grolls, which Swedol acquired in 2016. So it was actually founded in 1832, supplied the clothes to the engineer, Andree's polar expedition. Unfortunately, they all froze to death, but it was not due to our clothes, hopefully. Swedol was founded in 1963, celebrating its 60th birthday this year. Tools founded in 1999. And then we can skip a lot of different steps up to 2019 when we formed first -- the beginning of Alligo under the name of Momentum Group, with the merger of Momentum Group and Swedol. And then in 2022, when we spun off Components & Services and focused on what today is Alligo. So that is the timeline. It actually dates back to, not 2022, it takes back to 1832. So that's our impression with a solid history. Turnover rate, SEK 9.2 billion, as I said, 56% of that in Sweden; second biggest, Norway, 27%; and then Finland, 17%. And from a revenue perspective, Sweden, 78% of EBITDA. That was also why we were a bit nervous last year when we did all these changes. We did all those huge operations in our -- by far most profitable countries which we came out alive from. Share of own brands, it's 18%, it's increasing somewhat, and we're targeting officially but we've said it in different forums. We're targeting some 25%. We take this as a decent level to be on. So highlights, Q1 in brief, we are fairly happy with the development during Q1, we grew 9.2%. We had an EBITDA increased by close to 21%. We are very happy with the cash flow from minus SEK 30 million to plus SEK 146 million. And we're also very happy with what's happening on the customer side, we're talking a lot about increasing the share of small and medium-sized customers and that we do. But we also do a lot of things we haven't communicated a lot that is, we're trying to get, of course, have the best cooperation with the larger customers as well. So we actually terminated a few contracts and we are winning contracts with customers that appreciates our strength. We have a mission that we make businesses work. So we do not want to be a product provider at lowest price point. We'd like to offer our services, together, of course, with product offering to the customers that value that type of corporation. So we have Skoda Transtechhat in Finland, we have Samhall in Sweden, we have several different places in Norway. We are happy that we're quite successful in winning larger customers, which is more in line with the type of customers we would like to have going forward. Made one acquisition this year, the Finnish Kitakone Oy, even if we completed 3 in January, but they were done last year. So if we calculate the way we'd like to calculate, we have done one this year so far. So we have some catching up to do. We'd like to do acquisitions, as you know. Business conditions from 4 different perspectives. We're seeing strong demand in Norway and Finland, but we also have some hesitancy in those countries as well. We also see some increase in Sweden compared to what was said in Q4, but as you know, somewhat slower market is traditionally a chance for us to improve our position. So we have a lot to do, and we just came out of total remake over in the -- when we built Alligo. So as with that, we have a huge opportunity to take market shares, when we increase our operational efficiency. We worked with price adjustments, we work with different categories to make them to be -- the best profitability we can do looking at each and every customer, pushing for getting price increases through because we had some quite high price increases coming in. Our cost -- we worked with cost reductions and so far we managed to counteract some hesitance in the market by reducing costs. So we do it step by step. We look good in delivery capacity, box are still on reasonably high level, but we are taking actions to bring them down. From a macro perspective, of course, its's continued uncertainty, you all probably listen to different companies reporting and industrial sector seems to be running very well and the construction sectors is heading into various funds. So it is an uncertain market, but we feel safe and solid and where we are and what we are doing. So what do we do? We are planning growth initiatives per country, now starting looking outward instead of inward with all our different projects we've been running. Now again, we can come back to the beauty of running business and running sales. So we have some growth initiatives in all countries, ensure that we get the price increases we have targeted. We have a well-established process and we are successful in what we are doing. Cost initiatives that we -- that came out of the integration project, as we said, we are now in operational fine tuning. And as you can understand different type of activities follows, of course, where we need to have fine tune and see, are we meant in the right way in different functions and more efficient. Of course, we are not, we have more to do. Stock reduction. We can see external brands coming down that is easier that is quicker, of course, compared to when we have ordered products from Far East from 6 to 9 months ago, even if we reduced purchases from those type of suppliers across. It will take some time before we can see that here. So it could be a lead time of up to 9 months. And different type of efficiency measures, of course, we are fine tuning the sales organization on how to run internal sales, how to run external sales. We are fine tuning the organization, we go along. We said customer strategy. As you know, we define that, the way we define the market at SEK 53 billion business. We love all type of customers, of course, but we are trying to get up the share of small and medium sized enterprises. But we'd like to also large industrial customers. Focus on public sectors, we have 8 defined customer segments. Main competitors, there are some bigger ones, they are focusing on approximately the same customer segments as we are. And there are some independent local players. One slide showing a little bit of a shift, it's not super dramatic, but the blue circles are customer segments where the relative share has increased, the red ones are customer segments where we are at the same levels or lower share. So as we have communicated, as you know, the industrial side, it's a little bit bigger share of 1%, public sector delivered bigger share and also oil and gas. From a Group perspective, it's 1%, and it doesn't sound much but you take only Norway, of course, the capacity is higher. So as we have communicated, those segments have gotten a little bit higher relative share. And we'd like to focus more on construction, of course, even if that market is tough, we see that we'd like to have a higher share of construction-related customer, especially and generally small- and medium-sized customers. One interesting quite information heavy slide, but let me just take you through it quickly. We can see Sweden store sales 70%, Norway stores sales 45% and Finland store sales 20% of turnover, and that picture you probably already have generally but now put into the figures. And if we look by customer -- by product category on the second line, you can see in Sweden 46% workwear, the rest is Tools; Norway 36% and Finland 32%. And then on the last row you can see sales of own brands is 23% in Sweden, 15% in Norway and 9% in Finland, which gives us a quite interesting picture. So the higher share of store sales, higher the sales of workwear and the higher the sales of own brands, of course, the higher profitability. Hence the initiatives we are running. So what do we do to win more of the small- and medium-sized customers? We are investing quite heavily in Finland right now. We have 6 ongoing short projects. Relocating some, opening some new ones, we're establishing a new, call it, flagship store, where we will have the headquarter in Helsinki in Konala. We are refurbishing shops all over the place and we are running campaigns to targeted customer segments, a little new way -- a new way of running sales, which we're trying out in Sweden, which we will copy up to Norway and Finland. And we will again come back to what we used to have more of marketing efforts, as I said earlier, we've been very inwards focus for a while, for obvious reasons why we did this integration. Now we've kept -- I've noticed upwards again, a lot more marketing. And key accounts, we've been successful in some in energy, environmental sector, which we think is interesting where -- especially Sweden has attracted a number of companies. Those are the ones we think we fit well together with. And we seem to have an offering, which is interesting for them. So we'd like to do more within the environmental tech sectors. And everything is based on our service offering, the smart services, we have different ways of running, we built business with washing with adjusting cloth and specific assortment and so forth. So just 2 pictures, one of a new shop in the Middle East. As I said, 6 projects running in Finland. We'd like to do much more in the shops in Finland. As we said before, as well, Finland has the lowest starting point in, if you compare with type of shops. We would like to have different companies in Finland further away from that. And then a picture of a small service cabinet of the Skoda Transtec. If you look at the Finnish turnover, 30% of our sales comes from both the cabinet directly and 70% of our sales comes from customers, who we have smart service set up together with, where strategically it's very important for us to get that type of cooperation with our customers because it ties us closer together. Financials, over to you, Irene.

Thank you. As Clein mentioned, we continued to benefit from profitable growth despite a weaker market. Revenue increased by 9.2% to SEK 2.3 billion, where 3.7% was related to acquisitions and 1.6% was related to one more trading day. In addition, there was a slight positive currency effects. Organic growth in the quarter reached 3.6% driven by positive sales development from larger industrial customers in Finland and Norway. The slowdown in Sweden that began in Q4 intensified during first quarter for most customer segments. EBITA increased by 21% to SEK 127 million in the second quarter, corresponding to an EBITA margin of 5.6%. The improvement in profit is driven by Norway and Finland and is a result of stable growth, improved margins and integration synergies. The increased proportion of own brands also contributes positively, but there is a negative country mix that comes there. Let's have a closer look at the development in each market. Facing the Swedish business increased by 6.7% and were positively affected by acquisitions. Organic sales in the quarter were negative and the slowdown observed in Q4 intensified in Q1 and most customer segments have been affected. The decrease in profit in Sweden was driven by the drop in sales, with also pressure on margins on our own brands in the beginning of the quarter. The positive sales trend in Norway was driven by the good development in the oil and gas segment. Total sales increased by 11.7% in the quarter and organic sales reached about 9%. The improvement in profits in Norway is driven by stable growth, improved margins and integration synergies. The priority going forward is to increase the share of small- and mid-sized customers and strengthen sales and assortment management. In Finland, we have continued positive sales trend among larger industrial customers. Sales increased by 19.7% and organic sales reached about 9%. The result in Finland will strengthen because of growth and increased margins due to improved sales management. The customer mix remains unfavorable but activities such as investment in stores are ongoing to attract and increase the share of small- and medium-sized customers. Now moving onto cash flow. Cash flow from operating activities in the first quarter amounted to SEK 146 million compared to minus SEK 30 million last year. The improvement is mainly related to decreased prepayments to our Far East own brands suppliers. The inventory levels continued to increase in Tier 1 but at a lower pace. In the last 12 months, we have had an inventory build up of SEK 320 million. Approximately, 50% of inventory build up in the last 12 months is a result of higher purchase prices and unfavorable currency effects. The other 50% is related to increased volumes of our own brands and the ongoing assortment batch. So our focus on product availability and investments in our own brands range has tied up more capital and temporarily reduced cash flow. However, there are several ongoing actions to decrease the stock levels. For example, reducing the product range and reducing the minimum order quantities. The investing activities are related to M&A activities and consists of 3 completed acquisitions during Q1, but also store and central warehouse reductions and IT-related investments. Ratio of CapEx to depreciation amounted to a multiple of 1.2 in the quarter and 1.4 on a rolling 12 month basis. Finally, the financing activities are mainly related to the amortization of leasing liabilities. The group's net debt amounted to SEK 1.5 billion at the end of the period and the unutilized credit facilities amounted to SEK 960 million. The financial net amounted to minus SEK 18 million, excluding IFRS 16 compared to minus SEK 5 million in Q1 last year. Average lending rate in the quarter amounted to 3.7%. The ratio of net debt-to-EBITDA amounted to a multiple of 1.8, which is a decrease compared to Q1 last year and well within the financial target range. Our covenants are related to interest coverage and equity assets ratio. These are fulfilled at the end of the period and there is good head room before reaching the threshold. In summary, our strong financial position means that we can continue to invest in organic growth and take advantage of potentially good M&A opportunities. Turning it over to you, Clein, for summary and outlook.

Okay. Let's go into Q1 summary. Looking back, we had a decent start to the year we think. We navigated okay through some turbulent waters some time. Profitable growth. We drove the cash flow. Where the market is heading, the jury is still out, we still see some increased hesitance in the Swedish market and tendencies to slowdowns in Norway and Finland, even if we have really good growth in both those countries in Q1. We managed 1 acquisition in Finland, more to follow hopefully. We have a really good delivery capacity for our own-brands and we know that we have strengthened our competitiveness, especially within the customer segments we are targeting, especially in the environmental tech sector, which we find very interesting. So the outlook for 2023, we feel really, really comfortable that we're in a good position, financially strong as Irene just showed, we know what we're doing, done it before. We are eager to begin 2023 and it's also quite much fun all of us who are involved in this business, we love sales. So it's fun that we finally are at the point where we now can talk more about customers and our offerings, and sales. Good availability, as we've said several times already. We are focused on small and medium-sized customers. We are, as we speak, running this close to famous Swedol and Tools, based in all 3 countries which we love, because we can really closely connect to our smaller customers. We need to fine-tune the cost structure. We need to do that anyway, but it's also preparing us for potentially in certain markets. And then of course we'd like to make more acquisitions as we clearly communicated. After the 9 acquisitions last year, we'd like to be on at least that level for 2023. So we feel quite confident. So that's all for now. So if we hand back to you, dear facilitator, over to the Q&A session.

[Operator Instructions] And the first question is from the line of Emanuel Jansson from Danske Bank.

Clein and Irene, so a couple of questions from my side. And if we start with the earnings development, even if we saw the decline in the Swedish market when it comes to profitability, earnings increased impressively 20% year-over-year in this quarter. And can you say anything on how the developments in regards to profitability have developed throughout the quarters in Sweden, in Norway and in Finland?

As Irene mentioned, quickly touched upon was that we had a -- we were a little bit disappointed as we are more different in time -- in the beginning of the quarter, we had quite high price increases during the autumn. We made this price revision in September, and we have been pushing harder to get the price increases through. So in all openness, January was worse than we expected gross margin-wise across all 3 countries, but it developed better in February and March. So now we feel leaving the quarter that we are on the level we should be from a contribution margin perspective.

Okay. Sounds good. And you also -- you're mentioning the reduction in profit in Sweden due to unfavorable currency effects and you're also mentioning some costing also you're going to implement. Do you see that this will have a good effect already in Q2? Or will it take longer time to get these implementations to give an effect?

It will come continuously. I mean, the things we have said is you don't need to be super optimistic to see some nice things happening going forward. Will it happen in Q2, Q3 or when will it happen, but we -- it's sometimes good when you are put under stress. We have looked over the whole supplier base or factory base in Far East, which have had good effects when we pooled volumes to fewer plants and in more for us, favorable countries, i.e., you can get rid of some customs. If you don't buy from China, you buy from Pakistan, Bangladesh or elsewhere. So today, we have a good effect. The dollar has actually come down from its worst level, so it's coming down. So a slight strengthening of the SEK over time. It's not good for the industrial companies in Sweden, potentially, but it's good for us. So that feels good that good times ahead with a stronger currency, all the initiatives we are running on improving our purchase prices from plants in Far East. And continuous work with our partner suppliers because we are in this together and trying to find a good price point in the market where we can earn money. So from that perspective, we feel comfortable. Probably foolish to say, but it feels okay. And then from a cost perspective, we have a lot to do even if we said we are ready with the integration project of the course. Now we need to look into how we work with our processes that we have. Perhaps I'm downgrading our stuff, but we have huge inefficiencies that we need to fine-tune, which is not so strange, but we need to do it.

Okay. That's very clear. And also looking on the Norwegian and Finnish markets, have you experienced slowdown? Or have you seen it from customers saying that the market is slowing down? Or have you self-experienced it?

As I said, we saw quite good growth in Q1 in Finland. So it's a bit strange. But we try to communicate what we have and it was mentioned today earlier in the television that a bit of mismatch. Many talks about the uncertainty in the market and all reports coming in better than expected. Some are talking in real terms, some are talking in nominal terms. And we are very focused in real terms and taking inflation out of the equation. So perhaps we are more focusing on what the talks are in the market and we haven't really, really seen it yet. But we try to communicate it what we think in a balanced way.

Yes. Okay. Great. And how satisfied are you in the development of own brands in this quarter? I assume if you have some trading down in Sweden, we have a larger share of private labels, but also in the Norwegian and Finnish market, you have more of larger customers where it's maybe more difficult to implement the private labels to. Are you satisfied with the pace of the development of our brands? Or is it lower than you expected it would be, for maybe 6 months ago or so?

You can always hope and we would hope, but it would have been better/potentially a little bit expected, but it's more or less as we expected, but it will take time. And what we're doing now with the shops, especially in Finland, will increase that speed. The success journey from Swedol base in 2014 and onwards was that we could change the assortment in the shops that you do fairly quick. As you just train the store persons in selling, get the shoes instead of other brands potentially, and that goes quickly, what is slowly -- slower as you are mentioning yourself, Emanuel. The larger customers where we've promised a certain brand and that takes some time and some discussion before you can change that. So we are persistent in the way we're heading. It's well received everywhere. I mentioned Skoda earlier as one example. They had one meeting we presented to get the shoes and then it was decided we want this. So even with larger customers, it works. And the strategy for us was to have enough of own brands at home. When we did January 2014, we actually talked a lot to our sales person saying, now you need to push for our own brands and then we ran out of stock. And that's what we should not do, hence the high stocks of own brands in Alligo. So yes, you always want it to be quicker, but we have a steady development in the right direction.

Yes. Okay. Great. And also, you show us on the slide of different countries, you show that in Finland you have a much larger share of direct sales instead of store sales. Over time, you want to have the major part from store sales? Or should it remain the largest share from direct sales in that country? And maybe you can give us some flavor on the profitability in those 2 channels?

Yes, of course, we'd like to have not as high as possible, but a much higher share because store sales is to the greatest extent equivalent with small- and medium-sized customers. That's why the difference in margins. So of course, it's much better from a profitability point of view. And then you can apply ABC analysis and say that a huge industry customer is not using our shops, thereby you shouldn't burden them with a store sales cost, but we do have the store network and, in some cases, also industrial customers need to come to our shops. And in many contracts is the demand that you are existing in that business. You cannot win that contract if you don't have an operation in that city. So we'd like to have a higher share of shop sales. We think we are -- we have proven and we are proving that we are good at running shops, and it's also very good for both attracting the smaller customers and also to convert to our own brands. So yes, higher share of shops, yes, please.

Okay. Great. And maybe last question for myself regarding M&A. You're mentioning that you're targeting to do more acquisitions. And if we see a slowdown in the market and also in Norway and Finland, will you put the M&A agenda on the side for a while? Or how should we view the M&A pipeline and the ramp-up maybe of it?

We have no intention to slow down the M&A focus, and we are financially stable. So of course, within reason, if the market is extremely bad and we are getting really unsure, then we need to revise it, but we are so safe about our own development. And we have, as we said earlier, good pipe of the good acquisition, candidates. So we have no other focus to pursue that. And you mentioned Finland and Finland is especially of interest to us, both because of the starting point of the business there is the furthest away from what we think is the Alligo structure. And also, Finland is an interesting market in relation to price and what you get in profitability in the acquisition targets. So Finland, it's really, really interesting for us. And the only acquisition we've done so far this year has been in Finland. So we'd like to do more acquisitions in Finland, please.

Yes. Yes, that sounds good. And maybe, sorry, last question here. Maybe I'll always come with this question, and maybe it's a little bit boring, but also interesting, you grew 9% on top line, 3.6% organic. Can you give us some flavor of volumes versus price here? I guess it's more of price here.

Yes. Yes, correct. Not boring. We are highlighting that, let's call it what it is. But you can argue that some companies have inflation in, but kind of push it through. So in some ways, it's a signal that at least can push it forward. But in real terms, it's not much left if you eliminate for inflation, of course.

Okay. Great. Clein and Irene, I have to say congratulations on a solid report.

We'll now take our next question from the phones. This is from the line of Karl-Johan Bonnevier from DNB Markets.

Great run-through of the customer offering, customer segments. And if you look at the customer segments, where do you see the biggest, say, fear for the moment or the biggest drop downs and the most reluctant clients? And where do you see the good spots?

A good question. I mean, we had a bit of unluck, what you should say. We have many lovely customer segments, which were suffering early, if you take the transportation sector, which is very interesting for us. Agricultural sector, they were all punished by high fuel prices. So we saw some turbulence there early 2022. Now we see the industry, of course, just look at all the companies who have reported as stable and strong. And then you have the construction sector. But I think we will come out okay of that for many different reasons. One is that we are focused on small and medium-sized customers, just like my father was when I grew up in the construction sector, and they always tend to find work. And two, we are as long as there are some constructions going on, probably some bridges and so forth, that is more our sector. So it's the construction sector, we -- from a national perspective, we talk about Sweden in all 3 countries, be on the most -- sorry 4. But I'm so confident that we can come out okay with that. And also that we have proven that in tougher times, when these lovely owners and managing directors of these smaller companies, they are more cost-effective in the way they run the purchases. We are an attractive alternative to them. So we intend to capitalize on potential as it does in that market.

If you look at the worry for the moment, is that more related to manufacturing, repair, maintenance, if you are looking at the verticals?

Yes. And if you take -- I mean, just more general worry, I think we're all scratching our heads, how strong the reports are coming in and everybody has been shopping for the world for quite a while at, still they come in quite strong. So we will see a general downturn. And I think with that several times, I don't have any good KPI at the moment, but in the good old days, we correlated quite well with GDP. So if the activity in the market goes down, of course, we will be affected. But to pinpoint the specific customer sector, which could be some hesitant of course, it's the construction sector. But on the other hand, we are growing in other sectors. So -- but if I should pinpoint one, it's that one.

But if you look at your categories towards your main clients, is there -- has there been any, say, what you can call that they have kept higher inventory themselves because of the challenges in the overall, say, supply chain? And maybe those -- that's the thing that has gone out of inventory now, so we are back to more of a normal kind of outsourcing environment also for them?

It's more -- I guess you will hear other reports where they say that about us, that we have reduced our purchases into our stock and with our consumables. So when your trousers are worn out, or you need a new electrical drill, then you buy it. So we don't have that much stock at our customers. So it goes quite quickly. If their business turns up or down, it will affect us quickly, positive and negative.

No, that would have been my take on it as well. So then looking at the country sales mix, a great chart on all those pipes. When you look at the main business driver for the store channel, is that the workwear or is it a combination of things and workwear is the money earner in the stores? Or how does it work?

It's a good question, and it's both, of course. But where we have had our -- we have both categories which are big with us, but we have a big competitive advantage, especially in workwear, since our own brands have the highest share there. So that has been our success story. And you also potentially need it more, and especially with weather changes. I promised myself I wont talk too much about the weather, but I mean, just looking at the window in Tyreso office, when it rained the other day, then it's full on the parking lot. And when they are in there buying rain gear, they buy other things within workwear, but also buy whatever they need on the tools that are suffice to buy. But workwear is as a competitive advantage for us because there's no other player in our part of the value chain who has what we have.

And coming back to ask a little on the pricing as well. I saw you had still a good move on the gross margin in the quarter, even though you said that you lagged behind a little in getting pricing through. The gross margin benefit you saw in the quarter, is that more related to that Q1, last year was an easy starting point easy comparison, if you think so?

As we said, we were in the beginning of the quarter, just as we communicated in Q4, but I think we managed to turn that around during the quarter. So mid-February and March, we've had -- you sometimes use the word brutal, and then I use the word brutal, our sales force, key accounting and normal sales person across the company are brutally focused on getting price increases through, and we have monitoring profitability closely down per single customer, and that is paying off. This is the type of business where you need to be on top things and it's giving effect.

And I guess when you now indicate that you are taking lower purchasing volumes to moderate the inventory against the demand you see out there, I guess we should expect a better cash conversion over the next couple of quarters than we have seen, so when you have now rejigged activities during 2022. Is that the proper way of looking at it?

Yes.

Yes.

Good. I like to kind of short snap the answer.

And I like to -- it was against my nature to say yes.

Yes. Then finally, also coming to acquisitions. It looks like you're able to do them at very, very attractive multiples and that we have seen one of your major competitors also wagering into other verticals in the market. Is that something you could consider as well?

We've said we have plenty to do where we are, and we have a good pipeline in all 3 countries, and we are really picking. We don't do acquisitions, start to do the acquisitions. As we have said, we promised ourselves not to take on any turnaround cases. So we pinpoint profitable companies who have shown the ability to grow in all 3 countries within the product areas that we are existing right now with so much to do that. So not at the moment.

So no temptation going into paint or anything like that?

Sorry, painting what?

Going in to…

Paint, yes, I know what you mean. That we looked at some years ago. And it was quite a messy business. We didn't want to have our floors and our nice shops being -- filled with paint, exactly. That we dug into a lot 5, 6 years ago and then decided not to move into that. Okay. Then I know what you're getting at.

Thank you. No further questions on the phones at the moment. [Operator Instructions].

We have a number of questions mailed to us. Let's try to read and talk at the same time. Price increases, all you've done? Or is there more to be done? It's a continuous process, and I don't know if I'm saying too much, but we are 70% through with key customers, for example, in Sweden. So yes, there are more to be done. Yes. The question is if we can counteract with cost, if the market turns down, and yes, we can to certain extent, but we have our shops. We have our central wear office. But historically, also there, we have proven that we've been good at mitigating variations in volumes with costs, but of course, nobody can fully mitigate if it goes really, really bad, but that there are no signs it should be. So very good. No other real -- any questions besides the ones we already answered, I think.

There were no further questions on the phone lines either.

Okay. Should I do the closing remarks?

Yes, if you are ready for closing remarks, Please go ahead.

And so thank you to everybody listening in. There are report heavy days we know, but thank you for paying attention. And just in conclusion, we had a good start of the year. We are now in the process of starting or continuing with operational efficiency and our journey of the company we have built. We are focused on small- and medium-sized customers. We're focusing on own brands, as you know. And we're also focused on continuing doing acquisitions on this platform that we have now built, not at least through the brutal Monday in May 2022. So as I always end, this journey continues. Thank you very much.

Thank you. This does conclude the conference for today. Thank you for participating, and you may now disconnect. Speakers, please stand by.