Boozt AB (publ) (BOOZT) Earnings Call Transcript & Summary

Welcome to the Boozt Q2 2023 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers CEO, Hermann Haraldsson; and CFO, Sandra Gadd. Please go ahead.

Thank you. Good morning, everyone, and welcome to our Q2 webcast 2023. Let's just jump right into it and go to our first key highlights. Basically, our Nordic Department Store continued to demonstrate its strength in the quarter as we grew 8.6% in a market that was quite depressed. This is, to a large degree, driven by the migration from single category to multi-category customers, and this is exactly what we are aiming for. Even though the market was characterized by very high promotional activity due to peers offsetting to a high inventory level we actually managed to increase our gross margin due to a very well-balanced inventory mix supported by campaign buys. The higher gross margin compensated for an increased inflationary pressure enabling us to deliver an adjusted EBIT level of 5.1% and more or less on par with last year. The underlying business drivers continued at all point in the right direction. Average order value for Boozt.com continues to increase, driven by more items per basket migration of customers to multi-category buyers and slightly by currency. What is even more encouraging is that the average order value for Booztlet is up 10% and getting close to the average order value of Boozt.com. This is the key to a strong profitability. Our stock position is very healthy. We have received the Autumn/Winter '23 stock much earlier than last year as the supply chain disruptions that affected last year's in deliveries no longer persist. This enables us to take advantage of the unusually early start of the autumn winter season, driven by the miserable weather in the Nordics. This is also why we have more confidence in maintaining our midpoint at 10% for the growth and SEK 325 million for the adjusted EBIT. So going to the next slide, the customer satisfaction KPIs. During the quarter, we have maintained our 5-star rating on Trustpilot and even though NPS is slightly down, it is more or less stable and still at a best in industry level. This tells us that we still are able to meet and exceed the expectations of our customers in terms of selection price and convenience. If we go to the next slide, we can see that the number of orders is up 2.4% versus Q2 '22 and Boozt.com and the average order value is up by 5%. And year-to-date, the number of orders is up by 2% and the average order value is up by 8.2%. And finally, it's a quite that the average order value is up 12% compared to Q2 2021, 2 years ago. This is a very good indicator showing that the department store strategy is working. And this is the reason why we are more profitable than most, if not all, of our peers. Moving on to the next slide, the cohort development. The active customer base is slightly up compared to last year, which is quite encouraging taking into account that we have been offering in a quite depressed market. Number of orders per customers also up and now at 2.4 orders. True Frequency is up 6.6% to 6.8% versus last year, but I believe that the most interesting thing is that is up from 6.3% 2 years ago. This is again a proof point that our loyal customers are buying more frequently, embracing our department store strategy. So let's go to the next slide. Before I hand over to Sandra, I would like to touch on our ability to get customers to buy into our different departments. There we see a very nice movement in customer behavior. Last year, 60% of customers who bought in the last 12 months, only bought 1 category. This year, that number is down to 52%, and we see a nice movement from 1 to 2 from 2 to 3, et cetera, et cetera. And this to us demonstrates that we're able to get customers to buy into the department store concept. And this is also explains why our average order value continues to increase. So I will now hand it over to Sandra for some perspectives on the financial performance.

So if we look at the results for the quarter, net revenue growth was 8.6%. The impact on net revenue growth of 4.2 percentage points and relates primarily to the strengthening of the DKK in euro compared to last year. As we mentioned in our Q1 call, the spring summer season started off rather late due to the cold weather conditions in the region. As the weather got more spring like, the momentum improved with higher growth rates in the beginning of the quarter, while customers became more cautious at the end of the quarter. Finland and Denmark were the strongest growing countries in the second quarter. Return rates increased slightly compared to last year as a result of the product mix. However, we do not see any increased underlying return behaviors in each of the categories. Other revenues constituted 4% of the total net revenue. Growth of other revenues was related to Boozt data intelligence a new part of our Boozt Media offering, where our brand partners get valuable data insights related to their assortments that can be used to optimize production volumes, reduce returns compare performance with relevant peers and such. For the first half of '23, net revenue growth was 7.9%, including a positive impact from currencies of 3.6 percentage points. As a result of the attractive inventory mix with a higher share of campaign buys than last year, we managed to increase the gross margin with 1 percentage point to 42.3% in the quarter. Year-to-date, the gross margin was 40.5%, a slight increase from last year's 40.4%. The adjusted EBIT margin was on par with last year in the quarter, 5.1% versus 5.2% last year. Year-to-date, the adjusted EBIT margin increased from 3% to 3.2%. So if we move to the next page, we can see that the revenue growth for Boozt.com was a solid 8.1% in the second quarter, positively impacted by the strengthening of the DK and euro. Year-to-date growth was 10.1%. The market continued to be highly promotional driven also in the second quarter as the Nordic fragmented market that we operate in has many small- and medium-sized players fighting for survival at the same time as consumers hold back on spending. Growth for Boozt was driven by a solid performance and growth across all categories, showing the strength of the department store model. Beauty, Home and Kids had the highest growth rates in the quarter. Growth was fueled by the attractive inventory position, which enabled a competitive offering to our customers. Looking at the customer base, we saw an increase of 1% of active customers at the same time as our cohorts displayed encouraging buying patterns despite pressure on disposable income. This was showcased in the increase True Frequency going from 6.6% to 6.8% orders. As a reminder, the True Frequency is how we measure the order frequency from customers that have been with Boozt during the last 12 months, therefore, not impacted by orders from new customers. The average order value was SEK 896 in the quarter and SEK 915 year-to-date, corresponding to a growth of 5% in the quarter and 8.2% year-to-date. While the AUV was positively impacted by currencies, the underlying increase was driven by the number of items per basket which is in line with the department store strategy, where we take higher share of our customers' total spending as we widen our assortment and build strong categories. The adjusted EBIT margin of 4.9% was on par with last. So if we move on to Booztlet. As you might recall, we presented a few new initiatives we're implementing to make Booztlet even more attractive environment at our last earnings call. These initiatives that aim to strengthen Booztlet as a relevant shop 365 days per year rather than primarily driving seasonal stock clearing are developing according to plan and helped us grow the Booztlet segment with 11% in the quarter. Year-to-date, net revenue growth was a negative 1.6%. Year-to-date numbers are negatively impacted by the first quarter where the Booztlet segment was impacted by the higher-than-expected sell-through of inventory coming into the year. With the new concept, we aim to mitigate such effects with an offering with more focus on basics and seasonal relevant inventory. Just as we mentioned in the first quarter, we believe that the typical Booztlet customer is relatively more impacted by the pressure on disposable incomes than the typical Boozt customer. But we have seen examples in the second quarter where customers in a specific local market active on the Boozt side to boost those interaction increases. We see this as a sign that the basic foundation of Booztlet as a hedging tool for our existing customers seem to work. The stock composition with a higher level of campaign stock enabled us to keep healthy gross margin in the second quarter despite the maintained highly promotional environment in our industry. The average order value increased 10.3% in the quarter to SEK 873. Year-to-date, the average order value increased 11.6% to SEK 894. The increase is positively impacted by currency effects, but driven by increased number of items per basket. The adjusted EBIT margin was 5.9% in the quarter compared to 6.5% last year. Year-to-date, the adjusted EBIT margin increased from 2% to 2.4%. Our ambition for Booztlet is to deliver higher for the group with healthy profitability. So let's move on to the cost ratios. The fulfillment cost ratio decreased from 11.4% to 11.2% in the second quarter. The development is a result of continuous improvement as well as continued positive impact from the higher average order value. Negative currency effects on distribution costs outside of Sweden offset these improvements slightly. Year-to-date, the fulfillment cost ratio decreased from 11.9% to 11.6%. The marketing cost ratio of 11.1% was on par with last year. We stick to our principle of investing into profitable growth with a payback period of 16 to 18 months. We remain confident that this enables us to gain market share also in the current environment, especially as we experienced that marketing costs are coming down, which should enable us to continue to get high return on investments. Year-to-date, cost ratio decreased from 11% to 10.6%. The admin and other cost ratio increased 1 percentage point to 12.3% in the quarter. While salary increases implemented in May had an impact on the absolute amounts, the relative cost for personnel was on par with last year in the quarter. While our cost structure protects us from significant impact from inflation, the current environment does impact our cost base to some extent as the weak Swedish krona had a negative impact on operational costs. This is the main driver of the increase of admin and other costs in the quarter. Year-to-date, the admin cost ratio increased 0.4 percentage points to 11.2%, driven by negative impact from currencies partly offset by lower cost of personnel. The depreciation cost ratio increased 0.2 percentage points to 3.7%, as expected and as a consequence of the higher availability at the BFC after the investments that we made over the past year. Year-to-date, the depreciation cost ratio increased from 3.6% to 3.9%. The increase was partly offset by the reassessment of useful lives of selected parts of our fixed assets. So let's move on to the next page. Here, we see that net working capital was 11.1% of the net revenue for the last 12 months, which is 1.5 percentage points higher than last year. The net working capital increase is driven by the investments made in inventory with an inventory composition tweaked to support strong sales in the second half of '23. We believe that there are good opportunities to accelerate market share, and that is what we are prepared for. Looking at net working capital, there are some timing differences, which makes comparison between quarters, a business leading especially coming into -- the last few years supply chain issues created delays that now normalized. We've seen in deliveries for the autumn/winter season earlier and with less cancellations than in comparable period and this will likely impact net working capital at the third quarter color. However, the position that we are in right now strengthens our ability to deliver strong profitable growth for the rest of the year, which is our main priority. Free cash flow for the quarter was a negative SEK 10.2 million, that is to be compared to a negative SEK 229 million last year, mainly driven by the lower investments in CapEx according to plan. Rolling 12 months free cash flow for June is a positive SEK 33.6 million to be compared to a negative SEK 893 million last year with an improved operating cash flow as well as the planned lower CapEx. The cash flow generation in December last year was extremely [indiscernible] due to higher-than-expected sales and sell-through of inventory. This impacts our free cash flow year-to-date negatively as accounts payables decreased significantly in the first quarter from the higher-than-normal level as per December '22. Cash flow year-to-date improved compared to last year as we have less investments, but net working capital changes are negatively impacted compared to last year due to this timing effect. As we expect timing differences to continue into the second half of '23, cash generation will likely be tilted towards the fourth quarter. According to plan, we only made limited investments in fixed assets in the quarter. Year-to-date, CapEx for fixed assets was SEK 11.7 million, and investments in the development platform was SEK 48.1 million. As communicated earlier, we expect CapEx for the full year in the level of SEK 150 million, where around SEK 100 million is related to the development costs. The ambition is to deliver a positive free cash flow for the year. Our cash position at the end of the quarter was SEK 901 million, that is to be compared to SEK 1.038 billion last year. And this concludes the financial update, and I will hand back to Hermann.

Thank you, Sandra. And let's just go to the outlook slide. Well, the market for Fashion and Lifestyle products has had a quite modest start to 2023. We see that we are taking significant market share as far as we can see and probably even more share points than during COVID. We're able to get a lot of customers to buy into our categories. Marketing costs have come down recently, and we're getting more mileage out of a marketing spend at the moment. Therefore, seeing how the first half has turned out and taking the start of the autumn/winter season into consideration, we don't see that the revenue growth will be below 7.5% for the full year. At the same time, we believe that it would be rather optimistic to assume that we will be growing more than 12.5% for the full year, taking the strong comps from last year into account. Therefore, we narrow the range but maintain a midpoint of 10% growth for the full year. The same applies to the adjusted EBIT margin where we maintain a midpoint of SEK 325 million, but narrow the range. At the midpoint of SEK 325 million represents an adjusted EBIT margin of 4.4%. As Sandra said, we still expect a modest level of investments in fixed and intangible assets with CapEx between SEK 150 million. Before I hand it over to the operator, I would like to touch on our staff satisfaction. So going to the next slide. I know that it's actually very unusual to include an ENPS slide. in investor call. And ENPS is the Employee Net Promoter Score. Our ENPS is absolutely best-in-class and at a level of top 1% of company's measures. So our top-performing people, they are the reason why we are stronger than ever before. And they are also the reason why we are managing the downturn better than most. And there also would be the reason why we will be able to handle the turning tide faster and better than most. So just like NPS is a pretty good indicator of future customer success. We believe that the ENPS is a solid predictor of future company before. So this concludes our presentation, and I would like to hand it over to the operator to get the Q&A session underway.

[Operator Instructions] The next question comes from Niklas Ekman from Carnegie.

A couple of questions. Firstly, can I start with your comments here on current trading. You don't specify current trading. You talk on the one hand of a weekend to Q2 and then you talk about in the call here, you mentioned that you benefited from an early start of the autumn. And I just note that even the low end of your guidance requires that you show similar growth in H2 as you did in H1, but you faced significantly tougher comparisons in Q4. So I'm trying to see what you're actually trying to communicate there? Because it sounds like the guidance suggests that Q3 must be off to a much stronger start than Q2. And I'm just curious if you could elaborate a little bit here.

Yes, Niklas, as you know, we don't comment on current trading. So I don't want to kind of go into that discussion other than, of course, we are more confident in our guidance. We almost have 8 months of the year in the books. The weather is quite good for selling or to winter season items. And to be honest, when people have been looking at similar web to predict our performance or traffic, we think that is quite misleading. So I think kind of that we are confident we -- again, we don't see a 50% growth, but we also see a [ 5% ] growth. So I think this is just a sign that we are confident in our ability to deliver the 10% that we promised at the beginning of the year.

Very good. And you mentioned here, on the one hand, you talked about a more cautious consumer behavior here during the summer. And on the other hand, you talk about improved consumer confidence. And I'm curious which one of these do you think is the most important.

The most important thing is that our customers buy into our proposition. This is what we see. Now they're buying more categories, putting more items in the basket, increasing basket size. In some countries, it looks like consumers are getting more confident in other countries, it could be Sweden, consumers are pulling back. So almost schizophrenic environment, but I think we are managing that quite well. We have Boozt.com and the department store, and then we've Booztlet which is the value shop, which kind of seems to kind of be just right at the moment with the value for money. So I think that in a very kind of rough seas, we are handling that quite well. Also, we have to remember that we don't have -- we'll have any issues. We don't have old inventory to offload or stuff like that. So we just have to only have to fix on, focus on selling more today or to more than last year. So no matter kind of the consumer confidence at the moment consumers are buying into on 2 shelves.

If I may add, it's not like the consumer confidence in general on the overall market, we think that, that's much better, but we believe that there are good opportunities for us to take market share.

Super clear. And on the topic of inventory, you mentioned campaign buys here. in the quarter that, that was a contributing factor. How do you see that going into H2? Are you seeing an increased level of campaign buys? Or are you already at a high level?

Well, we know we started the year with 2 low inventory, and we had opportunities to invest in campaign buys. That's what we continue to do and we'll continue to do also coming into the second half, balancing with how the season goes and balancing with the deliveries of the seasonal stock. What is different this year compared to last year, and I mentioned that is that deliveries are much earlier we have the things in our warehouse right now, which also means that we're ready to sell them earlier than before.

Very clear. Also, can I just ask about your customers as well. You had 2.5 million customers, and that's fairly unchanged compared to where you have been in the last 2 years. So growth has mainly been driven by average order value. Are you finding it increasingly difficult to recruit new customers? Or is this a deliberate strategy? Or can you just elaborate on your thoughts there?

It's a good question. It actually goes up and down. So you can see that during the first half, there were some months where new customers were kind of more cautious. And then again, they came back. So I think kind of our new customer growth is actually quite stable. So but of course, the growth at the moment is very much driven by our ability to get them to buy more categories. But of course, you lose some customers who kind of maybe sleep for 12 months to 18 months and then come back. So it's our marketing are still very strong, cost payback are the same. So it's why we basically continue to do what we're doing.

The next question comes from Daniel Schmidt from Danske Bank. Please go ahead.

A couple of questions. Just following up on the active customer base. I think it's been actually quite flattish now for 6, 7 quarters. And at the same time, you are saying that you're gaining market shares and you have a sort of attractive offering, and customers are picking from more categories than before. Wouldn't it be reasonable to see the active customer base growing in that scenario?

Of course, if the growth is very much based on basket size, buying into more categories, that's a very positive thing. This is exactly what our strategy is. Some customers, they -- I think that since early days, Dan, we talked about that, a significant -- some parts of our new customers are not attractive customers and then we move them either to Boozt it or just don't want to get them back because they are not going to be profitable. So it's also kind of an active [ disease ] for us not to kind of reengage with bad customers, but kind of our ability to get customers to buy into more categories, putting more items into the basket [indiscernible] . So we are very satisfied with how things are developing at the moment.

Speaking about sort of being a bit more selective and maybe that explains it, too, because I discovered that you stop taking orders. In Sweden, it is always below 299. You don't process those orders things since beginning of June. What's the sort of feedback outcome? What do you feel about that action?

It's very positive. We don't want to do unprofitable e-commerce and when you have order value below that number, it doesn't make any sense at all. So of course, if you ask customers, would they prefer not to have that limit? Everyone would say, no, no, we like to have kind of no limits, but sometimes you don't have to -- you should ask the customers about it just to.

So it's fairly new. I haven't seen it anyone doing that before. I was just thinking, wouldn't it be a way to basically saying that if you process -- if your order value is below 300 , you have to pay twice as much for delivery? Or is this a better solution, you think?

We think it's a better solution. Asking customers to pay double delivery, that kind of thing. That would be a strange thing. And our assortment, you can always find something above that threshold. So and if your customer buying a pair of socks and kind of asking for a shipping and return for that, that just doesn't make sense.

It's very few orders that are below this level. So it's not like we canceled many orders in any way. This is just a thing in the margin.

Yes. No, I haven't seen anyone doing it. I think it's sort of -- it's a new policy, I guess, that you're out with. And it's going to be interesting to see how it works, of course. I didn't hear you, Hermann.

Dan, I think it's not new. It's actually been in the market also by.

Okay. I haven't seen it and probably maybe some others are doing it as well.

I think most have a minimum order value before the process deal.

And not to process it, I haven't seen more that you have to pay for delivery. But I haven't seen that you won't be able to finish the order. But anyway, it doesn't matter. And then you mentioned as sort of Niklas also touched upon a poor ending to Q2, but you said that sort of the similar web data that everyone is looking at is misleading for July. Should we interpret that as that momentum picked up in July versus June?

It's a tricky question there because we don't want to comment on current trading. But obviously, we start to the quarter, we probably wouldn't be as current in our guidance as we are now.

And could we read it as maybe things progressed in a better fashion as you got into August then? Is that a sort of a reasonable sort of reasoning.

I don't want to contradict you on that question.

Okay. Just a detailed question as well. I've noticed that capitalized development costs have increased quite a lot over the past 2 quarters, it's around SEK 23 million per quarter now instead of SEK 17 million. Is that going to continue for the second half as well?

The level we are at right now is what we continue to do, yes. It's we hire people who do development, and we are making good progress on that.

The next question comes from Simen Aas from DNB Markets.

So a few questions for me here. So you said that you continue to take market share. And I just could you give us some color on how is the market developing? And what are the numbers you're seeing? Are they going down? Or and who is the winners and who is the losers in this market?

Well, if we do it very simply, we look at our main competitors, and we see that they have not a big -- they have a declining revenue. Obviously, we know that things in the local players, the smaller local players are fighting for survival, and we are growing. So that's -- we, of course, follow everything related to consumer confidence and how are the local markets performing. And we just see that we are growing much more than the average. But it's not like we have an exact number of the market share we're gaining that's quite hard to get.

Yes. Okay. That's clear. And then just a follow-up on that one. So now you're entering kind of the high season of retail in coming into Black Week and Christmas sales, et cetera. Are you afraid that the market will be even more campaign heavy, given that your competitors are losing out at the moment?

Well, we don't think that the campaign activity will decrease. We know that it's going to continue to be competitive, and that's what we are prepared for. And that's why our inventory decision is so important that we're ready that we don't have a lot of old stuff, that we can on trading the in-season stuff, that we have campaign goods that will help us so that we can deliver on the gross margin that makes us profitable and makes our business remain healthy. This is kind of the main priority in what we discuss every day, and that's what we are prepared for.

Yes. Okay. That's very clear. And then just one last one for me here. So if I'm not wrong, you are currently placing orders for spring, summer next year. And could you just talk about how you think about ordering goods now and given the macro? And how do you see kind of the future here? Interested to get your thoughts on that.

Yes. Basically, the future is bright. If you ask me in a market like this, it benefits the big players. It benefits the players who have a very, very strong value chain, very cost efficient. We are -- we have, on the one hand, very numbers driven in our [ SS ] '24 buy as well as we are kind of gauging consumer development. And I think that the cautiousness is based that is it's more kind of never stock items and less seasonal items that customers are buying in a economic downturn. But in general, we are very bullish, also very bullish for e-commerce as we see that e-commerce is if that bounced back, is a strong trajectory again. So we are actually quite optimistic going forward because we feel that we are in a very good shape.

Yes. Okay. So just a follow-up on that one. So do you think kind of to look into next year, you should think that are you aiming to capture more market share? Or how should we think about that? Or are you more cautious?

Yes, we will capture more market share. That's our strategy. We said that we will have 10% of the [ other ] Market and 10% of the total market online, and that means that we need to grow more than the rest of the market. So definitely, we will take market share also next year.

The next question comes from [Benjamin Wolsted] from [ABG Sundal Collier]. Please go ahead.

So going into the -- you anticipated a very high campaign pressure. But in this quarter, you expand gross margins meaningfully, I believe year-on-year. Can you just talk a bit about what you see here ahead of the upcoming season, maybe what you see in terms of competitors' inventories and so on, please?

Yes. So I think our very strong position coming into the year or actually lacking goods, meaning that meant that we could focus on in season and campaign goods and that gave that margin. And we also have, as you know, other incomes that helps us even if it's tough on the competition side, we are able to deliver this around [ 48% ] gross margin. And that's the ambition. That's what we will continue to do, and that's what we think we're ready for. Looking at coming into the new season, we know what we have. We have a strong inventory position, as we said many times. Our competitors, we know that some are a little hesitant in taking in on new inventory, but of course, we don't know their strategy overall. But whatever happens, and we expect it to remain competitive, but we are ready to take on that challenge.

In recent quarters, you've also commented on a higher growth rate for specific categories, such as Home and Beauty. Could you give us an update on the development for these categories again, please?

Yes, they are still growing at a very high pace much more than kind of the rest of the shop. So of course, they're growing from a low base, but it's very, very good.

And sort of to follow on that question, talk a bit about return rates in the report, I believe you see lower return rates for the Home and Beauty categories typically seeing that these categories continue growing, as you say, much faster than the average. Could you perhaps comment on the increased return rates in the quarter around and elaborate, you make a comment on the product mix. But I mean, given the Home and Beauty continues growing much faster, that should support return rates, right, or lower return rates so let's equal.

Yes. So the way it works is that when the lower return rate categories such as Home and Beauty growth, you've seen the product mix. But you see different patterns depending on the month-to-month, it shifts a little, not much and the return rate increase is not much, but it is slight. And that could like, say, women have a higher return rate than men. So if the women constitute a higher share than the men's category. So it's not only depending on those Beauty and Home, they are rather small categories. But if you see a shift in between the other categories, that's normal. So it's nothing underlying. We don't see like that Home return rates have increased or anything like that. It's just the natural shift as I see.

And then like would want to discuss the sales target a bit more. So the Boozt.com platform grew by 10% year-to-date, meaning basically the reason why you're not on the pace or date for the 10% sales growth target booster. You sound quite optimistic on H2. Is this -- do you wish to sound optimistic on H2 also for the main Boozt.com platform?

It's good that we sound optimistic, but it's not a strategy for us to sound. It's just, I just want to convey that we want to be realistic. Booztlet had a bad Q1 and bounce back in Q2 and it seems to be just right with regards to a large customer base in the Nordic or consumer base who are being more value-driven. And Boozt.com is like what how do you say it's very, very encouraging to see that they are buying into the categories. And I'm -- I would say that I'm surprised, but I'm really, really happy to see that we are able to get a up also helps him do that because we've been trying to kind of tease them into trying the categories and giving them some date and they seem to bite on that. So that's why we are confident and as Sandra was saying that the stars are quite well aligned for us. We don't have -- we don't really have any issue. We don't have any old stuff to fix our -- we have more items in the warehouse that we had last year, where we had the supply chain issues. The season has started earlier. So and we are very competitive and still were able to deliver fast, et cetera, et cetera. So I think that kind of we are in actually in a very, very good shape, which is why we are realistic and believe that we can continue on this very good track. So I think the kind of all the investments we made in the 2 shops in the brands, in the inventory and in the supply chain. It seems to be timed right in the market to come. That was a long explanation.

No, I think it's good. It's insightful. One final question as well. Could you comment on the development between markets, please? It seems the Swedish market is rather sluggish compared to Denmark. Is this a result of market demand or market assortment fit or anything else? Anything to compare the markets really would be helpful.

Well, in general, and I think we said that before, that Denmark and Finland was quite strong. Norway and Sweden has been a little more hesitant and people have been holding back. And if it depends on how the interest market looks like that they're more like could be, but we've seen stronger sales in Denmark and Finland, basically.

So it's a result of general market demand then is your estimate?

Especially Norway, we think the consumer confidence has been really, really low.

The next question comes from Nicklas Skogman for Handelsbanken.

I have one question or a question on one topic. I asked about this in Q1 as well relating to the Boozt media partnership. So the other revenue grew 16% this quarter. Is it fair to assume that, that's pretty much was also the growth for the Boozt Media partnership revenues?

So we also have Boozt data intelligence, a new product where we offer outstanding insights into consumer behavior and performance of the brands. So it's a combination of Boozt Media Partnership and Boozt Data Intelligence. And we also have Boozt Pay, which is our own payment provider, also has seen growth. So it's kind of a.

I was more wondering if those sort of data selling businesses were growing roughly with 16% as well or if it or something else. So if we assume it also grow roughly at that rate, Wouldn't that be one of the main driver of the increase in the gross margin and given the very high margins. I mean, I calculate maybe a 40 basis point boost from the growth in the other revenue once you only really mentioned that it's the campaign buys that lifted the gross margin.

Yes. But if you look at the product margin, and it's been very competitive, we can help that with campaign buys. But then again, you're right that the other income it really helps us keep the gross margin high and that's the hedging tool that we have, and that's the strength that we have compared to many others since our size allows us to have this and to keep a stable gross margin even when it's very competitive on the product margin.

And I think the reason a decline in Q1 was because you had made less prebuying and now it, of course, clearly swung back again. So how do you see the rest of the year for this business? Will brands be still be keen on spending on those services, you think?

There are differences between the quarters, and we haven't had the BDI is quite new. So the it's not like totally comparable. But the BDI business is going as planned. Many of our brands appreciated uses. We see new signs or we sign new brands every day. So it's going according to plan, but then what the number will be, that remains to be same. But it's going according to plan, and we know that our brand is appreciated and we're very happy about it.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. Okay. Thank you for some very good questions, and thank you for participating in this call. I hope you have a good day, and I guess we'll see you again in 3 months' time. Thank you.