Matas A/S ($MATAS)

Welcome to the Matas Group Annual Report for 2025/'26. Today's call is being recorded. If you have any objections, please disconnect at this time. [Operator Instructions] I will now hand the call to your speakers, Group CEO, Mette Uglebjerg and Group CFO, Per Johannesen Madsen. Mette, you may now begin.

Thank you very much. Good morning, everyone, and thank you for joining us today. I'm Mette Uglebjerg and this is my first quarter and my first presentation for the full year as CEO for Matas Group. I joined the group in mid-April. And over the last month, I spent focused on getting closer to the business. And it's been a very intense, but also a very inspiring first 4 weeks. And I'm generally impressed by the strength of the business, but also the opportunities that lies ahead of us. Today, I'll start by sharing some of my early observations and some key priorities. And then Per will set the scene with -- or I'll set the scene with some of our highlights, and Per will walk us through some of our financial performance and the outlook for next year before we open up for questions. So -- but a bit of context on my experience, I bring it into the group and how that has shaped my first month here. I have more than 30 years of international retail experience across market, formats and function, including leading Circle K Denmark, but also had international role within operation and commercial and also been part of Alimentation Couche-Tard executive team. A large part of my experience has been about acquisition. It's been about integration, but also realizing synergies across markets. And one thing that has taught me is that realizing those synergies is not only about processes and structure it is as much about culture, clear priorities and then identifying that value and understand how we create that value across markets and at the same time, staying relevant and super close to the customer and understand the competitive dynamic. What connect those roles and if I look across that has been really much about a growth journey, focusing on the integration, but also on operational execution and how to turn that into a very clear strategy, concrete performance that results obviously in concrete performance across markets. And I think that the experience feels highly relevant here in Matas Group. We have very strong brands. We have strong position and we have a clear strategy. The task now is to ensure a sharp prioritization and make sure we execute with speed and pace and a very disciplined follow-through. You say the retail is detail, and that's very much true, but it's about identifying those details that will really move the needles for the customers but also for us commercially. And it's about finding that balance between taking out synergies, but also staying very relevant to the local markets. And that's obviously the mindset I bring with me here in Matas Group. During my first month, I have focused on building a very strong and solid understanding of the business across our markets. I visit colleagues, I visit stores, competitors, logistics centers, been around Denmark, Norway, Sweden and Finland. And I spent a lot of time listening, and I spent a lot of time understanding the business across functions and stores and markets. And after 1 month in the role, I have 3 observations I would love to share with you. First and foremost, we have a very strong foundation. We have strong brands, leading market positions, we have a broad omnichannel platform. We have loyal customers and very highly capable colleagues across the group. And just to give you a couple of examples, some of the things I've seen that I'm really impressed with is our digital capabilities, loyalty, omnichannel and how we execute that but also our supply chain. But that's just a couple of examples, there's many of them. So we have a lot to build on, and I'm generally impressed with the engagement and capabilities I've seen in the organization. Secondly, the strategy remains unchanged. Win the Nordic is the right strategy for the group, and I see significant potential for us, and we have a lot to build on. My focus is therefore not to change direction, but my focus is to accelerate our initiatives and bring that to the market. We already benefited from a lot of synergies. But I also see opportunity over time to unlock even more values as we get closer to each other and work across the different markets and functions, et cetera. My third observation is that we have an opportunity to further increase the pace of execution as we see our customers or consumers in general, the behavior evolves. We see a change and particularly in the key markets where market conditions have changed rapidly. And when I talk about that, we see the biggest change in Sweden. So that requires us to move faster, require us to prioritize even sharper than we do today. and stay very close to the local markets and the local competition and obviously, the consumers. So to summarize my first month, very strong foundation. We have a clear strategy and many opportunities we have a lot to build on. My focus is now to increase pace of our strategy with the strategic initiative and to strengthen our relevance across our Nordic markets. But let's move on and turning into the highlights for '25 and '26. The group delivered a revenue growth of 4.7% or corresponding to 3.5% currency neutral which is in line with our guidance for the year. We delivered the highest revenue in the group's history, reaching DKK 8.8 billion. And we also saw a significant improvement in free cash flow compared to last year. In Matas, we continued the very strong development and grew 5.8% and including our subsidiaries. And we see that growth across channels. We see that across categories. And very importantly, we see that the customers, we have a high engagement scores from our customer, which is super important. KICKS operated in a significant and more challenging market conditions or market environment. And we delivered currency-neutral growth for the year. And that's very much reflecting the lower consumer confidence and how the change in customer behavior has -- and a more intense competition in our market, and that is in particular in Sweden. At the same time, we continue to strengthen our business, operational EBITDA before special items reached DKK 1.23 billion, and we ended the year with an EBITDA margin of 14.1% or 14.4% adjusted for currency effects. So one very solid and strong aspect of the year is a significant improvement of the cash flow where we turned around from negative DKK 2 million to positive DKK 545 million. So if we look ahead, we continue to see growth in '26 and '27, but we also remain mindful of the environment we are operating in and the more fierce competition that we are facing. And with that, I'll hand it over to you, Per, to walk us through the financial results in more details.

Okay. Thank you, Mette, and welcome. So I will take you through the details of our financial performance. And just looking at Q4, and then I'll also touch upon the full year. But Q4 growth on 4% currency neutral with an 11.4% EBITDA margin basically in line close with last year's profit margin. And beneath that is really a little bit of key elements I want to highlight. Sweden growing 5.9% adjusted for Skincity and Matas including the subsidiaries, slightly lower, but still at 3.6% growth. Some of the key elements here is really looking at our online business, which grew 13.8%, so almost 14% growth in our online business, which I think is from an overall competitive environment perspective, a strong growth continuing on our online business. If we then turn to the full year, and as Mette just alluded to, 3.5% growth, currency neutral, with an EBITDA margin of 14.1%. I'll come back to some more details on that. And on guidance, I just want to highlight here that we posted the guidance for next year being a revenue growth of 2.2% to 6% growth. And you need to look at this reflecting the current uncertainty we have in the macroeconomic outlook and all the uncertainties that we are facing right now. Getting rid of those, of course, would be very nice for all of us. But this is the situation, this is the conditions we're in right now. EBITDA margin between 14% and 14.5% and CapEx, slightly higher but I'll come back to some more details on that as we move forward. From a capital distribution perspective, we're looking at an unchanged policy with at least 40% of our net adjusted profit. And we will be proposing a DKK 2 dividend per share and continuing our share buyback with up to DKK 100 million next year. That, of course, is all subject to our general meeting approval. But let me take into some more details in terms of our strategy and some of the key elements of us progressing on our strategy, delivering the strategy as planned for this year. So basically, more for you, closer to you and stronger for you. And the more for you, it's really about providing more brands to our consumers, and we continue that throughout the years both in Matas and in KICKS. What we're looking at now is actually accelerating that and as Mette just alluded to how do we increase our pace in terms of doing that, both from a pricing, marketing and assortment perspective. In terms of our in-house brands, which has really been a success this year, Nilens Jord has been launched in the KICKS markets with good success. And as you remember, we also launched Striber last year. So we are continuing to expand our footprint on our in-house brands. And we actually grew our in-house brands 8% this year. And as you'll see, KICKS almost grew 16% of our in-house brands. So a very strong launch this year. And do remember that we launched Nilens Jord in October or September, so still a full year impact to see in the coming years. In terms of closer to you, again, the focus we have on our membership club and our growth on our online business as we move forward. Again, consumer engagement is very high, very high and satisfaction. In terms of stores, net, as you can see, 3 more stores this year, mainly driven by KICKS opening 6 more stores. Last but not least, the stronger for you. This is the second year of having 2 logistics centers, and they are operating very efficiently. And we continuously see getting improvements and even faster response to our consumers in terms of deliveries, which is very encouraging as we move forward and also with the pace we have on our e-com business. In the beginning of the year, we launched a plan to realize synergies for the coming year of DKK 50 million, and those are fully phased into our plans for the coming year. So again, on plan in terms of the key activities from improving our platform to grow from. And here's just some highlights. And I think again, in Q4, we talked about we wanted to accelerate. So in Q4, we accelerated. We launched more brands compared to previously. And thereby, we're looking at the full year, actually, we launched 143 brands in Matas, and we launched 67 brands in KICKS and when we talked about acceleration, Matas have been on the journey of assortment expansion for a longer period of time and, of course, have more pace in that, and this is some of the things that we need to look at as we move forward. And I think very successful launches, and I just bought a few of them because this really also demonstrates the power we have as a as a Nordic beauty business and beauty company, we have the size. And thereby, we are able to basically attract brands like Charlotte Tilbury, KIKO from Milano, and just on Too Faced, that's actually a -- I forgot the name -- Sephora, sorry, Sephora brand, which is now launched in our business. And I think that just demonstrates the strength that we have across the Nordic. And last but not least, the success of Nilens Jord. In terms of our app, we continuously use the Matas app. And this year, we just launched the KICKS app, and that is off for a very good start. And that, of course, also plays into the fact that we have a very good club member base with 6 million members, which we continue to talk with on a regular basis. And this is all combined with stores, e-com, our app, our club in both KICKS and Matas gives us a very high member satisfaction and we continuously see improvement in that as well. Just closing off with our 2 logistics centers before I move into some more details on the financials. So that will be in operation for 2 years. And I think a lot of you was expecting us or expecting the launch of the Matas Logistics Center after we did the KICKS Logistics Center a year before. And what we're really looking into a very strong performance since opening of the Matas Logistics Center. And we're actually looking at a cost roughly at 50% compared to the manual operation, which is very strong numbers as we move in and as we continue to grow our e-com business. So let me just turn to Q4. So Q4, 4% growth. And as you'll see on the gross margin decline on gross margin, which is basically a couple of factors coming into play in KICKS, we had a bigger campaign this year on fragrance, which we had in April last year, which, of course, impacts our gross margin. And then also, we were in the market with our campaigns, activities. And as I said, after Q3, a little bit of acceleration also in terms of how we do campaigns in the market. And that was also reflected in the growth you saw in the KICKS market with 5.9% growth. In terms of cost, and I think this is a continuation of what you've seen most of the year, a strong cost control as we move forward, both in terms of our other external costs but also in terms of our staff costs. A little bit of timing in the staff costs as we also this year, and I'll come back to some more details, but this year, we said goodbye to our previous CEO. And of course, that gives us a little bit of tailwind, so to say. Last but not least, closing the EBITDA for the quarter with a growth of 5%, although a slightly lower EBITDA margin. So just moving into the full year results and we look at that. From a [ banner ] perspective, as Mette already mentioned, we are looking at Matas growing almost 5%. Our other subsidiaries growing 13%, and that includes wholesale and then KICKS basically flat compared to last year. If we exclude Skincity, and I think that's probably the right number we need to look at, we see a growth of 2.3%. Going into the different channels, as I already alluded to, a strong growth on online, 11%, excluding Skincity. And this is the last quarter we will ever talk about Skincity, so that will be nice. And then there's a small growth in our stores. When we look at the like-for-like growth, really, we see a growth in Matas of 1.2% and KICKS basically in line with last year, a decline of 0.1%. And moving into the gross margin on the different banners, and I think you will find that in our reports as well. A year where we invested also from a growth perspective, we invested part of our gross margin, so a 1% decline basically in both markets, a little bit more in KICKS where the competition has been even more fierce but where we also see an impact of the currency effects, as we talked about earlier, as we bought all the products in Swedish krona and we sell in Norwegian and Norwegian kroner has not been as strong last year. A little different today. But last year, that was the outcome. And that basically combines when we look at from a group perspective, on a currency-neutral basis, we're looking at a slight growth in our gross profit, and we are looking at a margin with 1% decline compared to last year. Turning to cost. And this was what I was talking about earlier, really looking at our cost with a cost discipline this year, where we look at our other external costs growing slightly, but you need to take into account that is, of course, part of of our online business growing. So when our online business is growing, our other external cost is growing with freight and all the packaging material and all the other costs coming from basically delivering the e-com revenues. When we look at our salary cost, you'll basically see a decline compared to last year. And that has to do with both a very strong management of our cost in the stores. So our salary percentage managing the cost of operating in the stores as well as when we look at -- that was the one-off I talked about when our CEO left, there is some reversal of some of the long-term incentives that he was entitled to have, which is basically reversed in our salary cost. Which brings me to a summary for the full year before I'll move into some of the more capital elements, and that is an EBITDA of growing 1% and an EBITDA margin if I adjust for the currency impact on the cost of goods in our KICKS business of roughly in line with last year at 14.4% compared to 14.5% last year. This has been a year really delivering growth on our e-comm business with a like-for-like, small growth in our stores, but predominantly driven by e-com, which is also reflecting the competitiveness in our markets. A gross margin decline, as I just alluded to, impacted by product mix, also the FX impact, as I talked about, and then all the decisions we make in terms of how do we activate the market, how do we go against our competitors and the initiative campaigns we're running in the market. Cost -- strong cost control and the building up to release some of the synergies we talked about, which will come into next year. It also includes investments in the market. from a marketing perspective as competition has been more fierce this year compared to previously. And that just summarizes the full year for 2025, '26, and let me just move into some balance sheet items and some cash flows. And we present this every quarter in terms of our revenue -- or sorry, our inventories. And as you'll see on the left side, this is the inventory percentage compared to the last 12 months of sales, and this is just for Matas. And the reason why we bring this just to show you, we had the buildup with MLC starting but you'll also see we closed this year below last year and even below the previous year as a percentage. Having said that, our total inventory has increased this year, and we are still looking at how we will -- as we move forward, optimize that as we have even more knowledge with our 2 logistics centers. And that brings me to the cash flow and some of the key elements in the cash flow. As you'll see, we generated roughly DKK 1.3 billion from the operation. We had a working capital and tax which took almost DKK 300 million. Part of the working capital is linked into our inventories but overall, slightly more tied up in working capital end of this year compared to previously. And this is somewhat linked to the acceleration I talked about after Q3 where we accelerated a certain thing, and we also added more inventory. So we pushed the agenda of further assortment expansion. Then we had our CapEx generated a free cash flow of DKK 600 million. We had our special items, and we had the closure of the Miild acquisition, which is now finally paid, which generated the cash flow of almost DKK 550 million. When we look at the CapEx and some of the guidance, we also have really looking at the CapEx for the coming year to be a front-loaded CapEx but a totality for the 2 coming years in line with our guidance, but I'll come back to that in more details. So in terms of gearing, we're closing the year at 3.3, slightly higher than where we would like to be. Part of that is linked, of course, to the overall performance of the year where we ended up with slightly lower income as compared to our expectations. Again, all linked to the element I talked about before and also thinking about the acceleration we did, which tied up some more working capital. And those 2 things combined actually means that we closed the year at 3.3. But looking at that going forward and also looking at our investment levels and some of the proposed capital distribution. If we just start with what we're looking at from a guidance perspective to next year, 2% to 6% growth on a currency-neutral basis. It's slightly higher if we take the current exchange rates, but it's roughly in the same area. We're looking at EBITDA of 14%to 14.5% also here being a little cautious with the competitive situation we're looking into for the coming year. And last but not least, we're looking at investment with a front loading of our electronic shelf labeling, so what does that really mean? It basically means that when we look at our guidance, where we say 3% to 4% or capital allocation, 3% to 4% CapEx investments, we're basically front-loading that to make sure that we get electronic shelf labels across all our markets during the coming period to make sure that we become even more efficient in our stores. And also from a competitive perspective, we'll be even more agile in the way that we can run campaigns and activate activities in the stores and online. And with that, moving into the capital allocation. As we have completed the big investments in our logistics centers, we are also looking at generating a significant cash flow next year when we then take the guidance which I just showed you, investing in CapEx. We have a free cash flow. We need to get our gearing between 2 to 3 and looking at that in the coming year, that's where we feel comfortable with proposing a dividend of DKK 2 per share and a continuation of the share buyback with up to DKK 100 million for the coming year. So a total of roughly DKK 177 million, which is 56% or above -- slightly above the -- our capital allocation that we presented just in terms of gearing and then proposing a continuation of our share buyback. This year, we generated DKK 545 million in free cash flow with the plans we have for the coming years with the focus on our inventories and our working capital, we feel comfortable still proposing this and closing the year within our gearing guidance of 2 to 3x. And with that, I would hand over for Q&A.

[Operator Instructions] Our first question comes from the line of Amina Ashraf from Danske Bank.

Yes. Good morning and good attempt in pronouncing my name. Better than I expected, actually. My first question is with regards to the strategy of '27-2028. And I could see that you have maintained the strategy and this is of sales higher than DKK 10 billion and EBITDA margin of 15% to 16%. My question is actually with regards to the underlying assumptions of this strategy. and it was of a group sales CAGR of higher than 6% and market growth CAGR of 3.6% in the strategy period. So if I take the sales reported until this year, you have a CAGR of 5.8%, which is below the underlying assumption of higher than 6%. So my question is this signal of maintaining the timing of the strategy, does this mean that the market is growing higher than what you initially expected? Or do you expect acceleration in the group sales from now until 2027-2028?

Thanks for your question, Amina. First and foremost, the strategy remains unchanged. The ambition is the same. We believe that yes, the market has changed. So that means that the initial strategic initiatives, we need to launch them with a greater pace. So that is what we are doing and to ramp up to make sure that we deliver on the plan but we are also delivering and operating in uncertain environment, but that's the case. And it happens quickly, but it goes off quickly as well. So our focus is to accelerate our strategy and deliver on the plan. I don't know if you want to add a couple of...

Go on Amina.

Yes, I was just about to say, is it then correctly understood that you are slightly behind the schedule right now? To the group sales CAGR [ means ].

Yes. If you look at the numbers, Amina, and you draw the line, yes, that means that we would be behind. I think the guidance we're giving for the coming year is also a reflection of the uncertainty we see in the market. And then we do not have a clear view of what's going to happen next year. But I think what we would focus on is as Mette was saying is really to increase the pace focus on accelerating the plans, the strategy but stay on the same strategy.

And what about the market growth? Is it as expected? Or is it lower?

I think if we look at some of the different analysts posing views on the market growth, there is a little uncertainty where we're going -- what we're looking into. And if you combine one with the other, you see different numbers and that is also reflected in our guidance. So I think our guidance 2% to 6% really reflects the uncertainty also from a market growth perspective, where we will, again, we'll focus on our plans, we'll focus on what we can do to win in the market.

Understood. And then my other question is regards to Sweden. Mette, you commented that the biggest change you've seen in the market is actually in the Swedish market. And I understand competition is intense. It's a fragmented market, and now you're responding with higher CapEx and electronic shelf labels, which would allow you to be more agile. I think what I'm trying to understand is how long do you expect that intense competition? Is that a permanent change in the Swedish market? Do you expect that to end soon? And are you interested in inorganic growth?

Well, there was a lot of questions here. Thank you, Amina. Let me try to answer those questions in order. Otherwise, you need to revert if I'm not answering correctly here. But first and foremost, we experienced a fierce competition on the Swedish market. And we see that from different players. We see that from online players. We see that from physical stores. And that, in combination with a more softer consumer confidence, and changing consumer behavior. That, of course, those 2 in combination is giving us a little bit more fierce marketplace. And that's what we are experiencing, how long that's going to last, we don't know. We don't know anything about the geopolitical situation. But we just know that the customer has changed their behavior, and we need to make sure that we adapt. We are in 75% of our assortment is in high-end beauty. We're still going to be in high-end beauty, but we need to broaden out our assortment and be relevant, more relevant in even more situations. So I think that answer at least some of your questions. I don't know if there's any open others, just fill in here, Amina.

I think I would just like to understand the growth strategy. Are you focused at all at inorganic growth, particularly in Sweden?

Yes. So in general, so we are -- part of our strategy, and we talked about the investment we had in electronic shelf label. We are also having investment in our stores. building more stores, expanding stores, and that is part of our plan also for next year in our Nordic markets.

Alright. And if I can ask about the CapEx at 4.5%. And Per, you have already said that the guidance -- the long-term guidance is still between 3% to 4%. And this is just merely front-loading of the electronic shelf labels, for example. But is that only this investment? Or is there other investment in cost-saving initiatives? And if there is an example for these initiatives?

I think we continue to invest in our digital platforms and the strengths that we have in the online business. And I also think looking at this year and the strength in what we have delivered from a growth perspective online, is a good result of the year and that, of course, requires certain investment for us to continue to do that. When we then look at the coming year and the investments that covers these things. It covers the basic maintenance, we don't have any major investments in our warehouse facilities. But of course, there will be certain investment as business continues to grow, and we need to add a few robots in our logistics center in [indiscernible] investing our -- just to make sure that we can cope with the volume. But I think the biggest change is really when we look at the electronic shelf labeling and looking at our normal guidance between 3% to 4%. If you combine this year and the following year, you would be within that guidance. But we made a decision really to frontload that because that will enable us to drive a different campaign a different pricing structure to our consumers and thereby be even better in the competitive space that we're actually operating within.

And it also gives some more efficient operation.

More efficient in operations, yes.

Yes. Okay. My very last question for now would be with regards to a brand you mentioned called too Faced. Am I confused to understand this is actually owned by Estée Lauder, not by Sephora?

I think it's owned by Sephora.

So it is owned by Sephora, not by Estée Lauder?

I think so. But we can take that afterward, Amina. But I think it's just -- I think it's -- we have a couple of brands now from Sephora from their private labels or their in-house brands that we have now but we're basically aligned with them that we will sell those in our markets as we have the strongest position in the Nordics.

And if I can just add here. This is -- I mean if I can just add here. I think this is a very good example of how we use our Nordic scale, and we are able to attract much more new products, new products, we were never we didn't have the opportunity to attract early on. So I think this is a really good example of that, where we can be even more innovative and more relevant for our customers.

The next question comes from the line of Mads Quistgaard from DNB Carnegie.

Welcome to you Mette, and congrats on delivering your first fiscal quarter. I look forward to meeting you in person. I also have a few questions. Maybe just to start here. So it seems that you prioritize growth over margins in Q3. And now you do the opposite in KICKS since the gross margin is down 6 percentage points year-over-year in Q4. So can you elaborate on the impact from FX pricing campaign activities, Skincity, and then also the channel mix? That would be my first question.

Okay. There was a lot of variables you put on the table there, I'm not sure I can -- I have all those in my head. But I think from an overall perspective, as we came out of Q3, very soft in our KICKS markets. Then we have Q4, which is our smallest quarter. We had a campaign already planned, one on fragrance, which is hitting our KICKS market this year in March compared to April last year. That is a campaign we run every year. we always need to make sure we do it in a timing where competitors does not expect it. So we ran it in March this year to be a little bit more unpredictable from a competition perspective. In addition to that, we also made some conscious choices from a competition perspective, and we did selective pricing on certain subcategories in our KICKS markets, really focusing on getting the consumers into our business. And I think looking at that combined with the results we're getting from the quarter is we are pleased with seeing that our activations, our campaigns in the market is connecting with the consumers and we get the consumers back. And yes, we got 6 -- almost 6% growth in KICKS. We did some investments which was deliberate. It was also in a small quarter, not jeopardizing the biggest quarter of the year where a lot of the profit for the year is made as we do in Q3. And in terms of just one point, as, I think the FX impact on the gross margin in KICKS for Q4 alone is roughly 0.7 percentage point, 0.7%, 0.8%. So a little percentage is coming from FX.

Perfect. Then I have a question on Mette, which delivered 2.7% growth year-on-year in Q4. I think this is the first quarter in -- what is it, in 4 years? With negative like-for-like growth in your stores. I know this is a small quarter. But should we be nervous, you at least, concerned about negative like-for-like growth in the stores?

I think 1 quarter mass with a like-for-like growth as you see for Matas. I would look at the full year. We're delivering 1.2% growth like-for-like, and I think that should be the focus. It has a little bit of implications when we do different kind of campaigns in 1 quarter versus the other. But I think from a full year perspective, running 265 stores still delivering like-for-like growth is where we need to have the focus.

All right. And my final question is on the OpEx run rate from here. So if you sort of -- I know it might be difficult for you to quantify the effects of CEO incentives. But what would be sort of the normalized OpEx rate as a percentage of sales in the quarter, so we can extrapolate something from here from Q4?

I think without going into too many details on our previous CEO, and I think that would probably not be appropriate. But I think from some of the cost run rate that we saw from a full year perspective, I think that would be somewhat marginal. It's probably more between the quarter. So if you take the full year level, I would use that math instead.

[Operator Instructions] The next question comes from the line of Yiwei Zhou from SEB.

It's Yiwei Zhou from SEB and also welcome, Mette, and looking forward to meeting you. I have 3 questions. I'll start with one by one. Firstly, also on the gross margin, and we have discussed the margin for KICKS. But then when I'm looking at the Matas brand, it also declined by 3 percentage points year-over-year. Can you elaborate a bit on the dynamics here? I will do the next question later.

You focused on the Q4 alone, right?

Yes. Exactly.

And that's correct. And that has to do with basically the product mix and the campaigns that we've been running in that quarter compared to previous quarters. So I think if you look at the full year we're looking roughly at 1 percentage below on gross margin. And that is linked in also as we talked about after Q3, the competitiveness in the market, new players coming in increasing competitiveness somewhat a little bit, but it also reflects the change -- a little bit change in the product mix and the way that the consumers behave.

Great. And as reflected in your guidance, for '26-'27, is it fair to assume that sort of the campaign and the price initiatives will continue into next year?

I think we're operating in a very uncertain market. And I think our guidance with 2% to 6% growth and then EBITDA margin, 14% to 14.5% is our view on next year and the whole geopolitical situation and the uncertainties that we see in the markets as we stand right now.

Okay, clear. Given you have mentioned the uncertainty in the macro uncertainty here. And then my next question is also a follow-up on your long-term target, '27-'28. I mean it's not that long anymore. Do you think it is still realistic? And I was wondering if, Mette, you are looking at a strategic review on -- could maybe communicate it to the market in the short term?

First and foremost, thank you for your question. Two things here. First and foremost, the strategy remains unchanged. The ambition remains the same. What we do is to accelerate those initiatives that is within the strategy to make sure that we deliver. We are facing uncertainty times, that's a fact, but it is what it is. And that just gives us even more urgency to accelerate the initiatives we are seeing. On your questions -- on your second question, what was that again? Yes, that's the strategy update. -- yes, sorry for that. Yes. Sorry for that. So on the strategy update, I'm 4 weeks in. So it's a little bit early for me to say anything about that, but at a later time, when I have more observations. And when I'm ready for that, I would love to and I'm looking forward to share that with you. But it's a little bit premature for me to talk about that. But when the Nordic strategy remains unchanged. Basically, I believe we have the right strategy. We have a very strong platform. I believe we can do more. And we just need to work on become even more relevant in particularly in our KICKS markets. And a very tangible number here that is in my head that the Matas customer visit our stores 3x often than a KICKS customers. So for us, the task is now to broaden out to be even more relevant in even more occasions. And that's why we are so focused on accelerating assortment, more price points and more efficient campaign, make sure we execute that properly. And part of that is also working with our in-house brands. We talked about Nilens Jord , you mentioned that. That's a good example, Striber, but there's more to come. We believe we have a lot of potential within the existing platform today. And I'm sure also as we get closer and work closer across the markets, more value will be a discover that we can go after.

Great. Very clear. And if I may ask the last question here, and it's regarding AI adoption. I mean, we have seen a lot of agentic AI and also physical AI adoption with some of your international peers in retail and e-commerce. I was wondering, does it change your view on where Matas is? Any initiatives already started here?

Yes. So first and foremost, that's one of the things I've seen when I come across the organization. We actually have a lot of strong AI initiatives already. And it's very much in line with we are strong within digital. We need to continue also to secure that we are super strong within AI. And what I've seen is really good stuff, a lot of great things. What we have done is, as an example, that all employees in our service office across, they have participated in what we call internal AI academy. So we see a lot of great initiatives come through the organization. as well, at the same time, we are prioritizing AI initiatives across the group. So that is definitely something that is on our radar, where we need to make sure that we keep up and is becoming a part of our days and ways of working.

Do you see any cost savings from the AI adoption it's possible for you to communicate a bit?

yes. Well, I'm 4 weeks in. But first and foremost, we believe AI is an important component of what we are doing also in the long run. First and foremost, we see that as an add for value on how we interact with our customers. We are strong here with digital, how can AI play a role here? So we are delivering even better solutions for our customers. So that is our primarily focus.

This concludes the Q&A. And I will now hand it back to Group CEO, Mette Uglebjerg, for concluding remarks.

Yes. First and foremost, thank you for your great questions. I'm looking forward to meet you in person. I think that what I want to bring back here is that it is a solid result we are delivering. We are delivering all-time high, but we also have some areas we need to improve. We are fully aware of that. And that is, in particular, where we've seen customer has changed behavior and lower consumer confidence in our KICKS markets, and we need to react. And we are reacting quickly by accelerating the pace of our strategy. We remain focused on our strategy, and that's what we're focused on. We have a very strong platform. We have a lot of great initiatives ahead of us and a lot of opportunities. So I'm very optimistic looking ahead even though it is a little bit more bumpy ride but that's how it is. But we'll stay close to the business.