Pricer AB (publ) ($PRICB)

Good afternoon, and welcome to the Pricer First Quarter 2026 Earnings Presentation and Q&A session. We are today joined by CEO, Magnus Larsson; and CFO, Claes Wenthzel, who will present the first quarter and take questions. With that said, I hand over the word.

Thank you very much, Hjalmar. I'm extremely happy to do the presentation here today together with Claes. Now I'm in London, we're at the -- I'm at the Retail Tech show. It's a 2-day show. It's been very interesting. So I'm doing it now from my hotel room. So I hope it's okay. Claes, next slide, please. So Pricer in brief, our vision. Our vision is to be the preferred partner for in-store communication and digitalization. And I think what we will see in some of the presentations today is how we actually -- or our presentation, how we're moving in that direction. We see a lot of traction with Plaza. We actually -- I haven't updated all the stores that we won in the quarter on this slide, but it's been quite a few. We have now more than 55 million labels active -- from active customers that we manage from Plaza. So we have seen very good progress, especially on Plaza now in this quarter. So next slide, please. So Q1 highlights. What are the highlights? It's, of course, as always, a mix of fantastic things and some things that are a little bit less fantastic. I think the first thing I'm really happy to state is that we have had good run rate business in almost all markets, and it's been fueled by a stable growth of order intake from our existing customers and some new customers as well. We haven't had any of those major groundbreaking deals this quarter, but we have had a continuous flow that has been extremely positive. And we can see that one of the companies, as you will see from the CEO word in the report is that Canada was a little bit less, but that's from our point of view, it's also expected. We have had a really good deployment with Canadian Tire. They are now almost fully deployed within their own brand and/or own banner. And we have good discussions moving on further, but this was expected. So Canada is still very hot. I would also like to highlight the growth that we've had in Scandinavia after the shift from resale mode into direct sales model, we can now see the full effect of this change. We have had really good order intake on the Scandinavian market. So we speak about Sweden, we speak about Norway. We can also see that we have improved profitability on these deals. So it's been something. It took a little bit longer than I was hoping for. But now when we have it in place, it's really, really good. We have built -- we have always had a relationship with these customers that we sold through our resellers, but now we have a different kind of relationship where I see that our chances of doing more business, helping them to be more successful with new products, it's definitely and has definitely increased. From a financial performance, we delivered the highest gross margin since 2020. And we can actually see that even though we had a slightly lower net sales in the quarter versus last quarter, we delivered gross profit that is actually higher in absolute terms than we had last year. And it's, of course, connected to this gross margin. We have continuous strong cash flow. We have improved our cash position, as you will see in Claes' presentation a little bit later. And we turned our net profitability from loss last year Q1 to a profit this year. In the quarter, we also announced that the exclusive supply agreement that we have with Carrefour has been terminated. It will result in lower volumes in Carrefour. But also as a reminder, when we look at the potential impact last year, the contribution of Carrefour to our gross profit was, as I put it here, mid-single digit. And we do expect that for this year, the impact will only be low single digits. So it will be a very low expected impact. One thing that has also been very positive is that when I look on the -- especially the French independent stores in France specifically, we have actually had a very good order uptick in this quarter compared to last quarter. It's actually been very good. And it's something that we can see also continuing after the announcement that our exclusivity has been changed. Why is this positive? Of course, it's positive because we sell more. But above all, it's positive because Carrefour is targeting to transfer somewhere around 50 stores every single year from owned and operated to Carrefour or to franchisees set up. So we will continue to work with the franchisees in France, just like in the other markets where we have a relationship with Carrefour. So it's been a very positive sign. And next slide, please, Claes. So the retail industry insights and macro trends for those of you that have been regulars on this presentation, you've seen the slide. I will now speak a little bit about Sobeys and about Avenue. So Sobeys will be very much about Area 1, actually, the strategic digitalization of the stores, which is one of the key reasons why we are engaging with them, and they are engaging with us and we work together. The other one would be the evolution of the in-store experience, which is really the Avenue track. So let's go to next slide and talk a little bit about Sobeys still. So as you might know, we have now signed an agreement together with JRTech and Sobeys for the deployment of 300 to 350 stores. It's a USD 51 million agreement, so we actually have an agreement and the order intake we will take continuously quarter-by-quarter. So there will not be a $51 million order, but we have a commitment on this volume to be delivered over the coming 18 months. And I think it's good to go back to actually the history. Back in June, we announced that an undisclosed Tier 1 grocery retailer order 50 stores. Actually, what they did was 50. And from their point of view, it was 50 pilot stores. They really wanted to validate the performance and the value, but also set it up to see, can we industrialize the deployment in a way that would make sense to us. And after a couple of months, we continued the discussion, which led to the order that we announced December 24 of deployment of 5 million ESLs. So from our point of view, it's like the first deployment win. The first one was a pilot story. So this is the first real deployment. So of course, it's extremely positive now that we are agreed -- that we have agreed to now do the next wave, big wave of the deployments. Sobeys have 1,500 stores, give or take, it's pharmacies and it's mainly -- but it's mainly groceries. A lot of different formats. Some of them are owned by Sobeys, and also the orders that you see on this slide, some of them are franchisee-based. So on top of this last year, we did a lot of the franchisees, and we still -- a lot of interest also from the franchisees. So that's not included in this agreement that we have. They have, of course, the right to utilize this agreement, but it's not part of the $51 million. Discussing with Sobeys, they have an interest to do this as fast as possible. So it will -- the deployment speed will very much be connected to the ability to deploy in the stores that will sort of be the limiting factor. But when we speak to the executives of Sobeys, they are very clear. We want it done as fast as possible. So let's see how fast this will go. Then next slide, please, Claes. Pricer Avenue, I've talked a lot about it now. We can see some more traction. We are not doing the official -- we have started the official deliveries and installation of the newly launched avenue. We had the first stores installed. For those of you living in Stockholm area, you will find stores in Stockholm now with Avenue. We are working together with the store owners. We are working with some other brands, which has been a really key point. We do not want to launch Avenue as just another beautiful ESL because it is a beautiful ESL. To us, this is about merchandise. We want to make sure that any of our customers using Avenue, they should make more money. That's the entire objective of Avenue, not to only beautify the store. It should be a tangible business. And of course, then we need to have a proof point. So now in Q2, I think it will be in May -- sorry, in June. June, we will do A/B testing now. So we have one store with -- we'll do ESL, we have ESLs. And then we have one store with Avenue to actually be able to see what is the uptick in sales we get when we do merchandise on Avenue. So this will be a very important test. We will do more of those to also be able to go to our customers and sellers, you should really do Avenue because it will help you get more customer attention, you will get more sales, and you will be able to sell this now to also your suppliers. So we are focusing also much of these discussions on the supplier in the fast-moving consumer goods world. And finally, of course, I said that it's a beautiful ESL. And it has been recognized now by GOOD DESIGN. It's priced from the Chicago -- I won't even bother to try to pronounce it, Athenaeum: Museum of Architecture and Design, and the Metropolitan Arts Press. It's one of these old and really prestigious awards programs. And we have been a winner now in the category, green products. When we were now, what it is, planning to also Polestar, the Swedish car, we're also giving the price from the GOOD DESIGN. So it's one of those prizes you really want to have. And maybe now it's time for Claes. I think it's -- your next slide is -- the next slide is yours.

Yes. And as you can see here, sales are down SEK 40 million compared to last year. But if you take into account that the U.S. dollar is down compared to last year with about 10% and the euro about 5%, we are -- we should otherwise have been on the same level as last year. And one other and maybe the most important thing here is, of course, even through sales are down 8%, the gross profit is higher, and that is due to the better margin, which is an effect from Plaza and also a better product mix. And we also took a decision now in April to cut the cost and we will, from the second half, save about SEK 17 million per year related to this cost cut we've now just been doing. Then if we look at the cash flow. We had a strong cash flow in the quarter with an EBIT of SEK 11 million. We achieved an operating cash flow of SEK 53 million and increased our liquidity with SEK 33 million in the quarter. So now we have SEK 341 million in cash. And then, of course, we have the bond of SEK 300 million, but we also have unused credit facilities of SEK 150 million. So we have a strong balance sheet now where we have good control over our operating capital now. And then if you look at the sales and the gross profit, you can see it's similar compared to a quarter ago. But then you should also have in mind here, the currency effect we now had in the first quarter for about SEK 38 million, SEK 40 million on the top line. With that, Magnus, summary.

All right. Thank you. So summarizing the quarter, strong financial performance. We have had stable order intake from our existing customers, but also from new customers, but not without one of those groundbreaking large deals. We had a net profitability turnaround and of course, a very good gross margin. So I would, of course, like to see more sales. But at large, I'm really happy to be able to present this today. Looking then at the geopolitical situation, there is still a lot of macroeconomic uncertainty on the market. It continued to actually impact customer near-term investments. But also what we see is that the customer interest and the customer engagement, it is growing in the North American market. And it's actually not only Canada. We also see, as you will see in the report, a lot of positive discussions on the U.S. market. There is simply more interest on the market right now. So that feels positive. And then I'm hopeful to see now that I hope that this will be a tangible change. And somehow, it's also now with the agreement and the win with Sobeys. To me, it's also signed in this direction, and we see that what we do with Sobeys, it's creating traction. It's creating a whole lot of interest from other customers that might not have started the ESL work or that want to not modernize and do that larger scope. As mentioned by Claes, we have done a strategic operational review. And then of course, that's prudent for a company. So we've been looking at what can we do to fine-tune our OpEx levels or adopt our OpEx level. And that actually was the result of our operational expenses that are actually not SEK 18 million, but SEK 17 million. And the official delivery and installation of Pricer Avenue has started with the first stores installed. So that's pretty much summarizing the quarter. So I think now, it's over to the Q&A. So I hand it over to you, Hjalmar.

All right. That's great. Thank you so much. Let's get started right away. I was thinking maybe we could address the revised reporting segments. Could you just elaborate a bit on this? Do you feel that this better reflects the underlying business? Or is there a reason for the sort of restating the geographical mix that you report through?

Well, the product mix is, of course, important, but as we also said before, we expect to be better on our procurement. So we don't want to make some forecast, but we think it's a good margin even if the volume has not been very, very high.

Okay. Yes. And then we have a question here on the line from -- which is regarding the Plaza revenue recognition. Could you elaborate a bit on how this revenue is recognized? And what is sort of like driving the -- maybe the volatility between quarters here? Is there a setup inherent in the Plaza revenue that makes it difficult to evaluate sort of quarter-on-quarter growth? And how should we view the sort of revenue that you generate?

No, I think we reported the same way all the time. And you can see in the notes exactly how much sales we have in Plaza. One thing that also is affecting Plaza is, of course, we have a base cost for Plaza, and that is also getting better now when we are increasing the volumes of Plaza. So the margins from Plaza also increased. So it's not only related to the volume.

Yes. Actually, I can add one thing to that one is it's actually that we -- sometimes, you could see it in Q3, you also see it in Q2. We have had very large rollout of Plaza to one Tier 1 grocery retailers in the Nordics. Some of the installs that were done in Q4 were actually not invoiced until now in Q1. So there is some element also retroactive invoicing, which might add temporarily, give a little bit of a spike. It's not a major thing, but we had it in Q3, and we also have it now in Q1. So that would explain some of the...

But that's small numbers. It's less than 10% of the Plaza sales.

All right. Yes, that's great. Fair enough. And then on the gross margin, I mean, you mentioned the drivers here. Could you say maybe whether it's mainly the product mix? Or is it the shift then to direct sales approach and the Nordics driving this? Maybe elaborate a bit on sort of like the sustainability of the gross margin on these levels, but of course, they are very impressive and strong. So what was sort of like driving the gross margin that we saw in Q1?

I think it's been a combination one. It's, of course, we've been working continuously with the sourcing. You have a fair -- you have an effect also on the Plaza that we can see. It's a bigger chunk. I would like to say it's also fair that some part of pricing power as well that we actually have a good position with our customers, and we are able to keep our pricing and actually defend our margins. So we've been working actively with that one as well. And of course, we have made some changes on our product families. So we actually took an old one totally out. So we can see that we get higher volumes also with what we have and I think that has also actually affected the margin. Anything you'd like to add, Claes, to this?

It's a lot related to the type of products we are selling, but it's also related to the customers and also customers buying different type of products. So if you sell to one specific customer, the margins might be much lower compared to others. So that's also a part of the mix, products and the customers, but most difference between the customers are actually the products.

Yes. Yes. Did you see any impact on the gross margin sort of from maybe sourcing, shipping costs and increased maybe input prices? Or is this something that we could maybe expect going forward? I mean there's been some recent discussions on these topics, I guess.

There is a lot of indirect cost in our cost of goods sold, and freight is a part of it. But still, it's a small part of our total cost of goods sold. So it will go up and down.

We have actually also been working actively with the way we do the transportation. So we have historically done more airfreight than we do right now. So with the balance sheet that we have right now, we have the possibility to actually then do the shipping. So of course, we see the effect of the transportation cost. But as Claes said, it's not been a major driver yet. So let's see about the future.

Yes. And then on the product mix and maybe the market mix, we received a question regarding the -- not like the previous Sobeys order that you've installed during 2025. Were there any installations connected to this order in Q1 as well? And are you finished with this -- with that order in terms of installations?

We are finished with that order. And actually, we got additional orders in Q1 that we are deploying right now. So nothing of the ones that we -- that they committed to now was actually delivered in Q1 that will start pretty much now.

Okay. And then I guess, you spoke some on the sort of like upside that you see within Sobeys. You mentioned, of course, the total store network of 1,500. Do you see additional upside here if everything goes well, I mean, now following the new sort of deal or the agreement that you see here? Could you elaborate a bit on this?

I'm an optimist. I always see upsides. But I would say, yes, there are tangible upsides.

All right. Yes. And then also, you mentioned some positivity regarding to North America, Canada and the U.S. Could you elaborate a bit on this? Is this in terms of pilot installations or is it more maybe leads or discussions that are carried out at a sort of lower or higher level?

It's a combination, actually. So we see more incoming interest. We are also maybe working a little bit differently. We have just also now strengthened the team with a very senior and good head of sales that will be responsible for Americas. So it's a welcome addition to the team. But we see more interest on the customers, and that could be in discussions. It could be in fact that they come to us. But of course, we also have a select list of customers where we are engaging with them proactively. It's also on the pilot side, but it's also deployment of some of the orders that we received back in Q4. And so all in all, there are many signs. And of course, they all have to be nurtured that we need to make sure that we will take them into real opportunities. But I think the positive thing is that we do see more activity. And it started in Q4, and it's continued. So maybe this will be the sign of a turnaround. So let's see.

Yes, very clear. And then we have another question on the line here. Could you explain the spikes in prepaid expenses and accrued income during the first quarter that we saw now both in 2025 and in 2026? Is this just a general seasonal pattern? Or are there any other drivers of this effect?

Can you specify exactly what does it mean?

No, I mean, I guess, just general comments on sort of the level of working capital, I guess, for the first quarter. Do you feel that there's anything noteworthy here? Or is it just -- are we just seeing a general seasonal pattern?

No, it's not a real seasonal pattern. What can vary a lot is, of course, if we make a lot of invoice at the end of the quarter, then the accounts receivables will be higher. And then, of course, we build up inventory. We expect to have a lot of delivery in the coming 6 months. That's the effect we have, and that is the same all the time. But the timing is not really seasonal. It's more how we expect to deliver the products out to the customers.

All right. Yes, that's very clear. And then we have a question on the line regarding the U.K. market. Could you give us some comments on the current activity here, the pilots or the potential pilots that are running? What sort of feeling are you picking up in the U.K. market currently?

It's finally -- it's the same as before. We see a lot of interest. We see a lot of engagement. But over the last year, we could see a few real deals that was made on the market, but that the actual deployments was extremely slow. We could see people that started and retailers that started doing something, but they haven't taken it further. But now when we discussed with them, when we had a lot of those meetings yesterday, as example, we see the interest is still there. And then they are trying to find a way forward. They are looking at how should we do it, what do we really want. They might have done pilots with us or with someone else and say, okay, what's the next step? And then they're probably in a phase where they're also learning a lot. But I still see the very clear path that there will be digitalization in the U.K. But it's a little bit slower than we could see last year, and maybe it's connected to more of the macro economic rationale. But it's -- I have heard from the people organizing now the exhibition that they expect a record number of participants. So certainly not anything wrong with the interest in the market and we -- it's been really packed in both. So I'm still positive to the U.K. market, but it's been developing slower than I was hoping and expecting.

Yes. And then we have a question, I guess, this is on the competition that you face in Canada. Could you elaborate a bit on sort of like the competitive environment that you see here? Are you facing the same competitors that you do maybe if we compare it to Europe or Scandinavia? And what are sort of like the characteristics of competing in Canada?

We do competition just like in Europe, it has increased in Canada. We are well positioned on the market by having Canadian Tire with pretty much all the stores now deployed with Pricer, looking at what we've done with Sobeys and then what we've done with METRO and other groups. Of course, there will be, when it's time for someone to modernize or they want to expand, there will be a lot of competitors that will both go to our existing customers and try to price them in. But so far, we've actually been able to stay in all the accounts and even expand our business. But I can see that the competitive environment is increasing a lot in Canada. But so far, we are in a really good position and we have credibility in the market and our partner, JRTech has a lot of credibility in the market, which I think has really helped. And that's why I was thinking a little bit about pricing power. So we are in a position where we've been actually able to defend our margins also when winning new large deals.

All right. That's super clear. And then we have a lot of questions on Avenue actually and sort of like the competition that you face here. Can you sort of describe the sort of like, I would say, that the functionality maybe a general on the Avenue compared to competition. And maybe if you can give us some -- maybe some KPIs or some soft values that you received from customers or through collaborations that you run pilots now. Anything would be useful.

So we don't really -- I don't intend to sound arrogant, but we don't really see any competition because what we do with Avenue, the ability to do merchandise the way we can do by putting these ends together, none of our competitors have that ability, and it's very much due to the form factor of the ESL. We have very thin frames on the sites where you have all our competitors have more of this bulky, bulky, old type ESLs. They cannot convey the merchandise space the same way. So when I look at our competitors and why they're using the powered rail, it states only one purpose. That is to make sure that the batteries doesn't die. Whereas the purpose for us to do a powered rail where we also have communication is to really create the ability to do merchandise in the store to make sure that instead of video, instead of anything else, that we use what they already have, they get the best of breed in terms of efficiency from the ESL, the Avenue ESL. But then combining them, we create the space where they can actually improve the shopper experience, improve the sales to the shopper, but also sell it to the suppliers. From the KPIs, I would say it's -- that's why the A/B testing will be so important. It's been more soft feedback. We have fast-moving consumer goods companies. They are very happy with the cooperation. We see the response from the ones now deploying in the store. They said, it's really great. But it's not tangible enough. I don't want to sit and just say, people like it. They do. But that's not what I want to use when I sell it. I want to tell them that if you do Avenue, we will help you increase your sales, and this is the way you can get more money paid or ask for more money from your suppliers. So it's still to come. We need to quantify the benefits, but we clearly see that there is a lot of interest.

Yes. And then one question there on the Carrefour nonexclusivity announcement that we saw previously. Have you made any revisions or any changes in your sort of like perceived impact from this, maybe now that the dust settled a little bit? Do you still have the same view on the potential here? I mean you spoke about it and with regards to the independent stores as well, but maybe if you could just reiterate that and share your thoughts on this matter?

I would say the view is still the same. We have seen a really good order uptick with the franchisees in France. Now of course, we need to see was that just something temporary? Or will it continue? So it's too early to say, but we have had positive traction. We see now also in Italy, which was Carrefour divested the Italian operation to a company called NewPrinces Here, we have good discussions with NewPrinces. There is a lot of opportunities. They are divesting the operations in Romania, will be ready now in -- during autumn. And also here, we expect to continue and then be able to develop the work together with them. When Carrefour at their strategy presentation 1.5 months ago, they also was quite clear with their ambition to -- they put it that Belgium and Poland, their operations there, it's up for strategic options. So in essence, they're looking at the potential divestment of them. And also here, we are very well embedded in Belgium and have a very good relationship. So for these countries that have been spun off, we continue the business. So there, we have no Carrefour effect. So it's primarily France and Spain. And Spain, we only had a very small installed base. So our focus will be on France. And we'll do our very best to make sure that we continue to sell to the franchisees, with Carrefour's ambition to take their hyper supermarkets move more into franchisee space. Well, let's see how it goes, but we haven't done any revision so far.

Yes. Okay. Thank you very much. All right. I think that concludes the Q&A session. So thank you so much, Magnus and Claes, for answering our questions today. And I'll leave it to you for any concluding remarks.

So thanks, Hjalmar. Thanks for hosting. I'm very happy. It's been, in many aspects, a good quarter. I would, of course, I'd like to see some more sales, which anyone, all of you listening would also like to see. Very happy to get the agreement in place with Sobeys. I think it's proving that we are doing things the right way that we have a position that is strong. And we will, of course, do our very best to build on that position. The traction we get with Avenue, the feedback also now at the exhibition, we see that the interest it generates is just growing. So I hope that, that will be more exciting Avenue news during the year. So thanks a lot.