Pricer AB (publ) (PRICB) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Pricer Second Quarter 2026 Investor Presentation here at the MB Carnegie. I'm joined today by Magnus Larsson, President and CEO; and Claes Wenthzel, CFO. Welcome. Thank you very much. A strong report today, so there's a lot to unpack, so I'll leave it to you right away.

Excellent. Thanks a lot, Hjalmar. So thank you, everyone, for joining today's call. It's a very hot day in Stockholm today. Let's see if we manage to make the summer hit a little bit higher after this presentation of the second quarter. I'll leave it up to you. Our vision to be the preferred partner for in-store communication and digitalization. That's what we work with. That's what we speak to our customer about, and that's actually what has been helping us with or generating today's results. I will dive straight into the Q2 highlights. And for those of you that read the report, you could see that we have had really good commercial traction in the -- a few of our markets. Canada, very strong, but also good growth in the U.S. in Scandinavia, in the Pacific. I will come to it a little bit more in detail. But one of the things -- one of my takeaway, I did some digging into our archives, and I realize that this is the first quarter since 2024, where actually we demonstrate growth in both net sales and order intake. So to me, this is a very positive sign that we're moving in the right direction. Another very positive aspect of what we've done is that we can see that the net sales of Plaza, our SaaS solution grew with 35% quarter-on-quarter. And we added actually more than 500 stores in Q2, and we were actually doing much more than 500 stores in Q1 as well. So as you could see from the previous slide, and I'll flip through it very fast. We have added more than 1,000 stores only this half year. So it's been quite a success. From a financial point of view, we are zooming in on historically high pricing levels of gross margin. Our gross margin reached 28.1% compared to 19% in Q2 last year. So it's been a major growth. It's actually a major growth versus Q1 this year and Claes will speak a little bit more about the gross margin later on in the presentation. We continue to show strong cash flow. We have a net cash position. So we're not in debt. The adjusted EBIT margin at 7.1% versus minus 2.8% in Q2 last year. So all in all, a very strong financial performance. Another thing that I really want to speak about is innovation. We have spent a lot of time actually more time than money on innovation, where avenue and the way that we wanted to reshape ESL and the way you look at ESL as the first step. It's been a success. We have had the first commercial order of price revenue in the quarter. We have done independent AB testing that really shows the price or avenue generate shop retention, shopper interest and above all, it actually does increase sales when you do promotion. So all in all, it's a Q2 that we're extremely happy with. Of course, we see that there are always things that we want more of actually most of it. But at large, we're super happy with this report. We dip a little bit more into the order intake. We had a growth of 13%. We landed at SEK 568 million this quarter. We have a growing backlog. We have a positive book-to-bill, which means that we can see that the company is growing from an order point of view, from a backlog point of view. The performance in America, we had a lot of orders from Sobeys for the Phase II installations. We have also started to install, but we'll see there will be quite intense work during autumn. We received continuous orders for IBM Federal for the [indiscernible], so the [ Army ] stores. But we also started to receive orders from small but tangible increase in orders from new customers. It's with some of the announced partners that we have, like [indiscernible] but it's also some new ones. We have a small but new customer in Alaska, Alaska hardware. But we see more of this. And I think above all, we start to see a mindset change on the market. we start to have more discussions on future digitalization. We see customers making plans, setting budget and some also starting to invest. So -- and of course, after a year, where we've seen maybe not hybrid nation, but it's been very slow. And the -- after the tariff discussion after the start of the war in Iran, it's nice to have seen some positive movements on the market. So this is something we definitely see in the North American market. We have a continuous commercial traction also in Scandinavia. The -- more from partner-led sales to direct sales has been very good. We had good traction actually way better than last year but also better than compared to our own plans. So it's been very positive. We have had success on the field sales in Sweden. We have had success on key account management and above all we are working much closer now to the large retailers and large retail customers that we have on this market. Pacific market was really slow last year, but we now see a rebound. So we had good order intake and also invoicing on the Pacific market, and we see an increased interest both in Australia and in New Zealand. So at large is actually very positive development. And the order intake trend is now moving in the right direction, as you can see from the graph. So what else is happening retail industry insight and macro trends. So I wanted to focus on the one that's been highlighted market growth and strategy for strategic digitalization, but also tech transformation and personalization. And I will speak about Avenue, and I will speak about AI. The first one, so we did this AB testing. It was done by an independent third-party company called retail academics. This is what they do. They investigate behavior in stores that's really what they focus on. We were working across 3 U.K. stores. We had 23 unique brands. We had [ CopoVist ] England's own brand, but then we had quite a few well-known brand. [ Pringles ] is one of them and we had 66 different products. The real question was, what is the impact of price for Avenue versus the traditional ESLs when you do promotion. So in 2 stores with Avenue and in one store, we had our regular ESLs. And of course, we got full access to the sales data or retail academics, got it. But they also did interviews with shoppers. And it was in a level where you can say that the statistics is correct from a statistical point of view. And what is the result? Well, shopper identified promotions 43% faster with price revenue. And that's the entire idea. You make a promotion, you want people to see it. 90% of the people that were interviewed, they stated that the promotion and the setup wood Avenue actually increased their interest to purchase. Of course, the best part was that we can see tangible and statistically verified sales increases. So when we looked at all the 23 brands and the 66 products, we could see 2.2% sales increase. It doesn't sound like an awful much, does it. But the thing is if you're in this world, if you're actually selling what we call fast-moving consumer goods, depending on the assortment, depending on the product that you sell, an increase of 0.2% might actually be a fantastic result. If it's something else, it could be that you want 3% or 4%. But regardless, when we look at it this way, it is really good. It's something that we bring this to our retail customers. They will say, yes, thank you. This is what we want. But if we then say, if we took it from more like a general picture with a price or Avenue price, if we had an inspirational picture, this figure raised to 3.8%. And -- if we added the brand logo, like you can see here in the Pringles picture, it was almost 5% sales increase. These figures are something that our retail customers want. This will be an immense help when we go out and sell Avenue. We can tell them with Avenue, you get all the benefits from the traditional ESL, but we will also unlike anyone else in the market, help you with real sales uplift when you do campaigning. This has also led to a situation where we're now engaged to a different way than before with the fast-moving consumer goods companies because we have something that can help them sell more in the same store, same setup but just sell more. So this has been really good. And the fact that we now have the test done by an independent third party will also be extremely helpful. Something we've also been working a lot with is our own AI platform, I call it Pricer.AI or think people call it Pricer.AI. We've been working with AI since 2024. And more recently, our team has now spent a lot of time basically building our own tools and our own way of working. So you could say that we have an internal platform that is now custom built it, we built it, applied AI infrastructure. It's agnostic from an agent point of view, which means that we can work with Gemini or we can work with Anthropics in Colorado, we can work with pretty much any agent we want. So if we want capacity, we can actually use the agent that adds most capacity. If you want low cost, we can use that one. something that actually impressed me quite a lot is that we have built our own way of training the AI. It learns through self-protection, but it also adds to external multi-model data whatever that means. That actually means that we can train it with YouTube. There is a lot of clips from really skilled engineers, where we can actually take that and use that as a part of the process to train our AI -- and we now look at the projects on the software side that we've actually done since we started to implement this project or this Pricer.AI as full. We've seen that we now go up to more than 10x the capacity in development. So as the next step, what we're doing now is actually we take this platform. We will also use it on our internal processes to see how can we improve corporate functions. Same logic. We have same kind of interfaces, but the agents will use -- help us to be more efficient internally. And the next step is we have 60 million ESLs connected. How can we actually use that in a different way? How can we give more power to our customers to adopt the way they work with Pricer.AI? Here, one potential will be to see how can we use our platform to actually embed it in our tools and our products that we have customer facing. So that will be also part of the future set up. So we think with this platform that the team has built and they've done fantastic work, we have something price-specific that we can use to improve internally, but also that we can have to improve the customer experience and the way our products are being used. So I think you will hear more and see more about what we're going to do with Pricer.AI into the future. I think I'm done with the shameless selling. So Claes, will you take the facts?

Okay. Yes. So let's look at our P&L then. As you can see, our sales growth at 8.5%, but if we exclude the currency effect, it was close to 10%. This was 9.9%. What also is very impressive for this quarter is, of course, the very strong gross margin. And that is driven by 3 things. It's lower production cost. And it's also the customer mix and the product mix that is also strong increase in the [ Plaza ] sales. We also took a one-off cost of SEK 9 million in this quarter, which will sale on an annual basis, which start now in July, SEK 17 million per year. And adjusted for the one-off costs, we have an EBIT of SEK 34.5 million in the quarter. which is a margin of 7.1%. And then if you look at the cash flow, we continue to have a strong cash flow. As Magnus said, we have no net debt. We have SEK 336 million in cash, which is net cash of SEK [ 36 ] million. But we also have available unused revolver credit of SEK 150 million. So we have available cash for almost SEK 0.5 billion at the end of this quarter. As you also can see, the inventory has gone up with more than SEK 100 million in the first half of the year. And that is, of course, for the upcoming sales. We have a higher inventory level now than we normally should have. So we can expect inventory to go down during the rest of the year. And then if you look at the net sales and the gross profit development, the interesting figure, of course, a very strong increase in the rolling 12 months gross profit. And yes, in this quarter, it's up more than 10% compared to last quarter, rolling 12 months.

All right. So let me summarize. Strong financial performance, good net sales, good order intake or at least it's growing. It depends on what you think is good. I think it's good. I'm happy. Increased gross margin. It's close to historical highs, and we are having net profitability. We've executed on the organizational changes that we spoke to in the Q1 report. It's of course, always hard when you do it in an organization like ourselves. It has a tangible impact, but also here, I have to say that colleagues have done it really well. And we have done our best, of course, to make sure it will be as painless as possible. But it's also, of course, adds to our ability to make profit into the future. So it's the right thing to do. Looking at the geopolitical situation, we start to see, as I mentioned before, that the sentiment press to slowly improve. And we can also say that in North America, customers are planning for new investments, they are starting to invest, and we are part of many of those discussions. Then something I guess wrote a little bit about in the CEO update, but I want to end with is that we need to continue and maintain our position as thought leaders we managed to establish something with Avenue that we get positive feedback on a regular basis on events, from customers, from suppliers. We see that also our competitors are trying to copy us. It's a position we need to maintain. So we have a few projects, new innovative solutions, and we make significant progress on these solutions. So it's something that we look forward to speaking more about later. But it's something that will keep us in the forefront of innovation, and that will maybe not cement our position but make it stronger as thought leaders. So that's pretty much it. We're ready for the Q&A.

All right. Perfect. Thank you. Very exciting finish there. I guess there's something we will come back to in the future.

I hope so. Yes.

I figured. Let's start with the gross margin. We have some questions on the line regarding this, and I'm also curious because you mentioned, of course, this is the result of a lot of things working together. But if we look at the sales mix, you mentioned, of course, the product mix and then there's the market mix. Is it safe to say that all markets are pulling evenly? Or is this sort of expansion may be concentrated towards certain geographies? Can you give us some details on this maybe or --

We can say that historically, there has been tougher competition, more price pressure on the European market and a little bit more maybe in the South and Central Europe than in Northern Europe and less so in North America. So yes, we can see a distinction, but there doesn't mean that there is no competition in North America. There is a lot of competition. but it's been historically on a different level. So yes, we can see that we have a higher contribution from North American customers, generally speaking, than from European customers.

And do you feel that this is in some way connected to your direct-to-market sales approach that you adopted across some geographies here in Europe as well? Or is it just a wider shift sort of in the pricing?

We have been regardless of sales method, when we move from partner led to direct sales like in the Nordics, yes, we can see that it's been contributing to increasing our gross margins, both from a service delivery point of view, but also from a product price point of view. I think in many geographies, we've been actually quite good to maintain price and really use the pricing power that we have. We have a good solution. We have customers that want to continue and of course, you can never be too high in price. But we need to make sure that we are careful about really addressing the value we deliver and to maintain our prices. And I think that's -- you can see a lot of that in our general increase of margin as well.

One other aspect also is we have a better plan now. which means that we are taking more by boat compared to claim before and that has a huge impact on the margin as well.

Which, of course, also affect the inventory.

Yes. Yes. Is that what you referred to when you mentioned production costs? Is that shipping or ...

Yes, yes, that's a part of the production costs and our cost of goods sold. Yes. Yes. And it's actually on the production cost, we, of course, we have continuously -- we are continuously working with optimizing our cost of the products. We reduced the number of products that we have. So it's more effective. we look at the way we do the transportation, but it's also manufacturing cost, component cost. So it's a constant negotiation to make sure we have the right cost levels.

Yes. Okay. And of course, like you mentioned, the strong development in the price of [ Plaza ] contributed to this as well.

Yes.

Yes. Do you see additional -- I mean, previously, you had a recurring sales target for the Plaza. Can you give us some -- maybe some soft values or what do you see for the type of potential for keep upselling the Plaza platform and the recurring revenue?

I see good opportunities. We have worked a lot with Plaza. We actually have a number of larger customers that are still on an on-prem version, that are planning to move over to Plaza because they see the benefits. So the customers we have, they are really happy. And we are spending probably the same amount of money developing Plaza, but now we don't develop Plaza. We develop the add-on functionalities. Some of them will be to make sure we maintain that will maintain a really good base level. Some of them are functionality that we will charge for that we can see there's a clear value add, that will be a clear price for this functionality as well. So you can say we moved a lot of the development from maintaining the platform to actually building new functionality, which has also been fueled basically by the AI advancements that we have done.

All right. Perfect. Thank you so much. And if we move on then to the sales and the order intake, could you elaborate a bit on the Sobeys, the framework agreement that you have the latest one, at least -- was this strongly contributing to the order intake in this quarter? Did you started deliveries? I believe you mentioned sometime around May that you anticipate deliveries to start. Is this -- what this --

It has all materialized.

It's materialized.

So we can see that, yes, we have had a lot of order intake -- it's -- I mean, it's a big contributor, but we have started deployment in May according to plan. We see that we said that we will deliver over 6 quarters. we're trying to squeeze and it's actually so business they want to do it as soon as they can. So -- and it's actually together with Sobeys and our partners plan store by store. So we really try -- when we get an order now, we know it will be delivered fairly soon. So it's not unlike 2024 when got this very large order and it would be spread across basically 6 quarters or 4 quarters at that time. Now -- so now every single order we get is something we plan to deploy quite fast.