StrongPoint ASA ($STRO)

Okay then 10:00. Welcome, everybody, to this investor presentation. Welcome. And just apologies right away if my voice is a bit rusty, it's because of these guys, all the regions would know why, the Nordic [ team ], proudness of [indiscernible]. So just, of course, very, very pleased about that. So apologies again if the voice is a bit broken today. Okay. We have a very insightful -- we hope, at this exciting agenda today. And with me to go through this agenda, I have -- or we have Roy Horgan, Roy is the CMO, but also the MD of U.K. and Ireland for Vusion. And I know that many of you are very excited about and curious about the partnership we have with Vusion. So we will be talking more about that. And Vusion, of course, being represented by Roy will talk more about exactly, the Vusion. We'll talk today about sort of overall market, the partnership, e-commerce and our strategy, and then we'll leave time in the end for Q&A. We try to wrap everything around 1.5 hour. Also for the Q&A session, we have Marius Drefvelin, our CFO, here in the front, with a tie as a proper CFO. Okay. I want to start with not a history lesson, but just a little bit now, what we've heard in the market and how we are trying to move ahead, right? So if you look back to 2020, StrongPoint was a company that had not only retail technology, but also a cash security business and a label production business, all very different kind of businesses than retail technology. And we took the decision back then to be a pure retail technology company. And I think we were both patient, but also we should say, lucky with some of the timing we went out of Russia. That was not because of our geopolitical foresight. There was a little bit of lucky on that. We managed to divest both the Cash Security business, which had a very, very big business in Russia and also the Labels business at an appropriate point in time, which then enabled us to also move into new markets. We both were and are still in the business of selling hardware, but with attached service contracts, which are very important for us. As you would have seen more and more so, we're more and more trying to sell more software solutions as well. Obviously, software solutions, which also have a recurring component in it. We were super proud and are still very proud of serving all the Scandinavian top retailers. But with expansion into U.K., Ireland and more so also into Spain, we're starting to serve more and more of these major European grocery retailers as well. And one of the points that we met -- I met when I was back in 2020 speaking with investors was, well, isn't it a bit risky to just be with principal 3 customers in Norway, and back then 4, now 3 customers in Sweden and 2 in Finland and 3, 4 in the Baltics. I mean it was felt as a risk. Well, certainly, now we have expanded the footprint to cover not only these companies, but also grocery retailers in [ Denmark ]. So it's more of a broad product portfolio we've got out with customers. And lastly, which we'll also talk more about today is we were super fortunate and skillful, I should say, looking at Jørgen to do the acquisition of CUB back in 2018. That proved to be an absolutely fantastic company. And it was with great humbleness that we sort of realized that this is a jewel that we have to take care of, make it from an on-premise solution to a cloud-based solution, put in the necessary features and functionalities to also be successful internationally, and we've really started on that journey, but it's been an absolutely amazing journey. So just for all of you, many old investors, a little bit of, should I say, history, in that respect. Now what's the market like today? And I think there are 3 megatrends, if you want, in the grocery space that affects grocery retail. The first is the continued growth of discounters. For many, many years, hard discounters was not even considered part of grocery business in the U.K., not until Aldi was all of a sudden #5 in the market, #4 in the market. And whereas these are absolutely amazing companies and in particular, in Norway with soft discounters dominating the market, this is, first of all, a very important customer base for a company like StrongPoint. But it's also a great push to the traditional supermarkets to do the differentiation versus hard discounters and other soft discounters. And the solution very often is how can you use technology to enhance the customer experience and reduce costs accordingly. The second bit is the growth of e-commerce. And although most of you at least here in the room are Norwegians and the e-commerce space within grocery is pretty limited. That's not the case in most other parts of the world. E-commerce is the fastest-growing segment within grocery retail full stop. In the U.S. alone, and I have to double check the figures, but in the U.S. alone, the growth at the end of last year was more than 30%, more than 30% growth in e-commerce for groceries in a market which is already very, very low penetrated. So I'd like to say this is like the Internet. It's not going to go away. It's just going to grow, and we're very fortunate to have solutions that fits exactly this market. And the last bit is the digitization of stores. And certainly, with the advent and growth of AI, the question is how can we utilize all the data points in a store to make the store more efficient. The truth of the matter is in today's world, the most -- or the biggest problem for most grocery retailers is out of stock. We have solutions to handle that. And so the store digitization is certainly -- also a megatrend that's affecting us. And again, super proud to have Vusion here to also share their experiences with both Walmart and Carrefour. So without further ado, let me do a little bit of an introduction of Vusion and StrongPoint's entry into the partnership with Vusion. So with Vusion, we have a what we call a multifaceted partnership. And it's multifaceted in the sense that, first and foremost, we are a value-added reseller. So in 9 countries where we are present, we have a reseller agreement to sell the entire portfolio of Vusion through -- throughout the market. The second bit of the partnership is what's called ISV, independent software vendor. And essentially, what it means is that Vusion has had the belief that in-store picking is the future. And we've seen the benefits of Vusion solutions and how Vusion can be connected with StrongPoint's order picking solution to enhance the profitability of both the picking solution as well as other infrastructure in store. So we're working together both to promote each other, but also together on a road map, and we'll be sharing some of the bits in what that road map looks like, so you can get a bit of sense of what it is actually all about. Now without mentioning our other partner, I mean, it's no secret that we had a fantastic partnership for many, many years with another company providing Electronic Shelf Labels. And so when we took the initiative to break that partnership and go with Vusion, there were certainly many questions. And if we try to sort of summarize why did we change to Vusion, there's really 3 reasons for that. Number one, it's not only about ESLs or Electronic Shelf Labels. Electronic Shelf Labels is one part of the entire suite of solutions that Vusion offers, but we're going from Electronic Shelf Labels that we've been used in Norway to see around stores to a digitization of stores. We'll talk more about some of these solutions, but I'll just mention, for instance, shelf-edge cameras. So these are shelf-mounted cameras that are able to see and as they see using both the camera, but also with an AI layer to understand is a product out of shelf, not out of stock, but out of shelf, which is what matters for customers in a store. That is, as I said, tackling one of the biggest challenges of grocery retailers today, namely shelf stocks. We are also with Vusion using their retail media platform. And retail media sounds a little bit difficult to get a grasp of, but let me give you 2 data points here. One is most of our advertising money today, unfortunately, I should say, goes across the ocean to the Alphabet's and the Meta's of the world. But if you're in the store, there's actually a fantastic opportunity to monetize on the attention we have from consumers. And bear in mind, even Norwegian consumers are, on average, 3.5x in a store per week. So when the giants like Walmart report that 20% of the net profit comes from retail media, and that's a very growing business. It's worthwhile keeping an eye on what's happening there. And there's a bunch of other things I'll leave that to Roy, but we're moving from an ESL partnership to a partnership which includes ESLs, but also so much more. Second thing is just de facto, a much broader footprint. We have been guilty as charged over many years in introducing Electronic Shelf Labels to Norway and Sweden with a different provider than Vusion, but it was really just in those 2 countries. The partnership with Vusion illustrates that we are able to also sell in all the 9 markets, and not just on paper in all 9 markets, but de facto, in all 9 markets. The setup we have with Vusion is unique in that sense that we have great expectations about what we can achieve also outside Norway and Sweden, where the market is more characterized by replacements of Electronic Shelf Labels rather than growth of Electronic Shelf Labels. We should all bear in mind that whereas Norwegians and Swedes, we think that the entire market is already fully penetrated, but that's just in the Nordics. U.K. is just getting started. Spain hasn't even started. There's so much more market to grow with, and we hope to do it with Vusion. And then the last bit is the e-commerce partnership we have. So the term local e-commerce is actually a term that at least we picked up from Vusion, which talks about how do you leverage the biggest asset that a grocery retailer have or retailer have, namely the stores themselves. How do you leverage that into also an e-commerce fulfillment platform. And so Vusion was looking for that, to be honest, over many, many years, asking us to please change sides to put it like that. And eventually, we took that step, and we're just truly happy about the work together to get local e-commerce fly. So I'll talk more about that in a second. But before that, I'll give it to you, Roy, to talk more about Vusion. Many here do not know that much about Vusion. And secondly, about your views on the StrongPoint partnership.

Okay. Thank you very much. Yes. My name is Roy Horgan, and I have 2 hats. One is from a group perspective, marketing and communications, but also from a market perspective, the U.K. and Ireland. So that has been -- that hopefully allows me to be qualified because I know what happens on the ground and not in theory, which helps. So -- yes. So the reality, Vusion actually -- so I started the company in 2014 on data analytics. And at the time, Vusion had a company called -- it was SES-imagotag that bought a company called imagotag. They were an investor of mine. At that time, 2014, it was in the region of EUR 80 million, and now we're at $1.5 billion, you can just see a 30% annual growth year-on-year. And there's been a couple of inflection points there. I think the onslaught of WiFi in store changed everything and embedded WiFi, so embedded IoT. So I think we don't see ourselves essentially as an ESL company. We see ourselves as an IoT and data business. That's what we see ourselves as, and it's proving to be true. And we've had a couple of -- I suppose, our key disruption in innovation was this technology called EdgeSense. So this basically is a rail, and we've basically connected the rail to Bluetooth. So we're going to Bluetooth, right? So we've -- we're -- typically, the technology embedded in these labels was type of WiFi proprietary, sticky, but hard to interoperate with different devices. So we rolled this technology EdgeSense out to Walmart, and we're -- we have fitted right now about 2,500 stores, and we'll have the rest of them done by the end of this year into next year. And that's just the start. So any analysts in the room, they think that the story when Walmart finishes when you stop fitting the stores, it's not true. It only starts because then we enable services like computer vision. And I'll talk about Walmart in a second, and also geolocation services like picking, fulfillment, task management and moving the stock in terms of geolocation of store. The biggest challenge actually retailers talk about in terms of their stores is they don't know what's in their stores. And when you can tell them what's in their stores, when you examine what is in their stores, when it is on their stores and if you can improve the metrics, then you enable stuff like better picking rates, quicker picking rates, quicker baskets. And it's interesting, and this is what we're starting to see. So the total return on investment is massively improving because we're no longer just talking about replacing paper with digital paper. We've actually unlocking a whole range of different business cases, which has proven to be true. So typically, what we do when we start to talk to retailers, we have a project called value assessment, and we start to look at our -- where we think their business case potential is. So it's back to those basic things in terms of pricing and taking labor out of the store. So nobody is ever going to pay you for adding cost to their business by taking costs out. So we look at that, then we look at efficiencies. So -- and one of the joys of this partnership with StrongPoint and not only the fact that we work with StrongPoint on -- we're rolling out, and I have it in the next slide, a number of retailers at the moment. In one particular retailer, we -- who was using their picking solution -- StrongPoint's picking solution. Overnight, they accidentally turned on the pick-by-light, and we saw a 20% uplift in the pick rates. And actually, one of the largest compliments we got was there was a challenge with the -- it went down overnight before when we can and the retailer rang us and said, we have a real problem because we've taken all the labor out of the store that we had. So we needed working because it was giving them the efficiencies. So they already saw the benefit of this. And when a retailer is ringing you for those problems, although you don't want them, then you know that they see value in the solution. So really, it's a case of -- and it's back to what Jacob was saying in terms of real -- the real end game here is combining a number of technologies to give that confidence in terms of what's on the shelf, what's in the store, and also using other technologies like computer vision for closed-loop attribution. And what that means is you know it's on the shelf, you know where it is on the shelf, you know what's been picked in the store and then you can unlock stuff like retail media. And that's where stuff like the cameras comes in, because you give the retailer the confidence to present data back to their CPGs and their FMCG suppliers. So U.K., this is where like have been invaluable to me in terms of the U.K. because we now have the Coop. We've -- we're at a pace of 80 stores per week. StrongPoint are rolling this out with us. And also, it's all ultimately -- and again, in terms of Asda and Morrisons are some of the brands that we're working with StrongPoint on and others. But ultimately, where we see this is getting really interesting is when these are rolled out, then the real fun starts because that's where we can really add value, and it's all about adding value. Not just in grocery, we see it in terms of a whole range of different applications in terms of DIY and home improvement, so on forecourts. But the reality here is it's all about operational efficiency and improving the profitability of the retailers and their colleagues in store. So yes, this is an interesting one because Walmart surpassed Amazon in terms of their e-commerce last year. And you see their numbers growing in a market that is struggling somewhat, and their metrics are getting bigger and better and better. Even last month, Walmart specifically called out Vusion as a core technology in terms of their e-commerce strategy and their in-store strategy because the colleagues in store have adopted it. They started to see the benefit of this because the difference between a technology and to change prices and an infrastructure for picking is -- when it comes to picking, it has to work on time every time. You can't -- and this was the real step change in terms of Bluetooth because we had a technology designed for absolute scale at speed and then that interconnectivity between the colleagues' devices. So it's basically the efficiencies that they're seeing now to the point where they have turned it on with third-party pickers. So now the store from a secure layer can deliver third-party pickers geolocation and routes in the store. Where we're ultimately going is even on the picking, if a picker can turn back in themselves because they know that their planogram is in real time, maybe we're starting to model now that we can save about 15% of the steps in store by just having real-time geolocation. So in the pick route, we can make them dynamic, and this is where it can get even better. And that's where -- and then moving to agents and using that Bluetooth to connect to headsets and devices and glasses. So this is where, again, with StrongPoint and what I particularly love StrongPoint's innovation is they're connecting our cameras to their picking app. So then the picker can see with confidence that the products on the shelf are not on the shelf. So then they can -- we can reroute them to where it actually is in that store or it's in non-pick. So ultimately, retailers like Walmart and now Carrefour are trying to get to a place where their metrics is about the perfect basket. The more perfect basket they deliver to their customers, the more competitive they are and the better they are in terms of their NPS and service and profitability in terms of savings. So again, this is recently launched, and it's now part of their capital markets plan for 2030 in terms of how we ingrain a range of technologies to unlock the potential of the connected store. So ultimately, I think it has on so many levels on -- from a core technology perspective, from a partner in terms of helping us in terms of roll out our technology to stores, to -- which I'm most excited about because with so much potential also is the reseller as well because it allows us to have more coverage and a partner that understands and knows and can explain the technology in the right way. I've been at this a while and very few partnerships work quickly. They're typically hard and they take a lot of time and investment. I think this has been probably the easiest partnership that I've experienced. And it's a combination of, I think, we have the same values, the same ethics, the same culture. We're technology driven. We're problem led. We don't point fingers. We work on solutions. And together, it's been really a valued partnership. And yes, so I'm pleased to be here today, and thank you for your time. Thank you.

Thank you, Roy. Don't leave just yet Roy. I mean there's lots of things, right? But if I were to sort of ask you to cut through everything, what are you most excited about when it comes to sort of retail technology in our space?

Honestly, what I'm most excited about is the potential, what we can see the potential of putting everything together. Well, like it's -- mobile phones were interesting to a point, but what the sea change was when you had geolocation in there. And then you unlock huge potential because you couldn't have Uber or you couldn't have Deliveroo or you couldn't have any technology ultimately until you had geolocation. So once you've unlocked that geolocation, suddenly, there's a whole industry that pops up that you can enable. And then coupling that with our capabilities in terms of agentic AI and agents, all I care about right now is our ability to reduce friction, and this reduces friction between the customer and the colleague, and the colleague and ourselves. That's what I'm excited about because I only see upside here. In the next -- I only see potential for us. And I think we're in a great space. We're in a great space.

So there's obviously, as you said, right, lots of potential as a value-added reseller. But you also alluded to the fact that together with the joint capabilities we have in e-commerce, we could do magic, hopefully. Now these are typical Norwegian and Swedish investors. And sitting in Norway looking at grocery e-commerce is kind of a non-event because it's not really happening. So with your sort of background, the areas you cover, what can you say to sort of investors? Because like the market here is not predominantly in Norway as such. It's internationally. What's still to say about the Vusion and StrongPoint partnership in that respect?

Yes. Well, look, in big population centers, like, for instance, the U.K. is an interesting one because they have big boxes, right? And they have -- it's a very small country with a massive population. And that's where you see huge potential in terms of e-commerce because you have the infrastructure, you have the population, you have the proximity. But what you don't have is great execution. And you have clogged up roads, right? So you have to be able to deliver in a very short period of time with confidence and use your existing infrastructure. So if you look at other markets, like we're starting to see amazing things happen in England, in France and in Turkey, for instance, in a lot of emerging markets. The U.S. has been phenomenal. You have a lot of regional grocers, as you know, in the U.S. that are dominant in their regions. So again, it's just about reducing friction. So that's -- it may not be -- like I'm from Ireland, right? So we have the same type of demographic and population as you have, and it's quite dispersed. So it doesn't work that well in Ireland. But in the U.K., France or Germany, it does.

Okay. So everything is positive. What about challenges? 1 or 2 big challenges that sort of -- you see for...

I think that the largest challenge we have is that retailers in their own businesses think in silos. So they're not connected. They talk about digital transformation. They talk about -- look, these are big transformational projects. So this is where it's really challenging. It's because what you have to do is you have to bring the whole organization with you. So that is a challenge. The way we kind of worked on it is we work hopefully at a C level. So the CEO, him or her have to get it. If they do, then it can filter down and then you have to go back up again and it filters down. But the reality is you have to sell -- this is a strategic sell. It's a long sales cycle. They'll have an infrastructure there that they've had for years like they've had in France or here in the Nordics and didn't realize that either they picked the wrong technology. So Carrefour obviously had no problem with their existing provider. But what they had is a challenge because they couldn't fulfill their objective in terms of digital transformation. So after 3 years of that contract, they decided to move to Vusion as a result. And we're seeing -- I think we'll see more of that. But it is a case of it has to start at the very top.

Thank you so much. Roy will be here also afterwards. So for -- at least for those of you showing up in person, there will be more opportunities. Thank you so much.

Thank you very much. Thank you, Jacob.

I will round it off. You basically touched upon some points when it comes to sort of the joint road map going forward. And I'll try to make these things more concrete, so you can get a sort of a sense of what's coming. You mentioned the first one, Roy, which is the sort of shelf-verified order picking. I'll double-click on that in a second. We can also say that what we are already showcasing and have showcased that amongst others, NRF. NRF, the retail forum in New York was also -- what's called the Put-to-Tote optimization. And basically, what it means is that you're picking the items on the shelf and putting it in the appropriate basket or tote. And when you're doing picking, you want to do several orders at the same time, 8, maybe 9 or 10 orders at the same time. So what our customers do today is they pick an item, they scan the item and then they need to scan the bag or most of them do scan the bag to make sure that you put it in the appropriate bag. You don't want to get it in the wrong order. Now with Put-to-Tote, the ESL, first of all, will help indicate with a flash, what item to pick. And then the tote or the basket itself will also pick flash with the same kind of color. So it's becoming sort of very difficult to make any mistakes. You can basically pick the item, put it exactly in that tote. And that might sound like a small thing, but that's 1 second save for every single SKU you put in a basket, it's hugely valuable for any grocery retailer. That's common. EdgeSense geolocation, you said it, right? The difficulty with Electronic Shelf Labels is that they haven't been able to geolocate exactly where our items. And still, whereas we have the -- and we can still say this, the best and most efficient picking solution there is in the world, the biggest thief to efficiencies is walking. So walking between the SKUs you're supposed to pick. Now with geolocation, we're able to take that geolocation and positioning of SKUs, principally because of EdgeSense, but take that geo positioning, put today's data of what are the items to be picked on top of that, run a linear programming and you have the most efficient way of going to the store to pick it. Hugely valuable to reduce the labors in store and increase efficiency, and much more. So that's to come. But I will first and foremost now just double-click on what does shelf-verified order picking. And this is what a camera looks like, a shelf-edge camera from Captana, which is part of Vusion. So basically, you're attaching it on the shelf, looking over to the other side of the shelf, being able to spot what are on the shelf. And when you do that and you run with our order picking data, you're able to see what is not on shelf that is going to be picked. So imagine a picker going to pick an order or several orders and you realize that this item here is supposed to be picked, but it's out of stock -- I'm sorry, out of shelf. It's out of shelf. Then the system would automatically trigger a message, well, is this item in stock? Because if this item is not on shelf, but in stock, it's either going to be the top shelf or it will be in the back room. You can actually refill the shelf and you can fulfill the order to get a perfect order as you said, Roy. If it's not, you can automatically send a substitution. But the last thing you want to do is send valuable employee time or employees to a store shelf, which you know is out of that specific SKU. So it's just a small example, but yet sort of so impactful when you look at how these technologies come together and create a much better business case than that one specific technology in itself. Okay. We'll leave it like that with Vusion now. Now I do have to sort of cover a little bit more on grocery e-commerce. And I want to start with just the markets. If you've been following sort of the grocery e-commerce penetrations, they have been growing steadily, even in Norway, by the way, but they've been growing steadily, right? So U.K. in the last few years has been going from 10%, 11% to now being closer to 14%. U.S., as I said, growing massively up to 15%. France going from 7%, 8% a few years ago back to 10%. And that kind of penetration is one of the most massive moves you see in the grocery retail sector. What is also very interesting to see is not only the growth, but also how the fulfillment shifts. So a few years back, the big discussion was, should I be leveraging the stores to do in-store picking or should have been investing billions of kroners or dollars into large, automated fulfillment centers. And the biggest advocate for the latter has been Ocado. And they've been -- they were hugely successful in selling their customer fulfillment centers or CFCs to the likes of Kroger, Sobeys, Casino, Auchan, even ICA. And now we're seeing the backlash, right? So just at the end of last year, many of you would have seen that Kroger announced the shutdown of many of its CFCs. So a massive, massive write-off of the investment. Same with Sobeys in Canada. And even in the U.K., where Marks & Spencer have a partnership with Ocado, there's been huge disputes about having delivered upon the contract. So what we're seeing now is going from the sort of large customer fulfillment facilities, which are large, they're capital expensive, they're inflexible and also inflexible when it comes to delivering the biggest growth within e-commerce of all, namely Q-commerce or quick commerce. We're just simply not able to deliver an order in 15 or 30 minutes if the fulfillment center is far, far away. It has to be used in the stores. So this really boils back into what we have believed in all the way along, namely the biggest asset of grocery retailers is the store. And if you think about the noise, I should say, and excitement around these CFCs and similar technologies, bear one thing in mind that that's all been coming from start-ups, right? It's never been an incumbent that have been doing that. And there's a reason for that. And the reason for that is that the stores are the most valuable asset and you can utilize that store much, much better. And this is where we believe we are very well positioned, one with the in-store picking that we talked a lot about, but also when it comes to deliveries. Grocery lockers, again, in Sweden, more than 50% of all e-commerce orders are being picked up in stores with grocery lockers. It's a massive reduction in costs for the last mile delivery that we hope to see also in other markets. As I said, quick commerce, what we're experimenting with now is not only fulfilling quick commerce orders with our order picking solution, but also using quick commerce lockers. Quick commerce lockers that doesn't have to be temperature controlled because the orders by definition are quick. If you're within the sort of temperature zones or time zones that is needed to fulfill the orders and deliver them in a safe manner. So there's also an added benefit to the solutions we're offering. And then lastly, also, we are a proud partner of AutoStore, we're seeing that -- well, first of all, we have installed the first 3 temperature zones with AutoStore with chilled, ambient and frozen. And with a sufficient high enough penetration, at least we believe that in certain markets and certain areas, you will see that you're using micro fulfillment centers attached to stores to alleviate the picking in the store itself. So we believe at least that we're very well set up to tackle and handle the e-commerce opportunities there are in the future. Okay. Now we're going to talk a little bit about markets. We are at StrongPoint in 9 different markets. And we also have a product division that spans over many geographies, delivering internal projects. And if you have been reading our quarterly reports over the years, you would probably have heard that our legacy markets: Norway, Sweden and the 3 Baltic countries, they've been doing quite okay. We have a fantastic position, both in terms of the products we deliver and getting the scale to deliver profitability. And then we have the other markets. Now I want to talk a little bit about that. The U.K. here, I mean, at the end of the last year, I mean, profit-wise or EBITDA-wise, I mean, certainly not at the level where we believe it has the potential to be. This is a big market. This is like 10x bigger than the Norwegian market, with a great product market fit that's kind of important. So it's not only a big market, but the product market fit is so good, not only on the e-commerce side and electronic shelf labels, but also when it comes to theft prevention or self-checkout. So we'll talk more about that. So that's why we're talking so much about the U.K. with this is a market we have big, big beliefs in after our acquisition of ALS back in a few years back. Ireland and Finland, we just have to be honest. I mean, these are markets that are -- they are good markets, certainly not as big as the U.K. market and are not delivering the kind of profitability we want. These markets have to grow or go if I'm being just very honest. They don't have the benefit of that size of the U.K., but we certainly have at least opportunity to build customer relations like we have in the Nordics. Then we have Spain. We've been in Spain for many, many years, principally with CashGuard. And CashGuard is still alive and kicking in Spain. But despite having a great agreement with Alimerka, which is one of the regional grocery retailers in Spain, the general grocery retail market in Spain has not picked up on automating cash handling. As many of you are very well aware, we are developing a very unique closed-loop cash solution that we believe will be that trigger to make cash automation, makes sense also in Spain. And again, it's also a big market with many other of our products with a potential. And then we have what we call product. And we just have to be honest that for many products that we have, we are superb in 1 or maybe 2 regions, but not across all 9 countries or beyond, right? So when we talk about how great we are with Click & Collect Lockers, we're absolutely great in Sweden, but we haven't seen that kind of penetration at least yet in other markets. That needs to happen to get sufficient volume on the investments we're doing in those solutions. If you look at self-checkout, we are the market leader in the Baltics. If you want to do anything in self-checkout, you come to StrongPoint in the Baltics. But still, when you come to Norway and Sweden, despite the great customer relationships we have, those are not our self-checkouts what you see out there. So when you're annoyed about the self-checkout experience, it's not because of StrongPoint. We're starting to get in there, sort of use of AI scales, but we're not nearly where we can be. And so the priority for the product is we need to get our products more into the other markets. I'll mention one more, and that's Vensafe, a very well-known market product here in the Nordics, but it's not well known elsewhere. And that is despite, in particular, in the U.K., theft being a huge issue beyond what you can believe in Norway. It's a huge issue with theft. And it's a huge issue of how do you actually in a safe and efficient manner, deliver tobacco or vape, which is a big thing in the U.K. And we have many proof of concepts, as you would know, in the U.K. that we believe could be the right way to tackle these challenges. But we need to get volume on our own solutions. And then lastly, I mean, even though we're successful, you could say, in Norway, Sweden and the Baltics, I mean, there's no time to sort of relax. We need to continuously rejuvenate. I mean, even though we did a fantastic agreement just the other day with NorgesGruppen on CashGuard, showing that cash automation is not disappearing anytime soon. I mean, nobody really believes that cash usage will grow massively. It just won't. So we need to also get out in the market that we are in the market with new solutions, both our own, but also third-party solutions that makes us stay relevant. So that is kind of key for us in these geographic markets. And we updated also this one slide that we shared earlier. What does the market opportunity look like? In a market where we're very well penetrated in the Nordics, extremely well. I mean we serve everybody with one exception. And -- but even if we do that, there is not all the solutions that we have in yet, partner. And we need to do a better job in getting across to the markets the solutions that we offer. And you could argue that we're a bit slow sometimes. But if you look at retail forums, they have been an integral part of the Baltic way of radiating the experience that you have in the Baltics. I mean that's something we also started with last year in both Norway, Sweden and Spain and U.K. to come as part of building that customer intimacy. But of course, the big, big markets are Spain and U.K. Those are just tremendous markets. And even people in the grocery industry in Norway and Sweden might not have heard about half of the retailers certainly in Spain, but maybe also in the U.K. These are big, big markets, and we have products, which are right for these markets, and that's what we're trying to chase. Now if you look at the revenue base of StrongPoint, we can basically divide it in 3 buckets. One is the recurring business that we all love. Recurring business with service agreements, license agreements, we also do some rentals, but principally, recurring revenue that serves us very well. We also have what we like to call, repeat business. A lot of the solutions we offer are have some kind of hardware components. There is a wear and tear to those products. And with customers being happy with, for instance, events-type solution is also very likely that you replace these every once in a while or CashGuard every once in a while. But we should also be whether we have a big portion of new sales, and we need to have that growing our business, but you will also then having been -- many of you investors for many years, see that the spikes between each quarter can be quite significant. And they will continue to be. Let's not fool ourselves. We are still a project-based company to a large extent, working all the time to grow this business. We want to grow the recurring business. Okay. We're getting to the hour. I want to round up by 2 things. One is sort of StrongPoint's overall strategy and direction. And in the end, some conclusion of remarks before we get on to Q&A. When we look at StrongPoint, I try to sort of say what's -- why is StrongPoint out in the world? What is StrongPoint's purpose? It can be boiled down to making grocery retailers more efficient and sustainable. That's what we do. Do we have customers outside grocery retail? Absolutely. But those are great spillover effects. If you're able to serve the grocery retailers, we believe with the level of professionalism and not least the velocity of transactions, you can serve any other retailer. But focus is grocery retail, which is by far the largest market in terms of retail technology. Approximately 75% of all grocery retail tech is spent in grocery retail. And we differentiate between 3 kind of strategic pillars together. One is what we call to make customer intimacy our differentiator. The difference between StrongPoint and many of the companies that might serve us as a competitor is that we're not going there with 1 solution. It's kind of boring for a CEO to know that if you have 1 solution to sell, they kind of know what the agenda is. We're there to solve the issues of the grocery retail and having a broad portfolio with own and third-party solutions offers that kind of ability. The second one is within order picking it. I'm using a little bit of Norwegian kind of word to dominate. I truly believe we have the opportunity to dominate in-store picking with the solution that we have and with the partnerships that we're creating. And lastly, to drive efficiency, we can't only expect our customers to be efficient. We have to be efficient ourselves. And the way we do that is with a lean, transparent structure and a very strong culture. So I'll double-click on all these 3 in a second, so we can go a little bit in more detail on those. So looking ahead, like what is StrongPoint's vision? Then we have a dual vision. A dual vision that says, we want to be the top recognized partner for any grocery retailer in the markets that we serve. So in those 9 markets, if you have any kind of opportunity or challenges, I should say, that involves any kind of technology, the membership pop up in your head is StrongPoint. We are there already in many markets, but we are not there at all in those 9 markets yet. And the second bit is for order picking to be the leading in-store fulfillment solution worldwide. Now this is a little bit daunting to sort of use these words. So I'll try to explain how we got there. So firstly, on customer intimacy, how can we make customer intimacy our core differentiator. And I think if you start with the markets that we have been in the longest that are most mature, so Norway, Sweden and the 3 Baltic countries where we serve all major grocery retailers. And you start looking at what do we serve these customers with? You get an average of 4.7 solutions, 4.7 solutions, which means you're not only buying cash card but you're getting the Vensafe. You might get the Click & Collect locker. And by the way, the order picking makes sense to that as well, 4.7 on average. And we believe that this happens for at least 2 reasons. One is when you first deliver a solution or a product, and it works in a high velocity environment and you do repeatedly deliver on that over time, you're getting the trust with grocery retailers. When you gain that trust, you also get the opportunity to bring in new solutions. That's number one. Number two is that many of these solutions talk together, right? So the -- 2 very simple examples. One is sort of if you do the order picking in-store and your last mile delivery is with lockers, we have a very nice communication between those 2 solutions that allows for a much more seamless experience from an associate point of view. So the value of lockers with order picking is not 2, it's 2.5, whatever. Second example is self-checkouts and Vensafe and no other places is better than in the Baltics. So if you're buying age-restricted items, in particular, tobacco products as a self-checkout. Well, today, you can't really do it unless you have it automated and automated in the sense that you're using the self-checkout connecting that with the Vensafe and on top of that, adding age verification. AI age verification tools. And this is for real, happening in the Baltics. We've challenged the Norwegian Minister of the Digitalisation. I mean it's Norway is supposed to be the most digitized world company in the world and well, look, no further than the Baltics, they are already doing it. But it shows that the value of solutions is just not 1 plus 1, it's more than the solutions themselves. This is what we want to get here. We want to go from that Nordic Baltic countries to Spain, U.K. markets with the kind of same mindset. And I think we have the ability to do so. We're starting to see fractions of that happening with many companies. Alimerka being one of them. We have CashGuard and then they're using our order-picking solution and Click & Collect. I mean, what does e-commerce have to do with cash automation? Absolutely nothing, but it's that gained trust that gives us the ability to work with these solutions that then again are working together in tandem. The second part of the strategic business is order picking. And we talked already a lot about it, but the present and the immediate future now is in-store fulfillment. And we are fortunate and lucky enough that, that trend is moving as we already have the most efficient solution in the world. We've been moving now from having an old Swedish customers into moving that into the Baltics. We have, of course, Sainsbury's in the U.K., which was a big event for us. Carrefour in Belgium, we announced last year. Sonae that many not have heard of, but it's the largest grocery retailer in Portugal. So not only StrongPoint only in Portugal, Baltic as well, of course, but Sonae is there. We have all the way down to New Zealand, Iceland, so this is a true global solution that we are also able to execute and get implemented in completely different markets. And then the thing is that every time we add a new customer, we learn something more. There might be a little bit of an extra future, we get a little bit more data into how order picking is the done most efficiently. So the product keeps getting better. But in addition to getting better product, we're also getting the best cost to serve because you don't need to expand the existing product team by the same amount to serve a new customer. We have a big, big leverage on that with gross margins that are typically in the very, very, very high double-digit numbers, as you would expect from a SaaS-based company that allows us to give us the best cost to serve. So best product, best cost to serve, which means we believe we have the opportunity to dominate this market going forward. And all this is great, but it couldn't be done without people. We have approximately 500 or 499, if someone asks and as for reporting purposes. But not only do we have 499 people across 9 geographies, we also have very satisfied and happy people. We're measuring what's called eNPS, or engagement net promoter score. And we are outperforming the peers in the benchmark we have. We have a 36 -- last year, we had 36 eNPS which is 14 higher than the benchmark of companies we compare with. And we'll continue strengthening that organization. That will be absolutely critical also in the Nordics and Baltics where we have a very good foothold today, but it will be important to continue to develop that organization to also deliver on the new technologies coming into the market. Now let me see here, some conclusionary remarks. How we're doing on time here, Dominic, we're close to 11:00. So we'll do the 5 minutes and then we'll leave time afterwards for Q&A. So first of all, it's taken a really long financial perspective. The EBITDA of StrongPoint back a year when we had both cash security and labels and what have you. And we had a very nice period of steadily increasing dividends payout. We have some amazing year as many others during COVID, it was absolutely amazing. And then we've had as you as investors should know, we have had 2 years which were really tough. We had to reduce and rightsize the organization. We have to take down some investments. And last year, we were pleased to see that we're moving in the right direction, the right trajectory again. And we have -- and I have many times reflected on, did we, during this period here, take on too many investments because we have to be clear that most of the investments that we are doing, we're doing over the P&L, right? It's really just CashGuard collect and 3 POS, our own POS solution that's being put in the balance sheet and everything else we do on the P&L because we have invested and are investing heavily into e-commerce. Do we believe it's right? We absolutely believe it's right. Did we believe it was right here? Maybe not, but we absolutely believe that long term, it will be right. And we're hoping and starting to see that happen. We did a major acquisition also in the U.K. with ALS. So ALS were in U.K. and Ireland. We do not buy them because of the products or solutions they had, but we bought them because of the presence and the credibility with many of the grocery retailers in the U.K. We also know that when we acquired this company, we would have to invest in people, salespeople, implementation people, service people to be able to deliver these solutions in a credible manner. That's been an investment. It still is an investment to make that happen. We also have been investing and are investing in a cash automation solution that closed-loop cash solution that we talked about earlier for Spain and markets beyond. And we're also continuing to invest and have started to get them out in the market now, our very own POS solutions, POS solution, point-of-sale solution. We're doing in the Baltics, where we had traditionally a very strong foothold with POS. Now we're doing that internally. The hopes are not only delivering that in the Baltics, but also eventually over time. So I just want to be sort of -- we're very deliberate on where we have been investing. We're hoping and starting to see some of that coming into effect now, and we are just leaving behind a year, which was a massive improvement from the 2 years that we had. So 2 slides here. Now so what are the stepping stones for our future growth? One is the customer intimacy. The customer intimacy we have built up over now 40 years, believe it or not, in Norway and in Sweden and Baltics over some shorter period of time is absolutely outstanding. So we need to continue strengthening that relationship where we have been for many, many years. and we are replicating that partnership or customer intimacy in the new markets, in particular U.K. aspect. Secondly, it's in e-commerce. There is a trend now. There is a market opening up that will have to be on. We have proven that last year, we hope to prove more of that this year and the years to come to fulfill our vision of really dominating that in-store fulfillment market. And lastly, we need to scale our own solutions. We can't be happy with being the premier self-checkout supplier in the Baltics. We have to do that in more countries. So it will not only help us on the customer intimacy, but also help us in getting the scale on their own solutions. So with long-term financial ambitions and these are our aspirations. These are a repeat of what we said earlier. We need to continue growing our revenue. Bearing in mind though that there are differences in terms of quality of revenue, certainly, SaaS-based revenue is both more valuable, but typically also smaller than a 1 big CapEx program that investors -- or sorry, grocery retailers do. But revenue growth is important. That means we are relevant, more and more so for groceries. Secondly, we are -- we have an ambition to get to over 10% EBITDA. And if you look historically, you will see that does not come by itself. We have to do things also different, which we believe we can do with more recurring, more repeat business. And lastly, we've left 2 years now with no ambitions. Or sorry, we had ambitions, but we hadn't had the ability in responsible manner to pay dividends. Obviously, that is also the ambition of StrongPoint and the Board to pay, again, dividends. So with that, at least for the people in the room, I don't know how you said, Dominic, but at least for the people in the room, there is opening for Q&A. I have Marius with me here as our CFO, there's Roy, there's me, of course. So Dominic.

[Operator Instructions]. So in the room, anybody got any questions?

Jacob, can you tell us a little bit more about your partner strategy. I mean, you have small partners in Ireland, France, Germany, and we are a very significant partner in South Africa. Obviously, our strategy for broadening your partner network?

So what Jorgen is referring to is partners that predominantly now selling CashGuards, right -- predominantly. I mean, like we have some great CashGuard partners in Bullion in French solution, in CashGuard Ireland. We're still giving them the ability to use the name. And yes, we are seeking other CashGuard partners. The great thing about a product like CashGuard is you're also able to sell that not only to grocery retailers and a big rollout, but also to smaller independent stores, right? So we are looking at expanding that sort of partnership. When it comes to other solutions, we have to be, we believe, a bit more careful because Vensafe, as an example, is typically not a product you just put in one store. You can have a partner that sort of serves for you in a specific market. I can do that pretty well. We have done that historically, both in Germany and in BeNeLux. But with the retreat of us in those markets, we didn't see the volume in these markets being big enough to handle that. When it comes to other products. We have been doing some Click & Collect locker sales also in the U.S. All that has been through partners at least up until to date. So CashGuard is an example of a perfect product to get out through partners for other products that need more of a rollout, you should say, we want to be a bit closer to sort of reductions.

Makes sense. And also, you're developing a new POS system? It is not a very competitive space. And we also had some partners in from Iceland and maybe -- so how is that going to be connected?

Yes. So we are a LS or LS retail partner in the Baltics. So Baltics, we're super strong on self-checkout, very strong point-of-sales solutions to a much wider market than the retail space. There have been and will be some changes within LS Retail that made us want to both maintain but also strengthen that position. So we took the decision some close to 2 years ago to develop our own solution. We're calling it 3 POS. It's already been introduced to the Baltic market. And whereas this is predominantly for the Baltic market, obviously, we hope and believe that with the IP and the source codes within StrongPoint, we're also able to take that to other markets. We should be careful, as I said, it's a competitive market, and it's a very long sales cycles on that. But you're right. I mean, we're doing this predominantly for Baltics with the potential to grow, of course.

I'll take an order for a bit, customer experience...

Any questions in the room?

I have a question for Vusion. You talked about the geolocation as important. Is it necessary to install the Captana cameras? Or is it EdgeSense is necessary -- is sufficient?

No, you don't need the cameras for geolocation. Whilst EdgeSense basically, if I look at a typical store, it's the rail gives you the location of where -- so the big problem you have in stores is even if you had lots and lots of labels around, it doesn't know where it is on the shelf, right? So what the camera does is it allows us some are starting to look at this in terms of mapping stores, 3 stores, but it's -- each device is Bluetooth connected to the rail. And then you have stand-alone labels that are also Bluetooth.

Thank you, Jacob, for a strong presentation. You spent significant time with a deep dive on e-commerce and with the ambition to dominate the global market for picking solutions. Can you remind us where you are today with regards to the total turnover in picking solutions? And perhaps also the number of different customers you have in the picking customers you have today? And then finally, you highlighted that the sales cycle is quite long here. So could you also provide an update on the maturity of discussions with different potential customers?

So maybe I can start and then when it comes to revenue, et cetera, I'll leave it to Marius because I'm so bad at remembering what we have shared externally. But when it comes to sort of customers, you would have seen, we have the legacy markets in Sweden, we have [indiscernible]. We used to have ICA, we lost ICA to Ocado, right? We just have to be honest, on 5 years, 6 years ago, we lost to ICA that went to Ocado, right? But despite of that blip, the blip down, sorry, -- we have been expanding this into the market of Cyprus, Iceland, New Zealand, Spain, Belgium, U.K. market. So there is more and more customers coming on. I think, yes, there are long sales cycles. This is -- the contract we sign are typically between 3 and 5 years. But to be honest, if you do a good enough job, then hopefully that is 7, 8, 9, 10 years, right? So it's a very long sales cycles and hence, very important to kind of win the deals when the window opens, right? And what's happened in the market now is that there's been a number of incidents that have led to this opening. One thing is Ocado and the questioning of really need to invest so much money in central fulfillment centers, shouldn't you rather use the stores. That's one. Number two is that traditionally, one of the biggest competitors we have had has been with big grocery retailers wanting to develop solutions themselves, right, very comfortable for them to invest themselves. And we've seen many examples of people doing that and then realizing that they don't get the efficiency. The cost is actually quite much higher than just developing and then finished because you never really finished. You want to integrate with Vusion, et cetera. So we're seeing a bit of a backlash there. And then lastly, is the fact that some of the competitors that we had have either pivoted or gone out of business. I'll make 2 examples, one is Walmart, of course, not Walmart, but Walmart, which is, by the way, hugely successful. They had white labeled or put aside their picking solution into what was called Walmart Commerce and Walmart Labs. And that solution was sold to many grocery retailers, Sonae is one of those. And obviously, when Walmart then falls that business, the opportunity emerges to sell that solution. Second example, that being Wynshop, a U.K. -- sorry, a U.S.-based company was recently acquired by Instacart. And we are experienced in many of Wynshop's customers are not too happy about that because typically, the reason we went with Wynshop was to not be in the hands and faith of Deliveroo, deliver or DoorDash, the bolts of the door to the world, because they typically then own the customer data. They wanted to own it themselves and had Wynshop. So when the acquisition happened of Wynshop, we're seeing many customers exploring opportunities outside that closed Instacart society. So yes, there are some triggers. There is also a big trend as we talked about for the growth of e-commerce. Now Marius, what do you want to share on numbers?

I'd like to share more, if I could. But to answer your question on recurring revenue on order picking, we are not sharing that specifically as much as we would like to and why are we not doing that? Well, the simple answer is it's kind of sensitive to the few new customers that we've had so far. So we definitely have a plan to come out with the ARR, SaaS-based order picking only figure. But also to your benefit, there's -- this business model is not necessarily subscription-based. It's based on usage. It's based on a fee per order. So yes, it's recurring. However, it will go slightly up and down during a month. For instance, they could be low seasons or low months where there are smaller amounts of orders. So usually, you have 2 kinds of SaaS-based business model, you have a subscription base, then you have the usage based, and we have the latter. But to give some more perspective, Jacob shared that slide on recurring revenue. We have south of NOK 400 million in total recurring revenue. 60% of that is service agreements, 35%, 40%, the residual relates to license revenue, about NOK 130 million. A good chunk of that relates to this order picking. And that has been pretty flat up until 2024. And then we have for the last 18, 24 months, seen a significant uplift on the back of the Sainsbury's contract. So our ambition is definitely to share this, but it's a customer sensitivity issue as well.

Just a question online before we continue on the room. Actually, also directly to you, Marius. In recent presentation, you've highlighted the dividends multiple times. What do you see going forward?

Yes. It's a question that comes into my e-mail several times. Jacob did touch upon that. Up until 2022, we have been paying dividends. What that figure did not show was that up until 2022, we also had net cash, okay? We had a very good cash position. And for the last few years, having to fund these operational deficits and the investments on the CashGuard Connect project in Spain, which has been significant. We have changed the situation from having net cash to net debt. So paying dividends with external debt, obviously, right now, it's not something we can do or would like to do. So first and foremost, it's a matter of getting back to positive net profits, positive cash flows. And then it's our ambition. We will stick to the ambition. But there's always a balance between whether to reinvest and capitalize on everything Jacob has talked about today compared to the dividend policy. But first, you have to really get our head above water, not just on EBITDA but on really on the bottom line, the net profit after tax. And then this is a continuous discussion. So we will talk more about that as soon as we feel that we have some more visibility.

Any more questions from anyone here in the room?

Yes. Yes. Thank you. If I'm allowed to ask you a question, Roy. You chose to partner with StrongPoint. And I believe much of the reason behind that was an e-com solution that was presented today. If I may ask you, why did you choose to partner with StrongPoint instead of trying to develop a similar product yourself in-house?

I think the best companies in the world should focus on what they can be the best in the world there. And while we've taken some very big bets on IoT and digitalization of shelves computer vision. And our next one was data and the ability to monetize the shelf through retail media. Sometimes, it's better to partner than to build. And I think it's -- and we found, I think, a partner that could be more than just e-commerce. As I said, they've been invaluable we're installing 80 stores a week at the moment in the co-op and StrongPoint stood up there. They were able to scale and they have expertise. So there's multi-facets and now, as I said, the reselling solution. But ultimately, what's the hardest thing about a partner is to educate and to -- they understand your business. And we're going in terms of providing the signals for e-commerce and a StrongPoint to understand what to do with those signals. So that's really the rationale behind that.

Any more questions in the room? I think there's someone else is asking? No more questions in the room. I'll take 1 more question then online. If you have asked a question in advance or online, and we don't get to you, we'll try to answer you by e-mail as well. What do you believe will be the next major investment area for grocery retailers in the Nordics over the coming years?

I guess that goes to me then. I mean like in general, right, sure, Norwegian population and everything is -- were digitized, but there's a reason why we digitized. I mean, we have compared to the likes of U.K., I mean, a very, call it, expensive low-cost labor. I mean we don't really have low cost labor, which means that any kind of automation you can do in-store to reduce the labor cost is very valuable. I think what you're seeing now with digitization of store that sort of Vusion represents fits very well to that. We were -- to take a longer perspective, in Norway, we were the first in the world to have pull down machines, also principally because of legislation, but also because of labor. We're the first to sort of have the auto stores because we need to automate warehouses. We're the first in the world to have the ESLs at scale because it costs a lot of money in the 10 years ago to go around and change tickets. Now it doesn't make sense to have people going around and seeing it's a shelf filled or not, and we can digitize that. And we cannot only digitize that, we can use that. I think you'll see a lot in the digitization space and with that, the benefits of AI to follow this. I think that would be the answer.

Okay. Any further in the room, I was going to take 1 more online. Otherwise, we'll call it a wrap of the day, okay? Looking ahead, are there any countries or markets where you see meaningful sales traction and expansion potential where StrongPoint does not yet have a presence?

Yes. I mean there is, of course, some dreams. I mean if you look at where we've had some traction already but where we don't have a presence, and we'll be very careful about sort of how to think about it is, of course, the U.S. I mean we have been selling lockers, grocery lockers to the U.S., traditionally it is also a market which is have a relatively high e-commerce penetration has been growing rapidly, but still is very, very inefficient compared to Europe. So that's, of course, a big dream, but we want to be sort of very, very careful before moving into such a market. Beyond that, there are other markets, obviously, in Europe that are both big and super interesting. France is one of them. We have -- I'm looking at you, Irish, but still it's a French company, right? We have a super strong presence in France that have also a very good product market fit to what we're doing. But right now, we're, first and foremost, focusing on the 9 countries we are, and then we'll have to see how it was, but there are many markets that could be interesting.

Then I think we'll call that a day. The people here we can stay here a little bit longer. But for those joining us online, this will be the end. Well, thank you very much for joining us.