Kid ASA Stock

Good morning, everyone, and welcome to our presentation of second quarter. I'm Marianne Fulford, CEO at Kid. And with me today, I have Mads Kigen, CFO at Kid, and we will walk you through the presentation together.

We delivered a solid second quarter, driven by strong development across both Kid and Hemtex. We delivered strong sales growth across both online and physical stores. This despite a negative Easter calendar effect in Norway. Growth was driven by a highly commercial seasonal assortment and an increase in the number of transacting customers. The solid online growth continues through second quarter and online revenues increased significantly. Online growth was driven by positive development across both Kid and Hemtex. We also delivered a solid growth in EBITDA and a strong gross margin in the quarter.

Overall, costs were in line with our expectations. As the business grew, we continue to invest in marketing, technology and commercial initiatives while maintaining good cost control. Several of these investments are designed to support future growth opportunities, improve customer experience and increase operational efficiency over time. Mads, he will walk you through the cost drivers in more details later.

So let's take a closer look at the operational highlights from the quarter. First of all, second quarter was negatively affected by the timing of Easter, which has a greater impact on sales in the Norwegian market. So considering the Easter timing effect, we are more than satisfied with the revenue performance this quarter. Category development continues and remain an important driver of customer traffic and sales growth. Our focus is to continue growing our major categories while developing new opportunities alongside them. During the quarter, we delivered a solid growth in both the established major categories, particularly bedlinen and also in new categories. We also know that new product groups contribute to growth in existing categories. Selected permanent low-priced products across major categories performed well and supported customer traffic during the quarter.

New categories introduced since 2022 performed well and grew by 25.7%, including furniture categories under the revised definition. And to help you clarify, from 2026, new categories was expanded to also include all furniture. Outdoor and garden furniture had not previously been included, but will be a key strategic focus within our furniture category this year and also going forward. And therefore, the revised definition provides a more representative view of our new category growth initiatives. We saw a very strong performance in our seasonal categories this quarter. So I'd like to spend a few minutes giving you some more insight into our assortment, an area I'm personally very passionate about and closely involved in together with our fantastic product development team, and I mean fantastic.

Outdoor furniture has been a strategic growth category this year and delivered particularly strong growth. It's driven by a new and expanded assortment and earlier product availability. Many of this year's new products sold out early, demonstrating strong commercial appeal, effective pricing and significant growth potential going forward. The image highlights a selection of our new product launches this year. Bathroom has also been a strategic growth category over the past years and continued to perform well in second quarter. The category has now become one of the 4 largest categories in Kid Group. And this season, we have expanded our bathroom category with lots of new products that naturally complement beach towels and outdoor summer living such as picnic products, beach toys, parasols and more. And the initiative has been a great success and proves that new product groups also increase the sale of existing products, in this case, towels.

And previously, we have seen the same development within the kitchen category. Logistically, we are back on track. Our warehouse operations are now stable, product availability is high and efficiency continues to improve. And as we complete the remaining system replacement, further efficiency improvements are expected over time. The logistical challenges from 2025 did not have any impact on revenues in this quarter. The modernization of our system portfolio is also progressing according to plan. During the quarter, we completed the rollout of a new POS, point-of-sale system across all our stores and markets, well ahead of peak season. I'll get back to it later.

Hemtex launched its first store online outside Scandinavia and the Baltics during second quarter. Hemtex.de went live on May 5. And right now, the most exciting part is observing and learning who is shopping on the site, their age, where they live and what they are buying. We can already reveal that bedlinen stands out as the largest product category and that having the right price point is key. Loyalty Club membership is growing every day, and we look forward to keeping you updated as we learn more along the way.

The launch of hemtex.com will find place later in 2026 based on learnings from the hemtex.de launch and our desire to make a few improvements before going live. The delay is only short term, and we remain confident in the plan. Store portfolio development continues. Four store projects were completed, 1 extended store was opened and 3 stores closed during second quarter. Our new country manager for Hemtex started May 1. His primary focus will be on building a much stronger sales culture in our stores and accelerate like-for-like growth in Hemtex. We continue to modernize our system landscape in line with plan. System modernization is crucial for our future growth and ambitions going forward.

A number of system changes and improvements have been implemented over the last 2, 3 years and further ones are planned. We have already completed much of the system renewal through the warehouse project by shifting to improved core systems for logistics, sourcing and supply chain operations. And during the second quarter, we completed the rollout of a new point-of-sale system across all stores and markets. This has been a major project and a busy period for the organization, most of all for our stores. But at the same time, we maintained focus on day-to-day operations and our customers and delivered a quarter with solid sales growth. The system supporting our stores are now fully implemented, and we are entering the peak season from a strong position.

Over the past year, we have also strengthened our e-commerce organization by bringing in new capabilities and expertise to support our future omni-growth. We have upgraded our website, created a more inspiring and seamless customer shopping experience. And at the same time, we continue to invest in the development of our customer loyalty program. Together, these initiatives help ensure that we meet our customers' expectations and stay ahead as customer behavior and shopping habits continue to evolve. We are now in the final phase of our system renewal program and remaining initiatives will be completed progressively. Once all systems are fully in place, we can realize even greater efficiency gains from many of these investments. Now Mads will walk you through the financials.

Thank you, Marianne, and good morning, everyone. First of all, the second quarter represent a robust development in 2026. In Q2, we see a stable and normalized warehouse capacity supporting execution and the underlying performance is developing well.

I will walk you through the financial performance and key drivers for this quarter. Group revenue reported increased by 6.8% to NOK 914.8 million in the second quarter. The result is positively driven by both Kid Interior and Hemtex. In constant currency, the growth was 9.1% with a like-for-like growth of 8.3%, including online sales. I will come back to highlights for the segments shortly. Online was a key growth driver with a growth of close to 43% year-on-year and an increased online share to 15.9% and 20.4%, including Click & Collect. I would also like to point out that like-for-like stores in Hemtex performed well with 6.9% growth compared to Q2 last year. This development proves both strong customer demand and well execution across channels. In terms of categories, we observe a positive underlying development across all our categories. And I would like to point out that bedlinen, bathroom and outdoor furniture, supported by strong sales of seasonal assortments from spring and summer, as already mentioned.

Kid Interior performed well with a total revenue growth of 7.1% and a like-for-like growth of 6.7%. The revenue development is driven up by increased number of transacting customers in the online channel and physical stores, partly offset by a slight negative contribution from basket size due to the product mix in our physical stores.

Easter had a negative timing effect this year in this quarter, particularly in Norway compared with the group's other markets. Second quarter includes 1 additional shopping day on group level compared to last year and is explained by Norway. But please note that the distribution and value of these days vary somewhat across segments due to bank holidays. Hemtex delivered a reported total growth of 6.3% measured in NOK during the quarter.

As previous quarter, currency had a significant impact on the reported figures, although this time in the opposite direction compared with recent periods. Measured on a constant currency basis, the total revenue growth was increased by robust 12.5%, supported by strong development in both physical stores and online sales. The development is positively impacted by an increased number of transacting customers in physical stores and online and increased basket size across both sales channels.

To summarize, for the group, the underlying development in the quarter was robust with a revenue growth of 9.1% in constant currency. Group gross margin increased by 0.9 percentage points to 63.2% in the second quarter, reflecting a solid gross margin development across the group. The improvement was primarily driven by a lower share of freight cost in the cost of goods sold and favorable currency effects compared with last year. Both segments contributed positively.

Kid Interior delivered an improved margin impacted by freight currency and mix effects, while Hemtex showed a stronger margin improvement year-on-year with less negative effect from Hemtex 24H and franchise this year. Please note that we, during the second quarter, have seen elevated freight rates as a consequence of the global situation, including unrest in the Middle East, which may negatively impact margins going forward.

Summarize the group gross margin of 63.2% for the second quarter is considered robust in a historical perspective and is well in line with our financial objectives. Reported operating expenses increased by 5.4% in the quarter from last year. The development is driven by marketing activity, bonus accruals and IT investments, partly offset by currency. Employee benefit expenses increased by NOK 5.8 million on a constant currency basis. The increase mainly reflects annual general salary increases and higher working hours in larger and new stores in addition to increased bonus accruals following the strong first half performance. These effects were partly offset by lower logistic staffing as a higher share of workforce was sourced externally compared with last year. We have control in terms of number of worked hours in our stores, and increase is affected by our new stores, larger stores and the store project activity, which is all initiatives that will drive future growth.

Other operating expenses increased by NOK 20.8 million on a constant currency basis. The increase is attributed to a strong performance and higher activity levels, a larger store portfolio in terms of space, higher marketing investments and logistics costs. In addition, exceptional strong online sales continue to drive higher last mile distribution this quarter. The operation in the warehouse in Sweden is supported by a higher share of external workforce compared to last year. The hours are linked to volumes distributed to our stores and following the online revenue development. Please note that the external workforce is booked as other OpEx, representing a temporary line shift, which gradually will be hired and presented as employee benefit expenses going forward, combined with external workforce to handle peak periods.

Finally, currency effects had an impact on the reported OpEx base in this quarter from translating SEK to NOK, explaining NOK 8 million. Overall, the OpEx to sales ratio decreases and the cost development reflects higher activity level combined with future growth investments. EBITDA for the quarter increases 15.2% and reflects the combined effect of robust revenue growth, strong gross margin and improved OpEx to sales ratio. High revenues supported by strong online sales and good store performance, combined with improvement in gross margins, more than offset higher activity-driven operating costs in the quarter.

Summarized, this quarter demonstrates good operating leverage in the business as activity level increase and reflects improved operational stability compared with last year. Cash flow development in the second quarter follows a normal seasonal pattern of our business. Cash flow from operations improved from last year and the development in the quarter was positively affected by inventory, other provisions, which partly was offset by trade creditors. Cash flow from investments mainly reflects continued investments to new stores, store projects and IT initiatives, which is in line with our investment activities stated in the financial objectives.

Financing cash flow reflects the use of available credit facilities, ordinary lease payments and net interest. This also includes dividend payment of NOK 2.50 per share, representing a total cash distribution of NOK 101.6 million to our shareholders during the quarter. Overall, the cash flow development in the quarter is consistent with operational activity and the investment level we have described earlier, and the cash flow from operations is improved significant from last year.

To conclude, the group's financial position remained satisfactory at the end of the quarter. We had cash and available credit facilities of NOK 318.8 million at quarter end, providing liquidity to support ongoing operations and planned activities. Net interest-bearing debt, excluding IFRS 16, increased compared with last year, reflecting higher activity levels, changes in working capital and investments during the quarter combined with effects following out of the transition year 2025. The gearing ratio of 2.06 remains within a manageable range. Overall, the balance sheet and financing structure provide flexibility as we continue to focus on disciplined execution and development across the business. That said, I would like to give the word to Marianne to give us a status on our store portfolio as the end of Q2.

Thank you, Mads. Store portfolio development continues and fuels growth across Kid and Hemtex. During second quarter, Kid completed 2 store projects and opened 1 extended store, the 15th in Norway at Buskerud Storsenter. One store was closed and at quarter end, contracts have been signed for 2 new stores in Norway and 7 additional store projects. One store closure is planned.

During second quarter, Hemtex completed 2 store projects and closed 2 stores in Sweden. At quarter end, contracts have been signed for 9 additional store projects. And going forward, efficiency and productivity improvements in our new warehouse remains a key focus. Several logistics improvements have already been implemented with good effects and optimization initiatives will progress further through 2026. We will continue our work with securing a long-term solution for the Norwegian warehouse.

At the moment, we are exploring opportunities with several attractive partners, but such processes tend to take time. As mentioned, our system modernization is moving forward as planned. And we're also keeping a close eye on the freight market right now as the situation is dynamic. Rates have increased during the first half of the year due to global trade disruptions and development in the Middle East, as Mads mentioned. Over the past few years, we have moved towards earlier intake of key seasonal assortment to reduce our exposure to disruptions in the global freight market. And based on what we see today, we do not expect any major delays.

We will continue to focus on more products with attractive value for money price points going forward. We see them as important traffic drivers for our stores. We saw this through second quarter as well as meeting competition from low-priced retailers. Most important of all is our focus on making sure we are fully prepared for a strong autumn and Christmas season, both in-store and online. New autumn products are arriving every day. And from September, the Christmas assortment will gradually start to come in.

And as we head into the most important quarter of the year, we are focused on ensuring stable systems, excellent product availability and the most inspiring shopping experience for our customers. And at the same time, as we prepare for a strong autumn and Christmas season, we are continuing to develop and refine next year's summer assortment. As we speak, next year's summer assortment, including outdoor furniture is just finalized with this year's experience clear in mind. I think that was it for today, and then we are ready to open up for Q&A, Mads.

Yes. So we have some questions here from the digital audience. Marianne, you can start answering. What's the status of the warehouse operations and what remains to be achieved going forward in terms of efficiency?

Well, as I explained earlier in the presentation, the warehouse operations are now stable. We are pleased that goods are going out from the warehouse to the stores as planned and the challenges we saw in '25 did not, in any way, affect the sale in the quarter. There is a lot of improvements going on in the warehouse, and there will be a lot more of them going forward also as we finalize our system modernization even more efficiency gains can be achieved going forward into 2027 as well.

Yes. And I can also add that we -- during the quarter, we had the labor productivity, which was increased by 25% compared to last year. At the same time, volumes and the activity was also increased, meaning that we delivered the efficiency improvements with significant higher level of operations.

The next question, with expected increase of freight rates, are you taking any actions with regards to hedging?

I think I can answer to that. And we continue to source and buy freight in the spot market, which is consistent with the strategy we already have had the last years, which has been successful. We believe this is -- provides most flexibility and allows us to optimize freight purchases based on the current market conditions, routes and timing of shipments.

The next question, we have another one for the warehouse. I think we already answered it. We will not share any efficiency numbers. But as I said, we had 25% more efficiency measured in employee benefit expenses over produced order lines out of the warehouse during the quarter compared to last year.

Then we have a question for online. Can you please elaborate on the strong online revenue development in the quarter from last year?

Yes. I think I can answer that one. During the last year, we have made some organizational changes in the e-commerce department and we have brought in new expertise. New people means new capabilities. We have upgraded our website with a new UX design, which means that we have achieved a more -- a better customer experience online, both more inspiring and an easier shopping experience. We have also done a lot of successful marketing during second quarter that drives traffic both to online and to our stores. And what we also see is the traffic we bring into our website convert more customers than earlier, and that's the traffic we want online. We have also made larger reservations of seasonal inventory for our web shop. That's also something that drives growth online. And we should might also mention that last year was quite soft in second quarter due to online growth. And going forward, we are meeting a challenging period in '25 with large growth online due to lack of product in our stores.

In the second half of '25, where the customers found their products online and not in stores due to the product availability.

So keep in mind, we meet high online growth going forward. But we're really happy with online growth in second quarter.

More questions coming in. Had strong seasonal sale a positive impact on gross margin this quarter?

I think I can start and you can fill in if you would like, Marianne. We see favorable margin effects from currency this quarter. The positive currency impact is normally seen in seasonal products and new products, while purchasing of the nonseasonal assortment will take more time. That is how we calculate the inventory and the cost of goods sold. So yes, we had a positive impact in the seasonal assortment compared to last year. Okay. Can you provide -- Marianne I think, for you, Germany. Can you provide some more color on the performance in Germany? How are sales performing? What are the lessons learned?

Well, we've been live for 4 months. It's not a long time, but there's a lot of learning in it. And as I said in my presentation, learning is the most important part right now. We are curious about who the customers are, where they live, what they shop. And this information will make a lot of input to how we will go forward. And regarding revenues and costs, maybe you comment.

Yes. So in terms of revenues, we had NOK 0.4 million during the quarter and some costs, marketing costs, especially of below NOK 1 million. So negative contribution in this first launch quarter, but we look forward to the journey with also hemtex.com later in 2026.

And we can also add that it is in line with our expectations after 4 months. Yes.

Just looking through the questions, I think we answered all of it. So the final question was for today. We see you in November for our third quarter presentation, and thank you for today.

See you.

Good morning, everyone, and welcome to our first quarter presentation. I am Marianne Fulford, CEO at Kid. And with me today, I have CFO, Mads Kigen, who will go through the financials.

Q1 marks a return to normal operations and stabilized warehouse processes. We deliver a solid 9.1% revenue growth driven by positive development across both Kid and Hemtex. The quarter was positively impacted by seasonal assortment and strong online development. Easter assortment performed well due to commercial assortment and the timing of Easter. The same did our spring and summer assortment, which arrived earlier this year. The early arrival contributed to more inspiring stores with a higher share of newness compared to last year, and it drives both store traffic and sales. Online revenues increased significantly in the quarter, driven by positive development in both Kid and Hemtex.

The online revenues represent 14.1% of total group revenues in the first quarter. Over the past period, we've made several upgrades to our websites with better product presentation and inspiration, driving traffic, improving customer experience, and lifting omni sales. Gross margin increased this quarter, positively impacted by freight and reduced clearance sale in January. Operating expenses increased by 8.6%, and Mads will provide you with more details later. The logistic challenges we had last year did not impact revenues this quarter, even though some stores weren't fully stocked until mid of Q1. Overall, the warehouse ran as planned in Q1 with higher capacity and much better flow, supporting increased volumes and normal deliveries to our stores. The central warehouse is now stable with more reliable and predictable day-to-day operations. We're still working on improving processes and gradually replacing IT systems.

Efficiency has already improved, and we expect it to keep getting better as system upgrades continue and volumes grow. Sublease agreements now cover approximately 65% of the warehouse capacity, including a new agreement for an additional 50% signed during the quarter. As a result, around 2/3 of the warehouse cost base for '26 is secured through subleasing agreements. We also remain confident in securing a long-term solution for the year. We continue to modernize our system landscape to support future growth and project activity remains high, particularly with core retail and operational systems. The rollout of our new point of sale POS kassa system is well underway across the group with good progress achieved during the quarter. A new workforce management system has been implemented in Norway together with additional supporting systems.

Remaining initiatives will be completed progressively and entering into 2027, the group will have a modern and scalable system platform supporting future growth and operational efficiency. Category development continues to be a key growth driver. During the quarter, we delivered a solid growth across major and focus categories alongside continued positive development in new categories. For the past two years, we have reported revenues from new categories introduced since 2022. This definition is carried forward and from 2026 expanded to also include all furnitures, as outdoor and garden furniture have not previously been included. The revised definition provides a more representative view of our new category growth initiatives. Store projects continue to support profitable growth through refurbishment, enlargement, and relocations.

During the quarter, we completed seven store projects, three new stores, and one extended store were opened, while one store was closed. With that, I give the word over to Mads, who will take you through the financials.

Thank you, Marianne, and good morning, everyone. First of all, the first quarter represent a solid start to 2026. In Q1, we see improved operational stability across the group with normalized warehouse capacity, supporting execution and underlying performance developing well. I will walk you through the financial performance and key drivers for the quarter. Group revenues increased by 9.1% to NOK 800.5 million in the first quarter, driven by both Kid Interior and Hemtex. In constant currency, the growth was 8% with a like-for-like growth of 6.1%, including online sales. I will come back to highlights for the segments shortly.

Online was a key growth driver with a growth of close to 25% year-on-year and increased online share to 14.1% and 21.2%, including click and collect. This development proves both strong customer demand and improved execution across channels. In terms of categories, we observed a general positive underlying development across our categories, and I would like to point out bed linen, bathroom, and outdoor furniture supported by strong sales of seasonal assortments from Easter, spring, and summer. Kid Interior performed solid with a total revenue growth of 8.9% and like-for-like growth was up by 7.4%. The revenue development is driven up by increased number of transacting customers in the online channel and in our physical stores, partly offset by a slight negative contribution from basket size due to the product mix.

Easter had a positive timing effect this year, particularly in Norway compared with the group's other markets. Q1 include the same number of shopping days on a group level as in 2025, but the distribution and value of these days vary across segments due to holidays. The April revenue figures disclosed today provide additional context beyond the quarter. Hemtex delivered a reported total growth of 9.4% and as for previous quarter, we see a significant currency effect in the reported group figures translated into NOK. Measured on a constant currency basis, the revenue growth increased by a steady 6.6% driven up by strong online development. The development is positively impacted by an increased number of transacting customers in our physical stores and online combined with decreased basket size as seen in Norway.

To summarize, the growth in the quarter was broad-based, driven by digital sales, solid store performance in Norway, and strong execution in key categories and seasonal assortments, achieving a revenue growth for Kid group of 9.1%. Group gross margin increased by 0.6 percentage points to 61.2% in the first quarter, reflecting a solid gross margin development across the group. The improvement was primarily driven by a lower share of freight cost in the cost of goods sold and reduced clearance of seasonal assortments compared to last year. Both segments contributed positively. Kid Interior delivered a stable gross margin with a slight improvement impacted by mix effects and campaign activity. While Hemtex showed a stronger margin improvement year-on-year.

Summarize the group gross margin of 61.2% for the quarter is considered robust and is well in line with our financial objectives. Reported operating expenses increased by 8.6% in the quarter from last year. The development is impacted by new stores, projects, and increased activity level compared to previous year. Employee benefit expenses increased by NOK 8 million on a constant currency basis, and I would like to highlight the following items. The development in employee benefit expenses is mainly reflecting general salary increases and higher working hours in larger and new stores in addition to store projects and the ongoing system modernizing. The increase was partly offset by lower logistics staffing as a higher share of labor during the warehouse ramp-up was sourced by externally and by the lower bonus accrual effect compared to last year.

We have control in terms of number of worked hours in our like-for-like stores, and the increase is affected by our new stores, larger stores, and the store projects. These are all key initiatives that will drive future growth. Other operating expenses increased by NOK 16.8 million on a constant currency basis and is attributed to higher activity levels, larger store portfolio in terms of space and logistic costs. In addition, strong online sales continued to drive higher last mile distribution cost this quarter. The operation in the warehouse in Sweden is supported by external workforce in the ramp-up. The hours in the logistics are linked to the volumes distributed to our stores and as a consequence of the online revenue development. Earlier arrival of seasonal assortments this year also drives hours this quarter.

Please note that external workforce is booked as other OpEx, representing temporary line shift, which gradually will be hired and presented as employee benefit expenses going forward. Finally, currency effects had a significant impact on the reported OpEx base in the quarter from translation from SEK to NOK explaining almost NOK 4 million. Overall, the cost development reflects higher activity, future growth initiatives, and a temporary shift in cost mix. While the OpEx to sales ratio remain stable.

EBITDA for the quarter reflects the combined effect of solid revenue growth, improved gross margin, and a stable OpEx to sales ratio. High revenues supported by strong online sales and a good store performance together with improved gross margin more than offset the higher activity-driven operating cost in the quarter. Overall, this demonstrates good operating leverage in the business as the activity levels increase and reflects improved operational stability compared with last year.

Cash flow development in the first quarter primarily reflects normal seasonal patterns in the business. Cash flow from operation was impacted by inventory buildup ahead of the spring and summer season, combined with payments of public duties and positive changes in the trade payables. These effects are timing related and expected to normalize over the year. Cash flow from investments mainly reflects continued investments in new stores, store projects and IT initiatives in line with our investment activity stated in the financial objectives. Financing cash flow reflects the use of available credit facilities together with ordinary lease payment and net interests. Overall, the cash flow development in the quarter is consistent with operational activity and investment level we have described earlier. To conclude, the group's financial position remains satisfactory at the end of the quarter.

We had cash and available credit facilities of NOK 296.2 million at the quarter end, providing liquidity to support ongoing operations and planned activities. Net interest-bearing debt, excluding IFRS 16, increased compared with last year, reflecting higher activity levels, changes in working capital, and investments during the quarter, combined with the results following the transition year 2025. This resulting in a gearing ratio of 2.04 remains, and remains within a manageable range. Overall, the balance sheet and financing structure provide sufficient flexibility as we continue to focus on the disciplined execution across the business. That said, I would like to give the word to Marianne to give a status on our store portfolio and outlook.

Thank you, Mads. Store projects continue to support profitable growth across the group, both through refurbishment, enlargement and relocations. We continue a high store project activity, fueling future like-for-like growth going forward. During the quarter, Kid completed five store projects and opened two new stores. At quarter end, contracts had been signed for one new store and one extended store in Norway, the last one so far opening at Buskerud Storsenter in May. In addition, contracts were signed for three further store projects, while one store is planned to be closed during the quarter. Hemtex completed two store projects and one extended store at Kållered in [Göteborg], closed one store and opened one new store. At quarter end, Hemtex had not signed any new or extended stores. Contracts were signed for six store projects, while two stores are planned to be closed.

As with previous Q1 reports, a more detailed review of the development of our store portfolio is provided, covering both the results of store projects and our outlook going forward. Conclusion from previous years' presentations have once again been verified, and the increased store portfolio drives profitable growth. We therefore continue expanding store sizes as it remains a profitable strategy. Over the last years, category development and new categories have become an important growth driver, supporting more traffic, attracting new customers, and increasing in-store customer experience and sale. This has increased the need for an updated store layout, improving fittings and more space in our stores. Today, our assortment needs at least 600 sq m to be displayed in a physical store, which is the foundation for our standard store size.

We therefore work to develop the store portfolio towards the standard store size of approximately 600 sq m by expanding or relocating existing stores in all our markets. The potential for growth by increasing the number of square meters is equally relevant for both Kid and Hemtex going forward. The chart on the right clearly shows that the larger stores drive higher revenue and contribution per store. This slide is a bit busy to read, but I'll do my best to explain. There is a clear potential for growth in both Kid and Hemtex by increasing the number of square meters [indiscernible]. The average store size within our portfolio still remains below the desired level, particularly within Hemtex. We therefore continue to develop our store portfolio as we need at least 600 sq m.

Compared to 2021, Kid has increased the average store size in the portfolio by 13.1%. Average store size in Kid was 518 sq m in 2025. Compared to 2021, Hemtex has increased the average store size in the portfolio by 26.2%, and the average store size in Hemtex was 463 sq m in 2025. Note that 14 extended stores have been excluded from the tables and figure. Please also refer to the chart in the bottom right. The dashed line indicates the target store size of approximately 600 sq m, and the peak of the graph illustrates where the majority of the stores are concentrated for Kid in green and Hemtex, the beige one respectively.

The gap between the dashed line and the peak highlights the significant number of stores that would benefit from expansion in order to move closer to the target size. I would like to highlight that Hemtex now has launched its first store online outside Scandinavia and the Baltics. hemtex.de went live on May 5. With a new Nordic warehouse in place, we have strengthened our logistics and distribution capabilities, enabling us to serve customers across the whole European market. Germany represent a large and attractive market where Scandinavian design is highly valued. Germany is also a market characterized by intense competition. Several retailers have successfully established themselves in Germany, demonstrating the market's potential, while others have chosen to exit after initial entry. Our approach is therefore deliberate and paced.

We are entering with a digital-first strategy enabling us to test, learn, and optimize before potentially taking further steps or exiting the market. We see this primarily as a pilot with our focus on our core markets going forward. True to Kid spirit, we will build step by step, and we have a long-term perspective and are entering with a low risk, cost-conscious approach. Looking ahead, efficiency improvements in warehouse operations remain key focus. As operations now are stabilized, optimization initiatives will progress through 2026 and further. We will continue our work with securing a long-term solution for the Norwegian warehouse facility. System modernization is crucial not to fall behind, and a number of system improvements have been implemented over the last two years.

We have shifted to improved core system for logistics, sourcing, and supply chain. We are rolling out a new point of sale system this spring. Remaining system modernization will be completed progressively going forward. Into 2027, we will have a modern and scalable system platform ready for future growth. A high store project activity will continue developing our store portfolio towards target size and fuel like-for-like growth going forward. We will secure best-in-class execution across categories and channels. With great seasonal execution, we shall inspire every customer this summer, both online and with even better in-store presentation and customer experience. We will continue our category development, both securing renewal of existing and major categories, but also working on new initiatives. Garden and outdoor furniture and the beach shop are key focus categories this summer.

If you would like the nice sun loungers in the picture, you can buy them at Kid and Hemtex this season. As we speak, our product developers have just started working with spring 2027. A new country manager started at Hemtex on May 1st. This role will have an overall responsibility for store operation and portfolio development across all Hemtex three countries. With this change, we set up an organization that strengthens our sales culture, improves coordination between markets, and drives an even stronger sales and growth agenda in Hemtex. Finally, we are pleased to confirm that group revenues increased by 4.6% in April and 7.1% year to date per April, including the effect from the timing of Easter. That said, I think we are ready to open up for Q&A now.

The first question, the extended stores seems to drive higher sales, but at the same time, new categories show somewhat slow growth. Can you please add some color to this answer, Marianne?

I can answer that one. I think it's important to note that new categories are important, but the same are at the development of our major categories and focus categories. During the quarter, we have had a significant growth in spring and summer and Easter assortment, which has been focus. I would also like to mention that we have swapped a lot of the furniture in stores to put more focus on outdoor furniture into second quarter. I would not pay too much attention to only looking at new categories, but see it under a total of new categories, focus and major categories. Yeah, they will vary from quarter to quarter.

Yes. Another question. You had higher financial costs in the quarter. Was there anything special this quarter? … I can take that question. The increased financial expense this quarter mainly relates to the higher level of net interest-bearing debt. We went out all 2025 with -- so increased the net interest-bearing debt due to the transition year, 2025. In addition, we have some [indiscernible] effect this quarter.

Next question. Can you please elaborate on the Easter effect for the Kid Group and quantify the revenue impact for second quarter '26?

I can try to answer that one. We have given you the revenues of April, since you have to look at March and April in total to look at the Easter effect. What I would like to underline is that the Easter effect hits harder in Kid in March, meaning that we see more sale of Easter in Kid in March and more sale of Easter in Hemtex in April. Please look at April and March under the same.

On the new warehouse in Sweden, you write improved efficiency and further gains are expected. Can you please give some details on this?

Maybe not so many details, but what we can tell is that we have stabilized the warehouse processes, but there are still many efficiency gains to unlock, and they will be unlocked through 2026 and also into 2027. Yeah, there will be a lot of work going on in the warehouse to improve efficiency, definitely.

Talking about warehouse, we have another for the warehouse facility in Norway. What's the latest news for the warehouse facility, and what is the cost impact to be expected in 2026 with reference to the NOK 20 million you reported in the Q4 presentation?

Yeah, maybe I will answer the first part of it, and you the second. As we informed, we have signed a new sublease agreement in the first quarter covering 50% approximately of the warehouse in Lier, which means that we now cover, roughly 65% of the warehouse cost.

In terms of the cost impact, the cost will be there, but we will have other operating income from the sublease, and we communicated roughly NOK 20 million for the full year 2026. With the signed sublease agreement, we expect to cover approximately NOK 12 million-NOK 13 million of the total of NOK 20 million as previously communicated for the full year 2026.

Another question for the warehouse in Lier is, can you disclose in term length of the new sublease contract?

Maybe you answer that one.

Yes. We will not disclose the exact terms, but it's like a short-term, more temporary … sublease period.

Yes, making us able to have a long-term agreement … going further.

That's the key focus. We are confident to secure a long-term solution for the Kid Group.

Is the lower growth development in Hemtex for the quarter due to lower customer momentum? How did Hemtex perform in April? Will you take that, Marianne?

I can take that. Referring to what I said a couple of questions ago, I think we have to see March and April in a total because the Easter effect are more relevant to Kid in March and to Hemtex in April as Hemtex and Sweden have more opening hours and the Easter effects. Look at March and April under one.

Yes. Another question right here for the warehouse in Lier. Is the new sublease contract effective from Q1? We can say that the contract was signed in Q1. But, effective in Q2. So, going forward. It's, I think we covered a lot of the questions now. Yeah, another question here now. What explains, I think for you, Marianne, what explains the lower basket size in Norway and Sweden in Q1 compared to past year?

The lower basket size, you have to -- again, affected by the Easter effect. A lot of small items, decreasing the basket size.

Okay. We have some questions I think we can consolidate for the launch in Germany. Can you comment on the revenue generated in Germany first week, and can you provide detail, when Hemtex.com is expected to go live?

I know that many of you are curious and excited about the launch. To me, it's important to underline that we see this as a pilot and that our main focus are our core market [indiscernible] market and core business. We have not started any marketing yet. We have just launched a silent website, and we will put some marketing on and some influencer cooperations going forward. I would say that maybe we have opened a door to something big, or maybe we will close that door in a couple of years. We don't know, but our main focus is our core markets.

I think that was the final question. Thank you everyone for this presentation and your attendance. We'll see you next quarter. Have a great day.

See you next time.

Hello, everyone, and welcome to this fourth quarter presentation by Kid ASA. With us today, we have CEO, Marianne Fulford; and CFO, Mads Kigen, who will present the results for us. In case you have any questions, please feel free to ask these in writing in the Q&A function, and we will get back to this after the presentation.

So with this, I leave the word to you, Marianne. Welcome.

Thank you, and good morning, everyone, and welcome to our presentation of the fourth quarter, the most important quarter in retail. And I must admit that we were a little bit excited and nervous when we entered into the fourth quarter because, as you know, we had some struggle with the logistics during the third quarter. But we are happy to inform that during the fourth quarter, the logistical situation improved every month. And by the year-end, the supply of goods from the warehouse to store were more or less normalized. Though the situation was normalized by the end of the year, there was still a bit of smaller struggle also during Q4.

We see strong performance in Kid and weaker performance in Hemtex, and I'll try to explain a little bit about why. Because of still some logistical struggle, we had to do some prioritization out from the warehouse to the stores, where we prioritized high-volume stores, meaning the largest and both in revenues and size. And because most of the high-volume stores are Kid stores, this affected Hemtex more negatively than Kid. And because we had to prioritize the larger stores, we ended up with kind of an unstable flow of goods to many of the other stores during the quarter. And we also see we have a limited availability of nonseasonal products through the quarter in some of the stores.

I will also mention that we had an incremental campaign in Hemtex last year, week 47. It was the first time we did that campaign. It was an all-time high campaign. So the comparables are quite high as well. But I would say, safeguarding the peak season by doing this prioritization was a success. We ended up with prioritizing seasonal assortment out from the warehouse, and we see a solid growth in both autumn and Christmas assortment during the quarter. And we also prioritized the 2, 3 most important categories, and we also see a good development in all of them. So what we have prioritized, we see growth within.

We have also positive development in focus categories during the quarter. And the focus categories is bathroom and kitchenware mainly. And this is where we have done a lot of product development, and we have new smaller product groups that fits within the assortment bathroom and kitchenware, and we see strong development within those categories. New categories also did well during the quarter, 12% growth.

We could have been better under normal circumstances. But taking the logistical situation into consideration, we are quite satisfied with a 3.5% growth for the group despite logistical challenges and limited product development. And we must also remember that we come from high comparables last year with 12% growth in the fourth quarter. I'm sorry, I forgot to switch the slides, but I hope you are still with us on the right slide.

To summarize the full year, looking back at 2025, 2025 was a transition year. It was a challenging year, and it was a year of change, and it was absolutely necessary because we are building for future growth, and we needed a new warehouse strongly because I have told you last time that 2024 was the absolutely last year it was possible to get the assortment through our old warehouse setup in Lier. And the new warehouse comes with some short-term negative effects on both costs and revenues in 2025.

Our new Nordic warehouse was operational from May. And looking back, we underestimated the complexity and the cost that came with the warehouse relocation. That said, the situation is under control. And as I said, the supply situation has improved from the start in May till the year-end, where the supply of goods are now back to normal. But I would also like to underline that we have not realized all synergies and efficiency gains, and there are still a lot of them to unlock.

Though a challenging year, there is a lot of positive underlying growth. Seasonal assortment has been prioritized during the whole 2025. We prioritize spring and summer out from our old warehouse setup in Lier, and it had a solid growth. We did the same with the autumn and Christmas assortment. It had a solid growth. So we are happy with the seasonal sale during the whole 2025, and it also makes us confident that our assortment are still commercial and attractive. We have a 17% growth in new categories during 2025. And I would also again like to mention the focus category, bathroom and kitchenware. Not only in the fourth quarter, but in the full year, those focus categories are doing really well despite a lot of out-of-stock situations, for example, for towels, it's -- still are doing good.

I would also like to mention garden and outdoor furniture that had a solid growth summer 2025. We could have had a broader assortment. We could have had larger volumes, but that's an opportunity for this year. So in 2026, we are doing a stronger push for outdoor furniture. I'm looking forward to that.

In 2025, we have had a high project activity. The warehouse project has not compromised on our daily operation focus and our focus on store projects. It's the most important thing we do and we will continue into 2026 as well. And as you all know, we decided to postpone the digital launch of the Hemtex brand to Germany and Europe. That was a simple prioritization. We had to have focus on core operation and stabilize the logistical situation in 2025.

So yes, I think that was the year summarized, Mads, and then, I will leave it over to you and back soon.

Thank you, Marianne. Good morning, everyone. 2025 has been a true transition year, shaped by the operational shift to the new warehouse and a ramp-up period that has been more demanding that we expected. Reported revenues are up 4.2% despite internal logistical constraints in stores, particularly parts of the year. Online performance was strong, supported by improved product availability compared to our physical stores, particularly with effect in Q3 and Q4.

It's also important to view the figures, the revenue figures in the light of the NOK 60 million to NOK 80 million estimated lost sales with impact from the warehouse transition. Looking on a longer term, we still maintain and deliver a robust CAGR when we see 7.5% going back to 2022. This demonstrates an underlying strong growth momentum.

The gross margin for '25 remains strong in a historical perspective of 61.5%. And the OpEx is heavily impacted by the warehouse transition. I will return to a separate slide with details later in this presentation. Combining the revenues and operating expenses, these factors temporarily reduced net income and earnings per share this year. It's also worth noting, comparing the EPS to last year, the last year's figure was impacted positively by the divestment of the company, Prognosgatan Fastighets AB, which is the owner of the warehouse in Sweden, which this year, the EPS is affected by the warehouse transition effect.

Looking into the fourth quarter, reported revenues for the group increased by NOK 48.8 million, representing an increase of 3.5%. This is driven mainly by higher sales in Norway, supported by seasonal assortments. I will come back to some highlights for the segments shortly. This quarter, revenue was negatively impacted by the ramp-up, and we estimate the total effect to be in the range from NOK 30 million to NOK 40 million on group level. As Marianne mentioned, we have prioritized the high-volume stores, impacting the stores in Hemtex relatively more negatively than Kid Interior. Please also bear in mind that we delivered revenue growth on a record high growth base and comparison figures from last year, especially in Hemtex.

Given the limited product availability as a consequence of the warehouse, I am pleased to report online revenue development in Kid Interior of 23.5% increase. Consequently, the online share increased to 13.7% on group level. And if we include Click & Collect, the share increased by 1.3 percentage points to 21.1% in the quarter.

In terms of categories, we continue observing positive underlying development across our focus categories, as Marianne mentioned. And in this quarter, bathroom curtains and kitchenware stands out as key drivers. In addition, the autumn and Christmas seasonal assortments delivered strong and robust commercial results in the quarter.

Kid Interior performed the best of our 2 segments with a total revenue growth of 4.4%. This comes on top of a strong fourth quarter last year and has significantly improved compared to previous quarter's development. The revenue development is driven by number -- increased number of transacting customers in online channel and our physical stores, partly offset by slight negative contribution from basket size due to the product mix and product availability during the quarter.

Hemtex delivered a reported revenue growth of 2.1%. But as for the previous quarter, we see a significant currency effect in the reported group figures. And on a constant currency basis, the growth decreased by 2.6% compared to fourth quarter last year. The development in the quarter is positively impacted by number of transacting customers in physical stores, offset by the number of customers online, combined with a negative -- or a reduced average basket size across sales channels.

The development in Hemtex should be assessed over the past 3 years since Hemtex delivered strong figures in Q4 '23 of 11.9%. And Q4 last year, in Q4 '24, Hemtex delivered 16.2% growth. Looking on the compound -- the CAGR, we have a 6.4% growth with the revenue figures reported for Hemtex going back to 2023. The reason is that we had, like Marianne mentioned, an exceptional strong campaign last year in Q4 '24, where we had an incremental campaign in week 47. And we also had -- the year before, we had the Hemtex 50 years anniversary. So we had 2 exceptional strong campaigns in the 2 past quarters, in '23 and '24.

To summarize, in the light of temporary internal logistical constraints and frictions related to the ramp-up of the warehouse, we are satisfied with the reported revenue development in the fourth quarter, both in Kid Interior and our focus categories, combined with the seasonal assortments delivering strong commercial results.

Looking into the gross margin, we delivered a margin of 61.2% for the group, which represents an unchanged margin from previous year. The development was positively impacted by Hemtex and negatively impacted by Kid. The margin overall of 61.2% is strong in a historical perspective. And the development this quarter is mainly a result of an increased campaign activity in Norway, partly offset by lower share of freight in the cost of goods sold compared to previous year as a consequence of the elevated freight rates we observed throughout 2024. To summarize, the group's gross margin of 61.2% and the full year of 61.5% is considered robust and is well in line with our financial objectives.

Reported operating expenses increased by 14.1% in the quarter. This may appear high, but it's important to note that the development is impacted by nonrecurring items and strategic investments, mainly related to the new warehouse. Reported employee benefit expenses decreased by almost NOK 18 million, and this is driven by lower bonus accrual in the quarter compared to previous year, combined with line shift from own employees in the Norwegian logistical setup to external workforce used in the ramp-up phase in the new warehouse in Sweden. This results that we have a temporary line shift from employee benefit expenses to other operating expenses this year that will gradually be converted to own employees going forward. The decline is partly offset by increase from last year's wage settlements and salary increases to our great employees in the group, the hours spent in store, meaning the project activity that has been high, combined with larger stores driving hours. In terms of the like-for-like stores, we have tight cost control. We have tight control of the number of worked hours, but it is affected by new stores and the store projects, as mentioned. These are both initiatives that will drive future like-for-like growth in Kid Group. Finally, we had this quarter a significant negative currency effect of NOK 4.4 million compared to last year.

In terms of the other operating expenses, they increased by NOK 73.7 million, and the increase is mainly related to the ramp-up of the new common warehouse, combined with significant currency effect, increased marketing activity and other future growth initiatives. Additional cost drivers also include increased floor -- store floor space and last mile distribution, following the strong online revenue development seen in Kid Interior, as mentioned.

The warehouse ramp-up in Sweden increased logistical hours, supported by external workforce. The hours in the logistic is linked directly to volumes of goods distributed to our stores and the online revenues. In total for the quarter, reported logistic costs have increased, excluding the line item reclassifications. And the key driver of the increased hours has been slight instability observed in the quarter and inefficiency. This is natural [ experiencing ] in a ramp-up phase and is temporarily increasing hours. The progress was positive this quarter and the inefficiency peaked as we reported last quarter in Q3. That said, we will have an impact in terms of some additional costs and inefficiency before we are fully stabilized in terms of speed and efficiency. This quarter, the logistical hours are also driven by some additional volumes required to replenish stores that experienced too low product availability and service level as reported previous quarter. Finally, we had also a negative impact from the currency effect of this reported number of NOK 3.8 million.

In the reported figures, there are some nonrecurring operating expenses, and approximately NOK 13 million were booked as other OpEx and rental costs in the quarter. And I have this slide to give some more flavor. As already mentioned, the new common warehouse in Sweden is an important strategic move for the group. And the transition and ramp-up has been more complex than anticipated and affected the reported figures. As we said last quarter, we pushed an ambitious timeline, which also added risk and temporary inefficiencies. All elements were in place, but fine-tuning across systems, automation solutions and workforce has taken longer time than expected.

As communicated Q4 last year, we expect a nonrecurring cost of approximately NOK 30 million in 2025. This was mainly related to double warehouse rent in Norway and Sweden in a period of time, in addition to transferring goods from the site in Norway to the new warehouse. We reported approximately NOK 5 million this quarter, totaling NOK 27 million for the full year '25. In addition, we have inefficiencies from the warehouse, and it's challenging to quantify the effect. But we have estimated booked costs related to inefficiency, mainly the hours and freight or last mile distribution of approximately NOK 8 million in Q4. This brings us to a total cost estimated to NOK 26 million in 2025.

Summarized, as part of the transition year '25, we estimate a total cost impact of NOK 53 million related to the operational shift. In addition, this year or '25 included a noncash impairment of NOK 25 million and a currency loss of NOK 8.8 million, which was related to a structural change in the Kid Group's sourcing and currency hedge setup done in Q2 last year. These effects are temporary and linked to the operational changes we are implementing to strengthen our platform for future growth, and the impact is easing quarter-by-quarter, as can be seen in the table on the right side of this slide.

Summarized, the development for the fourth quarter, we had revenue development with steady development in Norway. We had a strong gross margin in a historical perspective, and the OpEx base impacted by investments for future growth and scalability, resulting in a fourth quarter EBITDA of NOK 440 million.

In terms of cash flow, I would like to highlight the following items, where the cash flow from the operation was affected by net working capital changes, mainly from planned inventory buildup to ensure and secure the goods for the next year and particularly spring and summer assortment coming in. In addition, we had also a timing effect in the trade payable. Cash flow from investments this quarter mainly relates to capitalized expenditures to our store portfolio in Norway and Sweden of approximately NOK 50 million and other IT initiatives and projects. Cash flow from financing is explained by lease payments following IFRS 16, net interest expenses, changes in debt and repayment of revolving credit facility, in addition to the dividend payout in November '25. This resulted in a change of cash of NOK 10 million negative.

At the end of the quarter, we had cash and available credit facilities of total NOK 587.6 million. Excluding IFRS 16, net interest-bearing debt was NOK 722.4 million, resulting in a financial gearing ratio of 1.46 at the end of the fourth quarter. The group's financial position remains strong, particularly given the operational challenges and nonrecurring effects experienced during the transition period. The liquidity position reflects the full year result, including the warehouse transition and related one-off items that explained, yet continue to demonstrate solid capacity to support ongoing operations and strategic future initiatives.

The Board of Directors will propose for the Annual General Meeting a dividend of NOK 2.5 per share to be paid late May '26. Including the prepayment of NOK 2.5 in November '25, the dividend is NOK 5 per share, representing a payout ratio of 89% of the net income for 2025.

That said, I leave the word to Marianne, which will give you an update of our store portfolio.

Thank you, Mads, and I will try to remember to switch the slides this time. As I mentioned earlier, there has been a high project activity in Kid this year, not only the warehouse, but also within store operation. And as I said, the warehouse project has in no way compromised on our focus on store portfolio development.

We continue to develop our store size towards 600 square meters. And as I have explained many times, we need larger stores to grow further. To have space for a full assortment, the stores need to be 600 square meters. And we have a large potential for further growth in both Hemtex and Kid with expanding number of square meters.

During the fourth quarter, we had the same high level of project activity as last year. We had 9 store projects across Kid and Hemtex, and 1 store -- new store was opened. And when you look at 2025, we have had 35 store projects compared to 36 last year. Seven new stores were opened during '25. That's the same number as '24. And during '25, Kid completed 17 store projects, 5 extended stores, alongside 3 new openings and 1 closure. In '25, in Hemtex, we completed 12 store projects, 1 extended store and as well opened 4 new stores. And by the quarter-end, we have signed 6 store projects, 2 new stores and 1 extended store in Kid. And we have signed 4 store projects, 1 new store and 1 extended store in Sweden. They are all expected to be opened in the first half of '25. Regarding the extended stores, the last so far extended store in Norway will open at Buskerud Storsenter in the second quarter. And the second extended store will open in Sweden, Goteborg, Kallered. And we are excited to see the development of the extended stores in Sweden.

So looking ahead, we will be focusing on optimizing our warehouse. It's obvious. We will focus and realize efficiency gains. Though the supply of goods situation has normalized, there are still a lot of efficiencies to be unlocked. We do not expect product availability to be a problem because of the logistical situation, and we do not expect it to affect revenues in 2026. Of course, we can have out-of-stock situations, but that can be because we have sold too much of seasonal products or anything else, but not due to the logistical situation in 2026.

We will work on completing our ongoing modernization of the system portfolio. That's a project that has been going on for more than 2 years now. I told you a little bit about that last quarter. Modernization of the system portfolio is crucial not to fall behind. We all know that the customers' expectation change rapidly within retail. What is actual today is not actual tomorrow, and we need to follow up with a modern system portfolio. And we will finalize this project during 2026. We will have a new point of sale, POS, [indiscernible] to all Hemtex and Kid stores during the first half of '26. And there are yet more to come.

I would like to underline that the system architecture needs to be in place to unlock all synergies, and we will not be able to realize all synergies and efficiency gains. For example, first push, as we have been talking about a lot, in the new warehouse, where you can have a product directly from inbound through the warehouse to outbound in just some minutes. That will first be able when we have our system landscape fully in place during 2026, just to set an example on what we mean with not all synergies and efficiency gains before we have the system landscape in place.

And we are also working towards securing a long-term solution for the Norwegian warehouse exit. We consider both a full termination or sublease. And we are in some positive dialogues regarding the warehouse in Lier. We will get back with more information when we can say anything more. And as you all know, we decided to postpone the digital launch to Germany and Europe, and that will happen during 2026. We will get back to -- when later.

You can expect high store activity also in 2026, not surprisingly, I guess. And we look forward to a new year, a new spring and summer assortment that this time will come to our stores in time. If you visit the Hemtex or Kid stores as we speak, I guess, you will see a lot of the spring and summer assortment there already. And we will have higher focus on outdoor furniture this spring and summer, which we are looking forward to.

So that said, I think we could go over to the Q&A. Are you going to read the questions for us? Yes?

Thank you very much, Marianne and Mads, for a good presentation. And I'll just remind everyone that any questions can be submitted in writing in the Q&A function. So we'll start out with the first question, which has come in from Hakon Fuglu. The first question reads, how did the market perform in Q4 '25 in Norway and Sweden? Are you seeing increased competition as we enter 2026?

If we should talk about the market situation, I could use like 10 minutes, and we are not going to do that. But what we saw was that in our market in Norway, there was a quite weak October and November, better in December. But we -- compared to the market, we are happy with the performance in Kid. When it comes to Sweden, we see a stronger competition from the low-price players, and we also see a tougher competition from the Chinese, typically [indiscernible]. So that's something not to overlook. But we could talk a lot about that, but I don't think we have the time.

Thank you. And do you see any overhang of seasonal goods from Q4 '25 into first quarter '26?

No. And that's something we are really happy with, taking the logistical situation into consideration. We have over 90% sold out of our Christmas assortment, for example. So we have no large stock of seasonal assortment in our inventory by the year-end. So, that we are happy with.

Good. How is the progress on the sublease on Lier?

I'm not sure if you can say anything more about that. Mads...

No. And you said that we have positive dialogue with different solutions, and we are confident to secure a good solution for the group.

You saw some headwinds on sourcing due to FX. Do you expect FX tailwinds in 2026? Or FX tailwinds...

Yes. I think there is -- related to the margin picture, we have a currency hedging policy. The currency is one input factor to our reported margin. But the margin is dependent on several input factors. It's freight, it's energy, it's the raw materials, et cetera. But all else equal, you will say that stronger Norwegian kroner compared to the USD for the assortment we buy in USD, you will have a stronger margin. But that is more the theoretical kind of answer, and then it's dependent on a more complex picture.

Thank you. And then, we move on to next Ole Martin Westgaard's question from DNB Carnegie. Can you quantify how much synergies that have been realized from the new warehouse and what is left to be crystallized?

Yes, it's a good question. Thank you for that. We cannot say too much as of today, but we see positive effect from the new warehouse, but we are currently not in a position to quantify the realized gains. And I think we will come back to that going forward. But as we have said, we have had costs related to inefficiency and the ramp-up this quarter. And as we said last quarter, in the third quarter '25, we will go into '26 in Q2 before we see more of the potential to be realized.

Yes. There's another question here on this. There has been a lot of focus on the negative impact of the new warehouse. As operations start to stabilize, do you still expect to realize the benefits and improvements you initially anticipated?

Did you understand the question?

No.

No?

Okay. Maybe we can come back to that later.

Yes. Maybe we can move to next. Yes.

So how does the growth in the new categories compare to your growth in square meters in 2025? What was the revenue from furniture in 2025?

And that's something we do not share, is it?

No. But you can give the kind of overall picture.

Yes. Then, I can give you the overall picture. I would say that we are really satisfied with the outdoor furniture development, as I mentioned. We see that furniture for living room is doing okay. But as we have mentioned earlier, beds are not doing that well. So shortly summarized, but maybe the largest potential in '26 is within the outdoor furniture.

Thank you. And a question from [indiscernible] here. Do you think your need to throttle supply of goods from Hemtex in 2025 has hurt your brand value in Sweden?

That's hard to say, and I hope not. I hope the period was so short that it didn't affect our brand. That was seriously our only real worry through this project because all the others are nonrecurring effects, and hurting the brand would be a bigger issue, but I don't think so.

And here's a question from Ole Martin again. You guide for NOK 20 million in extraordinary rental costs in 2026, while it was NOK 13 million in 2025 according to your table. Why should it increase?

Yes, I can answer on that. The table of NOK 13 million is pure rental costs, while the NOK 20 million, it's an estimate. It also include the more indirect and operating costs of the warehouse in Lier, bringing the total to approximately NOK 20 million. So that's the difference.

Thank you. Just let me have a look. Okay. The last question so far here. You mentioned lost sales and higher OpEx related to the new warehouse. Any impact on the gross margin as well? Specifically, has this affected campaign activity, shipping costs, mix effects or any other gross margin-related items?

What should we answer to that, Mads?

That's a very long question. I'm not sure what...

Regarding campaigns, there are -- I can answer that at least. We haven't done any larger adjustments for campaigns in fourth quarter. We had realization of Christmas items 70% a couple of days earlier this year because we had to realize them for -- 2 days before Christmas. That's just a small change. Otherwise, the campaign activity was more or less the same as last year. That's an answer to something of it.

Yes. And then, you also will have some -- in the margin, you will have an effect that we have had limited product availability of the nonseasonal brands, saying that we haven't changed the campaign activity plan, but we have sold more -- relatively more.

Yes, you can see, we have a mix effect from the out-of-stock situation, yes.

So that's an indirect effect in the reported margin. But answering your question, we have the lost sales as we have reported of NOK 30 million to NOK 40 million. We have the inefficiency costs of the NOK 13 million nonrecurring items and the margin as explained.

Good. Thank you very much. I think all the questions have been answered. And if not, of course, feel free to reach out to [indiscernible] for any further clarifications. And with that, I thank everyone for joining us today, and I wish you all a great day.

Bye-bye.

Thank you.

Thank you.

Thank you.

Okay. Welcome to this third quarter presentation by Kid. We have the management, Marianne and Mads with us. What we'll do this is that they will present the numbers, and then we will go to the Q&A. Please send in questions during the chat, and we will take them after the presentation. So with that, I give the word to Marianne.

Thank you, and good morning, everyone, and welcome to the third quarter presentation. I will leave this page hanging for a couple of more seconds as I know that Mads will be back with a lot more information regarding the financials later. So we will not use a lot of time on this page.

The third quarter comes with a short-term pain for a long-term gain. We are investing in a new Nordic warehouse that are going to make a fundament for our future growth, but it comes with some short-term impacts that are negative on cost and revenues this quarter.

Revenues were impacted by limited product availability in our physical stores this quarter. It's due to some logistical challenges with some bottlenecks and some ramp-up challenges that are maybe not so uncommon in these kinds of projects.

This has caused actually revenue shortfall mainly for nonseasonal products and autumn products that arrive late in our stores. But we are confident that our customers are still with us and that our assortment is still commercial and doing well.

And why are we so sure about that? It's because we see online growth this quarter because our customers, they turn to our online platforms to buy products they couldn't find in our stores.

And we also see growth within the spring and summer assortment this quarter and spring and summer assortment was distributed from the old warehouse setup in Lier for Kid and in Boras for Hemtex. And we had enough availability of spring and summer, and it led to a good growth within spring and summer assortment.

This quarter, we have invested in customer satisfaction by providing free home delivery for those buying online. It comes with some extra shipping costs, but we think it was the right thing to do when customers could find their products online and not in our stores.

Growth in new categories have been soft this quarter, but we see a strong growth in focused categories like kitchenware, bathroom and lightning, where we have been expanded with new product groups. And regarding the Norwegian warehouse, approximately 15% has been subleased under a short-term agreement this quarter.

After several years with growth and especially after the acquisition with -- of Hemtex, we have experienced a clear need of renewal and increased capacity. It's not only within the logistics, but also within our store portfolio and within technology and systems.

We have -- I said we have outgrown the warehouse, the stores, our systems. Some call it growing pace. I'd like to say that this is a sign that we are moving in the right direction and gaining market shares. And to grow further, we must invest.

And you all know that we focus on long-term strategy, we are building for the future, not for the next day, week or quarter. And this year, our focus has been to establish a new Nordic warehouse that can offer efficiency and more capacity to support further growth.

And as I mentioned last time, 2024 was definitely the last year, it was even possible to get the Christmas assortment through the old warehouse setup. This year, it had to be done through a new warehouse setup.

And regarding the new warehouse, we have had an ambitious time line. That's true to the Kid spirit. I know it's a culture that has been driving us forward for many years. This project has proven complex, and implementation and fine-tuning has taken somewhat more time than we expected.

We haven't fully reached our potential by the end of third quarter, and it will still take some time before we see the full efficiency and cost saving effect because the systems and automization solutions still needs to be stabilized.

But with that said, note that efficiency and capacity is improving every week. It's going in the right direction. And we are confident that our new warehouse will be a strong foundation for future growth, though we're having some short-term struggle this quarter.

The photo on the page was taken a couple of weeks ago when I was in Väla. And you can see some of the automation and conveyor systems that will give us a future level of efficiency far behind what we have had before.

System modernization is crucial not to fall behind. We see that customers' expectations and customer behavior change rapidly within retail. A number of system changes and improvements have already been implemented over the last 2 years and further ones are planned.

We have already completed much of the system renewal through the warehouse project by shifting to improved core system for logistics, sourcing and supply chain operations. And next year, we will be focusing on implementing a new point-of-sale system to streamline in-store operation and to offer a much better customer journey than we have today.

And with a new warehouse providing scalability, efficiency and capacity, combined with further modernization of systems that impact stores and customers, we will deliver next-generation customer experience and are ready for future growth.

By the end of '26, we expect to have a fully modernized system portfolio ready for the future, even though modernization never truly end, does it? Mads, I think we are ready for your slides.

Thank you, Marianne. Good morning, everyone. For the third quarter, reported group revenues increased by NOK 15.1 million compared to last year. This represents an increase of 1.7%. I will come back to the highlights for the segments shortly.

As Marianne mentioned, this quarter, the revenue growth, especially in our physical stores was negatively impacted by the transition of the warehouse and internal logistical constraints contributing to reduced inventory level and product availability in our stores.

We estimate that the revenue shortfall to be in the range from NOK 30 million to NOK 40 million this quarter, primarily linked to nonseasonal assortment and autumn products.

Please also bear in mind that the revenue development this quarter comes on top of the growth base from last year in specific for Kid Interior.

The product availability has been better online compared to the physical store, resulting in an online -- a strong online revenue development, and I'm pleased to report an online revenues of total NOK 129.5 million this quarter, representing an increase on a constant currency basis of NOK 26.3 million.

In terms of share, the online revenue share increased by 3 percentage points to 14.4%, driven up by both Hemtex and Kid. Including the click-and-collect, the share increased further by 3.7 percentage points compared to last year to 19.8% this quarter.

In terms of categories, we continue observing a positive underlying development across our focused categories. And I would like to highlight that bathroom, homeware, kitchenware and light standing out as important drivers this quarter and deliver strong commercial results.

Kid Interior performed best of our 2 segments with a total revenue growth of 1.9%. This comes on top of the base -- the revenue base from last year. The development is driven up by number of transacting customers online, offset by a decreased number of customers in our physical stores.

Additionally, we have a slight negative impact this quarter from reduced average basket size due to the product mix. Hemtex delivered a reported revenue growth of 1.4%.

And as you can see, we have a significant currency effect as the Hemtex numbers in local currency was decreased by 1.8%. This is driven up and positively impacted by the online development in terms of revenue by 30.2%.

This development is positively impacted by, as for Kid, increased number of transacting customers online and offset by a number of customers in our stores. We have also a slightly reduced average basket size in Hemtex as for Kid.

Overall, given the negative impact from the temporary internal logistical constraints related to the warehouse transition, we are satisfied with the online revenue development in the third quarter and the commercial results from our products and assortment.

On the gross margin side, we delivered a gross margin of 61.8% for the group, which represents a decrease by 0.3 percentage points from previous year. The development was mainly driven down by Hemtex and was neutral effect from Kid Interior.

The gross margin is strong in a historical perspective, and the development is mainly due and explained by somewhat increased campaign activity to address the revenue development linked to the logistical constraints as explained.

The campaign activity was partly offset by lower share of freight in the cost of goods sold this quarter compared to last year, which was, last year, a consequence of the elevated freight rates observed throughout 2024.

Summarized, the group gross margin of 61.8% is considered robust and is well in line with our financial objectives. Reported operating expenses increased by 12% in the quarter from last year.

This is a high number, but it's important to note that the development is impacted by nonrecurring items from strategic investments largely related to the common new warehouse and the transition in Sweden.

This comes along with the other factors that we also will explain. In general, in retail, our cost base is subject to inflationary pressure and wage settlements, but this quarter is impacted, as I said, by this warehouse transition, and I will give some more flavor to that.

The reported employee benefit expenses decreased by NOK 5.1 million and the development is mainly explained that we have a lower bonus accrual this year compared to previous year.

In addition that we have a line shift where we last year had own employees in the Norwegian logistical setup. Whereas we now in the new setup in Sweden in the ramp-up phase have external workforce booked as other OpEx and not employee benefit expenses.

The decrease is partly offset by an increase from last year's wage settlements to our great employees, hours spent in our new stores and as a result of the high store project activity year-to-date.

In terms of work hours, we have tight control to our hours in our like-for-like stores and the increase we see above the wage settlement is linked to new stores and the store projects comprising increased floor space. These are both initiatives to drive future like-for-like growth for Kid Group.

Finally, on the employee benefit expenses, we had a negative currency effect compared to last year of NOK 2.4 million. The reported operating expenses increased by NOK 43.1 million. And here, this increase is largely attributed to the warehouse transition and must be seen in light of the reduction, as I explained in the employee benefit expenses.

We have also some additional costs from increased floor space and last mile distribution following, among others, the strong online revenue development. The warehouse ramp-up in Sweden increased our logistic hours, which is supported by external workforce in the transition and ramp-up.

This is mainly related to onboarding personnel to new processes, new systems as well as transferring goods, the remaining goods from the warehouse in Norway to the new common warehouse in Sweden.

As I said, these external workforce hours is booked as other OpEx and not employee benefit expenses, which gradually and partially will be hired as permanent own employees going forward.

One important driver this quarter is instability and inefficiency, which we have experienced during the transition and ramp-up phase, driving hours in the logistics.

The progress overall was positive throughout the quarter and costs from this reduced efficiency are considered temporary and the inefficiency peaked in this quarter, but we will and may have some impact in terms of additional costs going forward before we are at fully stabilized speed and capacity.

Summarized during the quarter, nonrecurring operating expenses approximately NOK 8 million were booked as other OpEx and rental costs. This is linked to the MNOK or the NOK 30 million communicated with the Q4 presentation last year.

This quarter, we also try to quantify and estimate the effect from the inefficiency in the transition period. The estimate is NOK 10 million this quarter, and I will explain and present a more detailed overview on the next slide.

As for employee benefit expenses, we also had a negative currency effect in the reported numbers compared to what we saw last year of NOK 1.9 million in the other OpEx. As I said, please note that going forward, we will have a line shift from -- as we will increase the share of own to own employees from external workforce related to the warehouse in Sweden.

Now that we have reviewed the OpEx figures, I would take a moment to explain some one-off effects in the presented cost base. These factors can seem complex and make it difficult to see the full picture. So I break them down to you and clarify what's temporary versus what reflects our underlying performance since we have significant one-off effects this quarter compared to last year.

As Marianne said, in short, the new common warehouse in Sweden is a strategic move, but the transition has been operationally complex. We pushed for an ambitious time line in true Kid spirit, which also added risk and temporary inefficiency.

While all elements were in place, fine-tuning across systems, personnel and automization solutions has taken longer time than expected.

As communicated in Q4 last year, we expected nonrecurring costs of NOK 30 million in 2025, mainly related to the double warehouse rental for 2025 in both Norway and expanded warehouse in Sweden, transferring goods to the new site from Norway in addition to some scaling costs.

Related to this NOK 30 million, we reported NOK 5 million in the first quarter this year, NOK 9 million previous quarter and NOK 8 million this quarter, totaling NOK 22 million year-to-date.

In addition, we see that inefficiencies driving costs mainly related to inefficiency and hours in the logistic operations and last mile distribution.

It's difficult to quantify the effect, but we have estimated the effect and what has been booked this quarter to be in the size of NOK 10 million in Q3 in addition to an estimate of NOK 8 million previous quarter, which is disclosed today.

Bringing this, we have NOK 18 million in total regarding inefficiency as per year-to-date. The table on the right side is -- shows the combined figures, and I will share some brief comments on each element.

We have employee benefit expenses in the first quarter. It's limited, but it's related to offering job seeker training for our former employees in the warehouse in Norway. The next -- the second one is the rental costs, which represent double warehouse rent and is related to the Norwegian warehouse starting double rent in February 2025.

Note -- please note that this cost is booked as depreciation and financial expense according to IFRS 16. Please also note that this rental cost for the Norwegian warehouse facility is dependent on the ongoing sublease process and might be partially recurring in 2026.

The logistic hours is an estimate based on the efficiency we would have achieved without the instability and start-up challenges we had this quarter and previous quarter.

In terms of last mile distribution, this number refers to estimated additional costs from, among others, the free shipping option, Marianne mentioned, which we offered our customers in absence of the -- pickup in store functionality was not available for our customers.

In addition, we have had some effect from suboptimal home delivery in the ramp-up phase from the new warehouse to online customers. Other OpEx includes several elements, but it is largely related to the transportation of goods from Norwegian warehouse to the warehouse in Sweden and estimated double operating costs for the warehouse facility in Norway.

The impairment, then we have the total estimated nonrecurring operating expenses, and the last 2 elements is related to impairment, which was NOK 25 million communicated and reported previous quarter related to the warehouse in Norway, and we had a disagio, which was a one-off effect from realized loss recognized in Q2 and is related and explained by a change in the sourcing and hedge setup for the group.

To summarize the development in the third quarter, we had a revenue development impacted by the warehouse transition, but with strong online revenue growth in both segments. We delivered a robust and strong margin, slightly impacted by campaign activity, but in line -- well in line with our financial objectives.

And the OpEx base, as I have explained, largely impacted by nonrecurring items and one-off effects related to the warehouse transition. This, as Marianne said, is a crucial and key investment enabling future growth for the whole Kid Group. This, all in all, results in an EBITDA of NOK 204.7 million.

In terms of cash flow, I would like to highlight following items for the quarter. The cash flow from operations was negatively impacted by net working capital changes, mainly from inventory buildup. This is also for securing Q4.

The cash flow from investment this quarter is increased from last year and mainly relates to our store projects in Norway and Sweden in addition to some more and final investments to the warehouse -- related to the warehouse project in Sweden.

Additionally, we also have investments to IT initiatives and projects. The cash flow from financing is explained by lease payments following IFRS 16, net interest expense and use of overdraft facility. This results in a change in cash for the quarter of NOK 1.9 million.

This cash flow follows a cyclical and historical pattern for Kid Group. At the end of the quarter, we had cash and available credit facilities of total NOK 182.3 million. Excluding IFRS 16, net interest-bearing debt was NOK 1,047.9 million, resulting in a financial gearing ratio of 1.96 at the end of the third quarter.

All in all, a satisfactory financial position for the Kid Group. That said, I would give the word to Marianne, bringing us -- taking us together or through the store portfolio.

Well, not surprisingly, we continue a high project activity through 2025. And we continue to develop our store portfolio towards the standard store size of 600 square meters. As you know, we have outgrown many of our stores already. They are too small to have the space for the total product range.

And we know there is a potential for growth by increasing the number of square meters in both Kid and in Hemtex, and that's what we do. We've had a high level of project activity in the first half of '25 with 21 projects compared to 16 last year.

And in third quarter, we have had 3 projects, the same level as last year. We had [indiscernible] in Hemtex this quarter. In addition, one new store was opened at Bryn and another one was closed at Tveita during this quarter.

By the end of the quarter, Kid signed contracts for 3 new stores and 2 extended stores in Norway, and Hemtex has signed 1 new store and 2 extended stores in Sweden by quarter end.

So looking ahead, there is a few things we'd like to highlight. In the fourth quarter '25, we have lined up 6 store projects for Kid and 3 for Hemtex. In addition, 2 extended stores, 1 in Norway and 1 in Sweden will open.

In October, we opened Kid's largest extended store at the largest shopping center in Norway, Lagunen in Bergen. And if you are in Bergen, I recommend you to stop by. The store is amazing. And next week, we are going to Barkarby in Stockholm to open the first Hemtex extended store.

We have decided to postpone the digital launch in Germany and EU until 2026. It's because we have to make sure we have enough focus on core operation the next month. Main focus going forward will be to continue to stabilize and ramp up our warehouse to further increase capacity and efficiency.

Modernizing system portfolio, as I mentioned, will continue going forward to support future growth. And we are working towards securing a long-term solution for the Norwegian warehouse exit, and we are now in dialogue with several parties regarding a partial sublease or full termination of the facility through a new potential tenant.

In the meantime, approximately 15% of the warehouse facility has been subleased under a short-term agreement, as mentioned. And last but not least, we are looking forward to Christmas season, and we are looking forward to presenting what I see as the best Christmas assortment ever.

The last -- I have one more slide -- the Board of Directors has decided to pay a half year dividend of NOK 2.5 per share as a payment for 2025 payable in November. So that was the last one, and then I think we can open up for a Q&A.

An important slide. Dividend is important so very good. We have received some questions on the chat, just to remind the followers that please just use the chat and send in questions.

We have several questions regarding product availability going into Q4. So I'll just take one of them instead of having 3, 4 questions on the same topic. Flows of goods improved through Q3. But how should we think about availability of both nonseasonal and seasonal goods going into Q4?

We cannot say too much about Q4 as there is much of Q4 left. But what we can say is that we are at a much better and more comfortable place now than we were in the third quarter. As I mentioned, we see that the efficiency is going up every week.

So there is no reason to be very negative regarding the coverage of products. Of course, it's scary to say because hiccups can suddenly appear, and we cannot guarantee that cannot happen. But at the moment, we are quite comfortable.

Perfect. And then we get a question here on the sales of new categories, which was somewhat soft in the quarter. Can you explain that? And also how is furniture sales doing?

During this quarter, you mean.

Yes. Yes.

Yes, I would say that we are not 100% satisfied with how furniture did this quarter. But we must say that it's not only about furniture, it's more about the whole store this quarter that was less inspiring than it usually is.

We know that products are selling each other. We know that if you have shelves with our products and not an inspiring store, you don't attract the customers.

So -- and we also had some challenges with, for example, carpets that was blocked from distribution because of some logistical challenges that has also affected the sale of new categories, just like an example.

So I wouldn't pay too much attention to this quarter actually. And I can also mention that we have launched a new sofa at the moment doing very well and a new dining table doing well. So I still believe in furniture, absolutely.

Perfect. And then we have a question here on the campaign activity level. I think Mads mentioned that it was on the high end in this quarter. Is that more related to a more competitive market? Or is it more like your own behavior that has changed the campaign structure somewhat?

It's more like an internal strategy. When we see that we need to fuel, we often use a campaign as fueling.

But as I said, it was slightly impacted by somewhat increased campaign activity.

Yes. Perfect. And then we have a question. I mean, I -- you mentioned that the sublease -- both of you. Is it possible to give some more details on the sublease development in Lier?

We have said that we are in process with several different potential tenants for the facility in Lier. This quarter or in third quarter, we succeeded in signing an agreement for sublease of approximately 15% of the warehouse facility, and we have other leads we are working against. So we hope to bring some positive news for the sublease process when we report to Q4 in February next year.

Perfect. We also got some questions on the postponement on the international expansion. I think you covered that, talking about prioritizing core operations.

It's easy for us. It's -- we can do the launch any time, we are ready with -- the whole setup is ready. So we can just push the button when we want, but it's the wrong timing now.

All the internal focus needs to be on the fourth and most important quarter and stabilizing the warehouse. Yes, that's the easy and correct answer to that question.

Perfect. Final one here is on store availability. How do you see the store availability now and also going forward in terms of new stores?

More opportunities, is that the question?

Yes. I mean, yes, exactly. Are you getting the stores and the location that you are looking at and at what terms basically?

Yes, we do not disclose our returns, but we have the ambition of the 320 stores in the portfolio, increasing a couple of stores in Estonia.

And yes, we are looking for some more in Finland, but the major part and the residual from today's number of approximately 280 to 320 is in Sweden. We have some more opportunities, but it's not like a huge change in the market conditions.

Okay. Then we have some questions on the nonrecurring items, and that goes into 2026. Should we expect some nonrecurring items for the warehouse in 2026?

And I assume then you need to exclude, obviously, the additional rent cost because that depends on the sublease, right, but on the other cost elements.

Yes. It's -- the clear thing is the sublease, as you say, it's dependent on the process. But in terms of the other nonrecurring items, we have -- do not -- we have not guided what we see going forward, but we see that we have peaked the inefficiency in the warehouse, driving hours in the logistic operations and last mile distribution that peaked in Q3.

We may have, as Marianne said, some instability going forward, but we are progressing every week, and we expect to have a reduced or -- impact from the nonrecurring going into the second quarter 2026.

Okay. Perfect. I think that was the questions for today. So by that, I'll leave the final remarks to you guys.

Yes. We thought that since we have Christmas just around the corner, we will leave you with a Christmas commercial. And thank you for today, and see you next time, yes.

Thank you.

Hello, and welcome to this. [Operator Instructions] So with that, I hand the word over to you, guys.

Thank you, [indiscernible]. Good morning, everyone, and welcome to our second quarter presentation. The quarter has delivered consistent revenue growth, and an all-time high revenue in second quarter despite some operational challenges associated with the warehouse relocation. And we are pleased with the gross margin performance this quarter. The growth is primarily driven by strong performance in Kid Interior this quarter.

And during the second quarter, we have launched a new, in my opinion, state-of-the-art centralized warehouse in Sweden, serving the entire group. This is a major project to carry out and is expected to have short-term impacts on operation and cost, but the new warehouse is a strategic investment for our future growth. Mads will provide you with comments and details on the figures later in the presentation. So I will not get into them now.

And before I share more about our new common warehouse in Sweden, I would like to show you all a video that was made during the sales process of the warehouse building last year. The warehouse was previously owned by a joint venture where Kid Group controlled 50%. And the warehouse was sold in December '24 to a fund managed by Storebrand Asset Management. And the video shows the warehouse building before the final construction was completed inside. So enjoy.

[Presentation]

I've had the privilege of being a part of Kid for many years now and being a part in an incredible growth journey. After several years of strong growth, we now face a care -- need for renewal and increased capacity, both within logistics, technology and stores. Transformation is essential for future growth. Our assortment has outgrown our store size, and we have expanded our standard store size over the last year, as you know. We need larger stores to grow further. We have outgrown our warehouse in Norway. 2024 was probably the final year in which we were able to distribute our Christmas assortment through this facility. We need more dynamic and static capacity to grow further.

And since the acquisition of Hemtex in 2019, we have been operating with 2 different warehouse and logistical setups, one serving Norway and one serving Sweden, Finland and Estonia. In August '23, we decided to expand the warehouse facilities in Sweden and establishing one central warehouse for both -- for all markets and to increase our storage capacity and to streamline operations. The 57,000 square meter warehouse became fully operational during the second quarter.

The warehouse is now serving all markets, both across online channels and physical stores. Their warehouse was delivered on time at expected cost and the building has already been sold at the profits. Although all facilities are in place and the project has been delivered, the ramp-up phase takes time. 100 new employees must be trained and it takes time before all employees, systems and new optimization solutions all work smoothly and efficiently together.

Four, a temporary period, we have not achieved capacity and efficiency required to meet the full demand from our stores. This has led to lower stock inventory in stores and some delayed online orders. The performance is improving every day, even though it will take some time before everything works seamlessly together and the full potential is materialized.

With the launch of a new Nordic warehouse, we have established a critical foundation for increased capacity in the years to come. Some of you have asked how long will it take before we grow out of this warehouse. The answer is, we don't know. But what we know is that we have built a more efficient and streamlined warehouse with 40% more storage capacity. And with that, we will be well prepared for the future.

To briefly summarize the quarter from an operational perspective, I would like to highlight that category development continued to be an important growth driver, Categories launched since '22 accounted for approximately NOK 25 million in revenues this quarter. Bathroom and outdoor furniture are focused categories and are standing out as primary growth drivers this quarter. The quarter was positively influenced by the timing of Easter, and we see a notable increase in sale of Easter assortment despite 2 fewer shopping days. We see growth in Easter assortment sales across all, though sales from seasonal assortment still is higher in Kid Interior than in Hemtex.

Seasonal assortment continues to play an important role in attracting customer attention, driving traffic and refreshing our store fronts. Our spring and summer assortment also delivered strong growth and performance and increased traffic in both physical and online channels this quarter. This quarter has a high level of project activity, completing a total of 15 store projects and we have successfully completed 4 extended stores in Kid and another 11 store projects, 6 under the Kid brand and 5 under the Hemtex brand.

We also signed the 15th and final store- extended store for Kid Interior. That's in line with our ambition to establish a total of 15 extended stores in Norway. And finally, I would like to mention that Kid groups participate in Tekstilpro AS. It's a company that was founded during the second quarter by Virke and other Nordic retailers to support responsible textile waste management in the Norwegian market.

So now, Mads, I think you will take us through the financials.

Thank you, Marianne. Good morning, everyone. For the second quarter, reported group revenues increased by NOK 58.6 million compared to last year. This represents an increase of 7.3%. I'll come back to the highlights for the segments shortly. The revenue growth is considered well consistent given the operational impact from the transition of the warehouse as already mentioned. Please also bear in mind that the positive revenue growth and the revenue development is -- this quarter comes on top of the high growth base from last year.

During the quarter, we observed in general, an increase in terms of number of transacting customers to our physical stores in both segments and online in Hemtex, compared to last year. Additionally, there was a positive contribution from the basket size in Kid Interior. The online revenue share increased by 0.1 percentage points to 12.2% and looking on the click-and-collect, the share increased by 1.5 percentage points to 18.8% this quarter. In terms of categories, we continue observing a positive underlying development across the major categories. I would like to point out that curtains, bathroom, outdoor and garden furniture standing out as important drivers this quarter. For Kid Interior, this Brand segment performed particularly well, and I'm pleased to report our total revenue growth of 7.1%.

The revenue development is driven by increased number of the transacting customers in physical stores, partly offset by decreased numbers online. Additionally, we had a positive effect from the average basket size. As Marianne mentioned, due to the timing of Easter this year, revenues from Easter seasonal products positively affected the revenues this quarter, partly offset by the 2 less shopping days compared to last year.

Hemtex delivered a reported total growth of 7.7% and we see a significant currency effect in the consolidated figures where the revenue growth in local currency was -- in constant currency was 1.7%, mainly driven up by online. The revenue development in Hemtex was positively impacted by a number of transacting customers in physical stores and online, partly offset by decreased average basket size across the sales channels due to mix effect.

Overall, we are satisfied with the second quarter, given the circumstances and the warehouse transition, and we have a total revenue growth of 7.3%. For the gross margin, we delivered a robust margin of 62.3% on the group level. We can see a similar development compared to last year in both Kid and Hemtex. The gross margin is strong in a historical perspective and the development this quarter is mainly due to and as a result of higher share of freight in the cost of goods sold as a consequence of the freight rates observed throughout 2024.

Finally, we did the early price adjustments last year to address these higher rates, which were elevated due to the unrest in the Red Sea and Gulf of Aden late '23 and in '24. The implemented price adjustments last year had a positive effect on the reported gross margin. Summarized, the group gross margin of 62.3% is considered robust and is well in line with our financial objectives. Reported operating expenses increased by 13.7% in this quarter compared to last year.

While this may appear high, it's important to note that the warehouse transition has been one key driver this quarter where we invest in future growth. Along, we also have some other underlying factors that explain this increase. Employee benefit expenses increased NOK 19.1 million, and the increase is a result mainly of last year, wage settlement and salary increases to our employees. We have an impact from new stores. The store project and increased hours in the logistics following the warehouse transition.

In terms of worked hours in our like-for-like stores, we have tight control and the development is affected by new stores and the high level of store projects this quarter compared to last year. As you said, Marianne, we had 15 this year compared to 6 last year. This is important initiatives to drive future like-for-like growth.

Finally, in employee benefit expenses this quarter, we had also a significant currency effect of NOK 4.3 million. Reported other operating expenses increased by NOK 22.6 million, an increase is largely attributed to this warehouse transition. In addition to effect from increased floor space in our store portfolio and last-mile distribution of furniture, shop-in-shop and online orders. The ramp-up period of the warehouse in Sweden is driving hours in our logistic operations, supported by external employees and workforce that will gradually be converted to permanent and owned employees.

Time spent is primarily linked to onboarding employees to the warehouse, the employees to the warehouse in terms of processes, systems and automation solutions. In addition that we have moved goods from the warehouse site in Lier to warehouse site in [ Borås ]. These activities are temporarily reducing productivity and efficiency this quarter.

During the quarter, we have nonrecurring operating expenses of approximately NOK 9 million, where this is booked as other OpEx and rental costs. With reference to the previous communication of the approximately NOK 30 million we will have for in -- extraordinary or nonrecurring operating costs for the full year 2025. Finally, we also had significant currency effect on the other operating expenses of NOK [ 36 ] million compared to last year.

To summarize, we have a consistent revenue development with increased revenues in both segments across all sales channels. We have a decreased gross margin, mainly due to the share of freight in the cost of goods sold, but strong in a historical perspective and well in line with our financial objectives. And OpEx base, as described, impacted by the warehouse transition. This resulting in an EBITDA of second quarter of NOK 189.1 million.

Below EBITDA, I would like to highlight 2 following additional one-off items amounting to NOK 33.8 million this quarter. This comes in addition to the NOK 30 million in nonrecurring operating expenses. The 2 items is -- the first of the 2 items is an impairment of NOK 25 million that was made related to the warehouse in Lier and is a noncash item.

The warehouse in Lier is now empty. It's not in use, and we are -- have been in the process of subleasing the warehouse since early 2024. We have a principal agreement with one potential tenant, which ultimately unfortunately stalled due to external factors this quarter. As a process -- as the subleasing process taking longer than anticipated, an impairment of NOK 25 million has been recognized this quarter on the right-of-use asset and is a onetime item.

Additionally, one of realized FX of NOK 8.8 million was recognized and is related to the changes in the Kid Group's sourcing and currency hedge setup. The effect is linked to other currency hedge and remaining USD balances in Hemtex. This has been reported as financial expense. In terms of cash flow, I would like to highlight the following items and the cash flow from operations was positively impacted this quarter by net working capital changes. The investments, you can see of NOK 98 million. That is related to store projects in Norway and Sweden and Finland, in addition to the warehouse expansion project in Sweden, and some IT and other IT projects.

Cash flow from financing is explained by lease payments, net interest expenses, use of overdraft facility and revolving credit facility. Additionally, we had a dividend payment of NOK 5 per share in May this year. The cash flow follows a cyclical historical pattern for the Kid Group. At the end of the quarter, we had cash and available credit facilities of total NOK 265.5 million. Excluding IFRS 16, the net interest-bearing debt was NOK 964.7 million, resulting in a financial gearing ratio of 1.65 at the end of the second quarter. All in all, a robust financial position for the Kid Group.

With that said, I leave the word to Marianne to give some status on our store portfolio.

Okay. Thank you, Mads. This quarter, we have had a really high store project activity, fueling future like-for-like growth. During second quarter, we had 15 store projects compared to 6 last year. In the first half, of this year, we have had 21 projects compared to 16 last year. And as I already told about expansion and the need of large stores, we continue to develop our store portfolio towards the standard -- new standard store size, 600 square meters, and that we need to have enough space for the whole product range.

We have outgrown our smaller stores. We know there is a potential for growth by increasing the number of square meters in both Kid and Hemtex. During the first half of '25, we opened 3 new stores in Finland, in line with our Finland ambitions and towards our 320 stores in total. 4 extended stores have been opened in Norway this quarter, and we look forward to open the 2 first extended stores in Sweden very soon, one in the fourth quarter and one during first quarter next year.

And we have reached the final slide, I think, and it's time to say a few words as we look ahead. In the second half of '25, we have lined up 5 store projects for Kid and 3 for Hemtex. These include a mix of refurbishment, expansion and relocations. On top of that, 2 extended stores, one in Norway and one in Sweden are scheduled to open. We are also moving forward with a digital pilot to launch the Hemtex brand in Germany and other EU markets. We will mostly -- most likely go live during fourth quarter.

In the coming months, our main focus will be to continue scaling up operation in the new warehouse. We are working on fine-tuning operations and implementing more automization solution to boost capacity and efficiency ahead of peak season. We expect to have somewhat low store inventory throughout in the third quarter, but we are working to catch up and expect normalized stock levels by the end of the quarter.

And finally, I will say that we are now looking forward to welcoming the autumn assortment into our stores. And then I think we should be ready for opening the Q&A session.

All right. We've got a couple of questions here coming in from your covering analysts. We'll start with Hakon Fuglu at SEB as he was first. First question -- Yes, a couple of ones. Can you elaborate on the strong gross margins in the quarter? Is this a result of the lower assortment availability?

The gross margin is historically stronger in the second quarter. And looking back, we had a decrease of the 0.9 percentage points this quarter compared to last year, and the development is mainly due to the freight part of the cost of goods sold compared to last year.

And the second question, also on the lower availability of assortment, if it impacted sales negatively in the quarter.

Well, I guess it had some impact. And therefore, we are satisfied with their revenues this quarter despite that we have seen some low stock in our stores during this quarter.

Moving on to the third question on OpEx, maybe for you, Mads. How did underlying OpEx develop in the quarter if adjusted for the record high store openings and refurbishments over Q2 and Q3?

It has affected the OpEx, of course, but we do not communicate the underlying growth. But the growth in the other OpEx of the 13.7% is highly affected by the warehouse transition, the significant currency effect and also the store projects and new stores we have opened during 2024 and this year, year-to-date.

And last 1 from Hakon, at least for now. Have you done some sample test for Hemtex online in new markets? And what is the customer feedback?

We have not done that yet. And so there is nothing more to comment on that, I think.

Then we move on to Ole Martin Westgaard at DNB Carnegie. Should we expect some more costs related to the warehouse transition in Q3? What is left?

As we have communicated previously, we will have other operating expenses of approximately NOK 30 million for the full year. That is related to double rental costs with the 2 warehouses we have now. There will be some ramp up and scaling up and scaling down costs and we reiterate the NOK 30 million, as we have communicated earlier. What comes in addition this quarter, it's more like technicality of the NOK 25 million of the impairment of the right-of-use asset for the warehouse in Lier in addition to the realized currency loss compared or related to the USD balances in Hemtex going out of the accounting policy.

Second one from Ole Martin. Has the sales trend in Q2 continued during the summer? Yes, I can take a follow-up after.

I don't think we comment upon the third quarter.

That's fair. And could you strip out the Easter impact on sales in the second quarter?

In figures, no, but we can say that we had a positive impact from Easter in the second quarter and a negative impact in the first quarter, and that's how it moves between quarters depending on when Easter is.

And then the last one from Ole Martin. Do you expect a low inventory in Q3 to impact sales?

It's hard to say, but probably some.

Let me move to Petter Nyström at ABG. You mentioned that the sublease for your warehouse in Lier has been delayed. Is this expected to be resolved from Q3?

I hope we can bring positive news, but we are working on the process on a weekly basis, daily basis to solve it and hope to bring good news when we report Q3 in November.

And then another one from Petter. Yes, you already had this one on the inventory for Q3. That's -- another one on the low stock level.

Again, please submit any questions you have. I'll wait a bit more. I can take from -- one from my side. And do you have any color on when we can see kind of the OpEx growth slowdown from the refurbishment and new store openings? Or should we just use kind of your business plan to model that out in the future?

I think we have the ambition of the total stores, right, of the 320 stores. That will take time. But we have, the recent years, done approximately around 30 store projects on a full year basis. I think that is kind of a fair assumption thing going forward.

Another one, you mentioned some changes in basket size and did this impact the gross margin? And how do you think the underlying gross margin developed in Q2 if you strip out kind of the external factors of currency and freight costs?

I don't think the basket size is directly linked to the gross margin development. The basket size is due to the mix effect. And the Easter, as Marianne mentioned, is seasonal products -- is one example of the seasonal products comprising accessories. And the items is -- yes, have a lower value, meaning that the basket size will decrease.

It seems that there are no further questions. So with that -- we've got one in here now. How does Hemtex perform in Finland and Estonia? Any differences in growth and margins compared to Sweden.

We do not usually share or we do not share the details on the market level on a quarterly basis. But what we have said is that we are satisfied with the development in the 2 markets.

Okay. With that, I think we're finished. Marianne, do you have some final remarks.

No, I think we are good.

Thank you for coming and thank you for listening in, everybody.

Thanks.