RVRC Holding Stock

Welcome to the RevolutionRace Q4 '20 and '25/'26 presentation. [Operator Instructions] Now I will hand the conference over to CEO, Paul Fischbein; and CFO, Jesper Alm. Please go ahead.

Thank you, operator, and good morning, everyone, and welcome to this conference call where we will address the report for the fourth quarter and also the full financial year 2025 and 2026. Our financial year starts 1st of July and ends 30th of June. So Q4 covers the period from April 1 to June 30. My name is Paul Fischbein, and I am the CEO of RevolutionRace. And joining me today for this conference call, I have the company's CFO, Jesper Alm.

Before we begin and talk about the fourth quarter, I would like to, of course, mention also the important event that took place shortly after the end of the financial year. In early July, we announced the acquisition of ICANIWILL. And I'm very pleased that we, through the acquisition of ICANIWILL are taking an important next step with this first acquisition. It is an important next step of the development of RVRC Holding as a group and actually marks the beginning of an exciting new chapter for us as a group. And I will return to the acquisition and the rationale behind it later in this presentation.

But first, for those of you who are new to the RevolutionRace story, let me start with an overview of the RevolutionRace brand and our business model. RevolutionRace is an international outdoor brand offering outdoor products, mainly clothing, but also shoes, bags and other outdoor products. Everything started with pants and that category is still the largest product category. We operate with a D2C business model, meaning that we skip the middlemen and sell our products directly to our customers. We do this mainly via our own website and with our D2C business model, we can secure a competitive offering and at the same time, maintain industry-leading margins. As a digital player, our brand is very much built together with our community on social media. And today, we have 2.5 -- or 2.5 million followers and almost 850,000 reviews on our site. RevolutionRace was founded in 2013 and launched in 2014, and we have been listed on Nasdaq Stockholm since 2021.

Moving on to this picture, I think, illustrates our international presence. We have customers in around 40 countries and 19 localized web shops. However, we focus our efforts in 10 countries in Europe and also operate 3 physical stores in Sweden. We design all our products in-house and work together with more than 25 suppliers for the production in Asia. Now let's take a look at the performance and our net sales development. And we conclude the full financial year of 2025, '26 with continued growth and very solid profitability. Net sales for the full year amounted to a little bit more than SEK 2 billion, resulting in sales growth of 8% in local currencies compared to last year. When we look at market data, we see that the market is weak. So, despite uncertain market conditions, we increased sales and continue to gain market share in several key markets.

Net sales in the fourth quarter amounted to SEK 414 million, corresponding to growth of 3% in local currencies compared to the same quarter last year. And we clearly aim for higher growth number. But given the uncertain market environment, we continue to grow and strengthen our position in several important markets. And in fact, it is clear that in some important markets, our sales is actually performing very well. So, let's have a look at our net sales development by region because looking at the financial year as a whole, sales increased in all regions. DACH grew by 10% in local currencies. The Nordics grew by 9% and the Rest of the World region grew by 1%. But if we exclude North America, sales in the Rest of the World region would have increased 6% in local currencies, while then total sales across all markets would have increased by 9%.

Sales in the United States, they were high in the previous financial year and fairly high and have since then been negatively affected by the changing market conditions. In the fourth quarter, sales in the Nordics increased by 7% in local currencies and also in Swedish krona. What is interesting is that Sweden, we saw the highest growth there in Sweden with 12%. And I think this is a good example of strong performance in a mature market, particularly as we have seen reports such as Sport Index reported a 4% decline in sales of auto clothing during the same period. So this clearly indicates that we continue to gain market share.

In DACH, sales increased by 3% in local currencies, and it was Austria and Switzerland that continue to perform well with double-digit growth in both markets. But we must also mention Germany, where we note a weak consumer sentiment. And despite the challenging markets, we've continued to grow market share and believe that we are strengthening our position in our largest market, even if we aim for more. And in the Rest of the World region, sales decreased by 3% in local currencies in the quarter, but excluding North America, sales in the region instead would have increased by 2% and total sales for the company, 4%.

If we look closer on the fourth quarter, we continue to demonstrate our ability also to combine the growth with high profitability. EBIT amounted to SEK 66 million corresponds to an EBIT margin of 15.9% and the gross margin improved to 72.2%. During the quarter, we worked on some IT projects, for example, a new product information management system. And during the quarter, we also opened a store in Haparanda in North Sweden on the borders of Finland, and we can say that, that is developing very well. We end the quarter and remain a strong financial position with inventory of SEK 520 million and a net cash position of SEK 313 million and also on top of that, an available credit facility of SEK 600 million at the end of this quarter.

And if we summarize the full financial year, adjusted EBIT amounted to SEK 425 million. That corresponds to an adjusted EBIT margin of 21%, and that confirms our continued industry-leading profitability. And of course, this is very strong and something we are also very proud of. During the year, we strengthened our operating platform. We completed the relocation of our Nordic warehouse operations to a modern automated logistics center. And we also continue to develop our physical retail presence selectively, opening a brand store in Stockholm and also the store in the fourth quarter in Haparanda. And as I mentioned, the Haparanda store has performed very well. And as I also mentioned, we have worked on some IT projects during the year, especially in the fourth quarter.

So our result is strong and our financial position remains strong. Therefore, we can conclude the financial year 2025 and '26, and the Board of Directors proposes a dividend of SEK 1.5 per share. And this proposal is in line with our dividend policy, and we are happy to be able to continue to grow the dividend again. So even if this report should focus on the Q4 numbers, I want to talk a little bit about the acquisition of ICANIWILL that we actually announced in July. And I am very pleased that we, through the acquisition of ICANIWILL are taking an important next step in the development of RVRC Holding as a group. We have always had a disciplined approach to capital allocation, and we will continue to have that. We will continue to have a strong focus on organically develop RevolutionRace, but have for some time considered adding M&A as a capital-efficient complement to our growth strategy.

And if we look at the transaction, RVRC Holding is acquiring 90.1% of ICANIWILL. The initial purchase price corresponds to a valuation of SEK 700 million in enterprise value for 100% of the company. There is a potential additional consideration of up to SEK 175 million payable in 2 tranches, and they are based on performance during 2026 and '27. This initial purchase implies an EBIT multiple of 9.5x based on the LTM data as per June '26. And if we assume full payment of the additional considerations, the total purchase price will correspond to an EBIT multiple of 7.8x. And the acquisition is financed through a combination of existing cash, available credit facilities and the transfer of our treasury shares.

Now let's take a closer look at the ICANIWILL company. And ICANIWILL is a Swedish sportswear brand founded in 2012, headquartered in Stockholm in Sweden. The products are primarily sold through a digital D2C-first model like RevolutionRace and has like RevolutionRace also built its brand together with its community, having now 620,000 social media followers and more than 230,000 product reviews with a rating of 4.5 out of 5. On the numbers, LTM sales per end of June was at SEK 470 million. Growth is strong. Q4 sales are expected to reach SEK 124 million, representing a growth of approximately 30%, which was also roughly the growth in Q3. Margins have also improved with this growth. Adjusted EBIT reached SEK 73 million for the full year '25-'26. That's up from SEK 52 million the year before. And that's an EBIT margin for the full year of approximately 15.6%. And that's a step-up from past numbers. And in Q4, the EBIT margin was at 16.3%, which is also higher than the same period last year.

Looking at the geographic mix, the Nordics account for over 80% of the sales with Germany and the rest of Europe representing the remaining. However, those markets are growing faster. What is interesting to note is the potential in Germany and DACH as Germany grew over 50% in the calendar Q1 '26. By channel, ICANIWILL is at around 87% D2C and 13% wholesale. And by gender, 82% of sales are to female customers and 14% to male customers. As part of our M&A strategy, we have developed an M&A framework, and we can clearly see that ICANIWILL meets all our M&A criteria. ICANIWILL is clearly a digital-first D2C company with a strong community. Growth-wise, it meets our target, and we see that the company grew around 30% in the last 2 quarters, respectively. Profitability is good and size-wise, ICANIWILL is right in the middle of our size range.

The product category within and training apparel with functional materials is a natural adjacency for our assortment. And valuation-wise at acquisition, the EBIT multiple, as I mentioned, is 9.5x, but falls to 7.8x, assuming the full additional purchase price is paid. Operationally, it shares very similar characteristics to RevolutionRace. It's e-commerce, it's asset-light and it's cash generative. And this is something that we truly understand. And lastly, we know many of the people at ICANIWILL and understand that the cultural fit is there. Our integration philosophy is a decentralized philosophy with a focus on best practice sharing rather than full operational integration. And this picture illustrates that the companies and brands will operate separately but have the same owner in RVRC Holding. We believe this approach preserves entrepreneurial drive and the brand's identities and offering and local market knowledge, both within RevolutionRace and ICANIWILL, and it also causes less disruption to management, employees, customers and partners.

And the structure is also an attractive proposition for the ICANIWILL management who seek continuity. And we, of course, see a strong signal of commitment that management want to stay and continue to build ICANIWILL, but also become an important shareholder to RVRC and thus believe in our joint future. So with that, I would like to hand over to our CFO, Jesper Alm, who will take us through the financial year for the fourth quarter and for the full year. So Jesper, please go ahead.

Thank you, Paul, and good morning, everyone. I will briefly cover the financial performance during the fourth quarter and the full financial year '25/'26. Gross profit amounted to SEK 299 million for the quarter compared to SEK 281 million a year ago. And this equals a gross margin of 72.2% compared to 69.4% last year. The increase in gross margin is mainly attributable to currency effects on goods for resale. So in essence, this is the weaker USD for purchasing, only partly offset by a weaker euro and both currencies versus the reporting currency being SEK. Gross profit for the full year increased to SEK 1.4 billion compared to SEK 1.3 billion last year, and this equals a gross margin of 70.5% compared to 69.8% last year. Personnel expenses are higher compared to the same quarter last year, and the number of full-time equivalents was 147 compared to 132 last year. The increase includes staff in our retail operations and now that is 3 stores in total.

Other external expenses were SEK 191 million compared to SEK 183 million a year ago. As a share of net sales of 42%, the number was higher than last year, and this is partly due to investments in IT and marketing. EBIT for the quarter amounted to SEK 66 million compared to SEK 63 million a year ago, and this translates to an EBIT margin of 15.9% compared to the 15.4% a year ago. Adjusted EBIT for the financial year amounted to SEK 425 million compared to the SEK 383 million a year ago. And the current adjusted EBIT margin then is 21% compared to just below 20% last year. Our financial position is strong. We had a solid net cash position of SEK 328 million at quarter end or a net cash position of SEK 313 million when adjusting for lease liabilities of SEK 15 million. The credit facility of SEK 600 million remains available and undrawn as of June 30.

Cash flow from operating activities came in at SEK 31 million in Q4 compared to SEK 85 million for the same period last year. The lower cash flow compared to the corresponding quarter last year is mainly attributable to ongoing inventory buildup and changes in operating receivables. The credit facility of SEK 600 million was undrawn at the end of the quarter. But following year-end, the revolving credit facility was increased by SEK 300 million to a new total of SEK 900 million. And further following the acquisition of ICANIWILL at the beginning of July, we entered into a net debt position. The inventory amounts to SEK 520 million, of which SEK 336 million was goods in warehouse being sellable compared to SEK 439 million a year ago. So inventory has increased by SEK 111 million compared to Q3, and that is driven by an increase in goods in transit.

Net working capital decreased to SEK 172 million compared to SEK 262 million a year ago. Changes in net working capital is mainly attributable to increase in accounts payable. We aim to distribute 40% to 60% of net profits annually in accordance with the dividend policy. And as a result of the company's continued growth and strong financial position, the Board proposes a dividend of SEK 1.5 per share. This represents a dividend growth of 11% compared to the SEK 1.35 per share paid out last year. The proposed dividend amounts to approximately SEK 161 million in total, representing a payout ratio of around 48%. And I note that we, over the 5 years since the IPO and the first dividend in '21 have more than doubled the dividend per share.

In addition to the dividends paid out or now proposed during the quarter, we continued repurchasing shares in line with the AGM mandate and the total amount repurchased was SEK 68 million during the quarter. And at the end of the financial year, we held 2.8 million treasury shares, of which 2.6 million approximately were used as consideration shares in the acquisition of ICANIWILL. So treasury shares remaining after the acquisition is approximately 200,000. And with that, it's over and out for me. Paul?

Thank you, Jesper. So to sum things up, through the acquisition of ICANIWILL, we are taking an important next step in the development of RVRC Holding. Together, the group now has a base of -- base with net sales of approximately SEK 2.5 billion and an adjusted EBIT of close to SEK 500 million. ICANIWILL will continue to operate as an independent brand with its existing management and its own identity. At the same time, our experience of geographical expansion provides good opportunities to support ICANIWILL's continued growth, particularly in the DACH region. and ICANIWILL will be consolidated from the acquisition early in July.

Also turning to inventory, our salable inventory was lower than at the corresponding point last year, but while the value of goods in transit was higher. Now inbound deliveries have increased since the end of the quarter, and we believe that our inventory is now better positioned ahead of the important autumn and winter season. Finally, also a quick word on current trading compared to last year. It should be noted that the strong sales growth of 15% reported in the -- for the first quarter last year was partly supported by outlet sales and also favorable weather in Germany. We see market conditions, particularly in Germany, that were weak in Q4. It looks like it will continue to be challenging for some time. But despite this, we note that RVRC Holding in July continued to deliver pro forma sales growth in local currencies.

And that concludes our comments on the results. Before we finish, I would like to thank everyone who contributed during the quarter and throughout the full financial year. That includes our employees, customers, partners, shareholders. And I would also like to take the opportunity to warmly welcome the ICANIWILL team to RVRC Holding. Together, we are now entering an exciting new chapter. And with that, we are now happy to answer questions. So therefore, I ask the operator, do we have any questions?

[Operator Instructions] The next question comes from Benjamin Wahlstedt from ABGSC.

I have a few questions. So first of all, I was wondering if you could share your view on the German market growth in the quarter, please? I understand this is a difficult task.

Sorry, I could not hear you properly. Can you repeat the question, please?

I will. So I was wondering if you could share your view on the German market growth in the quarter, please?

Yes. We have seen -- first of all, we have seen industry colleagues that --I'm sure you have seen also that have reported their quarterly results and also disclosed the performance in Germany. And from what we can see, it looks like the market and what we can read from those reports is that the market seems to be challenging and weak. And we can see that we are outperforming them and thus increasing our market shares. We also have access to other kind of data, for example, from partners like Google, where we see that our traffic and the sort of share of brand search for our brand compared to the total market that it looks like the market is also weak based on that number and that we increase market shares when it comes to searches for our brand. And then, of course, we also read what other people are reading when it comes to different kind of macro reports and note that Germany as a -- the consumer sentiment in Germany still seems to be challenging.

All right. And if you could distill that. I mean, is it possible to give like a number for market growth? Just your best guess is probably better than.

Best guess is negative.

I was wondering as well if you could give us a bit more color on the gross margin bridge. What share of the improvement is FX driven, for example?

A majority of the improvement is FX driven, and then we obviously always have the components of market mix and product mix, but both the purchasing currency, USD relative to primary sales currency euro developed positively in the quarter. And as we've stated before, we have a delay in the effect of the purchasing price. And also, we comment on outlet sales where we've seen lower outlet sales, which means that is kind of a market mix where we have slightly improved gross margins as well.

I was wondering as well if you could elaborate on the temporarily higher IT costs in the quarter. Any comment on the magnitude specifically is helpful, both for Q4 and Q1, although I suspect you'll be reluctant to comment on Q1.

Yes. So to start with, these are temporary. It's a project. The project has been focused on Q4. The costs are below SEK 5 million. They will continue into Q1 on a smaller scale for completion. So the cost in Q1 will be lower than what we saw in Q4.

Yes. And I can add to that, that we have chosen to implement it's, for example, a product information system to implement that now so that we are ready and don't have to do big deployments when we are right in the middle of our peak season. So even if it has a bigger impact on a smaller quarter such as Q1 and Q4, we believe it was the right thing to do it now so that we are ready and don't have to deploy big projects during the peak season.

And finally for me then, I was wondering about the personnel cost increase. I understand that adding in-store staff drives personnel costs in absolute terms. However, the annualized cost per employee is up some 10% as well. And I would imagine retail staff has a dilutive mix effect on the cost per head. So any additional color on personnel costs would be helpful.

Yes. As you mentioned, we have added headcount due to the opening of stores. That is clear. And there is, you could say, a temporary effect also on staff when it comes to some IT-related projects. And we don't expect -- and then, of course, there is a salary review that always takes place in May. That has been in line with sort of market. And -- but we don't expect staff costs to go up from here. It should be now on a stable level.

Is it possible for you to share where these increased IT costs landed or the split between external OpEx and personnel costs, just roughly?

Both. The projects are external costs and then we've -- and also, to some extent, consultants related to that, that is external costs and staff cost is -- we've seen a ramp-up of IT staff over a longer time period. But the projects are mainly external.

The next question comes from Emanuel Jansson from Danske Bank.

You can hear me. I was wondering if you could continue maybe on the sales trend during the quarter. Is it possible to maybe give us some more flavor on the sales trend month by month during the quarter? And I remember the last quarter, you mentioned there was a quite of a slowdown in March, specifically in the German markets.

Yes. Just on a very high level, May was the strongest month. June was the weakest month.

And did you experience any negative local sales growth in Germany during the quarter? Specific month.

Germany followed -- I mean, Germany has such a big impact on our total numbers. So May was also the strongest month in Germany and a weaker month in Germany in June compared to last year.

Fair enough. And could you potentially also talk a bit about the other markets because I assume that the Switzerland and Austria is growing quite well. And also maybe give us some flavor on the U.K. market and that would be very helpful.

Yes. As you mentioned, Austria and Switzerland are growing well, double digit and in some cases, over 20%. And yes, the Nordic region, especially Sweden, which is a mature market, also continues to show good development. And then we have the Rest of the World region where it's heavily impacted or that region is impacted by the development in the U.S., where we have deliberately slowed down or basically almost turned off the operations since a year ago, and that has a big impact on that region. I think it leads to a difference of 6, 7 percentage points in growth in that region. So U.S. obviously impacts the rest of the world region a lot. So meaning that the rest of the -- that region is growing. And within that region, we have 3 focus markets that we focus on, and that's U.K., Netherlands and Poland. And those are developing in line with, I would say, expectations.

However, one should also note that we total level, we always try to sort of balance growth with profitability. For us, profitability is important. And as you can see, we are delivering a 21% EBIT margin for the full year. And when a very important and highly profitable market such as Germany slows down, that has some sort of indirect impact on how much we can invest in marketing in the rest of the world regions such as U.K. But U.K. is growing.

And also, I think it was in Q2, you said the ambition was to have a new logistics setup for the U.S. in place after the summer within a couple of months. We are now in August. Is the new setup live? Or what's the situation now.

Yes, it is now live since a couple of weeks ago. So, we are slowly, slowly increasing our efforts into the U.S. again. But it is live. Now we are importing all our products to -- based on comps value, meaning that we can now -- we are now back to offering our products on a more competitive level than we could do last year. So yes, a couple of weeks ago now from July, it is live.

So will you say in the near term, is it lighter given the comparable base and also the new setup that it's more reasonable to expect some growth again on the U.S. market?

Well, we don't want to guide. But I think it is clear that comps in U.S. are more or less from July this year, quite easy since we more or less stopped operations in U.S. a year ago. So hopefully, we will see impact from that. We know that we had good interest from U.S. customers before market conditions change. And we also see -- we have seen also a continued growth in popularity if we -- based on followers on, for example, our social media platforms. So comps are easy. We are -- we have the new infrastructure in place, and we are now slowly increasing our in the U.S. Can you still hear me, Emanuel?

The next question comes from Victor Hansen from DNB Carnegie.

Just a couple of questions from my side. Firstly, you mentioned the higher marketing spend in this report. Was this related to any specific region? Because, for instance, Germany, where you saw low growth, 1% organically. Would you say that you overinvested in performance marketing in Germany with a negative effect on ROA?

There are always 2 main levers to achieve growth. One is price and campaigns and the other is marketing. And we have a fairly high gross margin, which then also comes with a slightly higher market spend. Have we overinvested? I don't believe that. We, on a daily basis, try to calibrate and have as efficient market spend as possible. But in total, market spend is slightly higher than it was in the comparison quarter.

Yes. We -- our higher gross margin sort of facilitates that we can increase market spend slightly. But it's within the range of our sort of ROAS targets even if it's a bit higher than last year.

Next question on ICANIWILL. So the weak consumer sentiment in Germany that you mentioned here today, could this affect ICANIWILL's go-to-market strategy in the DACH region? So perhaps you'll be less aggressive on marketing spend initially due to this weak consumer.

Not really. I think ICANIWILL -- I mean, Germany is such a big market and the sports market is, in fact, I don't know, 5x, 10x bigger than the auto market. And even if the consumer sentiment is a bit slow or weak for the moment, I mean, it is still in line with last year and -- or slightly down, meaning that there is a lot of opportunities for a new player like ICANIWILL to actually enter the market. So I could be actually the opposite that this actually sort of leads to opportunities if other players are sort of facing challenges that -- and especially players who are very geared towards wholesale. I think that, that can actually lead to bigger opportunities since ICANIWILL is sort of entering Germany with a very low base, more or less starting from scratch. So being like into the market. So it doesn't necessarily mean that it should be negative for ICANIWILL since they are so small for the moment.

I was curious here as a follow-up, if you could be a bit more tangible on sales initiatives for ICANIWILL in the DACH region in terms of your strategy there as you're starting close to -- from close to 0, as you mentioned here. Yes, any easy wins?

I should be a bit careful not to disclose all the magic to our competitors, but for competitive reasons. But it is clear that we have -- since our launch -- RevolutionRace launched 10 years ago, we have collected experience, and we are fairly good at CRM, for example, in Germany, that is something that RevolutionRace can share with ICANIWILL for sure. So there are a number of areas where I think our experience and knowledge can be shared with ICANIWILL, but I should be careful going too deep into that for competitive reasons.

Interesting. I guess we'll have to wait until you report going forward. Next question. So we had quite a warm summer here in Europe. Any idea how large of a negative effect this has had on you this quarter, Q4?

Yes. We've looked at -- we normally -- well, we don't speak about weather and temperatures often, but it is clear that it has historically had effect on our performance during our Q1 and especially the shift of season where we go from summer to autumn and when we switch from bathing suits or light T-shirts to shell sets, for example. We have noted that in July, it has been very warm in Europe. In many parts of Germany, where we look at, for example, the Düsseldorf area, which is our biggest area. We have seen that it is a little bit more than 10% warmer this year in July, and it has continued to be warm also in August compared to last year. If we look at Sweden, in fact, we've seen the opposite where we look at temperature statistics in July. It looks like in many parts of Sweden, it was actually colder this year. And we continue to see a good momentum in Sweden. So weather, especially this time of year has impact.

Fall will come. We are very certain of that. It's a question of when it will come. And very warm weather is not favorable for us. And so that is something to bear in mind when you look at comps now that it was very favorable a year ago compared to this year.

I have a final question. So how much of your strong Swedish sales growth came from your stores?

Good question. I think I'll have to come back to that. I'm not that fast in that. Looking at Jesper here.

They contribute, obviously, but bearing in mind that the main business of the e-com is the main driver of growth.

Yes, we see good growth on e-com for sure. And what is very promising to see is that during the quarter, we actually opened a new store also in Haparanda. And that has been -- it has been very promising since that start. That's not the full quarter in Haparanda. That is also maybe something to bear in mind. And actually -- and last year, one of the stores, they were actually opened during the quarter already. So that is not a -- so a full year impact is only the brand store Kungsgatan, even if the Haparanda store obviously have impact, but not full quarter. And the outlet in Barkarby was actually opened in April last year. So that is a full comparison.

The next question comes from Andreas Lundberg from SEB.

I would like to focus on the acquisition actually. Have you weighed any other options? Or why is this good for RVRC's shareholders with other allocation options? That's my first question.

Yes. So we have -- I mean, we have to go back and sort of first look at where we are. We are a very, very profitable company with good or high cash conversion and a very strong financial position, and we are, I mean, our mission is to create shareholder value. And we have done that through dividend and also buyback, and we have thought of other components to drive value for some time. M&A is an obvious alternative to that. And we actually set an M&A strategy some time ago. And when we did that, we also decided on a couple of M&A criteria that needs to be fulfilled in order to move forward. We've always been very disciplined with our capital allocation. And there is quite a lot of criteria that we have set, both -- and that those include that it should be a category that is sort of close to what we sell adjacent. It should be high growth potential, good profitability.

It should be a company that in size is not too small, but not too big so that we can manage it. Valuation is, of course, important. But what is also important is the operational model. It needs to be -- it should be a company where the vast majority of the operations is a D2C business and because that is an operational model that we understand and then culture is important. And then we know the people -- I've known the people at ICANIWILL for many years. And when we were told that that company is in sort of play or for sale, we started to engage in concrete discussions. But we believe that this could be a very efficient way of, over time, generate value because what is also important is what we can bring to the table and how we can help ICANIWILL and we discussed that recently. And -- but I think that also goes 2 ways. They have a lot of knowledge and competence that we can also maybe capitalize on because they have good people. So there are many things that I think really favor us moving forward with the acquisition of ICANIWILL.

You talked about decentralization thinking and they will basically be left alone more or less. Are there any potential synergies or things that you can share on the cost side?

Yes. I mean we are not looking at bigger integration projects. We want to keep the entrepreneurial drive. We want to keep the brand identities. I think it's important to reduce sort of heavy integration projects that could disrupt operations. But having said that, there are synergies or, call it, low-hanging fruit that we want to realize directly. One example is, for example, negotiate with joint higher volumes within areas such as logistics, it can be payment cost and those kind of sort of easy wins. It may take some time because some of the contracts that the companies are in may sort of expire in a year or so.

But scale is important. Volumes are important and has impact on what kind of sort of prices and deals that you can make on a long-term basis. So there are definitely synergies without moving into heavy integration projects, such as joint IT platforms or joint logistics platforms because those will take time, but they are also risky, and we don't want to risk operational disruptions.

And how does the supply chain or backbone look like today?

So they produce most of the products in Asia. It's been shipped to the warehouse in Sweden. In fact, that warehouse is based in Borås. It's operated by a third-party partner using an AutoStore solution. So it's highly automated, very similar to what we have, an AutoStore solution. However, our warehouse is based in Stockholm and they are based in Borås. And from there, they can ship to all the countries in Europe.

And did you say B2B for them, is it 13%?

Yes, that's correct. 13%.

Was that more important in the early days of this company or how has that developed?

That is how the company was actually started in the beginning. It was more or less a full wholesale-based company. And there was a switch when the new CEO came on board 2018, '19, sort of changing this into more of a D2C company and now accounting for 87% of the business. But yes.

And how does their cash conversion look like? Are there any investment needs, working capital needs that you would like to mention?

They have a very similar profile to RevolutionRace, very asset-light, no big investments, no infrastructure, it's third parties and it's external production. So the cash conversion profile is very similar to RevolutionRace.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Thank you, operator. Before we wrap up, let's see if there are any questions online. And I don't know if we had a technical disruption with one of the guests here, but I guess we'll have to take him offline if he had more questions.

We have more questions. We have received questions from Germany, and these have been answered in the Q&A and the presentation. It's on IT, weather, and AOV. So that has been covered. So we then have no further questions.

Okay. Thank you. So with that last comment, thank you all for joining us today and for your interest in our journey. And I also remind you that the report for our first quarter, we have also announced that today a new date that will be announced on November 19. So with that, thank you, and goodbye.

Welcome to RevolutionRace Conference Call, July 2026. [Operator Instructions] Now, I will hand the conference over to the CEO, Paul Fishbein; and CFO, Jesper Alm. Please go ahead.

Thank you, operator, and good morning, everyone, and thank you for joining us on this exciting day for RevolutionRace. We are excited to present the acquisition of Icaniwill [indiscernible] our first acquisition as a group and an important next step in the development of RVRC Holding. My name is Paul Fishbein. I am the CEO. Joining me today is -- for today's call is the group's CFO, Jesper Alm. I will start today with a very short introduction to RevolutionRace for those less familiar with us. And then I will move on to introduce you to can will. And after that, we'll cover the rationale behind adding M&A into our strategy and how this acquisition fits.

After that, we can look at the transaction structure and how we see the way forward, and we'll finish with a Q&A. So first, and I'll try to make this very short RevolutionRace. So RevolutionRace is an international auto brand, offering outdoor products, mainly clothing, but also shoes, bags and other auto products. We operate with a D2C business model. That's important to bear in mind when we move forward in the presentation. And that means that we skip the middlemen and sell our products directly to our customers.

And with our D2C model, we can secure our competitive offering and, at the same time, maintain industry-leading margins. And as a digital player, our brand is very much built together with our community on social media. We'll come back to that. And today, we have 2.4 million followers over on social media platforms and over 800,000 reviews on our site. RevolutionRace was launched in 2014, and we believe on Nasdaq Stockholm since 2021. I think this slide illustrates our international footprint. We operate 19 unique local web shops, reaching customers in around 40 countries and it's supported by 3 local warehouses and office in Sweden.

We currently operate 3 physical stores also. In total, we have around 140 FTEs, which I think is a good illustration of how asset-light and scalable our model is. A quick look on our financial development up until March, the latest quarter results represented March '26, where we see that net sales last 12 months is at around SEK 2 billion. And also just as important, our growth has been highly profitable. Adjusted EBIT has grown to SEK 422 million on the same LTM basis with an adjusted EBIT full year margin around 21%.

And we believe few companies in our industry can show this level of profitability. And that's something we are very proud of. Germany is by far our biggest market. In our Q3 DACH represented 59% of our net sales. Nordics represented 22% and the Rest of the World region, 18%. And this gives you a sense of how important Germany and DACH have become to our is a good example of relevant context why we see such a clear opportunity in Icaniwill's expansion into the same region.

But so with that said, now let's turn to Icaniwill. So Icaniwill, today, it's a Swedish sportswear brand. It was founded in 2012 and is headquartered in Stockholm in Sweden. The whole idea of Icaniwill is built on the vision to inspire and really to be true to training in everything that they do. Products are primarily sold through a digital D2C first model and also -- but it is also complemented by wholesale channel. And like RevolutionRace, I will have built its whole brand together with a community, and they have over 620,000 social media followers. And more than 230,000 product reviews with a rating of 4.5 out of 5.

On the numbers, LTM net sales per end of June, is reported estimated at SEK 470 million, and EBIT for the same period is estimated at SEK 73 million. Icaniwill's footprint today, spans web hubs available to customers in 10 countries, supported by 1 warehouse in Boras in Sweden and around 60 FTEs, all working in Stockholm. And they also work with many product suppliers in Asia and operate one physical retail store in Helsinki in Finland. So it is also a lean setup and very much operational and mirroring how we run RevolutionRace.

If we quickly look at Icaniwill's products, of course, everybody is welcome to visit the company's website to get the idea of the full assortment. But it consists of an assortment within training, for example, tight, tops, shorts, pants foods, T-shirts and accessories. And we believe it's a well-developed and but at the same time, still expanding assortment, which gives room for continued growth. Icaniwill's net sales trajectory has been strong. We have here for presentation purposes, we have translated all the numbers to our financial year.

And we expect LTM net sales as of June '26 to land around SEK 470 million, as I just mentioned. Growth has continued to accelerate. Q4 net sales is expected to reach SEK 124 million, which is up from SEK 95 million last year, and that represents growth of approximately 30%, which was also roughly the growth in Q3, so demonstrating strong growth momentum, which is promising. Margins have improved in parallel with this growth. Adjusted EBIT is expected to reach SEK 73 million for the full year, '25-'26. That is up from SEK 52 million the year before.

And that means an adjusted EBIT margin for the full year of approximately 15.6 percent. And that's a step-up from past numbers. And in Q4, the EBIT margin is estimated at 16.3%, which is also higher than the same period last year, so showing scalability.

Looking at the business mix. Geographically, Sweden and Finland and Norway together make up the bulk of sales with Denmark and Germany and the rest of year representing the remaining. But having said that, important to note, a faster growing sales. And on that note, what is interesting to note is the potential in Germany and in the whole DACH region as Germany grew over 50% in the calendar Q1 '26. By channel, Icaniwill is 87% D2C, but is also complemented by 13% wholesale and by gender, looking at the products, 82% of sales are female customers and 14% is male customers.

So to summarize, this training category highly complements the RevolutionRace offering. It's a -- Icaniwill is a digital first and D2C aligned with high growth and solid profitability, thus, very similar to RevolutionRace. We believe they are best-in-class as a community-driven brand in the sportswear segment, and they are very strong in social media execution, which also reminds us very much of our own journey back in the days -- over the last couple of years, I should say.

And we see great potential, obviously, mirroring our development from being founded in Sweden, but now accelerating growth in Germany, Austria, Switzerland and other countries in Europe. So that was an introduction to Icaniwill. Now let's talk about why we are adding M&A to our strategy and how we, through this acquisition of Icaniwill are taking an important next step in the development of RVRC Holding as a group.

And may I just say to begin with, I think it is worth mentioning that we have always had a disciplined approach to capital allocation. We have been focusing on organic investments to develop RevolutionRace D2C platform across Europe. And it is also very important to underline that this acquisition will not, in any way, take away the focus on the core offering and the effort to continue the organic growth of RevolutionRace. But why do we believe this is the right thing, why is M&A relevant for us?

We see M&A now as an efficient way to deploy and allocate capital into assets where our ownership can accelerate growth, margins and also generate return on capital. We believe that acquisitions can create new avenues for growth and thus can accelerate growth beyond our organic plan for evolution race. It can give us access to new categories and new customers, which increases the total addressable market, significantly also provide immediate presence in new categories. Size for us is very important and acquisitions give us economies of scale.

We will simply have larger volumes and it is important we have a scalable business model. So scale is important. And as we create a stronger combined platform, and of course, we also see synergies. Further, we are at the RevolutionRace, we have a proven playbook that is highly transferable we believe, to adjacent brands. We have managed to grow RevolutionRace to SEK 2 billion with that playbook in many markets. And now we want to capitalize on our knowledge and help to scale other brands who operate close to us.

Also timing is always important, and we think that now is the time to move forward, adding M&A since we now have an operational platform at disable and the balance sheet well positioned for acquisitions. And of course, valuation is important to manage. So that -- as that can also create shareholder value. And I can go on and mention other reasons such as diversification and so on. But I'll stop there and move on to the next slide and talk a little bit about the criteria that we have defined for potential M&A targets.

And we have worked to define clear criterias for what we look for. First, that's why it was so important to mention in the beginning of the presentation, it needs to be a D2C business model with clear digital brand approach. That is a business model that we understand that our team has been working with for many years. So that is extremely important. The targets needs to have a growth profile, should be above 50%, and we can see that Icaniwill will right now have the momentum growing 30% over the last 2 quarters.

Profitability should be in line with or at least have a clear plan or path to our group level profitability. Size-wise, we look at targets with revenue in the range of SEK 200 million to SEK 800 million. We are looking for brands within a product category that is adjacent to our own. One good example here is sports and outdoor, very closely connected categories. When we look at targets, valuation is, of course, very important. The operating model needs to be similar to our model and -- but also very important. It is important that culture fits and that target companies reminds us of our own entrepreneurial spirit.

So having said that, when we look at Icaniwill, we clearly see that it meets every single one of our M&A criteria. Icaniwill is clearly digital first D2C a company with over 80% of our sales going -- being sold directly to consumer. And so digital first community. Growth-wise, it meets our targets. As I mentioned, we can see that the company grew around 30% in the last 2 quarters, respectively. Profitability at Icaniwill is good. Size-wise, Icaniwill, is right in the middle of our size range. and product category, gym and training apparel will functional materials is a natural adjacency of our assortment.

Looking at valuation, the EV EBIT [indiscernible] is at 9.5x looking at the LTM numbers, but falls to 7.8x, assuming the full additional purchase price is paid, we'll come back to that. Operationally, shares very similar characteristics to RevolutionRace. It's e-commerce, it's asset-light and it's highly cash generative. And we know many of the people at Icaniwill understand the cultural fit I have personally worked many years with the CEO of Icaniwill. So we feel high confidence in that as well.

One thing I mentioned, but I want to highlight is the scale of opportunity. The combined global outdoor apparel and sportswear market represent a total addressable market, which we estimate is 10x larger than RevolutionRace's current addressable market. So by adding both 2 adjacent product portfolios, we are meaningfully expanding our long-term runway for growth, and we look forward to deploy our D2C and community strategy into this even bigger market.

So taken together, the combined group offers a compelling case, we believe. I have mentioned a lot of things already, but I think it's -- this is a good illustration of the step we now take. On an LTM basis, we are now size-wise combined roughly at SEK 2.5 billion net sales and SEK 0.5 billion in EBIT. We now have a combined platform within Sports and the outdoor segment with a digital-first D2C model that enables industry-leading profitability and both built on strong community relevance.

And as a strong group, we continue to have a strong balance sheet with an asset-light and highly captive model which is something we strive to continue with. So to summarize, Icaniwill, is today in many aspects where exactly where evolution was 5, 6 years ago. And now we have the platform and the pan-European reach and the operational experience and D2C playbook to further accelerate the Icaniwill journey.

So with that said, let's now turn to the transaction itself, and I will, with that, hand over to our group CFO, Jesper Alm, who can walk you through that.

Thank you very much, and good morning, everyone. So key transaction highlights. RVRC Holding is acquiring 90.1% of Icaniwill. The initial purchase price corresponds to a valuation of SEK 700 million enterprise value for 100% of Icaniwill on a cash and debt-free basis. There is potential additional consideration of up to SEK 175 million payable in 2 tranches with the first of up to SEK 100 million after the end of 2026 calendar year; and the second of up to SEK 75 million after the end of calendar year 2027.

These tranches are based on EBIT performance and with a growth threshold. The initial purchase price implies an EBIT multiple of 9.5 based on estimated LTM financial data as for June 2026. And assuming full payment of the additional considerations, the total purchase price corresponds to an EBIT multiple of 7.8x. The transaction is expected to close as soon as possible.

But in near term, in July '26, this current month and are subject to customary conditions. We expect the transaction to be EPS accretive already in a year 2027. The acquisition is financed through a combination of existing cash, available credit facilities and treasury shares. In a separate process, we have increased our revolving credit facility from SEK 600 million to SEK 900 million. This is for general working capital purposes.

Icaniwill CEO will receive treasury shares RVRC Holding as part of the consideration, and these shares will be subject to a 12-month lockup. And the CEO, Anders Walstead is expected to join RVRC Holding Group management team following the completion of the transaction. [indiscernible] not employed by Icaniwill, 6 months lockup for the received RevolutionRace treasury shares. The remaining 9.9% of outstanding shares in Icaniwill will be held by its management. And with the main shareholder after RVRS Holding being Icaniwill's CEO, Anders. And this remaining shareholding will be subject to a put call option at the end of 2028.

On the financing side, specifically, RVRC Holding is combining existing cash and part of our RCF revolving credit facility for the cash component of the acquisition and we will be using approximately 2.6 million treasury shares as part of the consideration. So post transaction, we will hold approximately 200,000 treasury shares still. At the end of March '26, as presented in our Q3 report, we had a net cash position of SEK 351 million. The cash component of the amounts to approximately SEK 467 million for 90.1%, including closing adjustments. And as an indicator of leverage, the bank net debt EBITDA as per the end of March '26, is approximately 0.3x.

Hence, based on these amounts, RVRC still holding would have moved to a limited net debt position at that point in time, it's the acquisition had been made then. As mentioned, we are increasing the RCF by another SEK 300 million to a total of SEK 900 million, and this is for working capital purposes. The RCF matures in June '28, so there's no change. Importantly, our dividend policy of distributing 40% to 60% of net profit remains unchanged. And we will continue to weigh long-term financial stability carefully in relation to future share.

Buybacks. So with that, I hand back to you, Paul.

Thank you, Jesper. And for wrapping up, I also want to take the opportunity and talk about how we intend to run this going forward shortly. So to start off with, we can say that our integration philosophy is decentralized. We will have a focus on best practice sharing between the companies rather than full operational integration. This picture on the left-hand side, I think illustrates that the companies and brands will operate separately on a stand-alone basis, but have the same owner in RVRC Holding.

We believe that this approach preserves entrepreneurial drive local market and brand knowledge, both within RevolutionRace and Icaniwill. And it also causes less disruption to management, employees, customers and other partners. This structure is also a more attractive proposition for the Icaniwill management who see continuity. And yes, wants to continue. And we, of course, see that as a strong signal of commitment that management want to stay and continue to build Icaniwill, but also become a part important shareholders to RevolutionRace.

And thus also believe in our joint future. So I think it's important to keep both brands operating on a stand-alone basis very much so that we can also keep brand identity and brand positionings and offerings so that it won't be noted so much by customers.

So with that, that concludes the presentation for today. But so we are -- we are happy to take questions. So therefore, I ask the operator, do we have any questions?

[Operator Instructions]

The next question comes [indiscernible] from DNB Carnegie.

Paul, Jasper. A couple of questions from my side. The first one, so this is your first acquisition, purely really an organic growth story. I'm just curious why you achieved M&A over launching your own branded products in this adjacent area this time as you have done, for instance, in Alpine and many other categories?

Victor, and yes, as I as I mentioned, the companies will continue to operate on a stand-alone basis and also look at adding new categories within the specific brands. But we believe that this is a very capital-efficient way of also adding new categories that is adjacent to RevolutionRace. But where we believe will not be sort of a big part of the RevolutionRace was offering. So we want to enter -- this gives us in an efficient way, an opportunity to to expand our market -- addressable market size without diluting the sort of core offering over RevolutionRace.

Understood. And then your fashion risk has been relatively limited before. How would you say that this changes with the inclusion of IcanIwill?

Yes, that is a good question and something we have discussed with Icaniwill team. And they are I would say that RevolutionRace is a very low fashion [indiscernible] maybe Icaniwill slightly increasing that, but not to a large extent. Icaniwill is very much focusing on performance and to be true to training and really stay within that segment. And having said that, not so exposed to a large extent of trends. They are very prudent in the entry, even if they have a small part of this one, that is leisure and lounge wear. So much more focused on performance and functional material rather than trends.

Okay. Understood. Third question here. Sales [indiscernible] is nearly EUR 40 million for yourself compared to EUR 8 million for Icaniwill. Do you see anything in Icaniwill's business model that would make it tougher for them to reach your levels of personnel efficiency.

Sorry, can you repeat that? It was a bit difficult to hear, sales, employee.

Yes, exactly. So you have a higher sales for employee compared to Icaniwill SEK 40 million compared to about SEK 8 million. Is there anything in canals business model that would make it tough for them to reach your levels of personnel staff efficiency.

No, not really. I think scale is important for us, and that is also one of the reasons we now want to invest in. I can we have I think their current momentum and their offering, looks very promising that we can see increased volumes and scale going forward. And if that happens, we have very high hopes that we will also see a higher degree of efficiency and as a result, also higher margins and yes, sales per employee going forward. So I think it comes down -- a D2C business is very scalable. So it will come down to increasing volumes basically.

Asset-light infrastructure light, they don't own any factories or operate warehouses internally. So I believe that we will be able to see sort of the same thing that we have seen with the RevolutionRace margin-wise for the last couple of years.

The next question comes from Benjamin Wahlstedt from ABGSC.

Good morning. A couple of questions from me as well. First of all, I was wondering if you could expand on the M&A rationale here, please. What will you do differently to the previous owners to keep growing and perhaps also turn more profitable?

So our plan is not to deploy anything particular because -- or change anything that they have done. We acquired this Icaniwill because we believe that they are doing the right things. So we don't want to change anything that is not broken. What we do see, we do see that both companies can capitalize on best practice sharing, for example. I mentioned in the introduction, the D2C playbook that we have deployed, for example, in -- that we have seen work very well when doing our journey in Germany.

We are now at over SEK 1 billion in sales in Germany, and that is something that we would like to try to capitalize on and try to see if we can mirror for a brand that is operating in a category that is closely connected to our category. But sort of marketing strategy wise is very close to what we do, focusing on community social media platform marketing and so on. So I think that the big upside lies much more in best practice and knowledge sharing.

And of course, scale is is important, we will be able to do some joint negotiations with different kind of suppliers and partners. But we have been very prudent in calculating on such synergies, but I think it's obvious that we will try to realize some of those by only negotiating together.

Okay. So correct me if I'm wrong here, but negotiating joint suppliers or purchasing that would be limited to things such as last mile and payments, right? I assume [indiscernible] set of materials and...

Yes, last mile is a good example of logistics as a whole. Payment is maybe another good example that -- where we can do joint negotiations, but at the same time not disrupt operations.

Perfect. Could you also talk us through what has been driving Icaniwill's margin in the last 2 years. And I'm referring to the move from 9% margins to close to 6%.

Yes, good question. I think it has been a combination of getting more efficient as a whole. Assortment-wise, I think they have done a good job and got some payback out of that. But I think end of the day also comes down to scale. They are simply much bigger. And I think part of it is a result of economies of scale. Maybe Jesper want to elaborate also a little bit on that.

Adding to that, procurement strategy resulting in an increased gross margin has been successful product assortment development and procurement. So that is also a contributor to increasing profitability. So scale and economies of scale in both operating and procurement are key contributors.

Perfect. We can sort of back out the implied 2027 EBIT target related to the earnouts in absolute terms, but not the margin. Could you share whether you expect will to reach the earnout hurdle through continued growth or margin expansion or if you can point us in any direction here, please?

A combination of both, profitable growth will facilitate the additional purchase price payment.

I suspect that, that would be the answer. What was the reason for paying with shares instead of just using more debt? Like as you point out, the post transaction leverage will be more than manageable, I guess, regardless of how you would have chosen to pay for the acquisition?

I can point out. I can mention one reason, and that is that it was important for us, but also we saw an interest from the sellers to actually be part of the combined journey. And we believe that especially when the sellers being part of the current management team signal that, that is something that they would like to join. That was, yes, a very strong signal of this is something that we want to do together. So that, I think, was the main reason and since we had [indiscernible] shares, I think it was very easy to facilitate that wish from them, but -- so not -- so a combination of a wish from the seller, but also something that we believe was a very strong single.

And we come from a history of having a prudent capital structure, careful and always keeping possibilities for growth. And I think combining shares -- treasury [indiscernible] means that we can stick to what we've communicated previously that we want to see a net debt, net cash position around the 0 mark. So it's a combination of continued financial prudency while maintaining growth upside.

Perfect. Just 1 final, I guess -- or 2 final bookkeeping questions. Firstly, how will can will be reported going forward? And secondly, can you say anything about the P&L structure in terms of gross margins, for example?

We'll get back on the reporting structure, but we will make sure that we would be able to track the development of both brands. So we'll get back on that, but make sure that the focus on visible organic growth in both brands will be very visible. Sorry, what was the other question?

Anything on the P&L structure. So what Icaniwill's gross margins, for example?

The P&L structure is roughly the same as the RevolutionRace's P&L structure, and we'll get back to that. But gross margin roughly in line and then roughly the same.

Yes. So financial structure is the same and also operational. And that was, as I mentioned in the beginning, an important component for us that we really understand how they operate. [indiscernible] we set back in the upcoming quarters with information about reporting structure and disclosing numbers.

[Operator Instructions] The next question comes from Emmanuel Jansson from Danske Bank.

Perfect. A couple of questions from my side as well here. I mean, on the process here, could you share some color on the process leading up to this deal? What is the structure M&A process or more of a direct dialogue between the companies?

So well, process wise, we can say that it all started with the Board discussing whether M&A was an interesting component that we wanted to add to our strategy from at all. So that is something that we have discussed for some time. And when we decided that that is the case, obviously, we started to have discussions with potential target companies.

But, having said that, as I mentioned before, I personally know the CEO quite well. We worked together for 5 years. And so we've had regular contact like both on a personal, but also professional level for some years. But it's sort of -- the discussions became concrete only the last weeks/months after we decided that this is something that we really want to move forward with. That also sort of fitted very well with Icaniwill sellers starting a process.

So sort of had a knowledge quite some time ago that, that was something that they wanted to kick off with, but their decision to actually kick off a process and our decision to concretely look for M&A targets. They occurred sort of at the same time. a couple of weeks ago, I would say, maybe 2 months ago. So that is how it all started.

I followed the company or for I would say, 3, 4 years. It's a company that is very close to what we do and I personally know the people behind it. So it has been obvious to follow it.

And where did you and the CEO work together for 5 years?

So we worked together up until 2014 or something, '15. So 10 years ago, but we've been in contact and we've done some private investments together and so on over the time. So we know each other well, which gives confidence.

Perfect. Yes, great. And from the perspective of the Icaniwill's founders, why you think -- why was now the right time to enter this partnership?

That's a question to maybe ask them, but it was not that obvious from what I understand for the CEO to move forward. And I think we can see that in the signal he's sending by actually keeping 9% in Icaniwill. So -- but I think it's a question that the sellers need to answer.

There was a distributor shareholder structure. And as in all those situations, there are probably diverse shareholder perspective on future and the important part is that the CEO who was a major shareholder in Icaniwill stand alone elected to stay with the main thing for us going forward.

Perfect. And jumping on to M&A again here. I mean, regarding your M&A agenda, what is the current internal setup and what's your experience within this area?

Well, so for RevolutionRace as a company, this is our first acquisition. So obviously, the experience for the company as such is fairly limited for me personally and other people in the company, we've been working with M&A previously in our careers in different shapes and forms. So we have experiences from striking deals.

And at the same time, we think it is important that the companies continue to operate on. So, with that said, we really want to reduce risks by having a very limited integration processes and realize synergies in that way. So it should be growth-oriented acquisitions. But also having said that, we are not in a rush. We are now adding M&A as a component to our strategy, but we will be extremely selective and prudent when we look at future targets.

And we now have a criteria with a lot of boxes that target companies need to take. So it's not obvious that it will happen fast. But -- and I think it should be wise and prudent to let this sort of sink in and land before we move into something new.

And also, are you looking at or drawing any inspiration from the platform style structure that we see in other names such as [indiscernible], for example, to manage your growing brand portfolio? are you getting an information from those kind of companies?

Not really. I mean, obviously, we look at other groups, how they do, but I think we will try to do it our own way. And I think it is really what we -- what I'm saying here, we really want to make sure that the brand identity, positioning, the way of working, the knowledge for the brands really stays within the different brands and also very important culturally. There is a -- we really -- we like the entrepreneurial spirit that we see in both companies and the passion for both building companies and the brands. And that's something we really want to keep and capitalize on. I think it's extremely important to keep that not swamp that with integration projects and trying to build something corporate. So making sure that they just continue to do what they do today is sort of the short answer.

Perfect. And final question. I don't know if you answered that already, but looking at the balance sheet of Icaniwill, I mean, this acquisition seems to bring quite a high amount of goodwill, I assume. And given the differences in accounting standards in specific the impact of goodwill amortization under K3 versus IFRS treatment, how should we think about the normalized EBIT margin going forward for Icaniwill?

Bear in mind that when we consolidate Icaniwill, that will be subject to our IFRS reporting. So the -- there will be -- we'll get back on the purchase price allocation, obviously. But as you note, a significant part will be related to intangible assets, including goodwill. And under IFRS, there are no depreciation outcome.

The next question comes from Benjamin Wahlstedt from ABGSC.

Just final bookkeeping question again. Do you expect any one-offs in relation to this acquisition?

Of course, there will be transaction costs that will be recorded as one-off costs, and those will get back to in connection with the report for our first quarter, but that is transaction-related costs, yes.

The next question comes from Oscar Mathison from Lunsenvest.

Could you talk a little bit more about the market dynamics where Icaniwill operate. You talked a little bit about the fashion sensitivity and such, but how does the competitive landscape compared to the other markets you are currently active in?

Yes. Yes. So first of all, the market size and the total addressable market is, as I mentioned, significantly bigger than the outdoor market. So combined, we increase our total addressable market. And that, we also see that it's more competitive within sports than it is within outdoor or I can say there are more companies competing in that bigger market. But we have already -- we are already competing in a competitive landscape with RevolutionRace. And for us, there is components that is important. It's the unmatched value concept, but also the way we -- our go-to-market strategy, which is very much based on community and the digital D2C marketing strategy.

And that is something that Icaniwill is doing as well. They sort of use the same method, and we look forward to sort of insert our D2C playbook into that. So we believe that even though -- so market is bigger, it's also more competitive. But having said that, we think we have a good way really differentiate the concept in that competitive market with the community strategy that we have already seen is working very well. If you look at the positioning of Icaniwill in that market when it comes to products and they are very much focused on function, functional material, functional use, functional performance and functional, I would say, try to be much more focused on functional and performance rather than fashion and trends compared to some of the other players in the industry.

Understood. And just a final question. What kind of leverage ratio are you comfortable with going forward? Have you communicated anything about that?

On the slide on key transaction highlights, we've indicated a bank net debt to EBITDA as per combined entities at the end of our Q3, which was March, which is our latest report, we indicate a leverage of 0.3. So we still believe we have a very conservative balance sheet, and we have a strong combined cash flow generation capacity. So looking forward, I think we'll be able to return to what we've discussed previously of having a net debt or a net cash position around nil. So that is what we look forward to returning to. We conclude that it's not stretched at the moment and we'll return to the conservative levels that we're used to.

Are you comfortable increasing it even further, like if you're continuing with buybacks, dividends and find another acquisition?

So noting the dividend policy of distributing 40% to 60% of net profits, that is unchanged. Buybacks, which has been a primary use of capital in the capital allocation previously is still on -- in the toolbox. We will apply some long-term financial stability in relation to the buybacks and the planning going forward with the aim of the same aim as we've had before of having net cash of around 0. But it's definitely still part of the toolbox for capital allocation.

The next question comes from Kristian Smolle from Pareto Securities.

Just one question from my side. So regarding the Icaniwill mix effects here. So are there any similarities with your own portfolio in terms of certain categories, products or geographies having different mix profiles?

And with mix, you mean product mix or gender mix or...

Sorry, so profitability mix.

Okay. As we discussed previously, the P&L structure, if we look at it from an overall perspective, is fairly similar to that of RevolutionRace historically. And obviously, there are always going to be differences on individual markets or products due to specific criteria. But in general, it looks pretty similar, and we'll get back to that going forward, obviously.

There are no more phone questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, operator. And before we finish up, let's see if there are any questions online that we have received. I'll ask Jesper to read the question and see who can answer it.

Yes. So we've received a couple of online questions, and they tie into parts of the discussions before, but I'll go through them anyway. The first one comes from Von Partners. Are you trying to realize any synergies in sourcing, logistics, IT and sales and also thinking about selling all the brands on all websites and physical stores, for example?

So I think I've partly answered that before when it comes to synergies and the answer there is that the companies will continue to operate stand-alone to a very large extent, but it could be areas, for example, negotiating with joint bigger volumes could be favorable. We don't have a plan to mix the brands on the different sites. And that sort of ties into that the companies should continue to do what they do today and not disrupt or dilute brand identity or brand positioning. I think that is extremely important to continue with that.

So Okay. And next question comes from Lance in Stockholm. Now that you have more than one brand within the group, do you see Amer Sports as a role model given that they are valued significantly higher than their competitors?

No, I think I mentioned that before that we look at many other groups in the industry. And whether you like it or not, you're always inspired of things that you see. But I think our answer is that we want to do it our way. And this is our first acquisition. We have now added M&A into our strategies. I think we simply have to organically grow into that strategy and see where we are in a couple of years. But the answer now is that we have RVRC Holding in the group, and then we have 2 subsidiaries that will continue to operate as they do today on a stand-alone basis.

And then final questions online from [indiscernible]. The shareholder structure of icaniwill before the deal, if we can comment on that.

It was owners, mainly Swedish owners, but combination of private and entities such as one fund, but also other investment -- Swedish investment companies, so a combination. And the combination of people working in the company, roughly 25%, 30% and the remaining part of the sellers were more financial sellers.

So a diverse shareholder base of around 10 names, funds, individuals, family offices and founders. Exactly. Yes. That concludes the online questions as well and as...

Yes. So thank you. To close, today and yesterday when we signed was an important milestone for RevolutionRace and for Icaniwill . We now very much look forward to partner up with Icaniwill and the whole Icaniwill team, which we are very impressed by. And so we look forward to working together with them. And for everybody who listened in, thank you all for joining us today and for your continued interest in RevolutionRace and now also interest in Icaniwill.

And before we finish, I also remind you that we have an earnings call at the announcement of our Q4 and full year report. and maybe we'll be answered to answer some of the questions that has been addressed today. And that is on August 11. So with that, thank you. Goodbye, and have a good summer.

Thank you. Bye-bye.

Welcome to the RevolutionRace Q3 2025-'26 Presentation. [Operator Instructions] Now I will hand the conference over to the CEO, Paul Fischbein; and CFO, Jesper Alm. Please go ahead.

Welcome to this conference call where we will address the report for the third quarter of the financial year 2025 and '26. Our financial year starts the 1st of July and ends 30th of June. So Q3 means the period from January 1 to March 31.

My name is Paul Fischbein, and I am the CEO of RevolutionRace. And joining me today for this conference call, I have the company's CFO, Jesper Alm. And for those of you who are new to the RevolutionRace story, I will start by giving you a brief introduction.

RevolutionRace is an international outdoor brand offering outdoor products, mainly clothing, but also shoes, bag and other outdoor products. Everything started with pants and that category is still the largest product category. We operate with a D2C business model, meaning that we skip the middlemen and sell our products directly to our customers. And we do this mainly via our own website, but also through marketplaces such as Amazon. And with our D2C business model, which is important to understand, we can secure our competitive offering and at the same time, also maintain industry-leading margins.

As a digital player, our brand is very much built together with our community on social media. Today, we have 2.4 million followers and over -- on the social media platforms and over 800,000 reviews on our website. And the company, RevolutionRace was founded in 2013 and launched in 2014, and we have been listed on Nasdaq Stockholm since June 2021.

If we continue, this picture illustrates our international presence. We have today customers in around 40 countries with 19 localized webshops. However, we do focus our efforts in 10 countries in Europe and also on top of that, operate 3 physical stores in Sweden. We design all our products in-house and work together with more than 25 suppliers for the production in Asia.

Now let's take a look at the performance and sales development for the third quarter. Net sales for the third quarter amounted to SEK 487 million, resulting in growth of 5% in local currencies compared to last year. Despite the continued uncertain market environment, we continue to gain market shares and strengthen our market positions in many markets.

During the quarter, net sales, margins and earnings, they were negatively affected by FX as the majority of our sales are generated in currencies other than SEK. That's around 75% to 80% is generated in euro, while we report -- the reporting currency is Swedish krona. And at the same time, gross margin improved, which is partly related to the weaker U.S. dollar versus the Swedish krona.

Let's have a look at the net sales development by region, looking at DACH. Sales increased by 7% in local currencies. Austria and Switzerland continued to perform very well and grew more than Germany, and Austria was our third largest market in the quarter.

In Germany, which is our largest and most important market, we continue to grow, strengthen our market position, but also note signs of overall weaker consumer confidence.

In the Nordics, sales increased by 6% in local currencies, and Sweden, the biggest country in the Nordics -- Nordic region, grew by 12%. And in the mature -- we believe Sweden is a mature market. We see this as a clear sign of strength.

And in the Rest of the World region, sales decreased by 4% in local currencies. But bear in mind that sales in U.S. peaked during Q3 last year and have since then been negatively affected by changing market conditions, including tariffs. And if we, in fact, exclude North America, the Rest of the World region would have grown instead by 2% in local currencies. And for the total group, sales would have increased by 6% if we include -- exclude North America.

The quarter been eventful. And during the quarter, we completed the relocation of our Nordic warehouse operations to a new automated logistics center just north of Stockholm in Sweden. This new warehouse will make it possible to facilitate and handle higher future volumes, and it also strengthens our customer promise and lays a good foundation for continued future growth. The relocation was carried out without any major disruption to operations, apart from some temporary impact on product availability during a few days. And I would like to take the opportunity here to thank our staff and partners for a very well-executed project.

Let me now also move on to product development and our latest launches. We continue to develop and broaden our product range, driven by customer feedback and with the aim of creating more opportunities for continued sales growth. During the quarter, we further developed and expanded the Nordwand series. These are our best-selling pants. The updates include an improved fit, some additional models and a broader range of lengths, and early feedback from customers have been very positive.

We also launched our first dedicated cycling collection covering everything from mountain biking to road cycling and our Alpine category, which we launched a few years ago, continued to develop well. Sales remained strong during the recent season, and we see good potential for continued growth in the coming seasons.

Let's continue to look a little bit closer at the third quarter. We continue, as I said, to combine growth with high profitability and again, show that we are one of the most profitable players in the outdoor industry. Adjusted EBIT in the quarter amounted to SEK 105 million. This corresponds to an adjusted EBIT margin of 21.4%, and this is in line with our target to maintain 20% EBIT margin.

Gross margin for the quarter was 71%. And as we have said earlier, we saw negative currency effects compared to last year from the stronger Swedish krona as most of our revenues are generated in other currencies, while we at the same time report in SEK. But at the same time, a weaker U.S. dollar has had a positive impact on purchasing costs, and we continue to have a positive view on the development of the gross margin in the coming quarters.

We continue to have a strong financial position with a net cash position of SEK 351 million and the SEK 600 million credit facility, which was unutilized at the end of the quarter. During the quarter, we received SEK 56 million in cash from the exercise of warrants under our incentive program. And we also continued with our share repurchases program, repurchasing shares for SEK 62 million in the quarter. So -- and we maintain a long-term approach to the share repurchase program.

If we continue, we can -- we note that in April, we opened our third store, this time in Haparanda, just on the border between Sweden and Finland. And just after some weeks, we can say that the store is outperforming our expectations, and we will continue to selectively look for more store opportunities also outside of Sweden. But we will come back when we have more news on this topic.

And with that, I would like to hand over to the company's CFO, Jesper Alm, who will present and walk through the financial performance. So with that, Jesper, please go ahead.

Well, thank you, Paul, and good morning, everyone. I will briefly cover the financial performance during the third quarter of the financial year '25-'26. Starting with gross profit, which amounted to SEK 345 million for the quarter compared to SEK 337 million a year ago, and this equals a gross margin of 71% compared to 69.4% last year. The slight increase in gross margin is mainly attributable to currency effects on net sales and goods for resale and product mix.

Personnel expenses are slightly higher compared to the same quarter last year, and the number of full-time equivalents was 145 compared to 132 last year. The increase includes 6 full-time equivalents for our retail operations. Personnel expenses as share of net sales were higher than last year.

Other external expenses were SEK 204 million compared to last year of SEK 200 million. And as a share of net sales of around 42%, the number was approximately in line with that of last year.

Adjusted EBIT for the quarter amounted to SEK 105 million compared to SEK 101 million a year ago. And EBIT for the quarter amounted to SEK 105 million, same as adjusted, but compared to SEK 80 million a year ago. And this translates to an adjusted EBIT margin of 21.4%, and it was 20.8% last year as well as an EBIT margin of 21.4%, the same, obviously, and compared to 16.4% last year. Adjusted EBIT last 12 months amounts to SEK 422 million, and the adjusted EBIT margin LTM is 21%, so above the financial target of 20%.

The balance sheet remains stable, no news really. Major changes within current assets with lower inventory and higher amount of cash and cash equivalents. The financial position is strong, and we have a solid cash position of SEK 368 million at quarter end, or a net cash position of SEK 351 million when adjusting for lease liabilities of SEK 17 million. Credit facility, SEK 600 million is available and undrawn.

Cash flow from operating activities came in at SEK 18 million, and that should be compared to a negative SEK 110 million for the same period last year.

Inventory amounts to SEK 409 million, of which SEK 369 million was goods in warehouse compared to SEK 543 million a year ago. Goods in transit has decreased from SEK 38 million last year to SEK 21 million this -- yes, to SEK 21 million.

To mitigate the delivery risk in uncertain environment and to maintain a balanced inventory position, we assess that inventory levels will need to increase somewhat from current levels. Net working capital decreased to SEK 148 million compared to SEK 295 million a year ago, and this is primarily driven by lower inventory levels.

We continued our repurchasing of shares in line with the AGM mandate during the quarter, acquiring shares for a total of SEK 62 million, and this brings the repurchase amount to a total of SEK 90 million under the current mandate of SEK 200 million. The current holding of treasury shares amount to 1.6 million shares, and that is equivalent to 1.4% of outstanding shares.

And with that, it's over and out for me. Paul?

Thank you, Jesper. So to sum things up, we have shown over the years and in this quarter that we can continue to grow even in challenging market conditions with an industry-leading profitability. We -- a competitive outdoor offering, combining high quality with attractive prices, we are in a strong position. We have also a strong financial position and a loyal customer base, which gives us a solid foundation for continued profitable growth over time. And we note also continued sales growth during the first weeks of April.

And that concludes our comments on the result. Before we finish, I would like to thank everyone who has contributed to our performance during the quarter, that includes our employees, customers, partners and shareholders.

And with that, we are now happy to answer questions. I ask the operator, do we have any questions?

[Operator Instructions] The next question comes from Emanuel Jansson from Danske Bank.

A couple of questions from my side. And starting off with the market development and your sales performance. I wonder if you can maybe give us perhaps some view on the trend during the quarter, if you go by month-by-month, if you could shed some light there?

Yes, I can do that, Emanuel. On a high level, well, first of all, you can see that it differs between markets with Sweden standing out with strong performance and even stronger in Austria and Switzerland. Looking at the quarter month-over-month, I would say January and also February, they were pretty strong. March in terms of growth was lower, also based on the fact that comps were a bit higher because March last year was very strong. We had somewhat an opposite scenario with a weaker January, February, but a very strong March. So -- but growth-wise, January, February was stronger than March. And also, we just -- we saw that same pattern in Germany. And obviously, the development in Germany has a big impact on the total group development and performance as it accounts for a little bit more than 50% of total sales. So both in total and in Germany, January, February, stronger. March growth-wise a little bit weaker, but still growing.

And would you say that compared to the end of 2025, which you finished off in a strong manner, would you say that the underlying market is weaker now than your -- than what you saw in your [ Q2 ] report?

Well, Germany, it's hard to say where it is on an overall perspective. Again, Sweden and Austria, our second and third biggest market, continues to show very strong development continuously. So we don't see any weaker signs there really. But in Germany, I think it's -- it is clear that we only saw 5% growth in Germany. I mean we are still growing market share, and we are very confident about that when we look at reports from industry colleagues and also some reports in the market. But yes, it is a lower growth number compared to the second -- our second quarter, that is clear. But we believe that 5% is still okay in such a big market and uncertain market situation.

But would you say that the impact on Germany in March is more driven by the tough comparable rather than a weak -- weaker market, you would say?

I think it's a combination. We do see external reports saying that the market is a bit weaker. And -- But we also know that March last year was very strong, especially in Germany, so -- for us at least. So I think it's somewhat a combination.

Okay. Perfect. And just looking into your Q4 report where you mentioned that you are seeing growth in April so far. Just looking at Q4 last year, we saw negative organic sales growth for Germany during that quarter. Would you say that perhaps the comparable base is slightly easier compared to what we experienced in March, something?

I don't -- we don't know what to answer on that question. I mean we normally -- we are using the same wording that we have used before. We don't want to guide. We want to disclose what we see and what we know. And I think it's up to every reader to interpret whether last year was a bit weaker or not. But in -- compared to last year, we see growth and continued growth in the first weeks of April.

Okay. Great. And looking at Sweden, as you mentioned, 12% organic growth in this market is a solid figure. What do you think is -- what is driving that growth during the quarter?

Yes. I think I mentioned before, I think that looking at the overall picture, I think we have a very strong customer offering. We are growing 12% in a market that we believe is somewhat stronger if you -- Sweden is -- it looks like the underlying market is somewhat stronger than in Germany. So maybe it is that -- we are very well positioned in many markets, including Sweden and Germany. But since the market is weaker in Germany for the moment, that is at least what we can see, I don't think that we are that far off from sort of growing market shares, both in Sweden and in Germany with sort of the same percentage.

So I -- it looks like Sweden is marketwise a bit stronger than Germany. I think that could be one explanation. But overall, I think we are positioned very well in the market with our unmatched offering -- unmatched value offering. And I think that will be -- that will pay off also going forward.

Perfect. And I assume also partly driven by quite favorable weather conditions. I know that you don't often talk about weather, or you don't like to talk about weather that much, but I assume that January and February was quite favorable in the Nordics and...

Yes, well -- Sorry, please.

Yes, no, no, continue, it's okay.

The thing is weather-wise, I think weather from a seasonality perspective, for us, I think that it's a little bit more important in the first quarter when summer shifts to fall. Then we often see clear shift of sales when you see a weather shift. I would -- I mean, it was a warm Q2 and somewhat a colder Q3. We have -- we are operating in many markets. Obviously, it was a bit colder in Sweden and in the Nordics.

However, if you look at our assortment, it's not a huge winter assortment if you sort of look at the number of winter jackets and down jackets in our assortment. So it could play a role, but -- and I don't want to downplay the role, but I don't think that we are that exposed to weather. And that's why I don't want to talk so much weather in this quarter as we maybe normally do in the Q1 because it's much, much more important when we go from summer to fall sales.

Fair enough for -- And you're mentioning the product expansion and you're highlighting Alpine collection. I know that for the previous season, you ended up around SEK 100 million in turnover. Is it possible to quantify what you ended up after this season for revenue?

Yes. And bear in mind that the full Alpine season is not only this quarter. It's -- yes, starts in Q2 roughly. But on a high-level basis, I can definitely -- I can disclose that it's plus 50% growth for the last -- the season that we just finished compared to before -- the year before. So that would be at least...

Perfect.

The north of SEK 151 million.

Perfect.

Without going into too much detail.

That sounds promising at least. And looking at...

It's promising. May I also add that we actually launched in the same season the cross-country collection, it's smaller volumes, but it was a successful launch. And this quarter, we launched a cycling collection. It's still small volumes. We do -- we are prudent when we launch new collections, it's sort of a dip our toe strategy, but it's more or less sold out after a couple of weeks. So we see promising starts of also other collections sort of related to the Alpine collection. So that's very promising for the future.

Perfect. And would you attribute the product launches and the update of the Nordwand plant, is that what's primarily driving the sales growth in Sweden? Or is it core or legacy products?

No, that's -- we have launched the updated Nordwand collection in all markets.

Perfect. And the final question, improvement on the gross margin from some tailwinds due to FX, is it fair to assume that this will continue throughout the year?

Well, we -- everything else equal, we see a positive impact going forward from the lower USD that we've filled up the inventory with. Everything else equals, the major impact short term is always how the euro develops versus the SEK. But if that remains stable, yes, we will see -- we should see a positive impact on the gross margin going forward. And then we obviously have product mix and market mix and campaign pressure. But yes, we are hopeful on the gross margin development going forward.

Perfect. And maybe just besides of FX, the situation in the Middle East, have you seen any impact yet on your operations and demand and so on?

We haven't seen any direct impact. But we're obviously close to the matter. We do expect to see delays in inbound. We do -- we wouldn't be surprised if there are fuel surcharges on inbound. So we're close to the matter. Indirect effects are likely, but still limited.

May I just add that, I mean, cost is one component. And as Jesper mentioned, lead time is also something that we are looking close at so that we get deliveries into our warehouses in time for peak season. So that's obviously something that we are working very active with. We haven't seen anything yet, small changes, but something to be close.

And then obviously, one thing that -- relating to that matter that is harder to estimate is the impact on consumer sentiment. And we saw a deteriorating consumer sentiment in Germany during March, and that coincides with developments in the Middle East. It's difficult to say. It's difficult to believe that the situation has had a positive impact on consumer sentiment overall.

The next question comes from Fredrik Ivarsson from ABG.

This is Fredrik from ABG for Benjamin. I have a few questions as well. First, if I can follow up on the gross margin. Obviously, you talked about FX being the main driver and then you also mentioned mix in terms of categories and markets. But could you maybe give us some kind of indication of how much of the expansion was driven by FX? Was it more than 1/2 or 2/3, or some more quantifications on that would be helpful.

The USD component is likely between 1/3 and 1/2 of the improvement.

1/3 and 1/2Okay. And you said a similar impact in the coming -- at least coming quarter, all else equal?

Isolated to the USD disregarding the other factors that may -- that we don't know yet because that's the U.S. development, et cetera. But yes, it should improve gradually, yes.

Perfect. And then on the AOV that was down a little bit in the quarter, can you talk about the key drivers apart from FX, of course?

And -- you mentioned FX, that is the main driver. But other than that, it's primarily a product mix.

Okay. And could you elaborate on that mix, which sort of categories did sell more with a lower margin?

So the margin is not included in the AOV. It's the basket...

I'm sorry, [indiscernible] -- AOV, I mean.

Yes. So when we set the FX component aside, there are small differences to the same -- the AOV of last year. So I don't have the details on exact product mix development. But the FX, you see the organic growth or the currency sale -- local currency development is the proxy for how that affected AOV as well.

Yes. That's fair. And last question from me. You mentioned some availability effects from the warehouse move. Is that lost sales worth quantifying? Or is it basically insignificant?

It depends on how we define insignificant. But during the move, which was executed very well, there were a couple of days with some of the products literally on the road, being moved. So obviously, they were not available for sales. If we want to quantify it, I would estimate a couple of million maybe, but single digit, so not more than that in lost sales. So we are not going to use it as some sort of excuse or something. But on the margin, it has some sort of impact.

The next question comes from Andreas Lundberg from SEB.

On the last question, if I ask about the inventory instead, you have a relatively low inventory now. Is that having an impact on top line? And how do you think about the inventory right now?

Andreas, so I think Jesper mentioned that in his script that, yes, it's a low -- I would even say low peak of inventory. We do estimate and plan for increasing the inventory over the upcoming months and quarters, especially now entering -- after the summer entering peak season, one can expect definitely inventory to go up. So whether it has -- so many of the sort of important products that were meant to be sold out, such as winter jackets, Alpine, have been sold out, which is a very positive problem. Was that a -- did that create availability sort of issue? No, not really. But obviously, we had higher inventory last year, so made it possible to -- maybe it had a somewhat positive impact on sales as well.

But we are fairly satisfied with the size of the inventory now going out of the peak season, and also the composition of the inventory, it's very fresh and a lot of -- mainly composed of high runners and the running assortment as we define it and -- or call it. So it's a bit lower. We expect to gradually increase from here, also obviously helping availability somewhat.

But was it a deliberate decision by you to have this kind of level on the inventory?

Sorry?

That was your decision to have such low inventory, so to say?

Well, yes, you can argue that we have now a very fresh inventory going into the -- in delivery season of new product. So we are pretty satisfied with the inventory composition for the moment. But it will definitely grow from here.

Cool. And then one thing on the -- actually the strategy. Now the markets have been tough for quite some time. You will still prioritize profitability, right? Or how is your thinking about spending money on marketing versus keeping a high profitability and so forth?

Yes. We have 2 targets basically and I think it's always a question of balancing them. It's a growth target of 20% annually. We haven't been there for some time. But at the same time, we have a target of maintaining an EBIT margin of 20%. And looking at the last 12 months, we are at 21%. So we're definitely delivering on that target.

One can always argue why don't we invest more in marketing, for example, and sort of decrease the margin in order to increase market shares faster. I think we're in it for the long-term. It's not the question of maximizing sales in 1 month or in 1 quarter. I think it's important to stay disciplined. We want to make sure that all the orders are profitable. And I think finding the balance is the trick here.

Right. I mean it can make sense to -- I mean, as you have now 5%, 10% growth, keeping high profits and then doing buybacks. And speaking of buybacks, you have some SEK 100 million plus remaining on the current mandate, Jesper, how is that, the figure?

That is correct. We were given a mandate by the AGM and then by the Board of SEK 200 million in November. We have executed SEK 90 million of those SEK 200 million. So SEK 110 million to go up until the AGM planned for November in this year. So, yes, on track.

That SEK 50 million per quarter, is that a reasonable run rate, you say or...?

Yes, well...

[indiscernible]

If you split the SEK 200 million mandates on 4 quarters, you end up with that rough number, obviously, yes. So it's hard to argue.

I haven't changed your thinking about running at a shorter net cash, but much smaller net cash position than you currently sit on.

Well, we're aware of the situation with the problem of an increasing cash position. But we remain with the previous statement that we want to be in a net cash position, but not necessarily as big as it is now, and we will continue -- our view is obviously to continue distributing this to shareholders via dividends and buybacks.

And I can also add, I mean, since the IPO 5 years ago, we have been able to increase dividend annually, and we hope to continue to do that. And on top of that also, but in the range of 40% to 60%, which is the dividend policy. And on top of that, we have a long-term view on the buyback program. So again, I -- we believe that that's a very balanced approach to what we operationally should deliver, but also in the perspective of distribution to shareholders. So we find this whole package as a very balanced approach to how to generate value over time.

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

And thank you, operator, and we also note that we have no further questions online. So with that, I would like to thank you all for joining us today and for your interest in our journey. And may I also remind you that the report for the fourth quarter and the full year -- full financial year will be announced on August 11. So with that, thank you, and goodbye.

Welcome to the RevolutionRace Q2 presentation. [Operator Instructions] Now I will hand the conference over to the CEO, Paul Fischbein; and CFO, Jesper Alm. Please go ahead.

Thank you, operator, and good morning, everyone, and welcome to this conference call, where we will address the report for the second quarter of the financial year 2025 and 2026. And our financial year starts 1st of July and ends the 30th of June. So Q2 means the period from October 1 to December 31.

My name is Paul Fischbein, and I am the CEO of RevolutionRace. And joining me for today's conference call, I have the company's Chief Financial Officer, Jesper Alm. For those of you who are new to the RevolutionRace story, I will start by giving you a brief introduction. RevolutionRace is an international outdoor brand offering outdoor products, mainly clothing, but also shoes, footwear, bags and other outdoor products.

Everything started with pants, and that category is still the largest product category. We operate with a B2C business model, and this is important to understand. It means that we skip the middleman and sell our products directly to consumers. We do this mainly via our own website, RevolutionRace, but also through, for example, marketplaces such as Amazon. And with our B2C business model, we can secure our competitive offering and at the same time, also maintain industry-leading margins. Going back, our brand was very much built on our community on social media platforms. And today, we have more than 2 million followers on those platforms and over 750,000 reviews on our site, product reviews.

RevolutionRace was founded in 2013 and launched in 2014, and we have been listed on NASDAQ Stockholm since 2021. Our headquarter is located in Sweden, and we have today approximately 140 employees. This picture illustrates our international presence. We have customers today in around 40 countries. We have 19 local web shops, including that we recently opened our Canadian site, and we also currently have 2 physical stores. We design all our products in-house in Sweden and work together with more than 25 suppliers for the production in Asia.

So, let's now take a look at our performance and net sales development in the quarter. Q2 is historically the biggest quarter, and we are very pleased to present a quarter with record sales and the strongest result in RevolutionRace's history. Net sales over the rolling 12 months, that means the full year 2025 passed for the first time SEK 2 billion, and that is, of course, a milestone for the company. Net sales in the second quarter amounted to SEK 726 million, resulting in sales growth of 11% in local currencies if you compare it with Q2 last year.

Despite the continued uncertain market environment, this means that we continue to gain market share, and we strengthen our market positions. During the quarter, net sales, margins and also earnings were negatively affected by currency effects. That follows a stronger Swedish krona as the majority of our sales are generated in other currencies than SEK. And for example, we have 75% to 80% of our sales in euro, while we are reporting the quarterly results in Swedish krona. On top of the underlying currency effects, in this quarter, we had a currency-related negative item of SEK 1 million compared to a positive item of SEK 5 million last year. So only here the difference amounts to SEK 6 million compared to last year.

So, all in all, we would, in fact, have an even higher profitability if you remove these currency effects when comparing with last year. Looking at the geographic split of sales, we delivered growth across all our 3 reporting regions during the quarter. Sales in our largest and most important region, the DACH region remained strong and increased by 14% in local currencies. Germany, our largest market grew by 11% in local currency, while sales in Austria and Switzerland continue to perform very well. In the Nordics, sales growth increased by 6% in local currencies.

And also yesterday, we saw the Swedish spot index data. It was published showing that outdoor sales in Sweden declined by 9.2% in the calendar fourth quarter. So, in contrast, our sales increased by 2% during the same period. And I think this clearly reflects our continued and significant market share gains. Sales in the Rest of the World region increased by 6% in local currencies. Excluding U.S., this rest of the world region would have grown by 10% in local currencies. And currently, we are not focusing on our U.S. sales since we are revisiting our logistics setup in order to match new tariff conditions, but we hope to be able to again focus on U.S. later this year.

Let's continue to look closer at the second quarter, and we continue to deliver strong industry-leading margins. And once again, we show our ability to combine growth with solid profitability even in a challenging market environment. Earnings grew faster than sales during the quarter and amounting to SEK 180 million, corresponding to an adjusted EBIT margin of 24.8%. Gross margin for the quarter was 69.8%. We saw negative currency effects from the stronger Swedish krona as most of our revenues are generated in other currencies, primarily euro, as I mentioned, while we report in SEK.

We can move on and look at cash flow. Cash flow from operations was strong in the quarter, amounting to SEK 360 million. We continue to maintain, as a result, a solid financial position with a net cash position of SEK 341 million. And that's actually despite having distributed dividends of SEK 143 million during the quarter. And on top of that, we also repurchased shares for SEK 39 million under our share repurchase mandate. So, all in all, we feel that we have a healthy position.

Looking also at some product development, we've continued to develop and expand our Alpine segment ahead of the winter season. But we have also launched new products, for example, for cross-country skiing and also winter running that has performed well in the beginning. These launches and our new premium collection, the Ultra Series that was also launched in the quarter have been well-received. And looking ahead to the coming quarters, we see further product development and launches that will strengthen the offering going into the spring season. One example of that is our best-selling auto plans, which are being updated with additional length options.

And with that, I would like to hand over now to the company's CFO, Jesper Alm, who will present and walk through the financial performance. Jesper, please go ahead.

Well, thank you, Paul, and good morning, everyone. I will briefly cover the financial performance during the second quarter of the financial year '25-'26. Gross profit amounted to SEK 506 million for the quarter compared to SEK 481 million a year ago, and this equals a gross margin of 69.8% compared to 70.3% last year.

The slight decrease in gross margin is mainly attributable to currency effects on net sales and goods for resale. Personnel expenses are slightly higher compared to the same quarter last year, and the number of full-time equivalents increased to 140 from 134 last year. The increase is mainly due to the hiring of staff for our physical stores, but personnel expenses as share of net sales were in line with those of the same quarter last year.

Other external expenses came in at SEK 287 million compared to last year of SEK 290 million, a slight decrease. And as a share of net sales, that was approximately 40% and obviously lower than last year.

Adjusted EBIT for the quarter amounted to SEK 180 million compared to SEK 162 million a year ago. And the EBIT amounted to SEK 177 million compared to SEK 158 million a year ago. This translates to an adjusted EBIT margin of 24.8% compared to the 23.6% last year and the EBIT margin at 24.4% versus 22.9%. The adjustment in this quarter of SEK 2 million is related to an AGM approved incentive program. And normally, Q2 is the only quarter where we have an adjustment.

The non favorable currency effect affecting reported sales and the gross margin had a corresponding impact on the operating profit and also noting a certain overrepresentation of SEK-denominated expenses. So, the underlying currency adjusted result has some upward potential compared to the reported. And adjusted EBIT for the last 12 months amounts to SEK 418 million.

As Paul said, the balance sheet remains stable. changes in line with seasonality. Net working capital decreased to SEK 81 million compared to SEK 118 million a year ago. And changes in net working capital is primarily driven by lower inventory levels and the decrease in current liabilities. The inventory amounts to SEK 494 million at quarter end of which SEK 378 million was goods in warehouse compared to a total of SEK 592 million a year ago.

Goods in transit has decreased from SEK 161 million to SEK 88 million. And ahead of the quarter, we carried out the planned inventory buildup to meet seasonally higher sales volumes, and we're now satisfied with the inventory levels.

Our financial position is strong, and we had a solid cash position of SEK 358 million at quarter end and a net cash position of SEK 341 million, adjusting for lease liabilities. The credit facility of SEK 600 million remains available and undrawn. Cash flow from operating activities came in at a strong SEK 360 million during the quarter, which means in conclusion that we have a strong financial position and are well prepared to manage ongoing market uncertainty while maintaining financial discipline and operational flexibility.

We aim to distribute 40% to 60% of net profit annually in accordance with the dividend policy. And as a result of the company's continued growth and strong financial position, the AGM in November, we sold on a dividend of SEK 1.35 per share for the previous financial year, which implies a growth of 13% compared to the dividend of SEK 1.20 a year ago. The dividend in total amounted to SEK 143 million. And in addition to the dividend paid, we continued repurchasing shares in line with the AGM mandate during the quarter, acquiring shares for a total of SEK 39 million. Also, in accordance with resolutions of the AGM, we canceled 3.8 million treasury shares, which corresponded to 3.5% of the total number of shares outstanding.

And with that, it's over and out for me, Paul.

Thank you, Jesper. So, to sum up, the market situation and also broader conditions remain uncertain. It's difficult to assess, but we believe that we are well prepared, have a strong business and a strong financial position. The outdoor market has been challenging in recent years. But during this time, we have shown that we have continued to strengthen our competitive position.

With our strong customer offering, the industry-leading margins, high customer satisfaction that gives us a solid foundation for continuing our profitable growth journey. And having said that, we can also say that we are pleased to report continued sales growth also during the first weeks of January.

And that concludes our comments on the results. And before we finish, I would like to thank everyone who has contributed to our performance during the quarter, includes employees, customers, important partners and also shareholders. And with that, we are now happy to answer questions. So we have a question to the operator. Do we have any questions?

[Operator Instructions] The next question comes from Emanuel Jansson from Danske Bank.

Hope you can hear me. A couple of questions from my side. First off, a really strong quarter. It's impressive to see growth across all regions, excluding U.S. And I know it's still early days into the reporting season. I think you have touched a little upon it, Paul, already, but we saw -- we saw Corp's number yesterday. But I wonder if you could maybe touch a little bit more on the broader market development in this quarter versus the previous one, how you think that has developed?

Yes, Emanuel. So yes, I'm sure you saw that also we received data from the Swedish Trade Association reporting the spot index data and also they disclosed the performance of the outdoor industry. And we have now -- we have seen over the last 3, 4 years, almost every quarter a decline. I think the calendar Q2 was actually an exception where we saw an increase in the market. It is difficult to estimate where the market will go from here. We can say that in Sweden, we had lower growth actually compared to many of our other markets. So, it seems that Sweden continues to be tough. We had only 2% growth in Sweden, but compared to the spot index data, it was down 9%. So, you can argue that we are actually growing by roughly 11% in Sweden compared to the market.

We see on an overall basis that we continue to grow in January. That is what we are disclosing today. We don't provide any guidance. And as I also mentioned, the world, it's very difficult to sort of assess where the market will head from now. And we also, on top of that, we operate in so many markets. And I guess you also saw some data from Germany, for example, reflecting the market performance in Germany in December. They were also pretty weak. So hopefully, it will turn around and be stronger. But having said that, for us, we believe that we are very well-positioned. We feel that also in tough market conditions, we have a strong offering. And I think we have been showing for some time that we can also grow in tough times.

Following up on that, how did momentum look on a month-to-month basis for you? And were there any specific markets that stood out as particularly strong performance during this time period?

Market-wise, I would say that we have 2 markets really standing out, and that is within the DACH region. Switzerland and Austria are performing very well, both delivering 20% plus growth in this quarter also. So that is very promising to see. It seems that we have a very strong -- we have strong momentum in the whole DACH region. Germany, of course, being the biggest market still. And it's -- for us, it's the highest population, biggest market. But Austria is getting closer to more structural becoming one of the top 3, 4 countries. And in total, and Switzerland is, in fact, the country with the highest growth of the sort of focus markets that we have. So both we can sort of -- can highlight those 2 markets as very strong performing markets.

And considering that we had a fairly mild winter here in the Nordics, at least, I'm curious about the Alpine Collection that you mentioned. It was such a hit last year. How has that performed this time around? And are there any other categories that you would like to highlight? And I also assume that the cold weather in the start of January is not negative for you, right?

Yes, it shouldn't be negative, of course. We enjoy cold weather, business-wise. As you say, it was a bit mild, at least in Sweden, but also in Europe during the Q2. I think a colder winter would have been more favorable. But we have seen some lower temperatures and more snow in January. However, the Alpine Collection is maybe not -- I mean, it is, of course, weather related, but not maybe as weather related as sort of other winter jackets because Alpine Collection is more correlated to people traveling to the Alpine resorts rather than temperature. So maybe not that high correlation with the weather for that specific segment.

What we can say is that this is the third season that we have specific Alpine Collection. First year, we had sales of roughly for season, I would say, because the season goes into the current quarter as well. And we saw sales first year after launch of around SEK 30 million. Second year last year, it was around, if I remember correctly, SEK 100 million plus. And we see growth in this season also compared to last year. So that also looks promising. But the season is not over yet, so to speak, when it comes to the Alpine. It goes into February as well.

And I think you also mentioned it slightly, but also now that we are a quarter down the road, is there anything else you want to add to the reception of the Ultra series?

I think it has been well received. It has been well received. It was a good launch. However, it is volume-wise in relation to our total sales, it's a small collection. It was more a brand-related launch. So, I don't think that one should financially expect that collection to have a big impact on total sales. But hopefully, long-term, it will have a bigger impact on brand, and we can show the customers and the market that we are also able to produce products that can be used in tougher conditions, even more premium material, more minimalistic design and so on. So, it was more a project of stretching the brand and maybe one should not short-term expect big impact on numbers from that collection.

And regarding your OpEx and cost control, you have clearly have a solid grip on your cost base here. And I'm guessing there's some improved efficiency in your marketing activities. Do you see this level of cost control as sustainable moving forward? I mean, also now launching new products and product categories and also, you're seeing high growth again in the rest of the world. I assume that you will need to put some more effort into marketing as well. Or how should we view it going forward?

Yes, we have seen, I think we mentioned that in the Q1 report, and we see that also in this report that we have been able to see higher efficiency when it comes to marketing, and that is, of course, a big cost item in the P&L that is important. Our ambition is to always maintain cost efficiency across the line. But at the same time, also balance that we want to continue to grow market position and continue to grow our top line and sales. And we have a target to maintain and operate with an EBIT margin of 20% on an annual basis. So, you can argue that the business model is scalable. But if we can just maintain that, that will indirectly mean that we sort of continue to invest in growing the business at the same time.

And last question from my side. And last but not least as well, I mean, Haparanda might not have been the first place on everyone's radar for a new store opening. What was the logic behind choosing that specific location?

It's actually pretty simple. If we look at our heat map on where we have highest sales per capita actually in the world, in Europe, we have highest numbers in the northern part of Sweden and in the northern part of Finland. So that is actually the area where we have the highest degree of popularity and highest market share. So even though the population is, of course, smaller than in big cities or big areas, we were offered an opportunity. And yes, we choose to sign a lease agreement based on that opportunity, which we feel were pretty competitive and interesting. And we know that it is just on the border between Sweden and Finland, and there's actually a lot of business being done in that area. It is a store -- neighbor with another big store called IKEA and the other neighbor is some what I call Sustainable Ag. So, we feel that it is a very interesting location also.

Yes, really, really interesting. And I assume also given that you open up another new store that the first 2 are developing quite good.

Yes, we are very satisfied with the opening of both outlet store and the brand store in Stockholm that was actually opened in this quarter as well. So, it has been a very promising start. And I think I mentioned the last time we took a quarterly call that we are evaluating more retail opportunities. We do believe that it adds value as a complement to our e-commerce business. And so, I think one can expect a couple of more stores over the upcoming years to be opened. Having said that, e-commerce is definitely our main channel.

The next question comes from Victor Hansen from DNB Carnegie.

A couple of questions from my side. Firstly, Germany. So, the market data has been quite weak for Q2, while you posted impressive double-digit growth. So, I'm wondering if you could give us some more flavor on what's driving your growth here in Germany. Any silver bullets?

Unfortunately, not. I think it boils down to a lot of details and well execution in operations and hard work, good team, strong team. But I think that we simply have a very competitive offering. that seems to be very appealing to the German market, but also Austria and Switzerland. And we continue to have a good momentum in Germany, while we at the same time, see that the market conditions are a bit challenging in Germany for sure. So, no silver bullet, more hard work going to the office every day, doing more or less the same thing and try to do it better and better every day.

Understood. If we switch over to orders, it grew 6%, while your average order values were flat, which means up 5% adjusted for FX. I'm wondering how you want to prioritize between these 2 items going forward, AOV and order growth.

First of all, we have to recognize that the AOV that we present is in SEK. So, you have an underlying growth in euro, which is the predominant currency for orders late or orders put during the quarter. Obviously, we want to increase sales both in terms of number of orders and always increase average order value. That is the primary driver of profitability. So, there is no difference between the 2 items. We want to grow both definitely. But bear in mind the difference between SEK average order value and the underlying euro average order value.

Final question for me. Also, a bit on the FX theme. So, the gross margin trend has been negative for 8 of the last 9 quarters if we look year-on-year. And this should partly be due to mix as well. In the report here, you again mentioned that the weaker U.S. dollar should support your product margins ahead. So, I'm wondering, will you invest this extra product margin in, for instance, price or marketing? Or should we expect your margins to improve from the weak dollar going forward?

I mean if I understand the question correctly, we don't base tactics of daily operation so much on currency fluctuations. It's that would add too much complexity to operations. I think currency movements or fluctuations is what it is, not something that we can control. I think that it's better that we focus on what we can control. Yes, we have seen that the gross margin is slightly lower than last year. It is mostly related to a lower euro as we report in SEK. But going forward, as you mentioned, we do expect the weaker U.S. dollar to come into effect. But that takes a longer time because you have to turn around the whole warehouse and it's also related to when we actually pay those invoices.

So, for example, we are now -- we have just finalized purchase orders for the autumn/winter season, and those products are expected to come into the warehouse late spring during the summer. And so, it takes time, and we -- the vast majority of the warehouse consists of products included in the running assortment. So those products are sort of specified as never out-of-stock product. So, it will take some time. But gradually, of course, we do expect that lower U.S. dollar to come into effect also into the gross margin, keeping everything else fixed.

The next question comes from Nicklas Skogman from Nordea.

Two questions. On the gross margin, I mean, if we think about the net benefit and filtering through when you have sort of the dollar weakness fully into your COGS and then the euro SEK not being as negative as it's been in the past couple of quarters, we're looking on Q4 -- your fiscal Q4 seeing a pretty big impact, correct way thinking?

Well, the U.S. dollar, I mean, that impacts our purchase cost. The gross margin is obviously impacted by other things such as market conditions, I don't know, price reductions, potential price reductions in the market. Euro is an important factor as we -- most of what we sell is in euro. Average order value is another -- and the basket composition, we have, for example, higher gross margins when it comes to pants compared to footwear. So, it also depends on how successful the different product categories perform. But I mean, keeping everything -- all other factors fixed, we can see today, for example, that the U.S. dollar in comparison to the SEK is almost 20% lower. So yes, that is obvious and that will affect the purchase cost if it remains at this level.

And that we have a continuous forward development on the currencies, which will continue affecting our top line and gross margin. So, we have a picture of what it is today. If the euro and the dollar develops in different directions going forward, that will obviously also have an impact. But underlying, we benefit from the U.S. dollar weakening more than the euro. But as you can imagine, it's extremely hard to guide on where the currency -- what that will mean.

I'm just thinking where we stand today, but that's good enough. On the gross margin topic, how is the sort of campaigning intensity now? Is it more than a year ago or less than a year ago?

I would say generally on the market, levels are more or less the same. However, we did see -- November is an important month during the quarter, and we did see some sort of shift during November. We saw that many of the players on a general basis actually were more active during the full November rather than only Black Friday and Black weekend or Black week. So, it was clear, and I think that can be also be confirmed from other verticals online that it has been more spread out during November. So that was a shift. However, the most aggressive campaigns were, yes, more or less in line with last year, not more, but not less.

All right. And then could you give some flavor on the Rest of World countries? I see you're growing there 10% in local currency if we strip out the U.S., which is obviously facing some challenges of its own.

Yes. I mean the biggest countries in that region, it is U.K., Netherlands and Poland, and that is also the markets where we focus the most. And what can we say about that performance? I mean, U.K. is also highly impacted by currency. But some -- Poland and also Netherlands are performing very well, almost in line with the Austrian growth in the quarter. So that is also promising.

And then lastly, going back to Switzerland, any insight into why it's going so well there?

One insight is more -- maybe more related to the popularity or the momentum we have in the other German-speaking countries, Austria and Germany is that if you deep dive into the Swiss business, it is clear that we are getting momentum, and we are seeing strong performance in the German-speaking part of Switzerland, but much lower -- or not so good performance in the French part of Switzerland. So that is an interesting reflection sort of confirming that we are strong in the German part of Europe.

There are no more questions at this time. So, I hand the conference back to the speakers for any written questions and closing comments.

And thank you, operator. Before we wrap up, let us see if we have received any questions online. And if we have, I will ask Jesper to read a question and then see who will answer.

Yes. We have received a few questions. So, we start from Medium Invest in Denmark. How do RVRC balance growth, marketing spend, and profitability? Basically, are we going to spend everything above the 20% EBIT margin on marketing and growth? Or would we increase EBIT margins if -- so how do we balance this mix?

Yes. I think the straight -- the short answer is that we want to -- we strive or we aim to grow 20%. That is an ambitious objective or ambitious target. We are not really there yet, but that goal -- that target was set under the assumption that the market should be somewhat normalized going 2%, 3%, 4% or something like that. So bearing that in mind, the 11% in local currencies is not that far away from those 20%. But also at the same time, balance investments in growth with maintaining the profitability level or adjusted EBIT margin of 20%. And looking at the last 12 months, we just passed SEK 2 billion and delivered an EBIT of SEK 400 million. So we are more or less spot on that annual target. So we are over sort of -- we are focusing investments in markets where we believe that we have -- still have strong growth opportunities, but at the same time. So yes, keep overinvesting some EBIT margin, you can say.

And we have another question from the same source on why the weakening U.S. dollar is not more visible in the gross margin, and we've discussed that. We also see the weakening euro. And obviously, the impact from the USD is delayed when we turn the entire inventory over. So given today's currency rates, we will see the impact going forward during the year. But then currencies are dynamic every day.

Yes. Thank you. Nothing to add there.

We have a question from SB1 Markets Norway. If we can share some insights on new upcoming product innovations and categories beyond the winter running cross-country skiing.

Yes. I think maybe one important example to highlight or to mention is that we will focus on -- when it comes to product development and further develop some of our best-performing products. One example is one of our best-selling outdoor pants are being updated with additional length options. I think that is -- that can have a good impact both for customer satisfaction and for sales that there has been a high demand for that for some years, and we've listened into that, and that is something that we will launch in the upcoming months. So continue to work regularly with new products, but also further develop existing product lines.

We have from the same source, a question on January sales. We have commented on that. So I asked that question. And then what is your view on the U.S. market going forward if tariffs on news on small packages from China actually be positive for competition, but U.S. going forward.

I mean, I can start by saying that the U.S. market is the biggest auto market in the world. Long-term, our ambition is to also get a position in that market. If we look back, we had good momentum after the launch in the U.S. We can all see a high interest in our, for example, social media follower base. So, we believe that U.S. is still a big opportunity for us. We had an infrastructure earlier, meaning that we could actually send products from Europe on an order-to-order basis. And after the new tariff situation, we had to readdress or revisit the logistical setup. But we -- our ambition is to get the new setup up maybe after the summer or something in a couple of months so that we can sort of start to push that button again. And I mean, tariff is not long-term necessarily a big problem for us because it will actually affect all the whole market and competition as well.

iSo, I think as long as everybody will be treated on an equal basis, I think it's boils down to us and other companies to find the right setup when it comes to the full supply chain. So, we are addressing it. It will take some time. But for sure, U.S. is a huge opportunity for us. And we have also seen just a year ago, a very high interest and good momentum in the U.S. market. So hopefully, we will come back, and that is also our ambition.

We've got another question also from Norway by the looks of it. If we could say something about the effect of AI, both with regard to internal efficiency and not least AI agents and the effect of those on shopping online.

Yes. We have a couple of AI projects that we are working on internally. And we have split them into -- well, 2 or 3 different buckets. One is, of course, sales related and making sure that we have high visibility on important platforms such as LLM platforms such as ChatGPT, Google AI. We also see that they are launching initiatives facilitating checkout on those platforms. That is something that we are looking into. But we have also launched a number of projects internally in order to increase our operational efficiency based on AI technology. So we have a SWAT team working on different kind of projects internally related to AI.

And then what appears to be the final questions, and I'll merge these coming from various Norwegian investors. It's a bit on the DACH region and not so much on Germany, but Switzerland and Austria, if we can share anything on the size of those 2 markets, the return rates in those markets compared to Germany. Yes, exactly. So a bit more detail on Austria and Switzerland compared to Germany.

Yes, size-wise, I think if I remember correctly, Germany has a population of 80 million; Austria, 10 million; Switzerland, 10 million. So in total, the DACH region is a market for us of around 100 million. Right now, we are not that big in the French-speaking areas of Switzerland. But you can argue that Austria and Sweden are pretty similar in terms of size. In terms of return rates, very high level, Germany is the market -- of the markets where we operate that we see the highest return rates. So both Austria and Switzerland have lower return rates compared to Germany. So I think that our performance and momentum in both Austria and Switzerland are promising and can also have significant impact going forward. So that's very promising.

And we understand that we have another question from the operator.

The next question comes from Benjamin Wahlstedt from ABGSC.

Sorry, I must have missed earlier. So I want to revisit one of, I believe, Emanuel's questions. Could you elaborate on the per month growth in Q2 or say anything about the intra-quarter momentum, please?

Yes, I can do that. I think growth-wise, slightly lower in October, but growth, and that is also something that we mentioned when we launched the latest results. But the months were pretty similar, slightly higher in November and maybe slightly, slightly lower growth in December compared to November, but no big deviations. I would say that this 11% was -- yes, it was pretty close intra-quarter as well. But slight differences, slightly lower in October, higher in November and slightly lower in December again.

All right. And sort of perhaps following on that question as well then. This is the second quarter in a row where you do not comment or give any sort of indication of the magnitude of growth. And while I appreciate that going into Q2, November is by far the biggest month, you might not necessarily tell us anything by commenting on October growth. Is that the case in calendar Q1 as well? Or why the change, so to speak?

Yes. The dynamics in the -- our third quarter or the calendar Q1 is pretty much the same actually. So we have the highest season in front of us. Normally, March is the best month of this quarter. In fact, historically, we have actually seen that March is the second biggest month during the -- for a full year. So that's one thing. But historically, we have never provided guidance. We have only disclosed what we know. And we -- I mean, looking back to what we said last time, we said, I think the same thing that we're saying today that we see growth. And as you can see, the -- what we are delivering today is 11%. But we don't provide guidance, but of course, that is something you can see that we have done before.

Finally, for me, have you been able to see any change in order volumes from the Stockholm region sort of after the Kungsgatan store opening?

If we have seen.

Is it possible to talk about the halo effect?

Not really. I think it's too early to call that. I think we have had a store open for 3 months. So maybe I'll have to come back on that. I simply don't have that data in front of me whether we can see that halo effect specifically in Stockholm in terms of order value.

Finally, I was wondering if you could elaborate on the inventory level. So, year-on-year, you're down 17%. And I was wondering what part of this can be explained by a soft dollar and what share can be explained by a lower sort of volume of garments?

I would say the majority can be explained by volumes. And I think we guided a couple of quarters ago that we -- one should expect the inventory to come down gradually, and that is what we have seen now. So now we are very satisfied with the size of the inventory and also the composition of the inventory. It was a bit high in order to facilitate even higher sales, but we were sort of we were -- even if it was a bit higher, we were always comfortable with the composition. And the reason is that 80% of our sales consists of products that we include in what we call the running assortment. So, we have a very low degree of high-risk trend-related products. So yes, but the answer is more volume-based rather than currency related.

Have you made any changes in how you stock products? I'm talking about like the number of colors or anything like that.

I mean, no big changes, but we, I think, mentioned always, we always try to optimize and be more efficient both when it comes to operations, but also inventory management, inventory planning and working with the full supply chain. So, no big changes rather -- it was rather than daily operations and daily optimizing.

So you're just leaner and meaner.

There are no more questions at this time. So, I hand the conference back to the speakers for closing comments.

Thank you, operator. So, with that last comment, I would like to say thank you all for joining us today and for your interest in our journey. May I also remind you that the report for our third quarter will be announced April 28. So, with that, thank you, and goodbye.

Welcome to the RevolutionRace Q1 presentation. [Operator Instructions]

Now I will hand the conference over to the CEO, Paul Fischbein; and CFO, Jesper Alm. Please go ahead.

Thank you, operator, and good morning, everyone, and welcome to this conference call where we will address the report for the first quarter of the fiscal year 2025, 2026. Our financial year starts 1st of July and ends the 30th of June. So Q1 means the period July 1 to September 30.

My name is Paul Fischbein, and I am the CEO of RevolutionRace. And joining me today for today's conference call, I have the company's CFO, Jesper Alm.

Before we jump into any numbers, for those of you who are new to the RevolutionRace story, I will start by giving you a brief intro to the company. RevolutionRace is an international outdoor brand, offering a wide range of outdoor products, mainly clothing, but also shoes, bags and other outdoor-related products. Everything started with pants and that product category is still the largest product category.

We operate with a D2C business model, meaning that we skip the middlemen and sell our products directly to our customers. We do this mainly via our own website, but also through marketplaces such as Amazon.

With our D2C business model, we can secure our competitive offering and at the same time, maintain industry-leading margins. We are a digital-first company, but we have recently also taken our first steps into physical retail. In April, we opened our first outlet store outside Stockholm in Sweden. And at the end of September, we also opened our brand store in Central Stockholm.

Historically, our brand was very much built with our community on social media platforms. And today, we have more than 2 million followers and over 740,000 reviews on our site.

RevolutionRace was founded in 2013 and launched in 2014, and we have been listed on NASDAQ Stockholm since 2021. Our headquarter is located in Sweden, and we have approximately 130 employees.

We move on. And this picture I think, illustrates our international presence very well. We have customers in around 40 countries. We have 18 localized webshops and now also 2 physical stores, as I mentioned. We are fulfilling orders at 2 main logistics hubs with partners in Germany and Sweden and with a smaller location also in the U.S. We design all our products in-house and work together with more than 25 suppliers for production in Asia.

Now let's take a look at our performance and net sales development. And we started the financial year with a strong quarter. Net sales amounted to SEK 392 million. That corresponds to a sales growth of 15%, 1-5% in local currencies compared to the same quarter last year.

We believe that we are gaining market share in several markets as the overall market environment is described to remain challenging. The recent strengthening of the Swedish krona had a negative currency effect on our reported revenue since we report in Swedish krona, but the majority of our revenue is generated in other currencies.

We delivered growth across all regions during the quarter. In the Nordics, sales growth increased by 19% in local currencies. In the DACH region, growth was 18% and in the Rest of the World region, 2%.

Switzerland was the market with the strongest growth during the quarter, followed by Austria. And together with growth of 14% in our largest market, Germany, this resulted in a solid overall performance in the important DACH region.

In our most mature market, Sweden, we recorded growth of 18%. In the Rest of the World region, we are strengthening our position in several markets, including Poland and U.K. In the U.S., we saw a sales decline due to higher tariffs which impacted or contributed to lower growth for the Rest of the World region as a whole.

Now let's continue to look closer at the performance during the quarter, and we are also happy to report that we continue to deliver strong margins and remain one of the most profitable companies in our industry.

Our numbers demonstrate our ability to combine growth with profitability, despite an unfavorable currency impact from a stronger Swedish krona. And this impacts both top line, as I mentioned, but also gross margin and EBIT.

During the first quarter, EBIT amounted to SEK 75 million, corresponding to an EBIT margin of 19% and the gross margin for the quarter was 69.6%. We maintain a solid financial position with a net cash position of SEK 163 million at the end of the first quarter and on top of that also an undrawn credit facility.

Ahead of the second quarter, we have carried out a planned inventory buildup, and we are now well prepared for the seasonally strongest period of the year. Inventory is more or less in line with last year, and we expect that inventory levels will gradually decrease over the course of the financial year.

On operational level, we have strengthened our management team with a new Chief Product Officer and the new Chief Technology Officer. And these additions strengthen both our product development and technological capabilities, which will support the next phase of our journey.

During the quarter, we continued our share repurchase program in line with the mandate from the Annual General Meeting, repurchasing shares for a total amount of SEK 32 million. Since the AGM in 2024, we have now repurchased shares amounting to SEK 168 million in total, and the Board's proposal to the upcoming AGM in November is to cancel all repurchased shares.

During the quarter, we have carried out several successful product launches. Our shell products sold well compared to last year. One could note that it was challenging selling shell products during the first quarter last year due to the late start of the fall. So good to bear in mind.

Looking ahead, I also want to mention that we are excited to follow the launch of the new Ultra Series, our most technically advanced collection to date, which was introduced now in early October, a few weeks ago. The collection is using carefully selected materials designed to perform in tough conditions.

And with that news, I would like to hand over to the company's Chief Financial Officer, Jesper Alm, who will present and walk through the financial performance. With that, Jesper, please go ahead.

Thank you, Paul, and good morning, everyone. I will briefly cover the financial performance during the first quarter of the new financial year.

Gross profit amounted to SEK 273 million for the quarter compared to SEK 245 million a year ago, and this equals a gross margin of 69.6% compared to the 70% flat last year. The slight decrease in gross margin is mainly attributable to currency effects on net sales and goods for resale.

We note that the personnel expenses in absolute terms are slightly higher compared to the same quarter last year, while the number of full-time equivalents remained at just above 130. Personnel expenses as a share of net sales were basically in line with those of last year, the first quarter.

Other external expenses were SEK 169 million compared to SEK 158 million a year ago. And this as a share of net sales was approximately 43%, and that is lower than last year.

EBIT, as Paul mentioned, EBIT and adjusted EBIT for the quarter amounted to SEK 75 million compared to SEK 57 million a year ago, and this translates to an EBIT margin of 19% compared to 16.3% last year.

The non-favorable currency effect affecting reported revenue and the gross margin had a corresponding impact on the operating profit. And the primary contributor to the strong margin was good efficiency in marketing. Last 12 months' adjusted EBIT now is in excess of SEK 400 million.

The balance sheet remains stable with changes in line with seasonality. Net working capital decreased slightly to SEK 296 million compared to SEK 318 million a year ago. And changes in net working capital is primarily driven by slightly higher inventory levels and an increase in current liabilities.

The inventory amounts to SEK 586 million, of which SEK 500 million was sellable or goods in warehouse compared to a total of SEK 447 million a year ago. And goods in transit has decreased from SEK 118 million last year to SEK 66 million at the end of the first quarter.

And ahead of the second quarter, we completed the planned inventory buildup to prepare for the peak season that we're now entering into. And reminding that inventory levels are expected to decline gradually over the financial year.

Our financial position is strong, and we had a cash position of SEK 181 million at quarter end or net cash of SEK 163 million when adjusting for lease liabilities. The credit facility of SEK 600 million remains available and undrawn. Cash flow from operating activities came in at SEK 27 million in Q1.

So in conclusion, we have a strong financial position and are well prepared for the upcoming dividend payment. Our aim is to distribute 40% to 60% of net profit annually, which is in accordance with the dividend policy. And as a result of our continued growth and strong financial position, the Board has proposed a dividend of SEK 1.35 per share, which represents a dividend growth of 13% compared to the SEK 1.20 paid out per share last year. And the proposed dividend in total amounts to SEK 144 million, representing a payout ratio of 50%.

In addition to dividends being paid or proposed in this case as the AGM is coming up soon, during the quarter, we continued repurchasing shares in line with the AGM mandate of last year, acquiring shares for a total of SEK 32 million. And since the AGM in November '24, we have repurchased 3.8 million shares out of the 109.6 million that we had outstanding a year ago for a total consideration of SEK 168 million.

And with that, it's over for me, Paul.

Thank you, Jesper. So to sum up, the market environment is still described by many as challenging, but we are well positioned ahead of the peak season that we have in front of us. Our strong customer offering, our leading margins and our high customer satisfaction gives us a solid position when we now continue our journey.

With the autumn and winter approaching, we hope for a cold and snowy season that provides great opportunities for outdoor activities and experience also in nature. And as I mentioned, we are now entering the most important season of the year. The second quarter has just started, and the real peak season lies ahead. But having said that, we can report continued sales growth at the beginning of the second quarter as well.

And that concludes our comments on the results. Before we finish, I'd like to take this opportunity to thank everyone who has contributed to a strong start of the new financial year, our employees, customers, partners and other stakeholders.

And with that, we are now happy to answer questions. So operator, do we have any questions?

[Operator Instructions] The next question comes from Emanuel Jansson from Danske Bank.

The next question comes from Benjamin Wahlstedt from ABGSC.

A few questions from my end. So first of all, continued growth, you say, in the report. Historically, continued growth without a magnitude has meant growth around 5%, if I'm not mistaken. I was wondering if you could elaborate or give some additional color on the magnitude of growth.

Benjamin, so we are only a couple of weeks into the historically most important quarter. It has only been 3 weeks. And we know that the higher volumes, they lie sort of in front of us in November and in December. So we -- as always, we choose not to provide a guidance for what we think about this quarter. So what we say is that we have seen continued growth when we compare the first 3 weeks of October compared to the first 3 weeks of October last year, but we have -- we don't specify it more than that. We think it's not relevant since the higher volumes will lies ahead.

Fair enough. Another or a slightly different topic, FX. While I understand the translation impact on EBIT is negative in the quarter, could you say anything on the impact of the gross margin in Q1 from FX, please?

I think I'll hand over to Jesper.

Thank you for that one. So the -- we're still at the point where the weaker euro has had a bigger impact than the weaker USD. That goes for the first quarter. And as we state in the report, we expect the benefits of the weaker U.S. dollar to become more visible going forward.

Perfect. And the reason why I'm asking is your gross margin has been lower in Q1 versus the preceding Q4 in all but one case historically. If not driven by FX, what drove the Q-on-Q improvement in the gross margin in this quarter? Is it just strong sales of shell products?

Yes, it is. I mean, gross margin is a combination of FX, product mix, market mix. And so yes, it's a combination of many, many components. And also, to some extent, the competitive landscape, we see that it is still challenging. So that has had an impact as well.

All right. I was wondering as well if you could say anything about any sort of changes made to the Alpine Collection in terms of order sizes, et cetera, compared to last year? I assume we should not expect 200% growth this year as well.

No. But I mean, we launched our Alpine or ski collection 2 seasons ago. That year we had sales of, if I recall right, around SEK 30 million. Last year, last year's season, we saw sales within that category north of SEK 100 million. And of course, we expect growth to continue. We don't provide any -- we don't disclose exactly how much we have bought for, but we definitely expect the good momentum within Alpine category to continue to grow. And to facilitate that, we have, of course, placed orders so that that can be realized.

Perfect. And then I have 2 more. First of all, strong marketing efficiency in the quarter. What is the reason? And/or what can you say about that?

That's a good question. It sort of boils down to hard work, a lot of focus and a lot of tactical decisions and actions. So a very well performance by the team. So there is no sort of silver bullet or a magic hand that lies behind this. It's more -- it more boil down to hard work, and we're happy to see the impact of that hard work also paying off.

Do you think they can repeat that hard work, so to speak?

Well, I mean, our job is to sort of go to our office every day, more or less do the same thing and try to improve everything we do on a daily basis. And I think that is something that we have seen now. And hopefully, we will continue to do that. That is the plan.

So it's not any sort of external factors such as Google, pricing, or anything like that in terms of like…

No.

All right.

That was smarter decisions. We have added some new colleagues to the team who have also brought in some new knowledge that has also been an important contributor to the marketing efficiency that we now see. So extremely happy to see that, of course.

Perfect. Finally, for me then. You note that U.S. sales are slow due to tariffs. Could you remind us what the share of sales to the U.S. is approximately?

So approximately before we -- before the tariffs, it was at around 3% in total. Now that has declined heavily due to underlying -- it's due to the new tariff situation that we have. So we are not so exposed to that as a company in general, but that decline has an impact on the growth in the Rest of the World region. I think that is also important to bear in mind. We are talking about 3, 4 percentage points impact in that region. So we saw growth in Rest of the World of 2% in local currencies in the quarter. So you can sort of -- if you exclude the U.S. development, you can add 3, 4 percentage points to that growth in that region.

It sounds like a slow U.S. is not really that big of an issue.

The next question comes from Andreas Lundberg from SEB.

Andreas Lundberg with SEB. If I start with market development, you talked about continued challenging markets. Why you think you are growing so nicely despite of that? And also, why you think you grow so nicely across the board if we exclude perhaps the U.S. market?

Yes, I think it sort of boils down to what I just mentioned. We have improved our operational efficiency within marketing, but also, I think we have a very strong customer offering that has been strengthened over and over again. I think also bearing in mind that last year we had a more challenging situation. We had, for example, a decline of sales of shell products due to a bit warmer and hotter -- a bit -- yes, a drier summer and late entry of the fall. I think that is something also to sort of note, which obviously impacts the comparison numbers.

And back to your marketing question. I think you said last time that you were more cautious on putting on marketing given the weak demand. How would you characterize that in the first quarter?

Well, we haven't really -- we report quite early in this quarter compared to the industry. We haven't really seen so much market data yet. I used to refer to reports such as spot index in Sweden, and we haven't seen any industry colleagues reporting yet. So it's a bit hard to say. We -- what we do see is that the Swedish market is a bit better. But on a high-level basis, I can't really see that, for example, Germany has improved in terms of customer -- consumer demand compared to a year ago. It seems to be remain a bit challenging still in Germany.

Okay. I was more looking into the marketing as such. I think you said you were cautious putting on marketing costs when the demand was so weak or weaker in recent quarters. Have you still been cautious on marketing in Rest of the World? I guess, that's my question.

Yes. That's a very good question. I mean, we -- our policy is that -- I mean, we have this -- we have a financial target that we want to aim -- we want -- our aim is to grow at 20%. We are not there yet. But at the same time, we want to maintain an EBIT margin of 20% as well on a full year basis.

Now this is the smallest -- seasonally smallest quarter of the year, we report 19%. So I mean, it's -- we want to balance growth and EBIT. And to some point that, yes, puts a limit sort of on how much you could actually spend on, yes, marketing, for example, and other costs. So, yes.

Sounds wise. Maybe one for Jesper. You talk about gradually lower inventory from here. Is that more seasonal effect? Or is it anything else?

No, we see a structural effect. We have -- obviously, the seasonal pattern is roughly the same as every year, but we aim to structurally decrease the inventory share of net sales throughout the year. As we've talked about the previous quarter, we were slightly high on inventory levels due to slightly lower sales growth in that period than expected. And we've taken measures to reduce the inventory levels over time. So we think we're in a good place, and we're going to improve that over the year. That's the plan.

And lastly, on your recent store opening in downtown Stockholm, what's the learnings, what do you take with you from the start?

I mean it's a bit early to say too much. We haven't been open for a month yet. But we are satisfied with the start. We, obviously, can monitor the number of visitors and the interest it has generated. And it's a bit early to draw any big conclusions. But we definitely feel that this is a very good strategic complement to the e-commerce business. And we are evaluating opening up more stores.

However, as you may know, we are a bit careful. We are very selective, and we do it with a step-by-step approach. So sales-wise, I mean, it's a very small share of our total sales. But strategically and brand-wise, we feel that this can really, I'd say, support our journey of building a brand.

The next question comes from Emanuel Jansson from Danske Bank.

I hope you can hear me now. Sorry, I had some trouble with the technical equipment. I think a lot of the questions have already been answered at this point. But obviously, impressive growth in the quarter with Germany rebounding significantly. What would you say are the main drivers in this quarter in that region? Is it, as you mentioned, on the comparable base of shell products or new products or more stable market overall in Germany?

Emanuel, we can hear you now. I think as always, this boils down to a combination of a couple of components. I think, as I mentioned in conjunction with an earlier question, it boils down to better performance when it comes to acquiring customers and marketing. I think that we have been very well in terms of execution when it comes to, call it, campaign planning or merchandising on site.

And I think there's also a component of weather. We -- I try always to avoid speaking about weather. But in this first quarter, weather is sometimes is more or less -- is a component because we see a higher -- we simply see higher sales when fall enters. So -- and fall will always enter. It's more a question of when it enters. Last year, it came very late. This year, it came a bit earlier. And obviously, that has an impact on, for example, rain clothes or shell products.

So I think a combination of some external factors such as that I just mentioned, but also internally improving the operational efficiency, especially within marketing. And as always, I think we have a strong competitive offering. We developed new products. We have adjusted many details in our fleece assortment for -- just to lift one example, we have launched new products. And so continuously improving the customer proposition is also an important factor. So no like clear answer more than a combination of many things.

And this rhymes well with the Swedish market as well, right, or maybe a little bit slightly more stable market here versus DACH and Germany.

I mean, we have seen that the Swedish market has bounced back over the last couple of quarters. In the last quarter, I think we had access to spot index. They report -- spot index is a report from the Swedish trade association reporting quarterly. We haven't seen any number from the calendar Q3 yet.

But calendar Q2, it was reported that we saw growth for the first time after 13 quarters or something. So that is definitely a sign of -- that the market has bounced back slightly. The only data point we've really seen so far related to the calendar Q3 is some numbers from payment providers actually showing that the market is -- continues to be slightly better in Sweden, but we can't really see that happening in Germany yet. But bear in mind this is not a big amount of data points that I'm based that on.

Yes. And do you think that the 18% organic growth that we saw in Sweden, is that extraordinary high or given that this is considered as a relatively mature market for you? What should we expect going forward, I mean?

Good question. I think -- I mean, 18% is a good performance. Again, bear in mind that it's compared with a pretty weak quarter. We were disappointed when we stood here a year ago. That's also important to bear in mind. But on top of that, no real questions on what to expect on the Swedish market. But it's definitely an outperformance compared to the market in general. We are very comfortable to say that we are gaining market share in Sweden and in also many other markets, which is important, of course, and promising.

Okay. And looking into this current quarter then, have you seen -- you're stating that you still see growth -- can you maybe elaborate on if you see continued growth across all 3 regions in terms of organic growth still?

I mean, as I mentioned earlier, I think we should be a bit careful saying too much about the quarter we are in. Now it's only been 3 full weeks. And it's the beginning of the quarter and the big volumes are ahead of us. So it's more or less the smallest weeks. We expect those weeks that we have behind us, the smallest weeks, in the quarter. So we don't want to guide or disclose more than saying that we do see continued growth in the first quarter -- first weeks of October compared to the exact same date last year.

Okay. Fair enough. And on this new Ultra Series, I know it just recently was launched, but have you seen any signs of good receivings yet? And how will the rollout compared to the Alpine Collection be?

Interest has been very high. So -- and as you mentioned, it's only been, I think, 10 days, and the collection is very much sort of geared towards ski and Alpine. So we are not really in that season yet. But sales has started in a, yes, good way, and we see a lot of interest. We obviously, know how much we have bought, so you can more view this as a way of sort of lifting the status of the brand in general more than expect extreme volumes. And we -- without disclosing too much, we don't expect Ultra Series to be at the same levels as sort of the base Alpine assortment, the Atlas and the AccXel products that we have as is in our ordinary sort of Alpine Collection.

And can you maybe elaborate or give us some more color on what kind of customer you want to acquire from that type of products category…

Yes. The idea is actually to target our existing customers more than -- obviously, we always want to get new customers. But we think that we have a very loyal customer base, and this is a way of offering products in a slightly more premium segment than we used to have. So you can view this as a premium collection to our customer base.

And so, I mean, we have our concept of or we used to speak about the unmatched value. And the Ultra Series -- the aim of the Ultra Series is to remain with an unmatched value. So if you compare these new products and the functionalities and the technical specifications and the material, it should be a very competitive offering if you compare this with the competitive brands and competitive products. So the idea is to target our existing customer base. But obviously, we also hope to attract some attention from new customers as well.

Really interesting. And maybe last question from my side then and perhaps something in for the longer term here. But can you provide any overview or development of your strategy and development in the Asian market? Because my impression is at least that you have brought in at least some expertise through personnel with knowledge of this region. Is that correct? And yes, can you maybe provide us some updates on your thoughts about that region and the market?

Asia for us is today -- when it comes to Asia, it's a part of the world where the production is taking place. We have a small sourcing partner in Vietnam that we are working with, but that's 100% focused on production and the product development. We have, as you know, a year ago, we opened up the site in Japan and South Korea, but it's not a focus market for us.

The next question comes from [ Peter Hermanrud from First Partners Holding. ]

Congratulations. You see continued sales growth in October and Benjamin indicates that, that has historically been more like 5%. But when I look at the heading of your quarterly report, and it says continued sales growth, and you had 15% in the third quarter. So should we maybe think that what you're saying for the start of this quarter is basically saying it's not a catastrophe. It could be just acceptable, or it could be great, but you don't want to indicate anything more.

I think you should not over-interpret it. I think you should -- I mean, we should definitely believe that it's higher -- the sales during the first 3 weeks this year is higher than the first 3 weeks in October last year. We choose not to disclose more than that at this point because it doesn't really matter how strong the performance is in these initial weeks, because we expect much, much, much higher volumes in November and December. And so the peak lies in front of us, and we want to be a bit careful in disclosing more than we actually know and don't specify too much because it won't -- we don't expect that to have a big impact. The impact will come later in the quarter.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you, operator, and thank you all for all the questions. Before we wrap up, let's see if we have received any questions online. I will -- I look at Jesper and then ask him to maybe read the question if there are any.

Yes, we have received a couple of questions. One of them is partly answered already, but I'll read it out anyway.

So the new Ultra Series seems to be priced in line with the established outdoor brands. And wasn't your strategy as a D2C company to be cheaper?

Yes, that is our strategy. Our strategy is to maintain our unmatched value. If you compare this Ultra Series, you can call that our premium line with other brands' premium line, we see that we are, in many cases, at half the price level as many of the competing brands. So there's no change in strategy. And we have already in the past had 2 sort of segments in our range strategy. We've had our base assortment and the pro assortment, and now we have also launched a statement assortment, which is consisting of this Ultra Series. So you have to compare it with other brands' premium lines, and then we are at a competitive level.

Which leads into the next question.

With several ranges across different price points, how are you planning to structure your offering in order not to confuse customers?

I think it boils down to continue to be disciplined, offer quality products with our design element consisting of slightly more colorful products, tighter fit and good price points compared to similar products in the market. And I think that is important to bear in mind. We have not chosen to enter the cheapest segment in the market. I think it's always important to compare with products that are on par in terms of technical specifications, materials and so on.

And those were the online questions received.

Thank you. So may I then say with that last comment, thank you all for joining us today in this call and for your interest in our journey. And may I also remind you that the report for our second quarter will be announced on January 29. So hope to see you then. And with that, thank you, and goodbye.