RVRC Holding Aktie

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.

Welcome to the RevolutionRace Q4 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 full year and fourth quarter of the fiscal year 2024-'25.

Our financial year starts 1st of July and ends 30th of June. So, Q4 means that the period April 1 until June 30. My name is Paul Fischbein, and I'm the CEO of RevolutionRace. And joining me today for today's conference call, also I have the company's CFO, Jesper Alm.

For those of you who are not -- who are new to the RevolutionRace story, I will now start by giving you a very short intro. RevolutionRace is an international outdoor brand, offering a wide range of outdoor products, mainly clothing, but also other products such as shoes and bags. 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, the RevolutionRace website, but also through marketplaces such as Amazon. And with our D2C business model, we can secure our competitive offering and at the same time, maintain industry-leading margins.

RevolutionRace was founded in 2013 and we launched in 2014, and we have now been listed on Nasdaq Stockholm since 2021. Our headquarter is located in Sweden, and we have approximately 130 employees. This picture illustrates our international presence. We have customers in around 40 countries and 18 local web shops. We are fulfilling orders at our 2 main logistics hubs with partners in Germany and Sweden, and we also have a smaller location in the U.S. We design all our products in-house and work together with more than 25 suppliers for production in Asia. So, that was a short intro.

Now, let's take a look at our performance and also net sales development. And we conclude the full financial year of 2024 and '25 with continued growth. During the year, we have strengthened our positions and significantly increased our market shares in many key markets. Net sales for the full year totaled SEK 1.9 billion, which is a growth of 6% in local currencies for the full year. The last 12 months has been characterized by a challenging market environment. And I think it's important to highlight also the recent strengthening of the Swedish krona, and that had a negative currency effect on our reported revenue.

We report in SEK, Swedish krona, but the majority of our revenue is generated in other currencies. And this currency effect was most significant in this fourth quarter when the Swedish krona was strengthened. In the fourth quarter of the financial year, the net sales increased by 4% in local currencies and amounted to SEK 405 million.

Looking at the different regions in the quarter, the Nordic region continued to perform well as sales grew by 15% in local currencies. And I think that clearly demonstrates that we continue to increase market shares. For example, when we compare with the Swedish report called spot index, it is clear that we grow faster than the market, again. We are also continuing to strengthen our market positions in the important DACH region. Switzerland reported the highest growth in that region during the fourth quarter, followed by Austria. Both markets grew by more than 20% in the quarter. But in Germany, our largest and most important market, looking at the size of that market, conditions continued to be challenging, but we are nevertheless continuing to increase market share and we hope that the market will start to grow again soon.

For the financial year as a whole, we delivered growth across all regions. The DACH region grew by 7% in local currencies. The Nordic region also grew by 7% for the full year. And for the full year, we saw solid growth in several markets where we believe there is significant potential for continued expansion. This includes Austria grew by 22%; Switzerland, 23%; and U.K., 11% in local currencies.

Now, let's also continue to look closer at the performance during the fourth quarter. And as mentioned, we saw significant currency effects on revenues and also then margins during the quarter. In Swedish krona, the operating profit for the quarter was SEK 63 million. In Swedish krona, the EBIT was lower than last year. But, in fact, when adjusting for currency effects, the operating result for the fourth quarter was roughly in line with the results for the corresponding quarter last year. And I think this is important to understand, and we can, of course, deep dive into the currency impacts during the Q&A, if you wish.

Looking at the full year, underlying earnings in local currencies improved compared to the previous financial year. For the full year, the reported adjusted operating profit was SEK 383 million, and that was in line with the previous year's result of SEK 389 million when we take into account the net effect of other operating income and expenses, which was SEK 4 million this year compared to plus SEK 2 million in the previous year. So if you take that into account, the results are in line.

On top of this, one can also add the currency-related top line effect, especially in the fourth quarter in order to make the full comparison with last year. And I really think it is important to understand this dynamic when understanding the business. We report in Swedish krona, but 90% of our revenues are generated outside of Sweden, especially from countries with euro.

And looking at the costs side, we have a higher degree of costs in SEK compared to the revenue. So of course, we are impacted when currencies fluctuate. Our full-year adjusted EBIT margin amounted to 19.9%. So, we continue to deliver strong margins and we are proud to be among the most profitable companies in the industry. And I think this demonstrates also our ability to combine growth with profitability despite challenging times.

Our financial position remains strong. Inventory levels are well balanced, and the inventory is expected to also gradually decrease over the upcoming 12 months. At the end of the fourth quarter, we had a net cash position of SEK 177 million. And on top of that, we also had an unused credit facility of SEK 600 million. And as we today report the full year, we also report that the Board also proposes the dividend. In light of the company's position, the growth, the cash flow during the year, the Board of Directors proposes a dividend of SEK 1.35 per share. This is in line with our dividend policy and implies an increase of the dividend for each year since the company's IPO.

On top of this, we also continued our share repurchase program as part of our efforts to optimize the company's capital structure and create long-term shareholder value. In total, SEK 337 million was distributed to shareholders during the financial year, of which SEK 132 million through dividend for 2023-'24 and SEK 205 million through share repurchases. And during the fourth quarter, 1.1 million shares were repurchased for a total of SEK 51 million. And we aim to continue with this as our ambition is to reduce. We have a long-term view on this, and our ambition is to reduce the net cash position in a balanced way through dividends and also share repurchases without creating a net debt position when excluding seasonal fluctuations. And we do not foresee any big CapEx investments in the business in the near future.

If we continue -- our close relationship with our customers continues to be one of our most important assets and the driver of our success. Today, we have more than 2.2 million followers across our social media channels and more than 730,000 product reviews with an average rating of 4.6 out of 5. And that level of engagement builds trust, adds value, strengthens loyalty and gives us a real competitive advantage. And this is a core part of our strategy and something we monitor very closely. But we have also been busy developing other parts of the company. For example, in April, we opened our first physical outlet store. And soon, we will open a brand store in central Stockholm. So, stay tuned for that.

While we are a digital-first business, we also see clear value in meeting our customers physically in selected locations. And these stores complement our e-commerce offering and help us to strengthen the brand and also to reach new customers. And we can also say that we continue to evaluate more future store openings, including also potential locations outside Sweden. And we, of course, remain selective in our approach, but hopefully, we will be able to tell you more about this soon.

On the product side, we continue to broaden our outdoor range. Our GP and Nordwand Pants must be our biggest sellers, and we continue to develop our assortment. Operationally, we are building for scale. We have signed an agreement to move our Nordic warehouse to a new automated logistics center outside Stockholm. And the large automation project with a robotical system was recently deployed at our German site. And both these initiatives will support higher volumes going forward.

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

Well, thank you, Paul, and good morning, everyone.

I will briefly talk you through our financial performance during the fourth quarter and the full financial year '24-'25. Gross profit amounted to SEK 281 million for the quarter, slightly lower than compared to the SEK 293 million a year ago, and this equals a gross margin of 69.4% compared to 71.9% last year. The decrease in gross margin is mainly attributable to a non-favorable currency effect on net sales in relation to cost of goods for resale.

Gross profit for the full year increased to SEK 1,344 million compared to SEK 1,312 million last year, sorry. And this equals a gross margin of 69.8% compared to 71.3% last year. We note that personnel expenses are in line with the same quarter last year. The number of full-time equivalents was 132, which is flat compared to the last quarter. The increase versus last year is primarily attributable to the product and production side of the organization, which is in line with the company's strategy to invest more in product development.

Personnel costs as share of net sales were in line with last year. Other external expenses were SEK 182 million compared to Q4 last year of SEK 185 million. And this as a share of net sales, approximately 45% were in line with last year. EBIT and adjusted EBIT for the quarter, and those amounts are the same. They amounted to SEK 63 million compared to SEK 74 million a year ago. This translates to an EBIT margin of 15.5% compared to 18.3% last year.

The non-favorable currency effect affecting reported revenue and the gross margin had a corresponding impact on the operating profit. Adjusting for these adverse currency -- for the adverse currency effects, profitability is roughly in line with the comparison period. Adjusted EBIT for the financial year amounted to SEK 383 million compared to SEK 389 million the year prior. And further adjusting for other operating income and expenses, the underlying EBIT was flat.

The balance sheet remains stable with changes in line with seasonality. Net working capital increased to SEK 261 million compared to SEK 187 million a year ago. And the changes in net working capital is primarily driven by higher inventory levels and the decrease in cash. A dividend of SEK 132 million was paid out during the second quarter last year being November 2024. Our continued repurchase of shares amounted to SEK 51 million during the fourth quarter. And for the full year, that amount was SEK 205 million.

The inventory amounts to SEK 521 million, of which SEK 439 million was goods in warehouse compared to SEK 448 million a year ago. Goods in transit has decreased slightly from SEK 76 million last year to SEK 72 million at the end of the year. And inventory is well balanced and expected to gradually decrease during the current financial year.

Our financial position is strong, and we had a cash position of SEK 189 million at quarter and year-end or a net cash position of SEK 177 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 85 million during Q4, and primarily attributable to changes in inventory and operating receivables.

In conclusion, we have a strong financial position. 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 Board proposes a dividend of SEK 1.35 per share. This represents a dividend growth of 12.5% compared to the SEK 1.2 per share paid out last year in November. This proposed dividend amounts to approximately SEK 144 million in total, representing a payout ratio of around 50%. And I note that we, over the 4 years since IPO, and the first dividend in 2021 have more than doubled the dividend payout -- dividend per share.

And 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 was, as previously discussed, SEK 51 million. And since the AGM in November 2024, we have repurchased 3.2 million shares out of the 109.6 million outstanding, and that for a total consideration of SEK 137 million.

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

Thank you, Jesper.

To sum up, we report continued growth and high profitability in a market that remains challenging. We have, over the years, strengthened our positions in several key markets. We have continued to develop our product range and taken important operational steps to support future growth with store openings as an example.

Looking ahead, the market environment remains uncertain, but we are well prepared with strong margins, a solid financial position, good products and most importantly, satisfied customers. We are in a good position to take next steps. And we are now preparing for the key season, the autumn and winter season. We continue to focus on profitable growth. And at the beginning of this new financial year, quarter-to-date, we note the sales increase in local currencies at around 10% compared to -- with the same period last year. So, happy to see that.

And that concludes our comments on the result. Before we finish, I would like to take this opportunity also to thank the entire team at RevolutionRace, our customers, our shareholders and also our partners. I look forward to continuing to grow and create long-term value together with all of you.

And with that, we are now happy to take -- to answer questions. So operator, do we have any questions?[Operator Instructions] The next question comes from Benjamin Wahlstedt from ABGSC.

I'm going to dwell on growth for a little bit. First off, perhaps, do you have a view of the underlying market growth in the quarter, please?

Sorry, can you repeat the question? The growth in the first quarter, you mean?

No, in Q4. Do you have a view of the underlying market growth? That is the -- yes, the market growth in the markets that you are active in.

Yes. So, we report in the quarter that the Nordics -- if we look at the 3 regions, the Nordics is growing 15%, which we are very pleased with. We see that Sweden, for example, are growing with 13%. So, that is nice to see. Good growth in a market where we have been present for a long time. In the DACH region, we are also pleased to see high growth in Austria and in Switzerland, over 20% in both those markets. In Germany, for the total DACH region, we had a growth of 3%. So, obviously, Germany being such a big, big market in terms of size in that region has a big impact on that growth. So, I think it is safe to say that it is important for us to really focus now on making sure that Germany continues to grow again at a higher level than what we have seen in that last quarter.

Looking at the rest of the world, I think what is important is that we have seen that the biggest market in that region, U.K. continues to grow. I think that is important, even though the growth number actually declined in the full rest of the world. We report that in that quarter. I don't know if that really answered your question.

I was more referring to your growth versus the markets, the competitors, the overall market.

Yes. So yes, we have access to a couple of data points. One obvious one is, of course, if we look at quarterly results from industry colleagues, we note one colleague who had sales decline in the quarter. And then with our 4% growth in local currency, we obviously outperformed the market if you take that as some sort of mark for the full market. We also note spot index in Sweden, reporting 9% in Sweden. We grow Nordics with 15%, so higher growth also here.

And then we have access to a relevant peer group through payment suppliers that we work with in different markets and also a lot of search data, which are often very highly correlated from Google, which is often highly correlated with market share development. And there, we can see many markets declining double digit. And we are outperforming the market basically -- yes, basically in every market without going too much into detail.

Perfect. And then looking at Q4, I was wondering if you could talk a bit about the growth by month, please. It seems the start of the quarter could be like somewhat similar to the quarter's growth overall. And I was wondering really, are there any differences in the growth rate between May and June?

Well, April was pretty weak. The start of May, the first week of May was really strong. And May in general was compared to the full quarter strong. Also, June was much stronger than April. So, April was weak. May, June strong. So in fact, seeing also that we have been able to grow double digit at around 10% in this quarter. We have now seen 3 months in a row with good growth. So we are, of course, pleased to see that. So yes, it's an uncertain market. It's jumping a little bit intra-quarter, but during the last 3 months, it has been -- we have a good feeling.

And I was wondering if you could confirm whether you agree that growth comps towards the end of Q2 is easier to meet than in July?

It's hard to guide on that. The only thing we can note is that last year, I think, if I remember correctly. I mean, we normally don't talk so much about weather. But last year, we noted that there used to be some sort of impact -- weather impact on our Q1 because fall always comes, but it's a question of when it comes. Last year, we saw a very hot and dry August. And that was, of course, unfavorable to sales a year ago. We saw -- I don't know if you remember, we saw a pretty deep drop in sales of Shell products as an example, that was correlated with a dry August. So, I'm not going to forecast about the weather, but there -- I think that's a good thing to bear in mind also.

Perfect. And then finally for me then. In Q3, your OpEx to sales ratio improved rather materially compared to the previous year. Could you talk us through the difference between Q3 and Q4 in terms of the OpEx development, please?

Yes. I'll hand this to Jesper.

Thank you for that question. If we start by looking at the comparison quarter last year, Q4, the cost structure is very much in line. And your question is relating to the previous quarter, Q3, where we had a beneficial position, and that was a very good quarter from a cost perspective. So, we're now back to some kind of normality. And one must bear in mind the overrepresentation of SEK in the cost base. So, many of the fixed costs are SEK denominated. And obviously, then we have a negative currency impact on those costs.

When it comes to marketing, marketing was pretty much in line with Q3, slightly higher, but in line. We had logistics costs that increased. And in logistics, we also have an overrepresentation of SEK as a currency. So, we have that disadvantage. We have a smaller quarter, which means that the fixed logistics costs come in at a higher share. We have the average order value actually coming down slightly, which means that we have normally then higher logistics costs per sales. And we also had customs relating to our export to the U.S. that we know that there is a turbulent situation when it comes to tariffs and customs in relation to the U.S., and that has also affected us during this past quarter. So, I hope that gives some flavor to the cost structure, very much in line with the same quarter last year and obviously, higher than the previous quarter and that is size, currency and a few other items.

The next question comes from Emanuel Jansson from Danske Bank.

Hope you can hear me. A couple of questions from my side and just jumping back to the general market growth that we just recently talked about. But I think in the last quarter Q3, I think you stated that the market -- you estimated that the market was in general down more than double-digit decline in Q3. Do you think that the market in general has improved sequentially versus the Q3?

It looks like it has improved. In Sweden, for example, we have seen that spot index have actually now turned to positive numbers. Looking at some of the other data points that we have sort of access to, it looks like it has slightly improved in some markets, not all 40 markets where we operate, but some of the most important ones. So hopefully, optimism will come back and it will have some sort of positive impact on our numbers also. But the short answer is yes, slightly.

Okay. Great. And I don't see you mentioning any specifically on promotional pressure in this quarter. Do you still see high promotional pressure from competitors in the market in general? Or how has that situation developed?

I think you can -- I mean, it's -- we still see a high degree of activities, but we don't feel not from our perspective that, that has increased. I think it is sort of -- it has stabilized on a somewhat new normal. So, no news really on that front. But if you ask for, like, more activities on price reductions or clearances or that kind of activities in the market.

Yes. Okay. Fair enough. And also looking at the gross profit, of course, you're mentioning the FX headwinds, of course, but I think you're also talking slightly about the geographical mix also affecting the gross profit. Can you maybe elaborate a bit on that and maybe also give us a view on how the profitability are between the 3 regions?

Yes. I, mean you can, very high level or roughly say that 2 percentage points of gross margin is related to currency fluctuation. And there's also this market mix that you are referring to. You may know that Germany is a profitable market for us. We have slightly lower profitability in the Nordics, especially in Sweden, looking at gross margin. So when Sweden and Nordics is growing slightly faster, that sort of has a negative impact on the gross margin. But those 2 together sort of adds up to the whole difference compared to last year, currency and market mix.

Yes. Okay. Great. And what's your view on the FX impact here going forward on purchasing, et cetera, given the current state at least on the FX side here, should do you see a gradual improvement throughout 2025? Or when should we see maybe some support from -- or some tailwind again from FX?

Yes. It's hard to guide on that, obviously. But as you may know, that our 10% of our COGS is purchase orders on our products is made in U.S. dollar and the Swedish krona has been strengthened versus the U.S. dollar for a couple of months now. But it takes a little bit more time to that really to see the impact on that because those products are sort of, yes, paid now, but it will -- we have to wait until we actually sell those products until we see it -- until we see the P&L impact.

I don't know, Jesper, if you want to elaborate on this also.

It relates back to the inventory mix. Some of the products that we normally sell out seasonally were obviously replenished from scratch and those pieces or those products will have the impact right away. We have an inventory of SEK 500 million plus that is related primarily to our never out-of-stock products. And obviously, in those cases, we have higher COGS products to sell before we see the impact of the current beneficial dollar situation. So it will be a gradual improvement, but we should also bear in mind that we have seen a strengthening of the SEK versus the euro and obviously, even more versus the U.S. dollar, but we buy in U.S. dollars and we sell in euros primarily. So, one must take those currencies into consideration when we see the potential improvements over time. So it will be a gradual process, and it will start during autumn or after summer now basically and gradually improve. And then it's down to the turnover of the inventory.

Perfect. That's very clear. And maybe last question from my side here. You're talking about dry August last year. Was that mainly affecting Germany? Or maybe should we interpret that the 10% organic sales growth that you're seeing now that you may be seeing some recovery now in Germany and in the DACH region?

It's hard to guide. But we saw 2 things last year in this quarter. We saw very dry -- we saw a dry August impacting especially Shell products, both in the Nordics and in the DACH region. But on top of that, we also saw some sort of weak macro in Finland. I don't know if you recall, but Finland in general was weak at that time. That has significantly changed actually over the last couple of months for us. We see much better performance in Finland compared to a year ago. But it's really hard to guide on how much weather will impact our sales going forward. But it had an impact a year ago, definitely. We saw, I think, a decline of 38% of Shell products compared to the year before. And that was most certainly highly correlated to a dry and very hot August. So, we hope for some rain.

Yes. And these products are quite profitable, I assume?

Sorry?

I assume these Shell products are, in general, quite profitable for you, right?

Yes, they are. I would say, in terms of profitability on average, the most profitable product category are pants, but of course, we have some -- we have good sales of pants also when the weather is somewhat more unstable and getting closer to the autumn. So, autumn, winter are the best seasons for us without question, without doubt. And again, autumn will come. It's a question of will it come in August? Yes, maybe in the Nordics. But when will it arrive in Germany? Will it arrive in August or September or in some cases like early October? That always has an impact. But it will come. We are not worried about that.

Totally understand. Yes, it's indeed very hard to predict.

The next question comes from Victor Hansen from DNB Carnegie.

A couple of questions from my side. Firstly, I'll follow up here on current trading. So, you mentioned here the current trading of 10% roughly organically up year-on-year. And I was curious if you could tell us roughly what the year-on-year change was in your comparison period, so July and beginning of August 2024?

Compared to the year before that?

Yes, for the growth. The growth or the decline for this month.

I'm afraid I don't have that in front of me the growth for the first 5, 6 months compared to the year before that. But we know, of course, what the growth was for the full quarter.

Yes. The reason why I'm asking is to try to understand if this 10% organic growth in your current trading, if that's based on very easy comps.

What I remember and can say in general that July was actually pretty strong last year. It was August that was weak. And obviously, we have not only -- we haven't even been through half August. So, we are compared to a fairly okay July last year and now compared to -- now -- August was weak last year.

Yes. Yes. Perfect. That's very helpful. And then if we stay on Q1, the current quarter, are there any particular markets that are performing strongly in the beginning of Q1 that's driving up your current trading? And I'm asking this because the German apparel market sales data that we have, that looks slightly weaker sequentially as we enter Q1, actually, so July and early August.

Yes, no, we haven't guided on that. So, I'm afraid I think it would be a bit tricky to comment on that. So, I think we have to stick to that. We have seen quarter-to-date or financial year-to-date growth at around 10%. So, happy that we are at double digit.

All right. Yes. Okay. And then on Rest of the World, growth continues to accelerate, declining even. And if we disregard FX, which is one part of it, of course, what else can you tell us about the performance in your many markets here, large versus small markets? What's the road forward? Do you have less focus on this? Or what's the plan?

Yes. So, I mean, the Rest of World, it contains many markets, as you say, many of them are very small. I think it also boils down to that we have an ambition to balance growth with high profitability. We have our financial target to maintain an EBIT margin of 20%. I think it is important for us to really continue to aim for that. We had 19.9% in SEK. If you take the currency effect into account, we were actually above the 20% that we have as a goal. So when -- I think it's -- I mean, it's -- so it's a way of balancing. And you could argue that some of these smaller markets, they get less focus in a situation where we feel that it is important to balance growth and EBIT.

I think some of the smaller markets get less focus out of that. I think that's fair to say. And also the other part of that is that in the more mature markets, I think it's obvious to say that we have a higher degree of recurring customers also. We have a stronger brand, higher brand awareness. We have many more customers in Germany, in Sweden. So, that means that it is more efficient also for us to drive sales in those markets. So, one could argue that in terms of investments, at least, they get less focus. But having said that, it is also important that the bigger markets such as U.K., which is the biggest market, continues to grow, which is the case.

Yes. Perfect. And that actually ties into my other question on marketing. So, you spend a lot on digital marketing each quarter. And I'm wondering here if you've seen any impact on web traffic and consumer patterns due to the AI operators that are reshaping SEO, if you've seen it already and/or what do you expect for the future?

I think that's a really good question. In terms of prices, we have seen -- it's pretty stable compared to a year ago, both on the Meta Platforms and Google. Those are the 2 main channels that we invest in or use as marketing on. Meta slightly, slightly up. Google has gone down slightly. But it is really interesting to follow what will happen with consumer search patterns. You could somewhat see small differences, but in searches maybe, but it's very hard to say exactly what it means, but something is -- we follow it and monitor it very closely, of course, since it is an important part of our marketing strategy.

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 before we wrap up, let's see if we have any questions online. I will ask Jesper to tell me if there are any questions. And then maybe if there are questions, please read it, and I will try to answer them.

Yes. We have received a number of questions. But as far as I can see, those have already been discussed in the questions asked just recently. So, I would say that we have already covered the questions that were sent via the web.

Okay. So with that -- thank you, Jesper. So with that last comment, thank you all for joining us today and for your interest in our journey. May I also remind you that the report for the first quarter will be announced on October 23.

So with that, thank you, and goodbye.