Nelly Group — Call Transcript 2025

Welcome to Nelly Group third quarter report 2025. Today, I am pleased to present CEO Helena Karlinder-Östlundh and CFO Niklas Lingblom. After the presentation, there will be a question and answer session. Participants are able to ask questions in written form on the audiocast page. Now, I will hand over to Helena Karlinder-Östlundh. Please go ahead. Thank you very much. Good morning and welcome to the results presentation for Nelly Group for the third quarter of 2025. My name is Helena Karlinder-Östlundh and I am the CEO of Nelly Group, and I will be presenting our results this morning together with our CFO, Niklas Lingblom. Let's have a brief look at what we will be covering in today's presentation. We will start with a short video introducing you to the Nelly business. I will then provide some commentary on the third quarter of 2025 before I hand over to Niklas for a more detailed financial summary of the quarter. As always, we will then conclude by answering some of your questions. At this point, we would like to remind you again that you are most welcome to send us your questions throughout today's presentation, and we will answer as many as we can at the end of the call. With that, let's start with a short video introducing you to the Nelly business. Okay, now let's have a look at the third quarter of 2025 in more detail. Overall, we are very pleased to report a strong third quarter for 2025 with both high growth and solid profitability. Underneath this result, and for me even more pleasingly, we also saw that our customer base grew once again in the quarter, and also importantly that we continue to build our brand towards a stronger and more attractive position in the market. These improvements, as always, were driven by our assortment, where we made further inroads, and of course also the effectiveness of our marketing. In the subsequent slides, we will be diving into each of these points in a little bit more detail to give you some more context. If we start with the overall performance during the quarter, I think it's also important to put this result into the context of the third quarter, which can be a precarious time in the world of fashion, primarily because it firstly is the transition from our spring and summer season to our autumn and winter season. We have to ensure that we finish the spring and summer season in a good way and of course get a flying start to the autumn and winter season. It's also an in-between period from a customer perspective where both the summer period and Christmas come with more natural occasions to shop. The third quarter can be a precarious quarter, and all the more pleasing then that this past quarter we succeeded in delivering both high growth and solid profitability. Net revenue grew by 18.4% to SEK 283.7 million, and we can compare this to our net revenue growth last year during the same period of 1.4%. Operating margin also increased to 15.3% as compared to 10.5% in the same period last year. This generated an operating profit of SEK 43.3 million, which we can compare to SEK 25.1 million in the same period last year. Clearly a strong result. This also means that so far in 2025, we have achieved net revenue growth of 15.1%, where during the same nine-month period last year, we achieved net revenue growth of 2.2%. We also have an improved operating margin for the year to date of 13.3% as compared to 7.3% for the same period last year. I think it's important to note that this is a strong result, but it's also the result of our consistent focus on expanding the profitable core business in Nelly. It's the result of a lot of work over a long period of time. If we look at the customer base, very pleasingly we see that we are winning more new and returning customers. For the fourth consecutive quarter, we saw growth in our active customer base. Here we saw that we both had strong new customer recruitment, but also more customers returning. New customer recruitment accelerated in the quarter, and we have really become much sharper in targeting both the most relevant segments of consumers, but also consistently with the very best products in our paid advertising, resulting in this good level of new customer recruitment. We also saw during the quarter that more customers are now returning to make another purchase. Overall, online traffic increased by 9.9%, and the number of orders rose by 20.2% in the quarter. It's also worth mentioning that we achieved this while marketing cost as a proportion of net revenue decreased slightly to 9.4% as compared to 9.9% in the same period last year. This really shows that we have improved the effectiveness of our marketing further. Of course, paid advertising is an important part of our business, but we also continue to focus very heavily on our social media channels, both in paid, of course, but also from an organic point of view. We were happy to see that during the third quarter, we reached 200,000 followers on TikTok, which is an important channel for us and one that we have actively been developing and growing over some time. A very pleasing result for us. Lastly, but very importantly, we also see in our brand tracking, which we conduct continuously, that our brand position is strengthening and that we now have a growing share of our target audience naming Nelly as their favorite store. This is, of course, something that we are very happy about, but it's also something that is important going forward as a sort of platform for continuing to develop and grow the business. As I said before, these improvements critically are always driven by the strength of our assortment. Here we really feel that we have made further inroads in key categories, not least in our own brand share. For the third quarter of 2025, we achieved an own brand share of 62.2%, which we can compare to the same period last year where our own brand share was 45.2%. As you can see in the graph there, it really is even historically when we look at a high own brand share that we achieved in this quarter. We really feel that there are some categories where we have now built a leading assortment. It doesn't mean that we are finished, of course, but it means that we feel we have a very strong position for our target audience. To name a couple, jeans and sneakers, we really have built a very strong assortment, both of our own products, but also importantly for us, we have been able to introduce new global brands that we know our target audience appreciates. During the spring and summer season, we were able to add big names like PUMA and One Teaspoon to our assortment, which we are, of course, very happy and proud about. In addition to jeans and sneakers, we also achieved growth in knitwear, pants, and shoes during the quarter. Here we also see that we have significant potential going forward to take a leading position in these categories by further developing them, both, of course, as I said, with our own products, but also the best external brands. Our own brands also have a leading role in our flagship stores, of which we now have two. Our flagship store in Stockholm, which has been open for about two years, and our flagship store in Copenhagen, which we opened at the beginning of October, so has only been open for a few weeks. Here, of course, are two very important places where we can showcase our own brand in a very good way. All that being said, we are very happy about the high own brand share, but the magic sauce in our business is definitely to be able to offer a curated assortment of both our own products and the best global brands. It's the combination that we know our customer appreciates. This is something we will continue to work on as well. Now, moving on to the return rate, this is an important metric in our business and something that we have been working very actively on for the last few years. Our return rate is always in focus. Pleasingly, we were able to achieve a further improvement in the third quarter where we saw a low return rate of 26.1% as compared to 27.1% for the same period last year. It is really important to emphasize that maintaining a low return rate requires constant focus to both protect and continue to develop our work in that space. Here we have made a number of changes or implemented a number of initiatives as well during the quarter. It's worth mentioning that we have now moved the handling of our returns in-house. Most of our returns are now handled at our own warehouse in Borås. This was, of course, an important move for us to achieve both more control, but also shorter handling times. Going forward, we have further initiatives underway that we are implementing to continue to work with our return rate. To name a couple, we are working both on being able to offer personalized size recommendations and also work with various forms of customer nudging. It is definitely important to note that return rate doesn't stay low by itself. This is also something that is very important as we expand our presence in other markets that have historically had high return rates. Return rate is something that we monitor very closely in each market where we are active. Moving on to the gross margin, here we also saw further improvement during the quarter. We achieved a strong gross margin in the third quarter of 56.8%, which we can compare to the same period last year where we achieved a gross margin of 54.5%. A further improvement there year on year. This was, of course, positively impacted by the growth in our own brand share. I think generally, though, it is testament to our strong assortment. We were able to maintain a strong gross margin during the start of the autumn and winter season as well. Our own brand share is very helpful in terms of generating a strong gross margin. Now, turning our attention to the future a little bit, building on the strong performance of this year so far, we are now working on a number of targeted growth initiatives in the context of our enduring high ambitions for profitable growth. Our assortment continues to be the most important growth driver in our business, given we're a product-centric business. Here we will continue to work on refining our key categories. As I mentioned before, in jeans and sneakers, we already have a strong position, but these are both really key categories for us that we will continue to work on. We also are very pleased that we have upcoming brand launches of, for us, new global brands like Diesel and Nike. We're very happy and proud to be able to add these to our external brand portfolio, and we really feel that they will further elevate our offering in these categories going forward. As I mentioned before, we also have an opportunity to take a leading position in more categories. To name a few, we have knitwear, tops, and pants where we have made further inroads, but feel we have more potential to take a leading position, and this will really reinforce our role as the go-to destination for our target audience. The more categories where we feel we have a leading assortment, the better we're able to meet all of our customers' everyday fashion needs, of course. In addition to continuing to work on improving and expanding and developing our assortment, we are also now investing in expanding Nelly's presence in markets where we see strong growth potential. We are strong in the Nordic markets, but we see that, for example, opening a second flagship store on Strøget in central Copenhagen in the beginning of October is also part of this initiative to expand our presence. Opening this store, key objectives, of course, increasing brand awareness and solidifying our position in Denmark, but also given the location of this store internationally. We have a lot of tourists on Strøget, and this is a key way for us to help new customers discover our brand. The Nordics will remain our core market. That is an important point to make. We have high brand awareness in the Nordics and a strong position, so this will continue to remain our core market. We do see growth opportunities beyond the Nordics, and we have chosen Germany as our next focus in terms of investing and expanding our presence. Very important to emphasize here is that our expansion in Germany is a long-term effort. Germany is not a new market for us. We have been active there for some time, but Germany is also a tricky market, so we see it as a long-term effort that will require both investment and time. We are convinced that our offering has broad appeal in Germany as well. To summarize, we are pleased to report a strong third quarter for 2025 with both high growth and solid profitability, definitely something we don't take for granted. As I mentioned during the presentation so far, even more pleasingly for me, and I'm sure for many at Nelly, is that we continue to see our customer base growing and our brand becoming stronger and stronger. Both our assortment and the effectiveness of our marketing have driven this improvement and will continue to be key focus areas for us going forward as well. With that, I will hand over to Niklas to provide a more detailed financial summary for the quarter. Thank you, Helena. Let me take you through some of the financial details for the third quarter. Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year, showing a strong and accelerated growth rate of 18.4%. Growth was mainly driven by online sales before returns, improved return rate, and increased store sales. The return rate improved in the quarter to 26.1% from 27.1% in the comparative quarter. The currency affected the growth rate negatively, mainly due to the depreciation of the Norwegian crown. Net revenue in local currencies grew by 20.2%. Average order value in the Nordics decreased by 8.1%, which was driven by both lower average item value and lower average ordered items. Total number of orders in the Nordics increased by 20.2%. With that, we move to the next slide. We conclude that operating profit in the third quarter amounted to SEK 43.3 million compared to SEK 25.1 million last year, with operating margin reaching 15.3% compared to 10.5% in the same quarter last year. The third quarter showed solid operating margin and a strong operating profit. Improved operating profit compared to the same quarter last year was mainly driven by higher gross profit through increased net revenue, as well as the improved gross margin contributing. In addition, we maintained a good level of cost control in the third quarter, improving the operating cost to net revenue ratio. A quick look at LTM figures shows a solid financial and operational performance over 12 months with both record high operating profit and operating margin. Operating profit amounted to SEK 154.8 million with an operating margin of 12.8%. This showcases the continued momentum in improving both profit and margin in LTM figures, even further through the third quarter. Now, moving on to the income statement on the next slide. Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year. Gross profit amounted to SEK 161.2 million compared to SEK 130.7 million, with an improved gross margin of 56.8% compared to 54.5% last year. Warehousing and distribution costs amounted to SEK 31.3 million compared to SEK 28.0 million. Cost as a share of net revenue improved to 11.0% from 11.7%, driven by operational improvements, optimized distribution, and an improved return rate. Marketing costs amounted to SEK 26.8 million compared to SEK 23.8 million last year, with costs mainly related to paid advertising. Marketing costs relative to net revenue decreased to 9.4% from 9.9% last year. Administration and other operating expenses increased to SEK 59.9 million compared to SEK 53.8 million, but improved as a share relative to net revenue amounting to 21.1% compared to 22.5% last year. Operating profit increased to SEK 43.3 million compared to SEK 25.1 million last year, with an increased operating margin of 15.3% compared to 10.5%. Lastly, let me talk you through some additional financials on the next slide. Operating cash flow in the third quarter amounted to -SEK 18.5 million compared to -SEK 18.5 million last year. The third quarter's cash flow from operating activities was in line with last year, where a stronger net result contributed positively to the cash flow, and higher inventory levels ahead of Q4 contributed negatively to the operating cash flow. As a general note, as seasonality shows, higher inventory levels are expected in the third quarter ahead of Q4. We also see a higher share of goods in transit by the end of third quarter, partially explaining higher inventory levels in relation to net revenue, this compared to last year. Cash flow from investing activities amounted to -SEK 5.6 million compared to -SEK 3.1 million last year. This was primarily attributable to IT investments. Cash flow from financing activities amounted to -SEK 8.7 million compared to -SEK 7.9 million, mainly related to payment of lease liabilities. Net cash flow amounted to -SEK 32.8 million compared to -SEK 29.5 million last year. By the end of Q3, we note that remaining tax deferrals amounted to SEK 69.6 million. This is down from SEK 105.6 million by the end of Q3 last year. We end the third quarter with a strengthened balance sheet with a solid equity ratio of 35.7%, improved from 26.2%, and with cash and cash equivalents amounting to SEK 226.7 million. Concluding the quarter, net revenue growth of 18.4%, operating margin of 15.3%, and operating profit of SEK 43.3 million. LTM figures outperformed previous highs with an operating profit of SEK 154.8 million and operating margin of 12.8%. With that, I hand it back to you, Helena. Thank you very much, Niklas. This concludes the presentation part of today's call. Before we move on to answer some of your questions, I just would like to take the opportunity to, first of all, thank all of our amazing customers. We have very discerning customers who I'm happy that they inspire us to continuously raise the bar and set very high ambitions for ourselves. A big thank you to all of our customers, and of course, most importantly, the Nelly team. It is such an incredibly committed team, and I see everyone working so hard every day to create the very best experience for our customers. It really is a joy and a privilege to be working alongside such an amazing team. Big, big thank you from me and Niklas as well, of course. With that, we will move on to answer your questions. Yes, thank you, Helena. Thank you all for joining our third quarter presentation this morning. We will now start with two questions from Albin from Kalqyl, and these two are for you, Helena. Congratulations on another strong quarter. Do you see a correlation between sales in your flagship store and your online sales? Yes, that's an excellent question. I think it is always tricky to pinpoint exactly what is an effect of what when you do so many things at the same time as we tend to do. I would say that we can't see a sort of a clear correlation between the two, but of course, we have seen very high traffic in our Stockholm store. I mean, our Copenhagen store only just opened, but in Stockholm, we have seen very high traffic, and it's been growing over that two-year period that it's been open as well. I think it would be strange to me if it didn't positively influence our brand position and our online sales, but it's something that is tricky to prove in numbers, so to speak. Thank you. Do you see a reason to increase the marketing budget in relation to sales, given the improved traction you're seeing? The way that we manage our paid marketing is, of course, extremely dynamic day by day, sometimes hour by hour. We drive our marketing now. We didn't do that historically, but now we drive it entirely on profitability, which basically means that we are able to increase our spend when we can do it profitably. We're also very careful to manage this closely and pull back on our spend when we're not seeing the results that we're after. I think it's difficult to give a general answer to this question because we do manage it so dynamically and closely every day. Great. We continue with you, Helena. This time, it's a question from Michael. I noticed that you've been out of stock of high-requested items like the green puffer jacket. How do you work on ensuring sufficient supply of high-demand products? Yeah, excellent question as well. This is, of course, for a fashion business, always a challenge to find exactly the right quantity to buy, given also that we buy quite far in advance. We have made very significant improvements in quantifying demand for our products, I would say. If we look at many of the periods in 2024, we were out of stock much more frequently on high sellers than we have been this year. Now, with the green puffer jacket in particular, there was a lot more demand than we had anticipated. I think this is something that we continue to work on going forward and that we also, I mean, you know, given that we have seen good growth in this period, we are improving our ability to forecast as we go along as well. Of course, it's our ambition to make sure, or our sort of goal to make sure that we can meet demand, but with something like seasonal products like jackets, we also don't want to have too much stock when we move out of the season. It's a delicate balance to get exactly right. Thank you. The next one is once again for you, Helena, and this time it's from an investor. What about the U.S. market since you're adding some major names into your company like Nike and PUMA? What is the plan to expand the U.S. market knowing that the sentiment is shifting away from Asian websites related and better take advantage of that? I think as we now carefully and very systematically are turning our attention a little bit outside the Nordic market, we have to do it in a very controlled and careful way. We know the Nordic market really well. Some of the other markets in Europe where we have been active for some time, we don't know them as well. We also know, as I mentioned during the presentation, that we have struggled with certain elements of other markets such as return rate, for example. I think it's important going into this that we want to do it in a very controlled and sort of purposeful way. I think the U.S. market is a tricky market. It's a big market for sure. It's also made up of a lot of mini markets within the U.S., really not to be underestimated. At this point we are focused more on Europe and, as I said, Germany in particular. Of course, making sure that we don't lose sight of our core market, which is the Nordics. I don't see the U.S. as a focus in the near future. Yes, we have another question from Julius. Congratulations on the great result. Will you be able to maintain this level of growth and profit going forward? Also an excellent question. I mean, we are, of course, happy and pleased about this third quarter, but I think it is important to remember and sort of stay humble about the fact that we are in a tricky and volatile industry with a customer who is very discerning and very careful with where they spend their money. I think apart from the fact that we obviously don't give forward projections, I think it's fair to say that we try and do our very best every quarter. It is a tricky industry and one that is both, as I said, volatile, but also sort of changes continuously with trends and so on. We will do our best, but I think it's difficult to say from quarter to quarter exactly what it will look like. We hope that we have built a sort of a healthy and sustainable core as a platform for, yeah, going forward as well. Great, thank you, Helena. I think that was actually the last question we had. Thank you very much, everyone, for listening. We will be here again next quarter, hopefully. Thank you. Thank you. Thank you.

Speaker 2: Welcome to Nelly Group third quarter report 2025. Today, I am pleased to present CEO Helena Karlinder-Östlundh and CFO Niklas Lingblom. After the presentation, there will be a question and answer session. Participants are able to ask questions in written form on the audiocast page. Now, I will hand over to Helena Karlinder-Östlundh. Please go ahead. Welcome to Nelly Group third quarter report 2025. welcome to nelly group third quarter report 2025 Today, I am pleased to present CEO Helena Karlinder-Östlundh and CFO Niklas Lingblom. today i am pleased to present ceo helena karlinder-östlundh and cfo niklas lingblom After the presentation, there will be a question and answer session. after the presentation there will be a question and answer session Participants are able to ask questions in written form on the audiocast page. participants are able to ask questions in written form on the audiocast page Now, I will hand over to Helena Karlinder-Östlundh. now i will hand over to helena karlinder-östlundh Please go ahead. please go ahead

Speaker 1: Thank you very much. Good morning and welcome to the results presentation for Nelly Group for the third quarter of 2025. My name is Helena Karlinder-Östlundh and I am the CEO of Nelly Group, and I will be presenting our results this morning together with our CFO, Niklas Lingblom. Let's have a brief look at what we will be covering in today's presentation. We will start with a short video introducing you to the Nelly business. I will then provide some commentary on the third quarter of 2025 before I hand over to Niklas for a more detailed financial summary of the quarter. As always, we will then conclude by answering some of your questions. Thank you very much. thank you very much Good morning and welcome to the results presentation for Nelly Group for the third quarter of 2025. good morning and welcome to the results presentation for nelly group for the third quarter of 2025 My name is Helena Karlinder-Östlundh and I am the CEO of Nelly Group, and I will be presenting our results this morning together with our CFO, Niklas Lingblom. my name is helena karlinder-östlundh and i am the ceo of nelly group and i will be presenting our results this morning together with our cfo niklas lingblom Let's have a brief look at what we will be covering in today's presentation. let's have a brief look at what we will be covering in today's presentation We will start with a short video introducing you to the Nelly business. we will start with a short video introducing you to the nelly business I will then provide some commentary on the third quarter of 2025 before I hand over to Niklas for a more detailed financial summary of the quarter. i will then provide some commentary on the third quarter of 2025 before i hand over to niklas for a more detailed financial summary of the quarter As always, we will then conclude by answering some of your questions. as always we will then conclude by answering some of your questions At this point, we would like to remind you again that you are most welcome to send us your questions throughout today's presentation, and we will answer as many as we can at the end of the call. With that, let's start with a short video introducing you to the Nelly business. Okay, now let's have a look at the third quarter of 2025 in more detail. Overall, we are very pleased to report a strong third quarter for 2025 with both high growth and solid profitability. Underneath this result, and for me even more pleasingly, we also saw that our customer base grew once again in the quarter, and also importantly that we continue to build our brand towards a stronger and more attractive position in the market. At this point, we would like to remind you again that you are most welcome to send us your questions throughout today's presentation, and we will answer as many as we can at the end of the call. at this point we would like to remind you again that you are most welcome to send us your questions throughout today's presentation and we will answer as many as we can at the end of the call With that, let's start with a short video introducing you to the Nelly business. with that let's start with a short video introducing you to the nelly business Okay, now let's have a look at the third quarter of 2025 in more detail. okay now let's have a look at the third quarter of 2025 in more detail Overall, we are very pleased to report a strong third quarter for 2025 with both high growth and solid profitability. overall we are very pleased to report a strong third quarter for 2025 with both high growth and solid profitability Underneath this result, and for me even more pleasingly, we also saw that our customer base grew once again in the quarter, and also importantly that we continue to build our brand towards a stronger and more attractive position in the market. underneath this result and for me even more pleasingly we also saw that our customer base grew once again in the quarter and also importantly that we continue to build our brand towards a stronger and more attractive position in the market These improvements, as always, were driven by our assortment, where we made further inroads, and of course also the effectiveness of our marketing. In the subsequent slides, we will be diving into each of these points in a little bit more detail to give you some more context. If we start with the overall performance during the quarter, I think it's also important to put this result into the context of the third quarter, which can be a precarious time in the world of fashion, primarily because it firstly is the transition from our spring and summer season to our autumn and winter season. We have to ensure that we finish the spring and summer season in a good way and of course get a flying start to the autumn and winter season. These improvements, as always, were driven by our assortment, where we made further inroads, and of course also the effectiveness of our marketing. these improvements as always were driven by our assortment where we made further inroads and of course also the effectiveness of our marketing In the subsequent slides, we will be diving into each of these points in a little bit more detail to give you some more context. in the subsequent slides we will be diving into each of these points in a little bit more detail to give you some more context If we start with the overall performance during the quarter, I think it's also important to put this result into the context of the third quarter, which can be a precarious time in the world of fashion, primarily because it firstly is the transition from our spring and summer season to our autumn and winter season. if we start with the overall performance during the quarter i think it's also important to put this result into the context of the third quarter which can be a precarious time in the world of fashion primarily because it firstly is the transition from our spring and summer season to our autumn and winter season We have to ensure that we finish the spring and summer season in a good way and of course get a flying start to the autumn and winter season. we have to ensure that we finish the spring and summer season in a good way and of course get a flying start to the autumn and winter season It's also an in-between period from a customer perspective where both the summer period and Christmas come with more natural occasions to shop. The third quarter can be a precarious quarter, and all the more pleasing then that this past quarter we succeeded in delivering both high growth and solid profitability. Net revenue grew by 18.4% to SEK 283.7 million, and we can compare this to our net revenue growth last year during the same period of 1.4%. Operating margin also increased to 15.3% as compared to 10.5% in the same period last year. This generated an operating profit of SEK 43.3 million, which we can compare to SEK 25.1 million in the same period last year. Clearly a strong result. It's also an in-between period from a customer perspective where both the summer period and Christmas come with more natural occasions to shop. it's also an in-between period from a customer perspective where both the summer period and christmas come with more natural occasions to shop The third quarter can be a precarious quarter, and all the more pleasing then that this past quarter we succeeded in delivering both high growth and solid profitability. the third quarter can be a precarious quarter and all the more pleasing then that this past quarter we succeeded in delivering both high growth and solid profitability Net revenue grew by 18.4% to SEK 283.7 million, and we can compare this to our net revenue growth last year during the same period of 1.4%. net revenue grew by 18.4% to sek 283.7 million and we can compare this to our net revenue growth last year during the same period of 1.4% Operating margin also increased to 15.3% as compared to 10.5% in the same period last year. operating margin also increased to 15.3% as compared to 10.5% in the same period last year This generated an operating profit of SEK 43.3 million, which we can compare to SEK 25.1 million in the same period last year. this generated an operating profit of sek 43.3 million which we can compare to sek 25.1 million in the same period last year Clearly a strong result. clearly a strong result This also means that so far in 2025, we have achieved net revenue growth of 15.1%, where during the same nine-month period last year, we achieved net revenue growth of 2.2%. We also have an improved operating margin for the year to date of 13.3% as compared to 7.3% for the same period last year. I think it's important to note that this is a strong result, but it's also the result of our consistent focus on expanding the profitable core business in Nelly. It's the result of a lot of work over a long period of time. If we look at the customer base, very pleasingly we see that we are winning more new and returning customers. For the fourth consecutive quarter, we saw growth in our active customer base. Here we saw that we both had strong new customer recruitment, but also more customers returning. This also means that so far in 2025, we have achieved net revenue growth of 15.1%, where during the same nine-month period last year, we achieved net revenue growth of 2.2%. this also means that so far in 2025 we have achieved net revenue growth of 15.1% where during the same nine-month period last year we achieved net revenue growth of 2.2% We also have an improved operating margin for the year to date of 13.3% as compared to 7.3% for the same period last year. we also have an improved operating margin for the year to date of 13.3% as compared to 7.3% for the same period last year I think it's important to note that this is a strong result, but it's also the result of our consistent focus on expanding the profitable core business in Nelly . i think it's important to note that this is a strong result but it's also the result of our consistent focus on expanding the profitable core business in nelly It's the result of a lot of work over a long period of time. it's the result of a lot of work over a long period of time If we look at the customer base, very pleasingly we see that we are winning more new and returning customers. if we look at the customer base very pleasingly we see that we are winning more new and returning customers For the fourth consecutive quarter, we saw growth in our active customer base. for the fourth consecutive quarter we saw growth in our active customer base Here we saw that we both had strong new customer recruitment, but also more customers returning. here we saw that we both had strong new customer recruitment but also more customers returning New customer recruitment accelerated in the quarter, and we have really become much sharper in targeting both the most relevant segments of consumers, but also consistently with the very best products in our paid advertising, resulting in this good level of new customer recruitment. We also saw during the quarter that more customers are now returning to make another purchase. Overall, online traffic increased by 9.9%, and the number of orders rose by 20.2% in the quarter. It's also worth mentioning that we achieved this while marketing cost as a proportion of net revenue decreased slightly to 9.4% as compared to 9.9% in the same period last year. This really shows that we have improved the effectiveness of our marketing further. New customer recruitment accelerated in the quarter, and we have really become much sharper in targeting both the most relevant segments of consumers, but also consistently with the very best products in our paid advertising, resulting in this good level of new customer recruitment. new customer recruitment accelerated in the quarter and we have really become much sharper in targeting both the most relevant segments of consumers but also consistently with the very best products in our paid advertising resulting in this good level of new customer recruitment We also saw during the quarter that more customers are now returning to make another purchase. we also saw during the quarter that more customers are now returning to make another purchase Overall, online traffic increased by 9.9%, and the number of orders rose by 20.2% in the quarter. overall online traffic increased by 9.9% and the number of orders rose by 20.2% in the quarter It's also worth mentioning that we achieved this while marketing cost as a proportion of net revenue decreased slightly to 9.4% as compared to 9.9% in the same period last year. it's also worth mentioning that we achieved this while marketing cost as a proportion of net revenue decreased slightly to 9.4% as compared to 9.9% in the same period last year This really shows that we have improved the effectiveness of our marketing further. this really shows that we have improved the effectiveness of our marketing further Of course, paid advertising is an important part of our business, but we also continue to focus very heavily on our social media channels, both in paid, of course, but also from an organic point of view. We were happy to see that during the third quarter, we reached 200,000 followers on TikTok, which is an important channel for us and one that we have actively been developing and growing over some time. A very pleasing result for us. Lastly, but very importantly, we also see in our brand tracking, which we conduct continuously, that our brand position is strengthening and that we now have a growing share of our target audience naming Nelly as their favorite store. Of course, paid advertising is an important part of our business, but we also continue to focus very heavily on our social media channels, both in paid, of course, but also from an organic point of view. of course paid advertising is an important part of our business but we also continue to focus very heavily on our social media channels both in paid of course but also from an organic point of view We were happy to see that during the third quarter, we reached 200,000 followers on TikTok, which is an important channel for us and one that we have actively been developing and growing over some time. we were happy to see that during the third quarter we reached 200,000 followers on tiktok which is an important channel for us and one that we have actively been developing and growing over some time A very pleasing result for us. a very pleasing result for us Lastly, but very importantly, we also see in our brand tracking, which we conduct continuously, that our brand position is strengthening and that we now have a growing share of our target audience naming Nelly as their favorite store. lastly but very importantly we also see in our brand tracking which we conduct continuously that our brand position is strengthening and that we now have a growing share of our target audience naming nelly as their favorite store This is, of course, something that we are very happy about, but it's also something that is important going forward as a sort of platform for continuing to develop and grow the business. As I said before, these improvements critically are always driven by the strength of our assortment. Here we really feel that we have made further inroads in key categories, not least in our own brand share. For the third quarter of 2025, we achieved an own brand share of 62.2%, which we can compare to the same period last year where our own brand share was 45.2%. As you can see in the graph there, it really is even historically when we look at a high own brand share that we achieved in this quarter. We really feel that there are some categories where we have now built a leading assortment. This is, of course, something that we are very happy about, but it's also something that is important going forward as a sort of platform for continuing to develop and grow the business. this is of course something that we are very happy about but it's also something that is important going forward as a sort of platform for continuing to develop and grow the business As I said before, these improvements critically are always driven by the strength of our assortment. as i said before these improvements critically are always driven by the strength of our assortment Here we really feel that we have made further inroads in key categories, not least in our own brand share. here we really feel that we have made further inroads in key categories not least in our own brand share For the third quarter of 2025, we achieved an own brand share of 62.2%, which we can compare to the same period last year where our own brand share was 45.2%. for the third quarter of 2025 we achieved an own brand share of 62.2% which we can compare to the same period last year where our own brand share was 45.2% As you can see in the graph there, it really is even historically when we look at a high own brand share that we achieved in this quarter. as you can see in the graph there it really is even historically when we look at a high own brand share that we achieved in this quarter We really feel that there are some categories where we have now built a leading assortment. we really feel that there are some categories where we have now built a leading assortment It doesn't mean that we are finished, of course, but it means that we feel we have a very strong position for our target audience. To name a couple, jeans and sneakers, we really have built a very strong assortment, both of our own products, but also importantly for us, we have been able to introduce new global brands that we know our target audience appreciates. During the spring and summer season, we were able to add big names like PUMA and One Teaspoon to our assortment, which we are, of course, very happy and proud about. In addition to jeans and sneakers, we also achieved growth in knitwear, pants, and shoes during the quarter. It doesn't mean that we are finished, of course, but it means that we feel we have a very strong position for our target audience. it doesn't mean that we are finished of course but it means that we feel we have a very strong position for our target audience To name a couple, jeans and sneakers, we really have built a very strong assortment, both of our own products, but also importantly for us, we have been able to introduce new global brands that we know our target audience appreciates. to name a couple jeans and sneakers we really have built a very strong assortment both of our own products but also importantly for us we have been able to introduce new global brands that we know our target audience appreciates During the spring and summer season, we were able to add big names like PUMA and One Teaspoon to our assortment, which we are, of course, very happy and proud about. during the spring and summer season we were able to add big names like puma and one teaspoon to our assortment which we are of course very happy and proud about In addition to jeans and sneakers, we also achieved growth in knitwear, pants, and shoes during the quarter. in addition to jeans and sneakers we also achieved growth in knitwear pants and shoes during the quarter Here we also see that we have significant potential going forward to take a leading position in these categories by further developing them, both, of course, as I said, with our own products, but also the best external brands. Our own brands also have a leading role in our flagship stores, of which we now have two. Our flagship store in Stockholm, which has been open for about two years, and our flagship store in Copenhagen, which we opened at the beginning of October, so has only been open for a few weeks. Here, of course, are two very important places where we can showcase our own brand in a very good way. Here we also see that we have significant potential going forward to take a leading position in these categories by further developing them, both, of course, as I said, with our own products, but also the best external brands. here we also see that we have significant potential going forward to take a leading position in these categories by further developing them both of course as i said with our own products but also the best external brands Our own brands also have a leading role in our flagship stores, of which we now have two. our own brands also have a leading role in our flagship stores of which we now have two Our flagship store in Stockholm, which has been open for about two years, and our flagship store in Copenhagen, which we opened at the beginning of October, so has only been open for a few weeks. our flagship store in stockholm which has been open for about two years and our flagship store in copenhagen which we opened at the beginning of october so has only been open for a few weeks Here, of course, are two very important places where we can showcase our own brand in a very good way. here of course are two very important places where we can showcase our own brand in a very good way All that being said, we are very happy about the high own brand share, but the magic sauce in our business is definitely to be able to offer a curated assortment of both our own products and the best global brands. It's the combination that we know our customer appreciates. This is something we will continue to work on as well. Now, moving on to the return rate, this is an important metric in our business and something that we have been working very actively on for the last few years. Our return rate is always in focus. Pleasingly, we were able to achieve a further improvement in the third quarter where we saw a low return rate of 26.1% as compared to 27.1% for the same period last year. All that being said, we are very happy about the high own brand share, but the magic sauce in our business is definitely to be able to offer a curated assortment of both our own products and the best global brands. all that being said we are very happy about the high own brand share but the magic sauce in our business is definitely to be able to offer a curated assortment of both our own products and the best global brands It's the combination that we know our customer appreciates. it's the combination that we know our customer appreciates This is something we will continue to work on as well. this is something we will continue to work on as well Now, moving on to the return rate, this is an important metric in our business and something that we have been working very actively on for the last few years. now moving on to the return rate this is an important metric in our business and something that we have been working very actively on for the last few years Our return rate is always in focus. our return rate is always in focus Pleasingly, we were able to achieve a further improvement in the third quarter where we saw a low return rate of 26.1% as compared to 27.1% for the same period last year. pleasingly we were able to achieve a further improvement in the third quarter where we saw a low return rate of 26.1% as compared to 27.1% for the same period last year It is really important to emphasize that maintaining a low return rate requires constant focus to both protect and continue to develop our work in that space. Here we have made a number of changes or implemented a number of initiatives as well during the quarter. It's worth mentioning that we have now moved the handling of our returns in-house. Most of our returns are now handled at our own warehouse in Borås. This was, of course, an important move for us to achieve both more control, but also shorter handling times. Going forward, we have further initiatives underway that we are implementing to continue to work with our return rate. To name a couple, we are working both on being able to offer personalized size recommendations and also work with various forms of customer nudging. It is definitely important to note that return rate doesn't stay low by itself. It is really important to emphasize that maintaining a low return rate requires constant focus to both protect and continue to develop our work in that space. it is really important to emphasize that maintaining a low return rate requires constant focus to both protect and continue to develop our work in that space Here we have made a number of changes or implemented a number of initiatives as well during the quarter. here we have made a number of changes or implemented a number of initiatives as well during the quarter It's worth mentioning that we have now moved the handling of our returns in-house. it's worth mentioning that we have now moved the handling of our returns in-house Most of our returns are now handled at our own warehouse in Borås. most of our returns are now handled at our own warehouse in borås This was, of course, an important move for us to achieve both more control, but also shorter handling times. this was of course an important move for us to achieve both more control but also shorter handling times Going forward, we have further initiatives underway that we are implementing to continue to work with our return rate. going forward we have further initiatives underway that we are implementing to continue to work with our return rate To name a couple, we are working both on being able to offer personalized size recommendations and also work with various forms of customer nudging. It is definitely important to note that return rate doesn't stay low by itself. to name a couple we are working both on being able to offer personalized size recommendations and also work with various forms of customer nudging. it is definitely important to note that return rate doesn't stay low by itself This is also something that is very important as we expand our presence in other markets that have historically had high return rates. Return rate is something that we monitor very closely in each market where we are active. Moving on to the gross margin, here we also saw further improvement during the quarter. We achieved a strong gross margin in the third quarter of 56.8%, which we can compare to the same period last year where we achieved a gross margin of 54.5%. A further improvement there year on year. This was, of course, positively impacted by the growth in our own brand share. I think generally, though, it is testament to our strong assortment. We were able to maintain a strong gross margin during the start of the autumn and winter season as well. This is also something that is very important as we expand our presence in other markets that have historically had high return rates. this is also something that is very important as we expand our presence in other markets that have historically had high return rates Return rate is something that we monitor very closely in each market where we are active. return rate is something that we monitor very closely in each market where we are active Moving on to the gross margin, here we also saw further improvement during the quarter. moving on to the gross margin here we also saw further improvement during the quarter We achieved a strong gross margin in the third quarter of 56.8%, which we can compare to the same period last year where we achieved a gross margin of 54.5%. we achieved a strong gross margin in the third quarter of 56.8% which we can compare to the same period last year where we achieved a gross margin of 54.5% A further improvement there year on year. a further improvement there year on year This was, of course, positively impacted by the growth in our own brand share. this was of course positively impacted by the growth in our own brand share I think generally, though, it is testament to our strong assortment. i think generally though it is testament to our strong assortment We were able to maintain a strong gross margin during the start of the autumn and winter season as well. we were able to maintain a strong gross margin during the start of the autumn and winter season as well Our own brand share is very helpful in terms of generating a strong gross margin. Now, turning our attention to the future a little bit, building on the strong performance of this year so far, we are now working on a number of targeted growth initiatives in the context of our enduring high ambitions for profitable growth. Our assortment continues to be the most important growth driver in our business, given we're a product-centric business. Here we will continue to work on refining our key categories. As I mentioned before, in jeans and sneakers, we already have a strong position, but these are both really key categories for us that we will continue to work on. We also are very pleased that we have upcoming brand launches of, for us, new global brands like Diesel and Nike. Our own brand share is very helpful in terms of generating a strong gross margin. our own brand share is very helpful in terms of generating a strong gross margin Now, turning our attention to the future a little bit, building on the strong performance of this year so far, we are now working on a number of targeted growth initiatives in the context of our enduring high ambitions for profitable growth. now turning our attention to the future a little bit building on the strong performance of this year so far we are now working on a number of targeted growth initiatives in the context of our enduring high ambitions for profitable growth Our assortment continues to be the most important growth driver in our business, given we're a product-centric business. our assortment continues to be the most important growth driver in our business given we're a product-centric business Here we will continue to work on refining our key categories. here we will continue to work on refining our key categories As I mentioned before, in jeans and sneakers, we already have a strong position, but these are both really key categories for us that we will continue to work on. as i mentioned before in jeans and sneakers we already have a strong position but these are both really key categories for us that we will continue to work on We also are very pleased that we have upcoming brand launches of, for us, new global brands like Diesel and Nike. we also are very pleased that we have upcoming brand launches of for us new global brands like diesel and nike We're very happy and proud to be able to add these to our external brand portfolio, and we really feel that they will further elevate our offering in these categories going forward. As I mentioned before, we also have an opportunity to take a leading position in more categories. To name a few, we have knitwear, tops, and pants where we have made further inroads, but feel we have more potential to take a leading position, and this will really reinforce our role as the go-to destination for our target audience. The more categories where we feel we have a leading assortment, the better we're able to meet all of our customers' everyday fashion needs, of course. In addition to continuing to work on improving and expanding and developing our assortment, we are also now investing in expanding Nelly's presence in markets where we see strong growth potential. We're very happy and proud to be able to add these to our external brand portfolio, and we really feel that they will further elevate our offering in these categories going forward. we're very happy and proud to be able to add these to our external brand portfolio and we really feel that they will further elevate our offering in these categories going forward As I mentioned before, we also have an opportunity to take a leading position in more categories. as i mentioned before we also have an opportunity to take a leading position in more categories To name a few, we have knitwear, tops, and pants where we have made further inroads, but feel we have more potential to take a leading position, and this will really reinforce our role as the go-to destination for our target audience. to name a few we have knitwear tops and pants where we have made further inroads but feel we have more potential to take a leading position and this will really reinforce our role as the go-to destination for our target audience The more categories where we feel we have a leading assortment, the better we're able to meet all of our customers' everyday fashion needs, of course. the more categories where we feel we have a leading assortment the better we're able to meet all of our customers' everyday fashion needs of course In addition to continuing to work on improving and expanding and developing our assortment, we are also now investing in expanding Nelly's presence in markets where we see strong growth potential. in addition to continuing to work on improving and expanding and developing our assortment we are also now investing in expanding nelly's presence in markets where we see strong growth potential We are strong in the Nordic markets, but we see that, for example, opening a second flagship store on Strøget in central Copenhagen in the beginning of October is also part of this initiative to expand our presence. Opening this store, key objectives, of course, increasing brand awareness and solidifying our position in Denmark, but also given the location of this store internationally. We have a lot of tourists on Strøget, and this is a key way for us to help new customers discover our brand. The Nordics will remain our core market. That is an important point to make. We have high brand awareness in the Nordics and a strong position, so this will continue to remain our core market. We do see growth opportunities beyond the Nordics, and we have chosen Germany as our next focus in terms of investing and expanding our presence. We are strong in the Nordic markets, but we see that, for example, opening a second flagship store on Strøget in central Copenhagen in the beginning of October is also part of this initiative to expand our presence. we are strong in the nordic markets but we see that for example opening a second flagship store on strøget in central copenhagen in the beginning of october is also part of this initiative to expand our presence Opening this store, key objectives, of course, increasing brand awareness and solidifying our position in Denmark, but also given the location of this store internationally. opening this store key objectives of course increasing brand awareness and solidifying our position in denmark but also given the location of this store internationally We have a lot of tourists on Strøget, and this is a key way for us to help new customers discover our brand. we have a lot of tourists on strøget and this is a key way for us to help new customers discover our brand The Nordics will remain our core market. the nordics will remain our core market That is an important point to make. that is an important point to make We have high brand awareness in the Nordics and a strong position, so this will continue to remain our core market. we have high brand awareness in the nordics and a strong position so this will continue to remain our core market We do see growth opportunities beyond the Nordics, and we have chosen Germany as our next focus in terms of investing and expanding our presence. we do see growth opportunities beyond the nordics and we have chosen germany as our next focus in terms of investing and expanding our presence Very important to emphasize here is that our expansion in Germany is a long-term effort. Germany is not a new market for us. We have been active there for some time, but Germany is also a tricky market, so we see it as a long-term effort that will require both investment and time. We are convinced that our offering has broad appeal in Germany as well. To summarize, we are pleased to report a strong third quarter for 2025 with both high growth and solid profitability, definitely something we don't take for granted. As I mentioned during the presentation so far, even more pleasingly for me, and I'm sure for many at Nelly, is that we continue to see our customer base growing and our brand becoming stronger and stronger. Very important to emphasize here is that our expansion in Germany is a long-term effort. very important to emphasize here is that our expansion in germany is a long-term effort Germany is not a new market for us. germany is not a new market for us We have been active there for some time, but Germany is also a tricky market, so we see it as a long-term effort that will require both investment and time. we have been active there for some time but germany is also a tricky market so we see it as a long-term effort that will require both investment and time We are convinced that our offering has broad appeal in Germany as well. we are convinced that our offering has broad appeal in germany as well To summarize, we are pleased to report a strong third quarter for 2025 with both high growth and solid profitability, definitely something we don't take for granted. to summarize we are pleased to report a strong third quarter for 2025 with both high growth and solid profitability definitely something we don't take for granted As I mentioned during the presentation so far, even more pleasingly for me, and I'm sure for many at Nelly , is that we continue to see our customer base growing and our brand becoming stronger and stronger. as i mentioned during the presentation so far even more pleasingly for me and i'm sure for many at nelly is that we continue to see our customer base growing and our brand becoming stronger and stronger Both our assortment and the effectiveness of our marketing have driven this improvement and will continue to be key focus areas for us going forward as well. With that, I will hand over to Niklas to provide a more detailed financial summary for the quarter. Both our assortment and the effectiveness of our marketing have driven this improvement and will continue to be key focus areas for us going forward as well. both our assortment and the effectiveness of our marketing have driven this improvement and will continue to be key focus areas for us going forward as well With that, I will hand over to Niklas to provide a more detailed financial summary for the quarter. with that i will hand over to niklas to provide a more detailed financial summary for the quarter

Speaker 4: Thank you, Helena. Let me take you through some of the financial details for the third quarter. Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year, showing a strong and accelerated growth rate of 18.4%. Growth was mainly driven by online sales before returns, improved return rate, and increased store sales. The return rate improved in the quarter to 26.1% from 27.1% in the comparative quarter. The currency affected the growth rate negatively, mainly due to the depreciation of the Norwegian crown. Net revenue in local currencies grew by 20.2%. Average order value in the Nordics decreased by 8.1%, which was driven by both lower average item value and lower average ordered items. Total number of orders in the Nordics increased by 20.2%. With that, we move to the next slide. Thank you, Helena. thank you helena Let me take you through some of the financial details for the third quarter. let me take you through some of the financial details for the third quarter Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year, showing a strong and accelerated growth rate of 18.4%. net revenue in the quarter amounted to sek 283.7 million compared to sek 239.6 million last year showing a strong and accelerated growth rate of 18.4% Growth was mainly driven by online sales before returns, improved return rate, and increased store sales. growth was mainly driven by online sales before returns improved return rate and increased store sales The return rate improved in the quarter to 26.1% from 27.1% in the comparative quarter. the return rate improved in the quarter to 26.1% from 27.1% in the comparative quarter The currency affected the growth rate negatively, mainly due to the depreciation of the Norwegian crown. the currency affected the growth rate negatively mainly due to the depreciation of the norwegian crown Net revenue in local currencies grew by 20.2%. net revenue in local currencies grew by 20.2% Average order value in the Nordics decreased by 8.1%, which was driven by both lower average item value and lower average ordered items. average order value in the nordics decreased by 8.1% which was driven by both lower average item value and lower average ordered items Total number of orders in the Nordics increased by 20.2%. total number of orders in the nordics increased by 20.2% With that, we move to the next slide. with that we move to the next slide We conclude that operating profit in the third quarter amounted to SEK 43.3 million compared to SEK 25.1 million last year, with operating margin reaching 15.3% compared to 10.5% in the same quarter last year. The third quarter showed solid operating margin and a strong operating profit. Improved operating profit compared to the same quarter last year was mainly driven by higher gross profit through increased net revenue, as well as the improved gross margin contributing. In addition, we maintained a good level of cost control in the third quarter, improving the operating cost to net revenue ratio. A quick look at LTM figures shows a solid financial and operational performance over 12 months with both record high operating profit and operating margin. Operating profit amounted to SEK 154.8 million with an operating margin of 12.8%. We conclude that operating profit in the third quarter amounted to SEK 43.3 million compared to SEK 25.1 million last year, with operating margin reaching 15.3% compared to 10.5% in the same quarter last year. we conclude that operating profit in the third quarter amounted to sek 43.3 million compared to sek 25.1 million last year with operating margin reaching 15.3% compared to 10.5% in the same quarter last year The third quarter showed solid operating margin and a strong operating profit. the third quarter showed solid operating margin and a strong operating profit Improved operating profit compared to the same quarter last year was mainly driven by higher gross profit through increased net revenue, as well as the improved gross margin contributing. improved operating profit compared to the same quarter last year was mainly driven by higher gross profit through increased net revenue as well as the improved gross margin contributing In addition, we maintained a good level of cost control in the third quarter, improving the operating cost to net revenue ratio. in addition we maintained a good level of cost control in the third quarter improving the operating cost to net revenue ratio A quick look at LTM figures shows a solid financial and operational performance over 12 months with both record high operating profit and operating margin. a quick look at ltm figures shows a solid financial and operational performance over 12 months with both record high operating profit and operating margin Operating profit amounted to SEK 154.8 million with an operating margin of 12.8%. operating profit amounted to sek 154.8 million with an operating margin of 12.8% This showcases the continued momentum in improving both profit and margin in LTM figures, even further through the third quarter. Now, moving on to the income statement on the next slide. Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year. Gross profit amounted to SEK 161.2 million compared to SEK 130.7 million, with an improved gross margin of 56.8% compared to 54.5% last year. Warehousing and distribution costs amounted to SEK 31.3 million compared to SEK 28.0 million. Cost as a share of net revenue improved to 11.0% from 11.7%, driven by operational improvements, optimized distribution, and an improved return rate. Marketing costs amounted to SEK 26.8 million compared to SEK 23.8 million last year, with costs mainly related to paid advertising. Marketing costs relative to net revenue decreased to 9.4% from 9.9% last year. This showcases the continued momentum in improving both profit and margin in LTM figures, even further through the third quarter. this showcases the continued momentum in improving both profit and margin in ltm figures even further through the third quarter Now, moving on to the income statement on the next slide. now moving on to the income statement on the next slide Net revenue in the quarter amounted to SEK 283.7 million compared to SEK 239.6 million last year. net revenue in the quarter amounted to sek 283.7 million compared to sek 239.6 million last year Gross profit amounted to SEK 161.2 million compared to SEK 130.7 million, with an improved gross margin of 56.8% compared to 54.5% last year. gross profit amounted to sek 161.2 million compared to sek 130.7 million with an improved gross margin of 56.8% compared to 54.5% last year Warehousing and distribution costs amounted to SEK 31.3 million compared to SEK 28.0 million. warehousing and distribution costs amounted to sek 31.3 million compared to sek 28.0 million Cost as a share of net revenue improved to 11.0% from 11.7%, driven by operational improvements, optimized distribution, and an improved return rate. cost as a share of net revenue improved to 11.0% from 11.7% driven by operational improvements optimized distribution and an improved return rate Marketing costs amounted to SEK 26.8 million compared to SEK 23.8 million last year, with costs mainly related to paid advertising. marketing costs amounted to sek 26.8 million compared to sek 23.8 million last year with costs mainly related to paid advertising Marketing costs relative to net revenue decreased to 9.4% from 9.9% last year. marketing costs relative to net revenue decreased to 9.4% from 9.9% last year Administration and other operating expenses increased to SEK 59.9 million compared to SEK 53.8 million, but improved as a share relative to net revenue amounting to 21.1% compared to 22.5% last year. Operating profit increased to SEK 43.3 million compared to SEK 25.1 million last year, with an increased operating margin of 15.3% compared to 10.5%. Lastly, let me talk you through some additional financials on the next slide. Operating cash flow in the third quarter amounted to -SEK 18.5 million compared to -SEK 18.5 million last year. The third quarter's cash flow from operating activities was in line with last year, where a stronger net result contributed positively to the cash flow, and higher inventory levels ahead of Q4 contributed negatively to the operating cash flow. As a general note, as seasonality shows, higher inventory levels are expected in the third quarter ahead of Q4. Administration and other operating expenses increased to SEK 59.9 million compared to SEK 53.8 million, but improved as a share relative to net revenue amounting to 21.1% compared to 22.5% last year. administration and other operating expenses increased to sek 59.9 million compared to sek 53.8 million but improved as a share relative to net revenue amounting to 21.1% compared to 22.5% last year Operating profit increased to SEK 43.3 million compared to SEK 25.1 million last year, with an increased operating margin of 15.3% compared to 10.5%. operating profit increased to sek 43.3 million compared to sek 25.1 million last year with an increased operating margin of 15.3% compared to 10.5% Lastly, let me talk you through some additional financials on the next slide. lastly let me talk you through some additional financials on the next slide Operating cash flow in the third quarter amounted to -SEK 18.5 million compared to -SEK 18.5 million last year. operating cash flow in the third quarter amounted to -sek 18.5 million compared to -sek 18.5 million last year The third quarter's cash flow from operating activities was in line with last year, where a stronger net result contributed positively to the cash flow, and higher inventory levels ahead of Q4 contributed negatively to the operating cash flow. the third quarter's cash flow from operating activities was in line with last year where a stronger net result contributed positively to the cash flow and higher inventory levels ahead of q4 contributed negatively to the operating cash flow As a general note, as seasonality shows, higher inventory levels are expected in the third quarter ahead of Q4. as a general note as seasonality shows higher inventory levels are expected in the third quarter ahead of q4 We also see a higher share of goods in transit by the end of third quarter, partially explaining higher inventory levels in relation to net revenue, this compared to last year. Cash flow from investing activities amounted to -SEK 5.6 million compared to -SEK 3.1 million last year. This was primarily attributable to IT investments. Cash flow from financing activities amounted to -SEK 8.7 million compared to -SEK 7.9 million, mainly related to payment of lease liabilities. Net cash flow amounted to -SEK 32.8 million compared to -SEK 29.5 million last year. By the end of Q3, we note that remaining tax deferrals amounted to SEK 69.6 million. This is down from SEK 105.6 million by the end of Q3 last year. We also see a higher share of goods in transit by the end of third quarter, partially explaining higher inventory levels in relation to net revenue, this compared to last year. we also see a higher share of goods in transit by the end of third quarter partially explaining higher inventory levels in relation to net revenue this compared to last year Cash flow from investing activities amounted to -SEK 5.6 million compared to -SEK 3.1 million last year. cash flow from investing activities amounted to -sek 5.6 million compared to -sek 3.1 million last year This was primarily attributable to IT investments. this was primarily attributable to it investments Cash flow from financing activities amounted to -SEK 8.7 million compared to -SEK 7.9 million, mainly related to payment of lease liabilities. cash flow from financing activities amounted to -sek 8.7 million compared to -sek 7.9 million mainly related to payment of lease liabilities Net cash flow amounted to -SEK 32.8 million compared to -SEK 29.5 million last year. net cash flow amounted to -sek 32.8 million compared to -sek 29.5 million last year By the end of Q3, we note that remaining tax deferrals amounted to SEK 69.6 million. by the end of q3 we note that remaining tax deferrals amounted to sek 69.6 million This is down from SEK 105.6 million by the end of Q3 last year. this is down from sek 105.6 million by the end of q3 last year We end the third quarter with a strengthened balance sheet with a solid equity ratio of 35.7%, improved from 26.2%, and with cash and cash equivalents amounting to SEK 226.7 million. Concluding the quarter, net revenue growth of 18.4%, operating margin of 15.3%, and operating profit of SEK 43.3 million. LTM figures outperformed previous highs with an operating profit of SEK 154.8 million and operating margin of 12.8%. With that, I hand it back to you, Helena. We end the third quarter with a strengthened balance sheet with a solid equity ratio of 35.7%, improved from 26.2%, and with cash and cash equivalents amounting to SEK 226.7 million. we end the third quarter with a strengthened balance sheet with a solid equity ratio of 35.7% improved from 26.2% and with cash and cash equivalents amounting to sek 226.7 million Concluding the quarter, net revenue growth of 18.4%, operating margin of 15.3%, and operating profit of SEK 43.3 million. concluding the quarter net revenue growth of 18.4% operating margin of 15.3% and operating profit of sek 43.3 million LTM figures outperformed previous highs with an operating profit of SEK 154.8 million and operating margin of 12.8%. ltm figures outperformed previous highs with an operating profit of sek 154.8 million and operating margin of 12.8% With that, I hand it back to you, Helena. with that i hand it back to you helena

Speaker 1: Thank you very much, Niklas. This concludes the presentation part of today's call. Before we move on to answer some of your questions, I just would like to take the opportunity to, first of all, thank all of our amazing customers. We have very discerning customers who I'm happy that they inspire us to continuously raise the bar and set very high ambitions for ourselves. A big thank you to all of our customers, and of course, most importantly, the Nelly team. It is such an incredibly committed team, and I see everyone working so hard every day to create the very best experience for our customers. It really is a joy and a privilege to be working alongside such an amazing team. Big, big thank you from me and Niklas as well, of course. With that, we will move on to answer your questions. Thank you very much, Niklas. thank you very much niklas This concludes the presentation part of today's call. this concludes the presentation part of today's call Before we move on to answer some of your questions, I just would like to take the opportunity to, first of all, thank all of our amazing customers. before we move on to answer some of your questions i just would like to take the opportunity to first of all thank all of our amazing customers We have very discerning customers who I'm happy that they inspire us to continuously raise the bar and set very high ambitions for ourselves. we have very discerning customers who i'm happy that they inspire us to continuously raise the bar and set very high ambitions for ourselves A big thank you to all of our customers, and of course, most importantly, the Nelly team. a big thank you to all of our customers and of course most importantly the nelly team It is such an incredibly committed team, and I see everyone working so hard every day to create the very best experience for our customers. it is such an incredibly committed team and i see everyone working so hard every day to create the very best experience for our customers It really is a joy and a privilege to be working alongside such an amazing team. it really is a joy and a privilege to be working alongside such an amazing team Big, big thank you from me and Niklas as well, of course. big big thank you from me and niklas as well of course With that, we will move on to answer your questions. with that we will move on to answer your questions Yes, thank you, Helena. Thank you all for joining our third quarter presentation this morning. We will now start with two questions from Albin from Kalqyl, and these two are for you, Helena. Congratulations on another strong quarter. Do you see a correlation between sales in your flagship store and your online sales? Yes, thank you, Helena. yes thank you helena Thank you all for joining our third quarter presentation this morning. thank you all for joining our third quarter presentation this morning We will now start with two questions from Albin from Kalqyl, and these two are for you, Helena. we will now start with two questions from albin from kalqyl and these two are for you helena Congratulations on another strong quarter. congratulations on another strong quarter Do you see a correlation between sales in your flagship store and your online sales? do you see a correlation between sales in your flagship store and your online sales Yes, that's an excellent question. I think it is always tricky to pinpoint exactly what is an effect of what when you do so many things at the same time as we tend to do. I would say that we can't see a sort of a clear correlation between the two, but of course, we have seen very high traffic in our Stockholm store. I mean, our Copenhagen store only just opened, but in Stockholm, we have seen very high traffic, and it's been growing over that two-year period that it's been open as well. I think it would be strange to me if it didn't positively influence our brand position and our online sales, but it's something that is tricky to prove in numbers, so to speak. Yes, that's an excellent question. yes that's an excellent question I think it is always tricky to pinpoint exactly what is an effect of what when you do so many things at the same time as we tend to do. i think it is always tricky to pinpoint exactly what is an effect of what when you do so many things at the same time as we tend to do I would say that we can't see a sort of a clear correlation between the two, but of course, we have seen very high traffic in our Stockholm store. i would say that we can't see a sort of a clear correlation between the two but of course we have seen very high traffic in our stockholm store I mean, our Copenhagen store only just opened, but in Stockholm, we have seen very high traffic, and it's been growing over that two-year period that it's been open as well. i mean our copenhagen store only just opened but in stockholm we have seen very high traffic and it's been growing over that two-year period that it's been open as well I think it would be strange to me if it didn't positively influence our brand position and our online sales, but it's something that is tricky to prove in numbers, so to speak. i think it would be strange to me if it didn't positively influence our brand position and our online sales but it's something that is tricky to prove in numbers so to speak Thank you. Do you see a reason to increase the marketing budget in relation to sales, given the improved traction you're seeing? Thank you. thank you Do you see a reason to increase the marketing budget in relation to sales, given the improved traction you're seeing? do you see a reason to increase the marketing budget in relation to sales given the improved traction you're seeing The way that we manage our paid marketing is, of course, extremely dynamic day by day, sometimes hour by hour. We drive our marketing now. We didn't do that historically, but now we drive it entirely on profitability, which basically means that we are able to increase our spend when we can do it profitably. We're also very careful to manage this closely and pull back on our spend when we're not seeing the results that we're after. I think it's difficult to give a general answer to this question because we do manage it so dynamically and closely every day. The way that we manage our paid marketing is, of course, extremely dynamic day by day, sometimes hour by hour. the way that we manage our paid marketing is of course extremely dynamic day by day sometimes hour by hour We drive our marketing now. we drive our marketing now We didn't do that historically, but now we drive it entirely on profitability, which basically means that we are able to increase our spend when we can do it profitably. we didn't do that historically but now we drive it entirely on profitability which basically means that we are able to increase our spend when we can do it profitably We're also very careful to manage this closely and pull back on our spend when we're not seeing the results that we're after. we're also very careful to manage this closely and pull back on our spend when we're not seeing the results that we're after I think it's difficult to give a general answer to this question because we do manage it so dynamically and closely every day. i think it's difficult to give a general answer to this question because we do manage it so dynamically and closely every day Great. We continue with you, Helena. This time, it's a question from Michael. I noticed that you've been out of stock of high-requested items like the green puffer jacket. How do you work on ensuring sufficient supply of high-demand products? Great. great We continue with you, Helena. we continue with you helena This time, it's a question from Michael. this time it's a question from michael I noticed that you've been out of stock of high-requested items like the green puffer jacket. i noticed that you've been out of stock of high-requested items like the green puffer jacket How do you work on ensuring sufficient supply of high-demand products? how do you work on ensuring sufficient supply of high-demand products Yeah, excellent question as well. This is, of course, for a fashion business, always a challenge to find exactly the right quantity to buy, given also that we buy quite far in advance. We have made very significant improvements in quantifying demand for our products, I would say. If we look at many of the periods in 2024, we were out of stock much more frequently on high sellers than we have been this year. Now, with the green puffer jacket in particular, there was a lot more demand than we had anticipated. I think this is something that we continue to work on going forward and that we also, I mean, you know, given that we have seen good growth in this period, we are improving our ability to forecast as we go along as well. Yeah, excellent question as well. yeah excellent question as well This is, of course, for a fashion business, always a challenge to find exactly the right quantity to buy, given also that we buy quite far in advance. this is of course for a fashion business always a challenge to find exactly the right quantity to buy given also that we buy quite far in advance We have made very significant improvements in quantifying demand for our products, I would say. we have made very significant improvements in quantifying demand for our products i would say If we look at many of the periods in 2024, we were out of stock much more frequently on high sellers than we have been this year. if we look at many of the periods in 2024 we were out of stock much more frequently on high sellers than we have been this year Now, with the green puffer jacket in particular, there was a lot more demand than we had anticipated. now with the green puffer jacket in particular there was a lot more demand than we had anticipated I think this is something that we continue to work on going forward and that we also, I mean, you know, given that we have seen good growth in this period, we are improving our ability to forecast as we go along as well. i think this is something that we continue to work on going forward and that we also i mean you know given that we have seen good growth in this period we are improving our ability to forecast as we go along as well Of course, it's our ambition to make sure, or our sort of goal to make sure that we can meet demand, but with something like seasonal products like jackets, we also don't want to have too much stock when we move out of the season. It's a delicate balance to get exactly right. Of course, it's our ambition to make sure, or our sort of goal to make sure that we can meet demand, but with something like seasonal products like jackets, we also don't want to have too much stock when we move out of the season. of course it's our ambition to make sure or our sort of goal to make sure that we can meet demand but with something like seasonal products like jackets we also don't want to have too much stock when we move out of the season It's a delicate balance to get exactly right. it's a delicate balance to get exactly right Thank you. The next one is once again for you, Helena, and this time it's from an investor. What about the U.S. market since you're adding some major names into your company like Nike and PUMA? What is the plan to expand the U.S. market knowing that the sentiment is shifting away from Asian websites related and better take advantage of that? Thank you. thank you The next one is once again for you, Helena, and this time it's from an investor. the next one is once again for you helena and this time it's from an investor What about the U.S. market since you're adding some major names into your company like Nike and PUMA? what about the u.s market since you're adding some major names into your company like nike and puma What is the plan to expand the U.S. market knowing that the sentiment is shifting away from Asian websites related and better take advantage of that? what is the plan to expand the u.s market knowing that the sentiment is shifting away from asian websites related and better take advantage of that I think as we now carefully and very systematically are turning our attention a little bit outside the Nordic market, we have to do it in a very controlled and careful way. We know the Nordic market really well. Some of the other markets in Europe where we have been active for some time, we don't know them as well. We also know, as I mentioned during the presentation, that we have struggled with certain elements of other markets such as return rate, for example. I think it's important going into this that we want to do it in a very controlled and sort of purposeful way. I think the U.S. market is a tricky market. It's a big market for sure. It's also made up of a lot of mini markets within the U.S., really not to be underestimated. I think as we now carefully and very systematically are turning our attention a little bit outside the Nordic market, we have to do it in a very controlled and careful way. i think as we now carefully and very systematically are turning our attention a little bit outside the nordic market we have to do it in a very controlled and careful way We know the Nordic market really well. we know the nordic market really well Some of the other markets in Europe where we have been active for some time, we don't know them as well. some of the other markets in europe where we have been active for some time we don't know them as well We also know, as I mentioned during the presentation, that we have struggled with certain elements of other markets such as return rate, for example. we also know as i mentioned during the presentation that we have struggled with certain elements of other markets such as return rate for example I think it's important going into this that we want to do it in a very controlled and sort of purposeful way. i think it's important going into this that we want to do it in a very controlled and sort of purposeful way I think the U.S. market is a tricky market. i think the u.s market is a tricky market It's a big market for sure. it's a big market for sure It's also made up of a lot of mini markets within the U.S., really not to be underestimated. it's also made up of a lot of mini markets within the u.s really not to be underestimated At this point we are focused more on Europe and, as I said, Germany in particular. Of course, making sure that we don't lose sight of our core market, which is the Nordics. I don't see the U.S. as a focus in the near future. At this point we are focused more on Europe and, as I said, Germany in particular. at this point we are focused more on europe and as i said germany in particular Of course, making sure that we don't lose sight of our core market, which is the Nordics. of course making sure that we don't lose sight of our core market which is the nordics I don't see the U.S. as a focus in the near future. i don't see the u.s as a focus in the near future Yes, we have another question from Julius. Congratulations on the great result. Will you be able to maintain this level of growth and profit going forward? Yes, we have another question from Julius. yes we have another question from julius Congratulations on the great result. congratulations on the great result Will you be able to maintain this level of growth and profit going forward? will you be able to maintain this level of growth and profit going forward Also an excellent question. I mean, we are, of course, happy and pleased about this third quarter, but I think it is important to remember and sort of stay humble about the fact that we are in a tricky and volatile industry with a customer who is very discerning and very careful with where they spend their money. I think apart from the fact that we obviously don't give forward projections, I think it's fair to say that we try and do our very best every quarter. It is a tricky industry and one that is both, as I said, volatile, but also sort of changes continuously with trends and so on. We will do our best, but I think it's difficult to say from quarter to quarter exactly what it will look like. Also an excellent question. also an excellent question I mean, we are, of course, happy and pleased about this third quarter, but I think it is important to remember and sort of stay humble about the fact that we are in a tricky and volatile industry with a customer who is very discerning and very careful with where they spend their money. i mean we are of course happy and pleased about this third quarter but i think it is important to remember and sort of stay humble about the fact that we are in a tricky and volatile industry with a customer who is very discerning and very careful with where they spend their money I think apart from the fact that we obviously don't give forward projections, I think it's fair to say that we try and do our very best every quarter. i think apart from the fact that we obviously don't give forward projections i think it's fair to say that we try and do our very best every quarter It is a tricky industry and one that is both, as I said, volatile, but also sort of changes continuously with trends and so on. it is a tricky industry and one that is both as i said volatile but also sort of changes continuously with trends and so on We will do our best, but I think it's difficult to say from quarter to quarter exactly what it will look like. we will do our best but i think it's difficult to say from quarter to quarter exactly what it will look like We hope that we have built a sort of a healthy and sustainable core as a platform for, yeah, going forward as well. We hope that we have built a sort of a healthy and sustainable core as a platform for, yeah, going forward as well. we hope that we have built a sort of a healthy and sustainable core as a platform for yeah going forward as well Great, thank you, Helena. I think that was actually the last question we had. Great, thank you, Helena. great thank you helena I think that was actually the last question we had. i think that was actually the last question we had Thank you very much, everyone, for listening. We will be here again next quarter, hopefully. Thank you. Thank you very much, everyone, for listening. thank you very much everyone for listening We will be here again next quarter, hopefully. we will be here again next quarter hopefully Thank you. thank you

Speaker 4: Thank you. Thank you. thank you Thank you. Thank you. thank you