Strongpoint ASA
OSE:STRO
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Welcome everybody to this Q4 presentation. My name is Jacob Tveraabak, I'm the CEO. And with me as always have our CFO, Hilde Horn Gilen. Well normally we go straight into the Q4 results, but what a morning. Of course, we have to talk a little bit about the acquisition that we announced, that we are in a process of doing in the UK, last night.Air Link Group is our first acquisition, since we announced our 2025 strategic ambitions. We said back then that we would be growing to NOK 2.5 billion. During the last 2 years, we have divested our Cash Security and Labels business, and we're now substituting that with other retail technology business and ALS being the first of those.I'm very proud that this is making a strong point to go significantly and materially into the U.K. market and the Ireland market. And if we're using the 2021 financial statements, we will be adding some NOK 240 million to the revenue and that was really 10% EBITDA margin. So it's a nice and decent sized operation that we're now adding to the StrongPoint business. The really important thing for us is that we're now expanding into a country in which we are seeing very good product market. We know that a lot of our solutions are in high demand in the U.K. and we are expecting to build on the amazing relations that ALS has in the U.K. market. ALS has been around for 25 years, serving some of the finest grocery retailers in the U.K. and beyond. And we want to continue that, build on that and also introduce our own solutions to ALS' operations. The price we have been paying for ALS is what we would say fair given that this is a service and installation company. And we will be talking more about ALS' business and the acquisition that we're in the process of doing now later today in the strategy update session. But very, very pleased about this acquisition and welcome to the ALS team. So then to the normal agenda, the Q4 results. And as always, I'd like to provide a short introduction to StrongPoint. At StrongPoint, we believe in the double opportunity. This double opportunity is stemming out of the growth of e-commerce that all other things equal, are taking volume away from the stores, putting it online and thereby making a margin pressure on the stores. Costs are rising in the stores. And when revenues are not increasing as much, that provides this margin pressure.And one of the solutions to solving this margin pressure is technology, making the stores more efficient and making the shopping experience more attractive. So that's the solution or the opportunity, number one. Opportunity number two for StrongPoint is the growth in e-commerce in and of itself, whether you are just about to grow your e-commerce or grow into e-commerce or expanding your e-commerce operations. And StrongPoint now has the full range of both fulfillment or picking solutions and last mile solutions from manual picking in-store and dark store to automated picking with AutoStore, to the -- all the last mile solutions you can imagine, with the click-and-collect lockers, both mobile and stationary, pickup in store and of course, also last-mile home deliveries and quick commerce solutions. So we're a very, very strong positioned in this respect. At StrongPoint, we believe in retail technology being an important part of making the shopping experience for a smarter and better life for people, both in-store and online. And exactly that purpose is what we are bringing with us to our retail customers and in particular, our grocery retail customers. We have, for a number of years now been serving all the major grocery retailers in our core markets, Norway, Sweden, the 3 Baltic countries and increasingly so in Spain. And we are going to continue to do that, with a breadth of more solutions that we're adding to our portfolio. As we're having a longer session afterwards or immediately after this session on our strategy update or strategy update session, I'm going to just restate the ambition that we set for some 2 years ago, namely achieving NOK 2.5 billion revenue in 2025 and achieving EBITDA margins of between 13% to 15%, restating that ambition again. So now to the highlights of Q4. And we really have, I say, again, as always, the 3 pillars: the financial results. We're going to take a short look at some of the customer stories. And then lastly, what else we're doing to achieve or go in the direction of achieving the 2025 financial ambition. So the Q4 revenue. Well, first of all, we should remember that last year's Q4 was extraordinary. We had a 35% growth in the revenue, which was really driven by a extraordinary ESL, or electronic shelf label, project that was rapidly deployed. So normally, we try to deploy these kind of large-scale projects over time last year, that was very different. And most of that big order came in Q4. So when we're achieving a maintained revenue this year, that is really extraordinary. Norway, of course, being the bigger part in this equation, did an amazing job in filling in with other solutions and other projects to both grocery customers, but also to some DYI customers. But the growth really driven by Spain, 44%, but that's 4-4-percent increase from last year. So the turnaround that the new management team in Spain has put forth is really paying off now. And this maintained record revenue comes in addition to the fact that we have global -- or we are being exposed to the global component shortages. We would have achieved some tens of millions of kroners more in revenue if we'd only had the components to fulfill the orders that we are actually trying to deliver on. So the component issue didn't help these figures. Actually, on the contrary, it reduced the revenue that otherwise would have been. On top of that, we have the currency effects. So whereas it looks here as we are having a 2% negative or a reduction in revenue, it's actually currency adjusted a plus 2% revenue. So this chart really doesn't do -- just unless you understand the drivers behind it. And I'm just incredibly proud of the entire StrongPoint team that has, again, maintained a record high revenue. Looking at the EBITDA. We are moving from a 6.9% EBITDA margin to a 7.1% EBITDA margin, a relatively stable or maintained EBITDA margin. But again, I'd like to emphasize what's behind these figures. So comparing with last year's, we're doing an incredible amount of investments also in this quarter, this Q4 2021 that we didn't do 1 year ago. And those of you following StrongPoint, we know we expense all the investments. We don't put that into the balance sheet. So all the investments that we have been doing on the order picking solution to make it production ready for Carrefour and Glovo is a part of this. The next-generation Click & Collect lockers is part of this, the introduction and crafting of the MFC, or micro fulfillment work where outlook story is the major part of this is included. And also the work with Halodi Robotics, which is a year-long journey for us with Halodi and some of the major grocery retailers to deploy actual humanoid robots in store is also included in this. And despite that, we're achieving the 7.1% EBITDA. So again, very strong performance by the entire StrongPoint organization. So looking at the segment percentages or relative shares of the revenue. This might be one of the areas in which I believe we still have a large upside. Throughout the year, we have maintained the e-commerce portion of 11%, same as last year. Clearly, with the investments that we have been doing and are doing, we're going to expect to see this increasing towards 2025. So to some of the customer stories that I believe it's important for investors to be aware. Number one is just prior to Christmas, we had COOP Sweden, again, renewing and expanding its 5-year agreement with StrongPoint. And order picking is a key part of this deal, making sure that we are still maintaining that 100% retention rate with our customers on the order picking, 100% retention rate. We're also seeing the fruits of the long -- or longly done integration work between Glovo and Carrefour coming to a production time. So just after -- or in the end of Q4, we were finalizing the integrations, and we're now in Q1, starting the real production of the Glovo and Carrefour work that we are doing -- or we keep on doing in Spain and that we will be continuing with Glovo, and we believe also with Delivery Hero as those 2 companies eventually find together after Delivery Hero announced its acquisition of Glovo. And lastly, we find it also extremely interesting that a player like Gordon Delivery in Sweden, a transportation company that also handles the last mile solutions for a number of the big grocery retailers in Sweden and also beyond are choosing to use StrongPoint lockers to provide added flexibility to its customers for pickup of groceries. So a very exciting development there to see not only direct customers of StrongPoint, but also integrators such as Gordon starting to deploy StrongPoint lockers in its offering to customers. Finally, what else have we been up to make investors clear about the path towards the 2025 financial ambition? As many of you hopefully would remember, we announced the AutoStore partnership in Q3, becoming the first ever grocery retail-specific partner for AutoStore. And then in Q4, we expanded that partnership by joining forces with Hörmann Logistik in Germany. Hörmann with its excellent track record in setting up AutoStore facilities. And in combination with StrongPoint and the grocery experience we have, we could not think of a better date, not marriage, but date than Hörmann. And also encouraging to see is that immediately after this announcement was made, we have been started to work on concrete requests from customers in the Nordic and Baltics to make sure we get the first MFC app in place in our region that we have AutoStore distribution rights for. So very encouraging. So with those words, I'd like to hand over to Hilde, please?
Thank you. Thank you, Jacob. As normal, I will go through some of the other key financial figures that we will present. Starting off with what we usually have as our rolling 12 figures, these are, of course, for the full year. 2021 came out with a 4% growth compared to 2020. We will elaborate a bit more about the development of the revenue in the strategy update session following this session. So I would just not go too deep into that. I will focus more on the EBITDA. We ended at NOK 54 million as EBITDA. This is down NOK 15 million and we ended at an EBITDA margin of 5.5%. The deviation from 2020 can actually be quite explained by the extraordinary write-down in Spain that we announced in Q2. Jacob was mentioning the investments we are doing. So we have put up an EBITDA bridge starting at 2020 of NOK 69 million. We had a good development of our gross profit in the year added NOK 32 million. Remember that the gross -- the write-down in Spain actually hit the gross profit margin mostly. So -- but in total, this -- the gross margin increased by 1.6% in total for the year. And this can be explained by a different product mix of more of our own solutions distributed in 2021. Our payroll of NOK 14 million can be split in 2 explained by 15 new people on -- in the StrongPoint team and of course, the normal salary adjustments. And then when you look from -- towards the right of this bridge, you see we are investing in research and development, mainly towards e-commerce. We have took a step up on IT security that is needed due to the Glovo focus on cyber crime. We had done our internal share on that, and we have been focusing a lot on marketing, and we hope you have seen us in many channels through the year. So this brings us down to the NOK 55 million that we have announced today for the full year of 2021. The earnings per share, if we are looking only at the continued operation ended at NOK 0.22 in the quarter itself, Normally, we do adjust also for the amortization of intangibles, and then we ended at NOK 0.26 per share. For the full year, the same figures are NOK 0.51 and NOK 0.67 adjusted for intangibles. If we include the discontinued operation and then the gain from the divestment of Labels, we had an earnings per share of NOK 4.32 per share. The 2 divestments that we have done obviously has made us into a very good cash position. We continue to be cash positive and even further, of course, with the Labels divestment that was closed in Q3. So we have a total gain in profit of discontinued of NOK 168 million that come on top of the NOK 54 million in EBITDA. We have smaller changes in working capital and CapEx. We have invested in Halodi. So that's the NOK 3 million that you see on the screen. We have repaid debts, we have paid the dividends, and we have had a buyback of shares in Q4 to a total of NOK 14 million in share purchase. So we ended in a cash position at NOK 174 million. Looking at then this is normally the net debt, but we are then in a net positive cash position, and we have NOK 16 million in IFRS liabilities. And we have a total of NOK 116 million in positive cash compared to a net interest-bearing debt equality. We have a financial calendar for 2022 coming up at the 28th of April, we will have the Annual General Meeting. In that meeting, we will be proposing a dividend of NOK 0.8 per share. That is explained in the quarterly report as well. And it follows a trend from the Board to be -- that we are going to pay and increase the dividend year-on-year. It might be on the next chart now, it was not. Sorry, the slide slipped. But it is focused on -- and this is going to be presented more also later on in the strategy update session. So the dividend proposed is NOK 0.8 per share. The financial calendar, 28th of April, General Meeting and Q1, and we look forward to see all the investors in meetings. Please contact me if you would like to set up separate sessions, and we are more than happy to do so. Thank you.
Welcome back to this strategy update session with StrongPoint. As always, I would say I will be joined by our CFO, Hilde Horn Gilen and also today joined by the latest member of the StrongPoint team, Chris Mackie, our new SVP of e-commerce and MD of U.K. For those of you that are new to StrongPoint, I will be going through a little bit the background of what StrongPoint is all about, and then moving into the 2025 strategy and the strategic ambitions that we have set forth. So firstly, StrongPoint. We are a retail technology company focusing in particularly on the grocery retail sector. We're providing a number of e-commerce logistics solutions as well as in-store productivity solutions. And with the home base out of Norway and Sweden with high labor cost, efficiency is and needs to be in the core of everything we do. As a macro trend, we're seeing more and more grocery retailers, even the very big giants pouring millions, if not billions of kroners and euros into driving more efficient operations and having more or better customer experiences. And exactly these mega trends and in particular, the growth of e-commerce is driving what we have, at StrongPoint, call the double opportunity. So e-commerce is driving to important opportunities for StrongPoint. Number one, with the growth of e-commerce exceeding far the general grocery retail growth, we're seeing a massive pressure on the margins in the stores. So cost levels are continuing to increase, both in terms of salaries, electricity, costs, rental costs, et cetera. And with a portion of the revenue being moved away from the stores on to the e-commerce arena, we're going to see a massive squeeze in the margins. And the solutions for the grocery retailers, obviously, is to invest in technology to be more efficient.Also, e-commerce in and of itself is driving growth for grocery retailers or said in a different way, e-commerce is driving existing players that are already in the e-commerce space to grow even more rapidly than they have been in the past, facing fierce competitors that are pure players. And you're also seeing the few players that haven't moved online yet needing to move online. And clearly, for both of those e-commerce scenarios, you would need the best technology out there to really succeed in the market, and as we'll talk about, StrongPoint's provides those. A bit more background on where StrongPoint is coming from. We are about 400 employees in today, 6 countries: Norway, Sweden, the 3 Baltic countries and Spain. And we have recently announced our satellite office in the U.K., which is now going to be more than a satellite office with the acquisition announced earlier of Air Link Group. I'll talk more about that later. But as of now, we're in 6 countries and getting 1 more where we have a proper organization in place. In total, our solutions are in more than 20 countries, and we have about NOK 1 billion revenue as of last year. So a bit more about what does StrongPoint offer to its customers. We're producing and delivering a number of in-store solutions and e-commerce solutions. And I think the best way to illustrate this for the new investor is to show a grocery store, we basically take the roof up. So on the left hand -- or sorry, right-hand side of this picture, we'll be able to see the electronic shelf labels that we are a proud distributor of in all our markets. We have the self-checkout solution, where StrongPoint owns both the hardware and the software, and we're the market leader in the Baltics. We have cash management position, which is very strong in our home countries and growing very rapidly in Spain with the pandemic situation now being more under control, so to speak. We have our -- then say for select and collect solution to dispense tobacco and other high-value items. We have a partnership with Reflexis acquired by Zebra on the task and workforce management side to ensure we have very efficient use of staff in store when they are supposed to be in store. And lastly, somewhat further out there in the development phase is our partnership with Halodi Robotics. We'll talk more about some of these solutions later today. Furthermore, when we're leveraging the store to also take advantage of the e-commerce growth in the market, we have on a number of -- with a number of customers already introduced our order picking solution and the range of pickup solutions in the store, either through a grocery locker through going to staff directly, from -- to home deliveries and even mobile lockers. I've also invested significantly in making sure we have a q-commerce or quick commerce capabilities that our customers can leverage either by themselves or with third-party providers like Glovo that we have a partnership with. And lastly, which we will also talk in more about today is our partnership with AutoStore announced last year, which allows StrongPoint also to offer automated picking facilities at or close to stores in association with the general e-commerce offering. We have a very large base of trusted grocery retailers using our solutions. We have virtually all the Nordic and Baltic grocery retailers using one or several of our solutions, and we are getting an increasing number of retailers using our solutions in other countries in particular, in Spain, and as we're seeing we have a number of pilots in other countries as well. And to give you a little bit of flavor of how important are our solutions, I'd like to pull out Dogen's industry, the Swedish financial newspaper. And one of our customers' use of our e-commerce solutions, Axfood. And Axfood is actually making a big point out of reaching breakeven in e-commerce. This has been one of the big conundrums in the industry. So seeing Axfood going out and saying we are achieving breakeven. And we're doing that with the very important Click & Collect service with our Click & Collect lockers, playing a major role in that transformation, which makes us very, very proud. I was actually reached out by investors asking whether we had written the script for the newspaper. I can assure you we did not, but it makes us even more proud. So our solutions are making its dent on the P&Ls of our clients and nothing else makes us more proud. Since we announced our strategic ambitions, and I'll get back to those in a second. In 2019, we've had a solid growth of 19% on the revenue side. Our e-commerce revenue has doubled, and we're expecting these growth engines to continue also in the future, which we'll talk about in a second. StrongPoint also have -- we have a significant recurring revenue base. About 1/3 of the business we are generating is recurring in nature, whether it's service, support, rentals or specific Software-as-a-Service revenue from -- in particular, the e-commerce operations we are managing. We have promised to existing investors that we would be sharing additional information about our e-commerce offering and its revenue impact. And clearly, a lot of the revenue, that's being generated in e-commerce, is project based with a rollout of Click & Collect, but it's also being the software revenues based on revenue or number of order picks. So I'm very pleased to share with you today that about NOK 30 million of the pure e-commerce offering that we generate are having is a Software-as-a-Service revenue, with 100% customer retention on the order picking solution. So clearly, with the future ahead, we're expecting this recurring revenue base to grow significantly in the years and quarters to go. So that was shortly about StrongPoint.Now allow me to take a recap of our 2025 strategy and the strategic ambitions we have set forth and also to give the crowd a small update on how we are progressing on exactly those ambitions. First and foremost, we have set forth a revenue target in 2025 of NOK 2.5 billion. We've also said that we are going to achieve an EBITDA margin of between 13% and 15%. How will we achieve this? Well, we're using a T-shaped strategy to explain this. On the one hand side, we're going deep and broad with our solutions in a number of markets that we are present. And that's specifically being in the markets where we are really present, so Norway, Sweden, the 3 Baltic countries and Spain. And with U.K. being the latest addition, of course, that will be part of exactly that stem of the T. In addition, we have an overlay. Those are the solutions that we own 100% that are proprietary to StrongPoint either directly or through exclusivity agreements. That means that our e-commerce logistics solutions is something we want to bring out also beyond the countries mentioned. Our self-checkout solution is also one of these solutions that we want to bring to other geographies and have proven to do so already. Cash management, likewise. Although we're in a Norway and Sweden, which are relatively cashless countries, the majority of transactions in the southern parts of Europe are still cash-based. So still a lot of potential there. And then lastly, we also have the Halodi humanoid robot to support the future store out there. I'm going to go through a few of the numbers now to talk about how we have been progressing and how we are expecting to be progressing towards the 2025 financial ambition. So first and foremost, we have a 19% growth on the revenue. And as said that history is probably the best indicator of future performance. That said, we, at StrongPoint, are investing heavily into the future, and that is going to give us -- or it has given us an impact on the EBITDA. We could we can stop doing all the investments we have done and we have increased our EBITDA significantly. Of course, we're not, we're investing for the future. And it should be said also in that context, we are expensing all our R&D and all our expenditures on -- that otherwise could have been put in the balance sheet.Also to be noted is in 2021, we had a significant negative impact from the Spanish operations. In total, for 2021, the Spanish operations had a negative impact of NOK 37 million on the EBITDA, out of which almost half of that was an extraordinary write-off of the business. But in total, all these investments we are, of course, expecting to give a much faster and more rapid growth, both on the revenue side as well as on the EBITDA side.So then to overview, which those of you who have followed StrongPoint will recognize, the buildup from the '20 -- well, now '21 revenue to the 2025 revenue. E-commerce stands out as very being very important. We'll talk more about that. M&A being also important. And as we have just showed earlier within the last 24 hours, with the acquisition of Air Link Group, we are now closing more than half the M&A ambitions. And then lastly, we will also be going through the key elements of the in-store solutions we have to get us to the 2025 financial ambitions. Looking at the year that has passed, I think this is sometimes useful to reflect on what has happened in the last 1 year. When we stood here about a year ago, we have recently divested the Cash Security business. And immediately or close after the strategy update session we were presenting the very, very significant and important strategic deal with Glovo, the Spanish unicorn and delivery platform that was recently announced acquired by Delivery Hero, a acquisition that we see as beneficial for StrongPoint also in the future. We announced a partnership with Halodi Robotics. We'll talk more about that today. And later in the summer, we made the step to become a pure retail technology company by investing successfully and very favorably for the StrongPoint investors, our Labels business. In the early fall, we announced the partnership with AutoStore, the second largest IPO in Norway since Statoil or now Equinor. And we shortly after announced an additional partnership with Hörmann Logistik, the AutoStore partner out of Germany and the DACH region, where we're joining forces to take StrongPoint's grocery experience and combining that with Hörmann's experience with AutoStore making it really a strong combination. And as announced last night, we have also now made the first acquisition with the acquisition of Air Link Systems. We'll talk more about Air Link Systems today. As an introduction, allow me to show you this short video of our new U.K. office. [Presentation]
So I hope that gave you a short and good introduction to Air Link Systems, ALS. We are extremely proud to have been given the opportunity to join forces with ALS. It's going to strong our -- or strengthen our presence in the U.K. and Ireland significantly. And with ALS, we are getting a really trusted partner with the grocery retailers in the U.K.We know we have solutions that will be adding on to the service support and installation capabilities that ALS has both with our Click & Collect lockers, our Self-Checkout solutions, our Select and Collect or [Foreign Language] as we call it, in Norway solutions as well. And we are hoping to continue to piggyback on the excellent relations that ALS has with Tesco, ASDA and the other major grocery retailers in the U.K. So we're very proud and we're looking forward to join forces with ALS as soon as we have completed the due diligence and gotten into operations together.So I'm going to pause here for a second, talking about our priorities, and we'll go through these in more detail now. We will be continuing to capitalize on the e-commerce opportunities that are out in the market with the growing e-commerce market. We're going to continue to execute on our in-store strategy, providing the solutions that will help withstand the margin pressure in stores. I will also talk about how we will continue to build on the momentum within M&A.And on the first bit, e-commerce, what better opportunity is it then to offer our newest member of the team, Chris Mackie, welcome, to help take you through what are the key trends moving in the e-commerce space. So Chris, welcome on board.
Thank you, Jacob. My name is Chris Mackie, and I recently joined StrongPoint. I have a long career in grocery e-commerce and e-commerce in general, and I'm incredibly proud to be joining StrongPoint to represent their solutions to our grocery retailers. I'm going to talk today about a number of strategic trends, but I don't think any grocery retailer can ignore.The pandemic brought the grocery industry many challenges. Thankfully, for us, its consumers, it rose to the challenge to keep us supplied with food. However, 2 years on and the grocery market has been changed permanently as a result. In many markets, consumers went online, established grocery retailers and pure players benefited just so did smaller entrants to the market, who enabled smaller stores to reach new customers. Most responded to the opportunity by doing whatever it took to meet the consumers' demand. However, this has left a legacy of suboptimal processes and misaligned supply chains, which are both inefficient and unprofitable. There has been a sustained shift in consumer preferences and retailers are now having to adapt to the new world around them.I live in the U.K., where grocery has been online since the late 1990s. At the time, I was implementing dark stores for a major U.K. grocery retailer. Back then, I'd order a weekly shop days in advance, and it took me almost as long as a physical shop to place my order. Today, I place my weekly grocery order in the morning in less than 10 minutes, and it's delivered the same evening. If I forgotten anything or my plans change, I use a quick commerce company to order from my favorite local store. The world has changed and is evolving at pace and different markets are at different levels of maturity. Even in less established markets, it often only takes one grocery retailer to move online for others to follow. And the entrance of one or more quick commerce players into a market poses both new opportunities as well as new challenges for the incumbent retailers. Today, I want to highlight 3 trends that can't be ignored by anyone in grocery e-commerce: The first is a focus on operational efficiency and profitability; the second is that quick commerce is continuing to grow and is now a channel in its own right; and the third is sustainability in the last mile. So let's take a closer look at each of these trends in turn. Everyone who's in online grocery retail knows it can be an expensive business. And this can also be a barrier to entry for some. However, it's a 20-year-old problem, and it can be sold by both technology and operational process design. And this is StrongPoint's opportunity. Even without the acceleration of e-commerce, challenging the profitability of grocery retailers, they're facing multiple cost pressures throughout the supply chain. They are facing downward pressures on prices led by the discounters, increased manufacturing and supply chain costs, labor shortages and inflationary pressures. There are several things, however, that a grocery retailer can do. Whether they are new to e-commerce or an established player, they should optimize and simplify their operations and their business processes. Retailers don't need to offer the same size assortment online as they do in store. They can and should offer a smaller range and ensure they include a high proportion of easier to pick higher margin items. They should optimize their stores for home delivery and Click & Collect, and they should review their pricing process and they're picking processes. We believe pick rates are between 200 to 300 picks an hour can be achieved, which is well above the industry average. Anything less and implementing a modern high proficient picking solution from StrongPoint will have a quick return on investment and will soon bring cost savings to the retailer. Retailers may want to consider implementing a dark store where the store layout can be optimized for picking rather than customers. We have the expertise and the solutions to deliver this capability. They should consider automation to improve both the capacity of their store and to reduce their reliance on labor. An automated performance center is many times more efficient than in-store picking. Our automation solutions from AutoStore are market leading. Another option is to mitigate their costs and their cost exposure to the last mile by either partnering with a quick commerce aggregator or a specialist carrier. If retailers wish to reduce the cost of delivery, they should consider incentivizing Click & Collect. If CapEx costs are of concern, they may want to consider our innovative new locker-as-a-service. If they have their own delivery fleet, they may want to benefit from using our delivery route software to calculate optimal routes for their drivers. If a retailer is considering offer faster services, they could consider a trial with a quick commerce aggregator to learn from their experience or we can advise the retailer on setting up their own. It's not, however, enough to simply optimize and upgrade their systems and their processes, they must also incentivize their consumers' behavior. Quick commerce players have many of the same challenges as retailers, but they are magnified partly due to the need for speed but also because of their phenomenal growth which has often led to inefficient and costly processes being employed. As they are newer to the market, they are faced with huge customer acquisition and CapEx costs, especially for the aggregators moving into retail. My advice to a quick commerce player is also to mitigate costs. As legislation starts to make it harder to open new MFCs in certain geographies, they may want to consider sharing real estate with retailers. A large proportion of their costs are related to onboarding. StrongPoint solutions are quick and easy to train and enable retailers to be self-sufficient, both with regards to onboarding their stores and products, but also their employees who can be picking in less than 5 minutes of training. If implementing a micro fulfillment center, they should design profitable processes and layouts from the beginning. A good MFC layout should be unrecognizable from a store. Adding automation can also reduce their reliance upon labor. They should explore using lockers for both drive per collections and to provide consumer choice. They may also wish to consider our new locker as a service and incentivize consumers to collect. As online profitability grows, even the discounters are now moving into online in the U.K., Halodi now offers Click & Collect from hundreds of stores. In summary, StrongPoint is uniquely placed with its industry expertise and its hyper efficient technology to produce a profitable solution from the outset or to increase the profitability of any existing operation. Fast delivery or quick commerce as it's now known, has been around for a while, but the pandemic has accelerated its growth, and it's now a channel in its own right. In the U.K., the market opportunity is estimated to be GBP 3.3 billion. The most common reasons consumers as one fast delivery are for food to go, an evening meal and a grocery top-up. COVID has encouraged consumers to use these services. And once they start, they don't go back. And that's why it's my new trend. In the U.K., there is activity across the industry from aggregators, quick commerce pure players and from retailers. All major retailers have a strategy and many have more than one. Profitability will only come from scale as you need the volume and customer density. However, customer acquisition costs are initially high, especially for the quick commerce players. However, their marketing costs are reduced as their presence increases due to the word of mouth. They initially focus on the higher-margin quick to pick convenience market. However, to fuel continued growth, all verticals and store sizes are being targeted in more mature markets. For a grocery retailer, it's an opportunity to expand into a new channel and to access new customers, but it's also a threat as quick commerce players are now focusing on increasing basket size and are taking the higher margin sales.Can a retailer afford to ignore how the market is evolving? My advice to a grocery retailer who is thinking of getting into quick commerce is to firstly develop a playbook. They should start by evaluating their market. For it to be profitable, they should focus on large cities and towns with a high urban population, smaller households, high employment and low vehicle ownership. The top 3 European markets are the U.K., The Netherlands and Germany, which are also target markets for StrongPoint.Retailers should consider partnering with aggregators in less densely populated areas. They should consider launching their own service by dark stores in more densely populated locations with an assortment of between 2,000 to 3,000 SKUs. It may also be an opportunity for them to invest or acquire as the market today is crowded with new entrants. There is expected to be a lot of merger and acquisition activity over the coming year. The market, however, is moving quickly, and they should regularly reevaluate their decisions. My advice to those already focused on quick commerce is to expand quickly and profitably. They should establish partnerships that the building blocks required to enable retailers to operate dark stores and should buy rather than build to accelerate their strategy. Our solutions have taken over 20 years to perfect and can be a short route to achieving their strategy.In summary, StrongPoint has the building blocks for an effective quick commerce strategy. We are talking to many retailers about quick commerce and we are forming partnerships with quick commerce players who recognize that we have best-of-breed solutions and unrivaled grocery expertise. My last trend is sustainability in the last mile. Grocery retailers and the industry are now under pressure to reduce their environmental impact. Many have made bold commitments. Consumers are also becoming more environmentally conscious and is becoming more and more important for a retailer to align with their consumers' values. The last mile is usually the most energy-intensive stage and typically generates more CO2 emissions than all the upstream logistical activities combined. The pandemic inadvertently made the last mile greener through the use of more localized fulfillment, lockers, dark stores and greener modes of delivery, such as electric vehicles and cycles. My advice to a grocery retailer is that they should consider for filling more locally to their consumers by repursuing stores to operate as dark stores. They should change consumer behavior by developing incentives that encourage consumers to select sustainable options. For example, they can highlight which delivery slots are already close to their customers and offer lower rates. They should also encourage Click & Collect as the greener option. They should offer green and delivery methods, either by investing in the cleanest, greenest fleets and utilizing route management software for a lower last mile carbon footprint or they can partner with urban specialist carriers or aggregators who use cleaner modes of transport. They should look for opportunities to share infrastructure. Developers, councils and carrier companies are installing lockers on commonly used commuter routes in marketplaces at train stations, in offices and in residential areas. We are seeing significant interest from nongrocers to deploy our lockers. Before committing to a location, you should consider testing it out using a mobile locker and we offer that solution. In summary, StrongPoint has the expertise to advise and the solutions to enable their sustainable strategy to help retailers, carriers, developers and counsels meet their commitments. Thank you for exploring these trends with me. We have an unrivaled solution set and are well placed to capitalize on these trends. I will now hand you back to Jacob.
Thank you so much, Chris. It's very good also to hear from an outsider. I still, I should say, 3 weeks in, that the trends that we have seen been shaping the industry also being confirmed by you. I'm going to continue from where you let go, Chris. Of course, we are expecting, and as we've shared in the past, the e-commerce in grocery to continue growing. And sometimes it's sort of easy to put up a graph showing a, in this case, 15% CAGR on the e-commerce growth. And to the hesitant people out there, I would just like to show this 1 graph. This is U.S. data, but still very relevant. This is just gravity at play. E-commerce in grocery has been and is likely to be at a much lower penetration than many other retail sectors. That said, it is only going to go in one direction. And that one direction is up in terms of penetration, and that penetration will lead to the double opportunity for StrongPoint. When we start looking at the addressable market, it's huge. The number of orders being fulfilled with the solutions that StrongPoint offer is going to grow rapidly, whether it's the picking solutions that we today offer with our order picking either in stores or in dark stores or it's the Click & Collect lockers, which offer the environmentally friendly and very easy to use pickup solution for customers, which happens to also have a major dent on the operational cost of the retailer or whether it is in the micro fulfillment space that we have partnered with I just told.So I will touch up on the solutions that StrongPoint have to show you just how world-class our solutions are. First and foremost, it's our order picking solution. We have time and again highlighted the extreme efficiency of our solution, where we're seeing a more than 240 items being picked per man hour being the general rule rather than the exception. And some retailers are achieving actually more than that. Very high precision in terms of quality, picking the right items that need to be in the basket, which you would expect, but it is highly, highly important. And it can also be used in combination with the micro fulfillment centers or in dark stores on a stand-alone basis, which many of our customers are doing. I'd like to give you all a small touch up on what our solution offers by showing this short video.[Presentation]
I hope that the short video there gave you a little glimpse into what our picking solution can do in the stores that are being used with our customers. Very quickly also regarding our Click & Collect lockers. As you've seen earlier today, our solutions are being hailed in the press by players like Axfood. We have a very large base of Click & Collect lockers being installed. And we're constantly evolving the development of the Click & Collect solution to be even better than its earlier generations. As some examples, you will see on the slide here that we have developed an app-based interface, which allows both the customers and the personnel to load or unload the grocery lockers with a map. We have also integrated with age verification tools, which allows for age-restricted items to be handed out. And when we look at some of the solutions out in the market. We're seeing there is a rapid growth of the Click & Collect lockers being installed throughout our core countries and beyond. And similarly, it goes for the picking solutions that we have out in the market with some of the major grocery retailers, either as an industrial type of solution already being used in production or in pilots.And final point on our e-commerce offering is the automated solutions. The micro fulfillment solutions that we have developed specifically for grocery with AutoStore. We were very proud and still are very proud to be the first AutoStore announced grocery-specific partner. And we have developed alongside Hörmann Logistiks, a specially made solution for the grocery sector. And I can even today say that even though the partnership is relatively new, we are already responding to concrete inquiries from customers in the market. So very exciting there. Again, I'd like to show you a small video not of what AutoStore is, I presume many of you already know what AutoStore can do for grocery retailers. [Presentation]
So I hope that video did show you of what AutoStore can offer to the grocery retailers out there. And to take a step back summarizing what do we have to offer to the players out in the market that wants to either embrace e-commerce much more than they have done already or just start, we have the solution for you, whether it's a brick-and-mortar player about to start the e-commerce journey to step up its e-commerce journey or it is to serve pure players and of course, also the q-commerce or quick commerce players in the market. I want also now to go to the second pillar, the in-store productivity or efficiency solutions that StrongPoint offer. We have at StrongPoint one of the best, if not the best Self-checkout solution in the market. We have a very big dominance in the Baltics. We've seen our solution go out to Poland through our partner, PartnerTech. And we're seeing more and more of the solutions coming through our -- through to our established markets, Spain being one of those markets, and I hope many more in the not too distant future. And we're doing that by using and leveraging the in-house technology of StrongPoint and also combining that with the best of third-party solutions that are out there. And in particular, like to mention our partnership with Edgify in this respect. Then I want to move on to something which sounds a bit more out in the future and maybe science fiction. And that is Halodi Robotics. And I cannot think of a better way to introduce the Halodi Robotics solution then to have Halodi Robot to join us here on stage today as well. Hello, Mr. Robot. How are you? Good to have you with me here today. Thank you. Would you like to say hi to the crowd as well? Here you go. Happy as always I can tell. This might seem like science fiction. And yes, it still is a few years out in time until we actually see these robots being industrialized and a regular site in the regular grocery stores, but it is happening. We are on a journey with the Norwegian robotic company, Halodi Robotics in cooperation with some of the leading grocery retailers to develop the use cases that will be solved using the Halodi Robotics. In 2023 -- 2022, I'm sorry, we will be doing this in a lab environment, 2023 still at the experimental phase. And in '24, we're hoping to see the first robots starting to make their way out in the grocery stores. And to get some help here not only with you my friends, but to show you as investors what the Halodi Robotic we're hoping to see them do in the future, we're showing this short video. [Presentation]
Okay. So from high-tech and almost science fiction videos to very down-to-earth business cash management. Cash Management and CashGuard still is an important part of the offering StrongPoint offers to retailers, maybe in particular in the southern parts of Europe and other places like South Africa. But we are just also astonished by the fact that cash is a very resilient payment method also in the Scandinavian countries. I think that's been proven as of last year, also somewhat to our surprise, the continuation of Cash Management solutions being used in grocery stores.We recognize that even with a low single-digit number of transactions being handled with cash, that cash still needs to be both handled and stored appropriately. And with the pandemic now, hopefully, at its end, we're also seeing the cash transactions in terms of percentage, starting to increase again from low 40% penetration in Spain, which was half of what it was pre-pandemic. It's now back up again far beyond 50%. So cash management solutions in particular, in Spain and the other regions, still going to be a nice cash flow for StrongPoint.And then over to some both happy news for StrongPoint and ALS, but also in more general terms, mergers and acquisitions. So Hilde, please?
Thank you, Jacob, and very nice to meet Mr. Halodi Robot, really enjoyed that. I will be talking a bit about mergers and acquisitions. And obviously, some of the slides, some of you have seen before, but it's important for us to repeat the message for you all. We are continuously evaluating mergers and acquisition candidates as part of our 2025 strategy. And we have evaluated quite a few targets through the past years. We have established a thorough routine in StrongPoint, where we are using both internal and external resources to help us identify the best targets. As we have said before, we are looking for targets within the 3 areas: the geographic expansion area, the technology additions to StrongPoint and of course, strengthening our core markets that we have talked about before.So why haven't we bought any companies so far despite the message yesterday? And there are multiple reasons for this. And price and strategic fit are the 2 dominating resources. No reasons. What seems to be a good candidate on the paper does not necessarily be that when we are looking closer into the target. That has nothing to do with the target or the identification process, it's more that it's not a perfect match. Through the years, we have evaluated over 60 companies. And when I say evaluated, we are going further than just identifying the target. We have learned a lot through these years about the market, the players and actually what we are looking for. And with the announcement yesterday, the Air Link System in U.K., it really proves that when we are looking and we know what we are looking for, we can find the right targets.As Jacob mentioned, the Air Link System are a company that matches several of our key identification areas. They are established in U.K. They have more than 95% grocery customers. They have a fantastic customer relationship and they actually know quite a few of our solutions, which we find as a very good fit for StrongPoint. And we really look forward to building on the Air Link established business in the years to come. I will talk just a bit more about Air Link in just a second. Through 2020 and 2021, we have also divested the Labels and Cash Security business areas. We have now established ourselves as a retail technology company, which eases the way of looking at M&A candidates. And the good situation we have on the cash position and a strengthening balance sheet, of course, enables us to do more M&A activities going forward. So we promised and we will continue to look for good targets and candidates as we move along further down the 2025 path. A bit more information about the Air Link System acquisition that we just announced. We are buying 100% of the shares in Air Link Systems in the U.K. and their assisted company in Ireland. Air Link has, over years, had a quite stable and good revenue position of around GBP 20 million. And if 2021 were to be the one -- the revenue position going forward, we would add some NOK 240 million revenue on top of StrongPoint's current revenue base. Air Link also provided 10% EBITDA last year, which we find to be very relevant. It's a profitable company and has been so for many years. We are not revealing the enterprise value, but we believe that it will be evaluated as fair when we are looking at transactions in the service and installation market in the U.K. The purchase price will be paid as a split between cash and shares in StrongPoint, securing continued ownership and collaboration with the current owners. We have -- we will commit with -- come out with much more information when due time comes, and we can share that towards the end of the process. We have already identified our team to help us out as of the legal and financial due diligence. And we hope to close the deal in good time before the exclusivity period ends at the end of April this year. So we really look forward to moving the process ahead towards the final negotiated agreement. I will then finalize with a slide on the dividend. As previously years, the Board continues to have an ambition to pay and increase dividend year-on-year in StrongPoint. The Board will propose a dividend of NOK 0.8 per shares to be voted for at the general meeting at the end of April. The positive cash position that StrongPoint currently have is going to be used for the growth that Jacob has explained more about earlier and also further M&As going forward. Then Jacob, can I welcome you up to the stage for the final outlook and priorities before we end the session with some Q&A.
Thank you, Hilde. Well, so finally, to round things off, where are we going now in -- towards 2025? We started with NOK 1 billion revenue in 2021. We're going to grow that to NOK 2.5 billion as a combination of organic growth and inorganic growth, as we just showed. We are growing our e-commerce share. We used to be 5% back in 2019. Now we're at 11%, and we're going to grow that increasingly to 25% or 1/4 of the business in 2025. And lastly, as we've shown, the current EBITDA margin is a result of massive investments that we are doing in the areas which will bring us to the NOK 2.5 billion turnover. So with that, we'd like to open for M&A -- Q&A.
Q&A.
Welcome back. Now it's time for Q&A, not M&A, but Q&A. Dominic, you have microphone you can help ask a few of the questions that have been coming in.
I have a few questions. First question, how many new shares will be issued in connection with the acquisition?
I can answer that. Of course, the whole transaction is dependent on financial and legal due diligence and final negotiation of the share purchase agreement, but we are expecting that the share part of the transaction will be in the lower range, single digit. And we also had some parts shares in treasury already. So the dilution should be in the lower range of -- in percentages.
You might have mentioned it, but did you do the much on the 2 CashGuard orders from NorgesGruppen and Bullion in Q4, how should we think about delivery on these 2 orders in 2022?
Okay. So first of all, yes, we've had -- as the rest of the world component issues or lack of components. So in Q4, we had a very much lower delivery on CashGuard orders that we had than we were expecting. So they are very, very small percentage of those orders have actually been delivered. And we're expecting the deliveries to happen throughout 2022. It's still challenging with regards to components that we're doing whatever we can to attract them. So very little deliveries in Q4, much more to be in 2022.
Next question. Why does a write-down affect EBITDA?
In the write-down in Spain, we are talking about was related to inventory. And when you do adjustments to inventory write-downs, it will be part of our COGS, cost of goods sold. So that is why it's above the EBITDA line. We do not use the extraordinary in StrongPoint, even though we are talking about it as extraordinary, which it was. We are booking it above the EBITDA.
Next question, what are the next steps with Glovo?
So the Glovo deal is now in production with Carrefour. And just 2 things to say about Glovo, one is, now is the time to start expanding the sort of number of stores and partners of Glovo being affiliated with the quick commerce offering they have. That's number one. And number two is, of course, the Glovo's announced acquired by Delivery Hero. That acquisition is pending approvals. But I think a natural step for StrongPoint will also be to see how we could also capitalize on exactly that deal in the context of us serving Glovo.
Next question. You target 13% to 15% EBITDA margin, materially higher than your current margin. What do you say to those that argue this margin looks challenging?
Okay. So there are 2 things about that. Number one is in this quarter and in the quarters that have been in Q -- I'm sorry, in 2021, we've been doing significant investments and all these investments were expensive. So it's hitting the EBITDA immediately. We're not putting that into the balance sheet. That is all the programming to be done on the third-generation picking solution for Glovo, for instance, it's the next-generation Click & Collect lockers that were continuously evolving. It's the AutoStore and MFC concept where we're building. It is the Halodi Robotics solution that we're exploring. So there's a number of investments we're doing today, but we are expensing that rather than putting it in the balance sheet. So that -- so it keeps the EBITDA artificially low. In addition to that, we're also expecting, as you will see from the 2025 buildup, a significant part of the growth coming from e-commerce. And we know that within e-commerce, whether it's our soft-based order picking solution, AutoStore solutions with our MFC concept or Click & Connect lockers and other solutions, we have a higher profit margin than we would have in most other solutions that are kept in store.
Final question, what are your expectations on AutoStore?
So AutoStore, well, first of all, we wouldn't have engaged with AutoStore, unless we believe there is a significant potential. And there is a significant potential. And as I said earlier today, the AutoStore partnership, along with the Hörmann partnership we have to make sure we have a proper implementation partner right now in place. It's starting to bear fruits in the sense that we have been receiving a number of inquiries from customers. And we have started working on proposals for delivering such facilities. There's a long way to sort of sign or signature, but we started working on that, and that keeps us very optimistic about the partnership.
That was the final question.
If that was the final question, then I think we can go back to work in other ways. Thank you, everybody, for listening, and have a great day.
Thank you.