Pricer AB

STO:PRIC B

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Magnus Larsson, executive]

Hello, everyone, and welcome to the presentation of the second quarter 2024. My name is Magnus Larsson, and I'm the CEO of Pricer. And with me today, I have Claes Wenthzel, our acting CFO. We are delighted to be here and get the opportunity to present the quarterly results. It's a pleasure that we get once a quarter, and so far I've enjoyed it every time.

I would like to start with our vision. And for those that have followed our presentations, you know that this is something we do all the time. Our vision is to become retail's first choice in in-store automation and communication. That basically means that when any retailer speak about your suppliers within the retail tech community, we want them to say that out of all the suppliers, Pricer is #1. We want them to get this feeling from every single interaction they have with us, from the first meeting to the first offer that we send them, to the first deal that we make, to the first delivery. When the way we conduct support, we send the faulty invoice and the way we handle it. We basically want them to say that through the entire journey if they have with Pricer from day 1 until they -- well, hopefully, not decide to do something else, but we see it's a continuous journey, that they say that out of the vendors that we work with within the ESL business, display business, within anything retail tech, Pricer is the first one.

Then what does that mean from our point of view? Does that mean that we want to be #1 in every single market? Well, that would be nice. But actually, we want to be #1 in selected markets. So first, we want our customers to say that Pricer is our first choice. And then we will actually say that these are the conditions under which we will actually conduct business jointly.

So that's our vision. But what about Pricer? We've been around since the 90s. By today, we have deployed and equipped more than 25,000 stores with our technology. Since last time I presented, we have grown the number of stores on our stores service, which we call Plaza. So we have more than 3,500 connected stores. And having the stores connected is one of the fundaments to be able to do the upsells and continue to work with the customer and give them more products and more services and more functionality to actually serve their customers in a better way, and to make more profit.

Looking at the market, it's a market that we've been following for a long time and that we can actually see that it's about to happen. I think 1 year ago or 1.5 year ago, I started to speak about the North American market that something is happening. And I think we can conclude that during the first half, and more importantly, now in the second quarter, we can really see that there are big changes on the North American market. We see it in the U.S., we see it in Canada as well. We see it at large retailers, and especially grocery retailers, with ourselves and with others, are actually starting to move from planning into actually doing.

It was really nice and it was after a lot of hard work that we could actually announce the major Tier 1 grocery retailer in North America. That has now placed an initial order for 50 stores with us. It's actually the first and the largest store deployment of its kind. It's an initial order of 50 stores. It's based on our stores -- Plaza stores service. And it's also based on full store deployments of four-color labels, which probably makes it the largest deployed for color deploy of this kind in pretty much any market, but it's definitely the largest one on the North American market.

Ambition is actually to do the full deployment of the 50 stores by the end of the year. So it's a highly strategic win. And to us, it's a sign that what's the work that we have done, it's now leading to really win the kind of customers that we do want. Of course, we want to have any segment. But if we look back on history, the retailers that have actually been the first to adopt the ESL technology have been the grocery retailers because the gain they get out of using them has been so obvious. So it's extremely pleasing. And -- but we also -- it's not only that thing. We see that there are more movements on different places in the North American market, on different markets within the U.S., on different markets within -- or areas within Canada, and also across different segments. So expect more on the development in North America.

In the U.K., 2 years ago, we could conclude that we had this Retail Technology Show in 2022, and it was not a lot of attendance. It was actually very important. And in 2023, we could actually see that it really changed. The deals that we announced in the first quarter, the Co-op stores, the O&CC stores, they were the result of the interaction in 2023. What we can see now after the Retail Show that we had now in April is that there is ongoing discussions with pretty much every single leading U.K. retailer. We speak the largest grocery retailers. We speak do-it-yourself retailers, we speak general retailers. I've rarely seen this much interaction and that this past uptake in these kind of discussions. And of course, as much as I want to land it all, that will probably not happen, but we can actually see that the chances are that we will -- ourselves and others will be successful in the market are very high, given the fact that the, call it -- should probably not say revolution, but the development is very fast. And it's been driven by the inflation, which is still high in the U.K. market. It's been driven by the lack of resources, especially after Brexit, but also the fact that they have now increased the minimum salaries, for example, store clerks and store staff in the U.K. So we do expect to see much more in the U.K. market over the coming couple of years. So it was a very positive development.

The third its bullet is something we've seen over the years that once a retailer actually do a full-store deployment of ESL very rarely go back. As a matter of fact, I cannot think of one single customer that has done a full-store deployment that's gone back to paper unless they said that we will actually do a trial for the entire chain. If we cannot find the findings, we might actually take it off. And normally, the few times where I've seen that happen, the store staff has been extremely unhappy because they have experienced firsthand the benefits of doing it. But just like we know that anyone with an ESL deploy will stay on ESL. What we see now is that as chains where there's been a partial chain deployment, let's say, that out of 1,000 stores, they've had 500 deployed.

On the headquarter side, they see the benefit of ESL. They see the use cases they can do. They see the benefit of the store digitalization. They see how they actually can do more with less staff. They see how they get the efficiency up and the cost down. They also now see the ability to get control and visibility of what's actually happening within these stores from a headquarter point of view.

So we can say that we see 2 different movements here. One is that these stores with a big chunk of the stores, one, the chain with a big chunk of the stores on deployment, let's say they have half of their stores deployed in chain. They are now taking measures to actually make sure that all stores will be deployed with ESL. It's both difficult, but it also is taking away some of the change -- the benefit they get out of it. This is something I expect that we will see more of and that there will be an acceleration in this kind of changes. But we also see that there are a lot of our franchisees chains or chains that are actually turning their own operated stores into franchisees that they want to have them connected, and they want them to have the stores digitized and they want to have ESL, because they give that -- that gives them a visibility of whatever happened -- whatever is happening in the store. It gives them the possibility to do central pricing. It gives them the chance to actually see what are the products that sell well. Do they follow the planogram design? So basically how they plan on the central level that a store should be built.

So I think over the coming couple of years, we'll see from the existing retail customers that've done a lot of deployment, but not near being fully deployed in the chains that they will actually take this action. And the way it will happen is probably that through changes of the way they run their in-store processes. Sure, you can -- it's your choice. You can do paper or you can do ESL, but you will get more out of an ESL deployed because we're changing some processes. It could also be that it's mandatory, say, that now we're moving on and we will actually do it this way, so you will actually have to comply at part of our standards for a store.

Something we've seen as well is that many of the traditional grocery retailers, some of the large chains, they are facing an increased competition from hard discounters. It could be hard discounters like Lidl or someone else. And to meet this and meet the lower consumer pricing, they, of course, in some market, they lower the prices as well to make sure they do not lose out on the market share. The way they do it is actually they look at the cost. They do maybe cost reduction programs. They try to see how they can actually minimize the overall spend to be able to also then fund some of this -- or, discount the actual prices on their consumer products.

So does that mean that they don't see the value of what we do or competition do? No, not at all. It merely means that we can see that it's actually delaying some of the investments they are planning for. We can see that in these areas when it happens, we still have really good dialogue with our customers. And there is -- we know when they actually will start to deploy again. But I think we will see more of this one. It will be interesting to see at large how gross retailers, the traditional ones, will actually respond on the hard discounters. We can see that some are starting to have their own hard discount formers, a low price everyday, that format. But right now, we have seen that this has been affecting some markets. We've seen it in France, we have seen it in Spain. To a certain extent, you can also say that we've seen it in Sweden.

But what we've also seen is that the need for four-color labels, which from our point of view, delivers, of course, a better experience in the store, better shopper experience, it delivers a better ability to promote, a better ability to sell for the retailer. For us, it means also better profitability. So of course, that's a development we're happy to see.

So what we do to actually meet this increased need is that we add capacity now in our production facility in Germany. So by the fourth quarter this year, we will actually produce four-color labels out of the factory in Germany, which also now is running on full speed. So a lot of good news here, and interesting market development movements.

So now you heard a little bit about the future and reflections on the market. So now I will hand over to my colleague, Claes, who will actually go through the highlights, the financial highlights, of the second quarter. So, Claes, over to you.

[Claes Wenthzel, executive]

Yes. And if you start to the left, where we have the order intake. And as you can see, it can vary a lot between quarters. Had a very strong order intake the first quarter, and now it's 500. It's still up 6% compared to last year. And the order intake is, of course, very dependent on all the projects we have and when these projects are turning into real orders.

If you look at the sales then even there, we can see that we see some pushed sales from some of our big customers. That's why it's maybe a little bit lower in this quarter. But after the first half, it's still up 4% compared to last year. But the most important thing for us just now is that we have much better control over our margins. As you see, the gross profit is up. And it's of course related to long, genuine work with our suppliers. We have also an effect from their product mix during the quarter. And now after the first 6 months, we have a margin of 21%.

Then we can go to the next slide. And here you see our EBIT result each quarter. And you see continue to go up. And it's mainly related to margins improvement, lower cost, much better cost control. That explains the main part of what we can see this very positive development in the company as well.

And if you go to the next slide, you see the rolling 12 months result. As you can see, the rolling 12 months now it's up SEK52 million compared to what we had last year. And you can also see that this is the fifth quarter in a row where the rolling 12 months result continued to grow. And the same goes for our net profit.

Here, if you look at the P&L and you see the margin, of course, but we have also an effect, as you can see from our operating cost. We started the project already last year, but we have effect of it now in the first half year, but not full effect yet. But the cost is down compared to last year by more than 8%. So it's SEK18.8 million this quarter.

And if you then look at the next slide, you see the strong cash flow we had the first half of this year. It's of course driven by the high result, but it's also much more focused now on our operating capital and on our accounts receivables. One thing to note there is also that we had a lot of factoring historically, and we are lowering our factoring part all the time and we will go all the way out of it now during Q3. And even if the factoring is going down significantly, we have been able to increase our cash flow. So that's really strong.

[Magnus Larsson, executive]

All right. Thank you, Claes. So let me then summarize our second quarter. I'll do the popular summarizing of what Claes said. I think that the cost reductions that we've done, it's been a long-term work. We started already in 2022. We've been looking at our suppliers, we've been looking at the products that we use, we've been looking at the design of our products, we've been minimizing the number of variations and products with very little difference, where we could actually just replace it with one or actually more products into one. We've been spending a lot of time looking at the pricing, how we set the pricing for the customers. When we do the sales, very often when you do sales, it's easier that your salespeople can end up in a cost discussion. It's banned within the company. We always speak about investment, because if it wasn't an investment from the customer point of view, well, they shouldn't do it at all if it's just a cost.

So from that point of view, we have changed the way we also communicate with the customers, which is helping us to also defend our pricing, because that forces us to be more vocal about the benefits our customers will actually get from using our technology. And as I said before, my ask to our Head of Sales is that we should always be 10% on top of the market price, or in average, we should be 10% on top of the market price. With that mentality and spending a little bit more time on the sales, well, that will have a good impact also on the gross margin. Then, of course, selling our last-generation four-color labels is also improving gross margin, just like the recurring revenues are.

So very nice. And I was very happy to have the 22.8% gross margin in the quarter. But of course, when we look at gross margin, we should look over several quarters to see the development, to make sure development over time.

The cost control, Claes mentioned the cost reduction program, that we are aligned with it and that we expect now early Q3 to have the full effect of the program. That, together with the cost control, together with the gross margin improvement led to the third highest EBIT and net profit in Pricer history in absolute terms. So after last year losses, it feels good now for 3 consecutive quarters that actually delivered a needed profit and now this year on net profit as well.

Order intake was of course disappointing, looking only at the quarter, but yet I'm actually here presenting without looking too concerned. We see that 2 of our largest customers, they have had delays. We are in discussion with both of them. We are doing joint plans and we know how the year will play out. So we do expect orders, good orders from them now during the second half. So what I see now is that this has been more of a -- I wouldn't like to call it a lumpiness, I don't really like that word, but it's clear that these are orders that could have come now into this quarter. Now they will come during Q3 and Q4.

The corporate transformation I communicated before, so we've had the cost reduction, but the corporate transformation is equally important. That's the part that actually will ensure that we don't start to build cost the same way, organizational cost the same way as we did before. So we have a very hard focus on just cost management in general. But we have been looking a lot at the organization. We made a larger reorganization from a management point of view to really clarify roles, responsibilities and mandates. And then we concluded by having a kickoff for the -- you can see the new expanded leadership team in June.

I feel a lot of confidence. I feel that we're on the right way. We are all marching in the same direction. We have the same mindset, and we know what are the key things, what are the key triggers that we need to do in order to successfully ensure the long-term profitability and competitiveness. And it was well-received also by the managers and for some of the older timers, they said this is the first time that we do something on this level, and it was really appreciated.

And of course, finally, I would like to end with just reminding and do some additional bragging on the deal that we got with these North American grocery retailers. 50 initial stores, they have 1,500 stores. It's one of the Tier 1s in the North American market. It's full deployment of four-colors. It will be the largest deployed to date when it's done. So extremely good, very strategic, and I look forward to actually develop the relationship with this customer. It's been -- as you've seen from the press release, it's been -- it's a deal that we've taken together with our partner, but it's also what I would call a direct-touch deal. So our partner, together with our local and actually global salespeople, have been working jointly to make this deal happen.

So that's pretty much what I would like to present. And I would actually now like to hand over to Cecilia for some Q&A.

[Cecilia Vinell, executive]

So we have some questions. You touched upon the prices. Are you generally satisfied with the prices on the customer contracts, or can customers be picky sometimes?

[Magnus Larsson, executive]

Of course, that's a difficult question to answer. I'm happy for every contract that we win. And very often what I've seen selling for many years is that the contract that you might not have been very happy with before, at some point of time, as you get more efficient, that you will actually make sure you get more out of it. And it's above all, a possibility to, to do more. Having said that, yes, sure, there are contracts where I feel that the price is too low. And we look at ways of actually renegotiating and increasing them. And very often, that would actually be through introduction of maybe new-generation products or a new approach. So that's something that's on the strategic plan for some of our key accounts and with our salespeople.

We have contracts where I'm really happy with the pricing, where it's very clear that the value we deliver with our products has been well-articulated and customers have been willing to pay it.

I think I might have mentioned it before, but I'd like to do it again. We had a major win last year. At the time we were closing the deal, we know it was the last week. We know they would actually make up their mind. I asked Mats, our Global Head of Sales. And I asked him, so what you're feeling, and he said our pricing is maybe a bit too high. So I asked him, what do you want to do? And he said, nothing, because we have done exactly what we should from a sales point of view. We have to stay our ground. And I was extremely happy for that response, and response, even though, of course, it does give you a bit sense of uncertainty. What happened was that Friday I got a message from the customer saying, thank you, you've been selected, really appreciate the teamwork. And then a couple of weeks later, our key account manager asked the customers, how come you selected us and what was the rationale? And they said, well, you demonstrated the value so clearly of what you actually deliver. So to us, there was no other option.

So, I mean, I think it's a good example also that if you do the sales work properly, this is the result. Not always, but it will actually increase your chances of actually getting the price that you want and that you actually deserve, given the value you give to our customers. Because I still think that despite I asked Mats to be 10% on top of the general market price, or the average market price, I am confident that we are the cheapest solution for the customer because we will deliver a higher value in terms of the saving they make, but also in terms of the additional sales they can get to the customer experience in the store, and the potential up-sales they can do by doing different kind of promotions on our four-color labels, or the signage solutions that we offer.

Just a very long answer to a fairly short question, so thanks.

[Cecilia Vinell, executive]

And there are several questions on the 2 largest customers that you mentioned that have postponed their orders. Could you elaborate on the revenue decline from your 2 largest customers? And also the drivers for the expected recovery in the second half of the year?

[Magnus Larsson, executive]

The size of the impact, well, I would say it's sizable. How much is sizable? I don't want to give any exact numbers because we don't do that kind of forecasting. But it's on a level where you could clearly see it. The impact was visible in the order intake specifically. And then you have -- as listeners now, you have to try to make up your mind what that really means. Sorry for not giving any more details.

On the drivers, well, the key drivers, digitalization. We can see that one of them, they have a large installed base already. They do wish to continue. We actually, we know that they will continue to deploy in their stores. And then the other one, they also have large deployment. But we see that here there are possibilities to actually do much more within the chain. So I realize that what I'm saying is pretty vague-ish. But in essence, we have 2 happy customers. For different reasons, they have delayed the orders. But we have a joint target and a joint goal, and that is to continue the digitalization further, and that we actually do have the plans on the way it will be done.

So I guess, that's what I can say.

[Cecilia Vinell, executive]

Okay. Thank you. And this is the question about the gross margin. So you state that the gross margin was positively affected by both your internal efforts as well as customer and product mix. So how much of this should be considered temporary effects? How should we think about the run rate for the gross margin?

[Magnus Larsson, executive]

I think that we can see that some of the order intake or net sales that was missing, I would like to refer to it as a product mix rather than something else. We can see that some of the orders that we have been missing has been on products while we haven't had the same gross margin. So there will be an impact? I'm not sure it will be a very large impact, but I think there will be an impact. On the other end, I also see for the second half, I'll try not to actually guide, but I think there are reasons to believe that if we -- I don't know, Claes, would you like to say something? I'll probably just try to hand over this to you now.

[Claes Wenthzel, executive]

No, well, we don't give that type of forecast, as you know. But of course, if the sales are -- it's a lot depending on different type of products. But also we have an effect that will continue to be there from better prices from our suppliers.

One other important thing is, of course, our recurring revenues, where the margins are totally different compared to when you buy in raw material and produce a product.

[Magnus Larsson, executive]

Yeah. No, I think that we can expect a good gross margin also during the second half, or we will expect that. Exact what level it will be on, that we cannot guide on.

[Cecilia Vinell, executive]

Thank you. And a question on the working capital. So, are you comfortable with today's working capital, or are you planning to make it more efficient through lower inventory levels and higher accounts payable for better liquidity?

[Claes Wenthzel, executive]

You're never satisfied with how much capital you are tying up in operating capital. And one thing that we're working a lot is -- with is, of course, the inventory. Inventory levels, or we should be able to turn over the inventory quicker than we have done. But that is something we are working hard with. So the goal is, of course, to get it lower compared to our sales volumes.

[Magnus Larsson, executive]

And here I think we can also say that sometimes there is a belief that there is a contradiction or there is some kind of conflict between sales and finance. In essence, we -- they both want the same thing. And what I can see here is that we have an extremely good and constructive dialogue within the management team, both from sales, finance and -- but also other parts. And we all agree that we want to look at the payment terms from our customers. We all want to look at all the parameters that's actually affecting the working capital and like inventory. And here we, of course, we have the product team involved, we have the supply chain involved to make sure that we have a setup where we actually minimize inventory. And there are many different levers that we are looking at.

[Cecilia Vinell, executive]

Thank you. And now we have a question on the four-color labels. So what proportion of sales do you expect to head for four-color labels? And will that impact the gross margin?

[Magnus Larsson, executive]

We see that it has an impact on gross margin, but we actually see that at large, we have 2 generations of ESL out right now, the SmartTAG and SmartTAG Power. And the color labels are based on the Power. We can actually see that for customers that choose to work more on the Power and use the Power label, regardless if it's a three-color, four-color, they get much more out of it and they get a higher benefit, but we also get a better gross margin on these customers.

So I think our task now is to actually gradually shift our customers from old-generation to the new-generation labels on different ways and try to do it as much as possible.

When it comes to volumes, we see a clear trend that four-color is growing. We see that the Power labels are growing. We'll depend a little bit on the forthcoming deals and negotiations with the customers that we're having right now. So it's a bit too early to say, but we can see that the growth of four-color will continue and it will continue outside the markets that has been strong before. Almost all labels we're selling in Sweden, in New Zealand, in Australia, and in the U.K. are four-colors. Now with the North American retailer, it's also breakthrough from the fact that they are only going for four-color. So, of course, this is something that we hope and expect will continue.

[Cecilia Vinell, executive]

Thank you. And a question on the EBIT margin that took a giant leap from Q1 to Q2 and a comment on that. The Q2 is almost on the long-term target of 8%. And of course, you should look at this over a longer time, but then 1 quarter. But can you comment on this, how much is a trend and how much is short-term effects in Q2?

[Magnus Larsson, executive]

Claes, would you like to take that?

[Claes Wenthzel, executive]

Yeah. Well, it's not so easy to cause an effect. And if we have reduced our cost and we'll continue to do that compared to last year. And that, of course, if the gross profit is increasing, then our margins or operating margin will continue to increase. But now after the first half year, we are not as high as 7.5% as it was in the second quarter. So we -- and we don't give that type of forecast. But the goal is of course to be above 8% over time.

[Magnus Larsson, executive]

Yeah. And I think it's also when we communicated around the transformation activities we have, we have had the focus, we had the efficiency, but it's also about building new capability. So we are doing select investments both in staff and within other areas to be better in actually addressing the market. So it could be within portfolio, it could be within strengthening the sales team. So we will also increase our costs. But the intention is if we employ salespeople that it will be offset by additional gross profit. But then we have the investments that we do on the product side, for example, that will be also offset, but it might take a little bit longer.

[Cecilia Vinell, executive]

Thank you. Question about production. So when do Pricer will have labels made in the U.S.?

[Magnus Larsson, executive]

Well, let's see. It's, once again, depending on market uptake. When we see that there is a point that it would make sense to actually have something in the U.S. or North America, then we'll do it. Right now, we have no immediate plans to do that. We see that we can do the supply and the orders from the factories that we have. But given the size of the deals that we hope to win into the future, then that will certainly be something that we need to look into.

[Cecilia Vinell, executive]

Thank you. And a lot of questions on the German factory. I'll pick a few of them. What type of labels are we producing in Germany?

[Magnus Larsson, executive]

So what we've done so far has been three-color labels. It's been limited amount of sizes. Now we increase the number of sizes we produce, and we will produce both three- and four-color labels as of the fourth quarter. Actually do more sizes, I think already in third quarter, and then both four- and three-colors in -- as of the fourth quarter.

[Cecilia Vinell, executive]

Thank you. So several questions on Plaza. I've tried to compile them. So the Pricer Plaza has been bought by approximately 3,000 stores. The other stores have server-based solutions that you want to migrate to Plaza. How is the migration to Plaza going?

[Magnus Larsson, executive]

It's going well. Not as fast as I would want to. But we have a program in place, we have good traction. So it's going well. But we are looking at ways to actually speed it up. We are working together with Google as well to actually use them also in this work to do something jointly to make sure we can speed it up. But we have dialogue with a lot of our larger customers. What has been sometimes limiting is if there has been a chain and they have -- they want to do something on the chain level, which they said that yes, we see all the benefits we get out of it, but we will not do it until next -- we will not start the discussion until next year because we have some other projects. Because when they decide to do it on a full chain scale, of course, then they will need to look at how the entire IT team showed up and they have to make sure that all parameters are in place.

But if you take Carrefour, for example, when I discussed with Miguel, their Global Head of Technology, we agreed that we wanted to transform as many of the Carrefour stores from something server-based in the store to a cloud solution or store solution as possible. And that has progressing really, really well. We have a couple of hundreds, more than 200 of Carrefour stores that's been transformed quite recently.

[Cecilia Vinell, executive]

Thank you. So -- and yes, so this also regarding Plaza. Will -- can we assume that the recurring revenue will increase substantially when other stores are moving to Plaza?

[Magnus Larsson, executive]

It will increase, but it does take time, since we're not invoicing, it's not like when you invoice a big product sell that you get everything at once and you invoice it. It's the gradual invoice. It will be -- it's cumulative. So you will see a continuous improvement on Plaza. And of course, almost all new stores and all new chains, they are almost 100% Plaza-based. I think actually, if they don't have previous -- sitting in a previous chain and there is a principle to go with in-store, it's all Plaza. So then it's the migration. So you will see continuous growth of the Plaza revenues.

[Cecilia Vinell, executive]

Thank you. 3M has recently implemented Pricer labels in manufacturing process. Is the industrial market segment something you intend to pursue?

[Magnus Larsson, executive]

I would say not really. It's interesting in a sense that you get to work with brand names that are well-known. So there's a certain value, from a branding point of view, saying that these brands, like 3M, they see the benefit of working with ourselves. But from a volume point of view, very rarely they have the size that would make it attractive from a deployment point of view. Then it's better to actually address, let's say, the chain of grocery retailers, because if we win them, we know -- like with this North American one that we just announced, we know they have 1,500 stores. So that's of course the target we've given to the key account manager that this is your job now to make sure we win as much as possible, which is much easier than actually than going for the industrial segment.

So in essence, the volume in the industrial segment is too low to make it really interesting.

[Cecilia Vinell, executive]

Thank you. And how much of the revenue is from old customers, I mean, existing customers, and how much is from new customers? And will this change over time with Plaza?

[Magnus Larsson, executive]

It's a good question. I don't have any exact figure, actually. We've been winning quite a lot over the last year, so we have a lot of customers, but also, we have had a lot of orders from existing customers. I don't know what.

You've got any?

[Claes Wenthzel, executive]

No, I don't have that number. But as you know, it's just a small part of the whole market that is penetrated. So of course, the market is growing and it's growing by new customers coming in. But the numbers we have, I don't have an answer to that.

[Magnus Larsson, executive]

No, and I think it's a good answer because we can actually see that now as, like the North American and U.K. market are growing, these customers are all new. So I think we are -- sometimes, I felt that we have had -- if you look at the using uptake or the uptake of the market, it feels like we've been on a very long early adapter phase of the market. And we reached the point now, the tipping point, where we move into mass market. And I think there's quite a lot of indicators showing that this is about to happen. We can look at some of the announcement in North America, we can see what's happening in the U.K. We see on some of the other markets that things are turning big and it's actually going quite fast.

So having said that, yes, it would be nice to see if a lot of the revenue will come from new customers. But of course, that we see and continuous increase of subscription and Plaza revenues over the years.

[Cecilia Vinell, executive]

Thank you. And this is a question from Sweden, a person who talks to retailers and some of them don't know Pricer. What is your comment on that?

[Magnus Larsson, executive]

I'm unhappy to hear that they don't know Pricer. They should all know Pricer. The way we sell in Sweden, we sell through partners. I'm sure they know our partners. In Sweden, we're actually doing the field sales through strong points. So my expectation is that we are exposed on a daily basis to the retailers in Sweden.

So the way we work is that in some of our countries we have our own field sales. In France, in Italy, in Belgium, we actually have field salespeople. So we have a frame agreement with a customer. And then we have people out knocking doors and doing really -- closing business with franchisees because then we're mainly addressing the franchisees, or we have a partner doing that, like in some [Indiscernible] point, or it could be NZ ESL in Australia and New Zealand. Sometimes, we address the large retailers and then they will help out with facilitating the contact with their stores. So it's a little bit, depending from country to country what kind of model we have. But yes, I would want all retailers in Sweden to know who we are because we want to be their first choice. And it's difficult to be their first choice if they don't even know us. So that has to be the target.

[Cecilia Vinell, executive]

Thank you, Magnus. There are several questions on the future of technology and solutions and products. So we see other players in the market go beyond ESLs. What are your thoughts on enriching and expanding the product offering and technology advancements going forward?

[Magnus Larsson, executive]

I think we will see that when we start and when the retailers start -- sorry, digitizing the store, well, they have a point of sales. They will have their back office, the store staff will have the PDAs where they have the necessary applications to run the store, they have the displays and they have the ESLs. So then I think a lot of them will ask what's next? They want to have different kind of devices in the store. It could be thermometers or it could be, let's say, automatic locks. It could be sensors to see -- if someone passing by, sensors to see -- was the product lifted by a customer, not to give insights in the store. It could be cameras.

So I think there will be a lot of these products required into the future. And it's a natural next step. So expanding the portfolio, I think that's one thing that -- it's something we actually do look at. What are the complementary products, or what are the products that we believe would fit really well with our product offering. What we've done over the last year is that we're focused -- over the last 2years, actually, we have focused on our core business. Now we've come to a point where actually we show that we actually do grow the company, and we do it profitably.

So building your capabilities that I've spoken as a part of the transformation, that also does include looking at the product portfolio, looking at the future. What are the products that want to take to market further on? So I think it's a natural development.

What we've seen also, it's been a lot of talks about computer vision on the market. We have a camera solution. The reason why we haven't been really pushing it to the market and to our customers is that we haven't seen the business case yet. We haven't seen any major retailer do a major deploy. So we're sort of waiting for that trigger point as well. We are ready, but since we don't see the market, then we want to focus on doing the gospel of store digitalization in general. We'll make sure that we get the basics. But I believe having additional software functionality or stores functionality on top of Plaza, that's a must. That's part of the road map and part of our focus areas. And then the complementary areas with different products that you can actually deploy in a store, more like an IoT device, I think that's an area that's also very interesting.

So we haven't finalized our products. We're in the strategy phase right now. But it's something we definitely look at.

[Cecilia Vinell, executive]

Thank you, Magnus and Claes. And these were the last questions.

[Magnus Larsson, executive]

Thank you very much, Cecilia, for facilitation. And I would like to thank everyone that has participated for actually participating and watching this fairly, by now, long webcast. Thanks to all of you that posted questions. It's much appreciated, and please continue the same way.

So thanks for this. And I will look forward to actually meet you again in 3 months' time.